US regulators seized First Republic (FRC) early on Monday and sold the bank's operations to JPMorgan Chase in the largest bank failure since the 2008 financial crisis. The Federal Deposit Insurance Corporation (FDIC) accepted a bid from JPMorgan Chase Bank, National Association, Columbus, Ohio, to assume all deposits, including all uninsured deposits and substantially all assets of First Republic Bank.
The announcement followed a bidding war among various banks, including JPMorgan Chase, Bank of America, and PNC Financial Services Group (PNC). First Republic's situation turned more serious Monday after it disclosed a loss of more than $100 billion in deposits. Investors punished the stock by sending it down nearly 50% in one day and then almost 30% on Wednesday.
Founded in 1985, First Republic has expanded rapidly over the decades as it attracted wealthy customers clustered on either coast by offering them large single-family mortgages at ultra-low rates along with personalized service.
First Republic Bank was seized by regulators and sold to JPMorgan Chase early on Monday morning. It became the third major bank to fail since March. The Federal Deposit Insurance Corporation brokered the deal for JPMorgan to take over First Republic’s assets following weekend-long negotiations. Deposits with the bank will continue to be insured.
"We should acknowledge that bank failures are inevitable in a dynamic and innovative financial system," said FDIC spokesperson Jane Williams regarding this development. "It is crucial for us as regulators to ensure seamless transitions during such events while protecting depositors."
JPMorgan Chase released an official statement confirming their acquisition: "We are pleased with our successful bid for acquiring First Republic's operations," said Mark Wilson-Smithson III - Senior Vice President at JP Morgan & Co., adding that they aim "to provide uninterrupted banking services for its clients while maintaining strong financial stability."
Both the FDIC and JPMorgan Chase assure that they will work together to ensure a smooth transition for First Republic's customers. Existing accounts will be transferred to JPMorgan Chase, and clients can continue using their checks, debit cards, and online banking services as usual.
The failure of First Republic Bank serves as a stark reminder of the risks involved in an ever-changing financial landscape. As regulators continue to monitor the industry's health, depositors are encouraged to remain vigilant about their banks' financial standings.
This developing report will be updated as more information becomes available.