Struggling lender to be acquired by JPMorgan, California financial watchdog says
The troubled First Republic Bank has been taken over by regulators and will be sold to JPMorgan Chase, the California Department of Financial Protection and Innovation (DFPI) announced on Monday.
Earlier this week, the Federal Deposit Insurance Corporation (FDIC), one of the main federal regulators of American financial institutions, asked a number of banks to submit offers for the troubled lender in a bid to find a buyer. before it went into receivership. A deadline for submissions has been set for Sunday.
JPMorgan, the largest American bank, will “Assume that all deposits, including all uninsured deposits, and substantially all assets” of the First Republic, according to a statement released by the California regulator.
The DFPI appointed the Federal Deposit Insurance Corporation as receiver of the San Francisco-based bank, which had total assets of nearly $229.1 billion as of April 13, 2023, while its total deposits stood at amounted to some $103.9 billion.
“Deposits are federally insured by the FDIC subject to applicable limits”, the statement read.
A sell-off last week wiped out 75% of the value of the bank’s shares, following the revelation that it had lost more than $100 billion in deposits in the first quarter of this year. The San Francisco-based lender has struggled to stay afloat since the US banking sector was hit by a major crisis.
The ongoing seizure and sale of First Republic Bank makes it the third U.S. lender to fail after the collapses of Silicon Valley Bank and Signature Bank in March. Both were shut down by regulators following massive bank runs.
In March, major US financial institutions agreed to a $30 billion injection for the struggling regional lender. First Republic shares are down 97% this year.
For more stories on economics and finance, visit RT’s business section
You can share this story on social media: