JPMorgan Chase is buying most assets of First Republic Bank after the nation’s second-largest bank failure, in a deal announced early Monday that protects the deposits of First Republic’s customers.
JPMorgan Chase said it had acquired “the substantial majority of assets” and assumed the deposits, insured and uninsured, of First Republic from the Federal Deposit Insurance Corporation, the independent government agency that insures deposits for bank customers, according to CNN.
“In carrying out this transaction, JPMorgan Chase is supporting the US financial system through its significant strength and execution capabilities,” the bank said in a statement.
The FDIC took control of the embattled First Republic and then immediately announced the sale. The failure will cost the FDIC about $13 billion. That money will be paid by the nation’s banks, which pay premiums to support the agency.
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First Republic was founded in February 1985 by Jim Herbert, previously the founder and CEO of San Francisco Bancorp, which he sold to Atlantic Financial. First Republic began operations on July 1, 1985, as a California-chartered industrial loan company. It became a public company via an initial public offering on the NASDAQ in August 1986, selling stock at $10 a share. In 1993, First Republic acquired Silver State Thrift, a savings and loan association in Nevada. In 1996, First Republic sought to shift to a banking charter to expand its offerings.
First Republic was known for its personalized service and its focus on high-net-worth individuals. The bank offered a wide range of products and services, including checking and savings accounts, loans, investments, and trust services. First Republic also had a strong presence in the San Francisco Bay Area, where it was one of the largest banks.
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In 2023, First Republic was hit hard by the global banking crisis. The bank’s stock price fell sharply, and it was forced to raise capital. In May 2023, the FDIC announced that First Republic had been closed and sold to JPMorgan Chase.
The sale of First Republic was a major blow to the San Francisco Bay Area banking community. The bank was one of the largest and most successful banks in the region, and its closure was a sign of the challenges facing the banking industry.
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