First Republic Bank Sold to JPMorgan Chase in 2023: What You Need to Know
In a major 2023 banking development, First Republic Bank was seized by the FDIC and acquired by JPMorgan Chase, ensuring full depositor access and branch reopenings across eight states.
Taylor Tompkins, an experienced journalist specializing in business and finance, brings over a decade of expertise in analyzing economic trends and interviewing industry leaders. She currently serves as the Economics Editor for Investopedia.
Over a month after warning signs emerged, First Republic Bank (FRC) was officially taken over by the Federal Deposit Insurance Corporation (FDIC) and sold to JPMorgan Chase in a decisive move to stabilize the regional banking sector.
Key Highlights
- First Republic Bank was seized and sold to JPMorgan Chase during the weekend of April 2023.
- All 84 branches across eight states will reopen as JPMorgan Chase locations, guaranteeing full access for all depositors.
- Despite earlier rescue efforts involving billions in deposits from top U.S. banks, First Republic struggled to regain stability following the Silicon Valley Bank collapse.
After unsuccessful negotiations by First Republic's leadership, government officials intervened early Monday to facilitate the FDIC's takeover. The FDIC promptly sold the bank’s deposits and most assets to JPMorgan Chase, ensuring customers could access their funds starting May 1, 2023.
Based in San Francisco, First Republic had been a focal point of the regional banking crisis triggered by Silicon Valley Bank’s failure in March 2023. Eleven major U.S. banks had previously injected $30 billion in deposits to support the institution, yet deposits still declined by over 40% in Q1 2023.
Reluctance from other banks to engage in rescue deals stemmed from concerns over uninsured deposits, but FDIC involvement eventually encouraged collaboration.
The bank’s stock price suffered dramatically, plummeting over 75% by the close of trading on the preceding Friday, with multiple trading halts throughout the week. Year-to-date, First Republic shares have lost approximately 98% of their value.
Short selling activity surged by 19.2% in the past month, with 9.26 million shares valued at $53 million being shorted, according to S3 Partners. Bloomberg reported that investors betting against the firm faced difficulties locating shares to short.
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