JPMorgan Chase to Take Over Failed First Republic Bank’s Assets

JPMorgan Chase has announced that it is buying most of the assets of First Republic Bank, confirming the second-largest bank failure ever in the US.

The US government invited several leading US banks to make offers to take over the assets of the beleaguered regional bank, with JPMorgan Chase coming out as the successful bidder over the weekend. As part of the deal, JPMorgan Chase was slated to assume the insured and uninsured retail banking deposits of First Republic from the Federal Deposit Insurance Corporation (FDIC), the independent government agency that insures deposits for bank customers.

JPMorgan Chase also will not assume First Republic’s corporate debt, and it will receive $50 billion in financing from the FDIC to complete the deal. The collapse will cost the FDIC about $13 billion. That figure will be covered by the country’s banks, which pay premiums to support the agency. The sum is lower than the $20 billion cost of the failure in March at Silicon Valley Bank.

As of the end of last year, First Republic was the nation’s 14 th -largest bank, according to a ranking by the US Federal Reserve.

Despite concerns that the US has lost three regional banks in a little under two months, with Silicon Valley Bank and Signature Bank both hitting the wall, treasury officials were satisfied with the latest deal that they claimed proved the resilience of the US banking sector.