First Republic Taken Over By JPMorgan Chase — What Happens to Customer Accounts?
JPMorgan Chase has acquired most of the assets and “assumed the deposits and certain other liabilities” of First Republic Bank, following the bank’s seizure by the Federal Deposit Insurance Corporation (FDIC) and the ensuing “highly competitive bidding process.”
This is the third bank failure so far this year, following those of Silicon Valley Bank and Signature Bank in March.
As part of the purchase, JPMorgan Chase is assuming all deposits – insured and uninsured, according to a May 1 press release.
“Our government invited us and others to step up, and we did,” Jamie Dimon, Chairman and CEO of JPMorgan Chase, said in the release. “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 FDIC said in a statement on May 1 that as part of the transaction, First Republic Bank’s 84 offices in eight states will reopen as branches of JPMorgan Chase Bank, today during normal business hours.
“All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits,” noted the FDIC.
In addition, deposits will continue to be insured by the FDIC, and customers do not need to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits.
“Customers of First Republic Bank should continue to use their existing branch until they receive notice from JPMorgan Chase Bank, National Association, that it has completed systems changes to allow other JPMorgan Chase Bank, National Association, branches to process their accounts as well,” according to the FDIC.
First Republic branches will open on Monday, May 1, as normal, and clients will continue to receive uninterrupted service, including digital and mobile banking capabilities, JPMorgan added.
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The California Department of Financial Protection and Innovation said it has appointed the FDIC as the receiver and that as of April 13, 2023, First Republic Bank, had total assets of approximately $229.1 billion and total deposits of approximately $103.9 billion, according to a statement.
“Its deposits are federally insured by the FDIC subject to applicable limits,” it added. The FDIC insures up to $250,000 in deposits.
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