Regulators searched for a solution to First Republic Bank’s woes over the weekend, hoping to find a way forward before U.S. stock markets opened Monday. San Francisco-based First Republic has struggled since the collapse of Silicon Valley Bank and Signature Bank in early March, as investors and depositors grew increasingly worried the bank may not survive as an independent entity. The bank’s stock closed at $3.51 on Friday, a fraction of the roughly $170 a share it traded for a year ago. It fell further in afterhours trading.
Regulators seize ailing First Republic Bank, sell remains to JPMorgan
Federal regulators have seized First Republic Bank and sold it to JPMorgan Chase Bank in a deal aimed at quelling renewed weakness in the nation’s banking industry.
In a statement issued early Monday, the Federal Deposit Insurance Corporation said that all depositors of First Republic Bank will become depositors of JPMorgan and will have full access to their deposits.
The deal involved a “highly competitive bidding process,” the FDIC said in its statement, but it did not say what JPMorgan is paying to purchase First Republic.
Under the deal, JPMorgan acquires “substantially all” First Republic assets and agrees to assume responsibility for all of its deposits, including those above the federal insurance limit of $250,000 per account. First Republic had about $229.1 billion in assets and $103.9 billion in deposits.
“Our government invited us and others to step up, and we did,” JP Morgan chairman and CEO Jamie Dimon said in a company statement. “Our financial strength, capabilities and business model allowed us to develop a bid to execute the transaction in a way to minimize costs to the Deposit Insurance Fund.”
JP Morgan is not assuming First Republic’s corporate debt or preferred stock, it said in a statement.