Beautiful Virgin Islands

Thursday, Jun 05, 2025

JPMorgan to take over deposits of troubled First Republic Bank

JPMorgan to take over deposits of troubled First Republic Bank

After Silicon Valley Bank and Signature Bank, First Republic is the third midsize bank in the US to fail in just two months.
US regulators have seized troubled First Republic Bank and sold all of its deposits and most of its assets to JPMorgan Chase Bank in a bid to head off further banking turmoil in the country.

San Francisco-based First Republic is the third midsize US bank to fail in two months. It has struggled since the collapse of Silicon Valley Bank and Signature Bank and investors and depositors had grown increasingly worried it might not survive because of its high amount of uninsured deposits and exposure to low-interest rate loans.

The Federal Deposit Insurance Corporation said early on Monday that First Republic Bank’s 84 branches in eight states will reopen as branches of JPMorgan Chase Bank and depositors will have full access to all of their deposits.

Regulators worked through the weekend to find a way forward before US stock markets opened. Markets in many parts of the world were closed for May 1 holidays. The two markets in Asia that were open, in Tokyo and Sydney, rose.

“Our government invited us and others to step up, and we did,” said Jamie Dimon, chairman and CEO of JPMorgan Chase.

As of April 13, First Republic had approximately $229 billion (€208 billion) in total assets and $104 billion (€95 billion) in total deposits, the FDIC said.

At the end of last year, the Federal Reserve ranked it 14th in size among US commercial banks.

Before Silicon Valley Bank failed, First Republic had a banking franchise that was the envy of most of the industry. Its clients - mostly the rich and powerful - rarely defaulted on their loans.

The bank has made much of its money-making low-cost loans to the wealthy, which reportedly included Meta Platforms CEO Mark Zuckerberg.

Flush with deposits from the well-heeled, First Republic saw total assets more than double from $102 billion (€93 billion) at the end of 2019’s first quarter, when its full-time workforce was 4,600.

But the vast majority of its deposits, like those in Silicon Valley and Signature Bank, were uninsured — that is, above the $250,000 (€227,400) limit set by the FDIC. And that worried analysts and investors. If First Republic were to fail, its depositors might not get all their money back.

Those fears were crystallised in the bank’s recent quarterly results. The bank said depositors pulled more than $100 billion (€90 billion) out of the bank during April’s crisis. San Francisco-based First Republic said that it was only able to stanch the bleeding after a group of large banks stepped in to save it with $30 billion (€27 billion) in uninsured deposits.

Since the crisis, First Republic has been looking for a way to quickly turn itself around. The bank planned to sell off unprofitable assets, including the low-interest mortgages that it provided to wealthy clients. It also announced plans to lay off up to a quarter of its workforce, which totalled about 7,200 employees in late 2022.

Investors remained sceptical. The bank’s executives have taken no questions from investors or analysts since the bank reported its results, causing First Republic's stock to sink further.

And it’s hard to profitably restructure a balance sheet when a firm has to sell off assets quickly and has fewer bankers to find opportunities for the bank to invest in.

It took years for banks like Citigroup and Bank of America to return to profitability after the global financial crisis 15 years ago, and those banks had the benefit of a government-aided backstop to keep them going.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Global News Roundup: From Ukraine's strategic military strikes and Russia's demands and Tensions Escalate in Ukraine, to serious legal issues faced by Britons in Bali and Trump's media criticism, the latest developments highlight a turbulent landscape
Majority of French Voters View Macron's Presidency as a Failure
Hungary Partners with China to Boost Electric Vehicle Production
‘Vibe Coding’ Emerges as the New DIY Trend
AI Pioneer Yoshua Bengio Warns Models Can Deceive Users
Big Four Firms Rush to Create AI Auditing Systems
Musk’s xAI Pursues $113 Billion Valuation in New Share Sale
Walmart Increases Revenue Despite Shrinking Workforce
Hims & Hers Plans UK and EU Launch of Replica Obesity Drugs
Toyota to Acquire Supplier in $33 Billion Buyout
U.S. Reduces Military Presence in Syria
Trump Demands Iran End All Uranium Enrichment in Nuclear Talks
China Accuses US of Violating Trade Truce
Panama Port Owner Balances US-China Pressures
France Implements Nationwide Outdoor Smoking Ban to Protect Children
German Chancellor Merz Keeps Putin Guessing on Missile Strategy
Mandelson Criticizes UK's 'Fetish' for Abandoning EU Regulations
British Fishing Boat Owner Fined €30,000 by French Authorities
Dutch government falls as far-right leader Wilders quits coalition
Harvard Urges US to Unfreeze Funds for Public Health Research
Businessman Mauled by Lion at Luxury Namibian Lodge
Researchers Consider New Destinations Beyond the U.S.
53-Year-Old Doctor Claims Biological Age of 23
Trump Struggles to Secure Trade Deals With China and Europe
Russia to Return 6,000 Corpses Under Ukraine Prisoner Swap Deal
Microsoft Lays Off Hundreds More Amid Restructuring
Harvey Weinstein’s Publicist Embraces Notoriety
Macron and Meloni Seek Unity Despite Tensions
Trump Administration Accused of Obstructing Deportation Cases
Newark Mayor Sues Over Arrest at Immigration Facility
Center-Left Candidate Projected to Win South Korean Presidency
Trump’s Tariffs Predicted to Stall Global Economic Growth
South Korea’s President-Elect Expected to Take Softer Line on Trump and North Korea
Trump’s China Strategy Remains a Geopolitical Puzzle
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
×