First Republic fails, and is snapped up by JPMorgan Chase

Before sharing sensitive information, make sure you’re on a federal government site. As a depositor, your money in an FDIC-insured bank is protected as long as it’s within FDIC limits and guidelines. JPMorgan will also acquire $173 billion of loans and $30 billion of securities from First Republic, it said in a slide presentation.

The FDIC estimates the takeover and sale of First Republic will cost that fund about $13 billion. The FDIC asked several banks to consider placing bids, and JPMorgan, the largest lender in the country, emerged as the winner. The failure of those two lenders sparked a search for other lenders that would be vulnerable to deposit outflows, and First Republic was soon identified.

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JPMorgan will buy all of First Republic’s $100bn-odd deposits; losses on the bank’s residential and commercial loans will be shared with the fdic. The banking crisis has also put federal regulators on the defensive by exposing problems that analysts said government officials should have identified and forced the banks to fix months ago. Last week the Fed and the F.D.I.C. published reports criticizing themselves for failing to adequately regulate Silicon Valley Bank and Signature. The reports also blamed the banks for poor management and excessive risk-taking.

Its clients — mostly the rich and powerful — rarely defaulted on their loans. The bank has made much of its money making low-cost loans to the wealthy, which reportedly included Meta Platforms CEO Mark Zuckerberg. Regulators worked through late last week and this weekend to find a way forward before U.S. stock markets opened. They solicited bids for first republic bank’s assets and once again turned to JPMorgan Chase, the nation’s biggest bank, with a reputation as a dealmaker during times of crisis.

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News Corp is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. First Republic was tossed a lifeline in March after 11 of the country’s biggest banks, led by JPMorgan, deposited $30 billion in it in a bid to raise confidence. Its stock tumbled so much last week that the New York Stock Exchange halted trading several dozen times. Its takeover caps a rocky week for First Republic, and it marks the latest event in a a period of banking turmoil that has roiled the country’s financial system.

Based in San Francisco, First Republic catered to high-net-worth individuals, and a significant portion of its deposits were uninsured. It had planned to strengthen its business by increasing insured deposits and reducing its borrowings from the Federal Reserve Bank. Bankrate.com is an independent, advertising-supported publisher and comparison service.