JP Morgan Chase is poised to take control of the now-defunct First Republic Bank, marking the third significant bank collapse in the United States under Joe Biden’s administration within the past two months, Breitbart reports.
The Federal Deposit Insurance Corporation (FDIC), the nation’s banking regulator, confirmed on Monday that the San Francisco-based First Republic Bank had collapsed after customers withdrew approximately $100 billion of deposits in recent days as the bank’s stock price plummeted.
JP Morgan will now “assume all of the deposits and substantially all of the assets of First Republic Bank.”
The 84 offices previously managed by First Republic across eight states will now open as branches of JP Morgan Chase on Monday.
As of April 13th, First Republic Bank reportedly held $229.1 billion in total assets and $103.9 billion in total deposits, making it the second largest bank failure in American history.
The FDIC reassured customers that all deposits will continue to be insured and that no changes are necessary for customers to maintain their deposit insurance.
The Deposit Insurance Fund is expected to incur a cost of around $13 billion due to the collapse of First Republic Bank, as it entered a loss-sharing agreement with JP Morgan Chase.
The FDIC released the following statement:
First Republic Bank, San Francisco, California, was closed today by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect depositors, the FDIC is entering into a purchase and assumption agreement with JPMorgan Chase Bank, National Association, Columbus, Ohio, to assume all of the deposits and substantially all of the assets of First Republic Bank. JPMorgan Chase Bank, National Association submitted a bid for all of First Republic Bank’s deposits. As part of the transaction, First Republic Bank’s 84 offices in eight states will reopen as branches of JPMorgan Chase Bank, National Association, today during normal business hours. All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits. Deposits will continue to be insured by the FDIC, and customers do not need to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of First Republic Bank should continue to use their existing branch until they receive notice from JPMorgan Chase Bank, National Association, that it has completed systems changes to allow other JPMorgan Chase Bank, National Association, branches to process their accounts as well.
The FDIC also revealed that it would enter into a loss-share transaction with JP Morgan Chase for single-family, residential, and commercial loans, which will maximize recoveries on the assets and minimize disruptions for loan customers.
The resolution of First Republic Bank involved an intensely competitive bidding process, ultimately resulting in a transaction that complied with the least-cost requirements of the Federal Deposit Insurance Act.
The final cost to the Deposit Insurance Fund, currently estimated at $13 billion, will be determined when the FDIC terminates the receivership.