JP Morgan bought First Republic Bank
The Federal Deposit Insurance Corporation (Fdic) has taken possession of the First Republic Bank and concluded an agreement for the sale of most of the bank’s assets to JP Morgan Chase.
JP Morgan will take over all of First Republic’s $103.9 billion in deposits and buy the majority of its $229.1 billion in assets. It is – explains the Wsj – of the second largest bank failure in US history which has seen multiple bank crashes in the past two months, including Silicon Valley Bank e Signature Bank.
JPMorgan – a statement from the California Department of Financial Protection and Innovation writes – “will assume all deposits, including uninsured ones, and substantially all assets of First Republic Bank”. The Californian regulator then appointed the Federal Deposit Insurance Corporation (Fdic) as the bankruptcy trustee of the San Francisco-based bank. The deposits are federally insured by the FDIC and subject to applicable limits.
JP Morgan becomes the first American bank
San Francisco’s regional bank First Republic has seen 75% of value on Wall Street evaporate since Monday, after confirming the flight of $100 billion in deposits in the first quarter of the year. On March 8, the day Silicon Valley disclosed the losses that triggered the run on deposits and subsequent crash, its shares were worth $115. It fell to $3.51 after the Wall Street close on Friday night. Now on the stock exchange it is worth only 650 million dollars.
With assets estimated at $233 billion at the end of the first quarter, First Republic would be the second-largest bank to fail in American history. A scenario that the Biden administration and the American regulatory authorities want to avoid with a market bailout. The transaction makes JP Morgan the largest bank in the US.