US regulators seize First Republic Bank
Regulators 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 U.S.
San Francisco-based First Republic is the third midsize 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.
Regulators worked through the weekend to find a way forward before U.S. stock markets opened.
As of April 13, First Republic had approximately $229 billion in total assets and $104 billion in total deposits, the The Federal Deposit Insurance Corporation (FDIC) said.
At the end of last year, the Federal Reserve ranked it 14th in size among U.S. 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 72-branch 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 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 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 crystalized in the...
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