First Republic Bank, based in San Francisco, California, was closed by the California Department of Financial Protection and Innovation. The Federal Deposit Insurance Corporation (FDIC) was appointed as receiver and entered into an agreement with JPMorgan Chase Bank to protect depositors, assume all deposits, and acquire most of First Republic Bank's assets.
Following the transaction, First Republic Bank's 84 offices across eight states will reopen as branches of JPMorgan Chase Bank during regular business hours. All depositors will become part of JPMorgan Chase Bank, with their deposits continuing to be insured by the FDIC.
As of April 13, 2023, First Republic Bank had around $229.1 billion in total assets and $103.9 billion in total deposits. JPMorgan Chase Bank agreed to purchase the majority of these assets, including residential and commercial loans from the former bank.
JPMorgan Chase announced that it has acquired most of First Republic Bank's assets and assumed its deposits from the FDIC. Jamie Dimon, Chairman and CEO of JPMorgan Chase, emphasized the bank's financial strength, capabilities, and commitment to executing the transaction, stating, "Our government invited us and others to step up, and we did. Our financial strength, capabilities, and business model allowed us to develop a bid to execute the transaction in a way to minimize costs to the Deposit Insurance Fund.”
The acquisition is expected to generate over $500 million of incremental net income per year, in addition to a one-time post-tax gain of approximately $2.6 billion. It will also result in restructuring costs of around $2.0 billion over 2023 and 2024.
Marianne Lake and Jennifer Piepszak, JPMorgan Chase's Consumer and Community Banking Co-CEOs, welcomed First Republic Bank employees in a joint statement, saying, “First Republic has built a strong reputation for serving clients with integrity and exceptional service. We look forward to welcoming First Republic employees. As always, we are committed to treating employees with respect, care, and transparency.”