Federal regulators formally seized control of San Francisco-based First Republic Bank early Monday, and announced its sale to JPMorgan Chase.
JPMorgan Chase will “assume all of the deposits and substantially all of the assets of First Republic Bank,” the Federal Deposit Insurance Corporation (FDIC) announced in a statement.
FDIC estimated its insurance fund will pay some $13 billion to cover the bank’s losses.
The purchase came in the wee hours of the morning before US markets were set to open.
First Republic was sold immediately after bids were submitted Sunday by PNC Financial Services Group (PNC.N), JPMorgan Chase & Co (JPM.N) and Citizens Financial Group Inc (CFG.N) in the auction by federal regulators.
Founded in 1985, First Republic is the second largest US bank (by assets) to collapse since the financial crisis of 2008. Its failure came just seven weeks after the collapse of Silicon Valley Bank and Signature Bank.
On January 1, 2023, First Republic was the 14th largest bank in the United States, but its size nevertheless did not provide insurance against failure.
The collapse came despite an injection of $30 billion by 11 of America’s largest banks in March.
As early as Monday, 84 branches of the bank in eight states are set to reopen under the name JPMorgan Chase.
