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IPFS News Link • Central Banks/Banking

Troubled First Republic Bank Seized and Sold to JPMorgan Chase

• Need To Know

First Republic Bank is the third financial institution taken under government control since March. First Republic Bank was snapped up by banking giant JPMorgan Chase. Jamie Dimon, the CEO of JPMorgan, said his bank will make a "modest" one-time $2.6 billion gain by acquiring First Republic but will also spend another $2 billion restructuring the regional bank. Without the deal, the FDIC would have needed to assume all of First Republic's debt. President Biden said that shareholders in First Republic Bank were the losers, not depositors or US taxpayers.

Regulators seized control of First Republic Bank on Monday and accepted a bid from JPMorgan Chase for virtually all of the lender's assets. It is the third financial institution taken under government control in the last two months following a series of lightning-fast bank runs that has shaken the confidence of financial industry customers and investors.

California's Department of Financial Protection and Innovation (DFPI) said it had taken over San Francisco-based First Republic and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. FDIC officials then accepted a bid from JPMorgan "to assume all deposits, including all uninsured deposits, and substantially all assets of First Republic Bank," the DFPI said.