JPMorgan Chase buys First Republic Bank

JP Morgan Chase
Key facts:
  • First Republic Bank was seized by the FDIC and sold to JPMorgan Chase Bank.
  • It is the second-largest bankruptcy in US banking history.

The US bank JPMorgan Chase, the largest in that country, assumed all the deposits and a substantial majority of all the assets of First Republic Bank. This banking entity was intervened by the regulators of the state of California this Monday, May 1.  

In a press release published today, the Federal Deposit Insurance Corporation (FDIC) explained that this financial institution, headquartered in San Francisco, was closed by the California Governor’s Department of Financial Protection and Innovation.  

Therefore, JPMorgan Chase Bank submitted an offer to assume all deposits in the name of the bank. It also agreed to buy a significant majority of all the assets of that bank, according to the FDIC. 

Due to the intervention of First Republic Bank and its subsequent sale to JPMorgan Chase, the bank’s 84 offices located in eight US states reopened on Monday as branches of the country’s largest bank and one of the largest financial companies. important in the world.  

The FDIC reported that all First Republic Bank customers became part of JPMorgan Chase Bank. “And they will have full access to all of their deposits.” It further notes that the funds will continue to be insured by them.  

First Republic was a bank with assets exceeding USD 220 billion 

The First Republic is a major bank in the United States, with assets of more than USD 229.1 billion and deposits of more than USD 103.9 billion, according to the FDIC’s own calculations.  

His intervention by the regulator is known days after the bank reported the 40% collapse in deposits during the first quarter of this year, as reported by Market Times. The Californian financial company also revealed that revenues fell 16% in the same period and stood at just USD 1,200 million. 

First Republic Bank informed clients about the deal with JPMorgan Chase in a statement posted on its website. In it, they maintain that this bank “will protect all deposits, insured and uninsured”, contributing its “financial strength, capabilities and capital”.  

The bank states that they want to “support First Republic customers and the banking system of the United States.” In this sense, they point out that user money “is protected” and that people can still manage their finances through the bank’s website or through the mobile application.  

A year of falls and closures of traditional banks linked to cryptocurrencies 

The fall of First Republic Bank is now among the largest bank failures in US history. This is after the case of Silicon Valley Bank (SVB), seen months ago.  

The SVB, which was focused on technological investments and which had ties to the bitcoin (BTC) ecosystem and cryptocurrencies, had assets valued at USD 209 billion, as reported by Market Times. 

The SVB bankruptcy earlier this year followed the collapse of Silvergate Bank. This is one of the banks that had the most relationship with the crypto asset market. The regulatory authorities of the United States also intervened in this financial institution. That was at the beginning of March 2023. 

Following the fall of Silicon Valley Bank, it was the turn of Signature Bank, the third largest bank failure in US history. This entity also had links with bitcoin and its ecosystem, as confirmed by its agreements and associations with companies in the field. Although according to regulators, crypto assets did not play any role in the closure of that institution.   

After the news of the intervention of the First Republic Bank and its absorption by JPMorgan Chase Bank, the price of BTC rebounded slightly to USD 28,640. As of press time, it remains above $28,500, according to CoinGecko figures.