JPMorgan set to Acquire First Republic Bank’s (FRB) assets

After initial attempts to save First Republic Bank (FRB) failed, the American banking behemoth, JPMorgan Chase is preparing to buy its assets. On April 29, JPMorgan and numerous other banks proposed to buy the troubled FRB’s assets.

On May 1, the Federal Deposit Insurance Corporation (FDIC) was appointed receiver after the California Department of Financial Protection and Innovation terminated FRB.

The FDIC signed a purchase and assumption agreement with JPMorgan to safeguard depositors.

All of First Republic Bank’s assets, including uninsured deposits, will be assumed by JPMorgan. FRB now has deposits of $103.9 billion and assets of $229.1 billion.

84 First Republic Bank facilities in eight states will reopen as JPMorgan Chase as part of the move. All FRB depositors will join JPMorgan and have access to the total amount of their FDIC-insured accounts.

Customers can continue using the present branch’s banking services until JPMorgan notifies them of any changes.

Along with the asset transfer, a loss-sharing arrangement for the residential and commercial loans that the FRB acquired was also reached between the FDIC and JPMorgan.

The FDIC, acting as receiver, and JPMorgan will split the losses and any recovery on the loans covered by the loss-share agreement.

On April 26, when the news of a government receivership broke, FRB’s problems began to develop. The statement caused the bank’s shares to plunge 20% in hours.

Before the regulators finally closed the bank, the days after the announcement were even more unstable for the bank.

In 2023, FRB will join Silicon Valley Bank and Signature Bank as the most recent U.S. banks to fail.