It is the third bank in two months to go bankrupt. After Silicon Valley Bank collapsed in March, customers withdrew $100 billion in deposits from First Republic. The largest US banks tried to bail out the San Francisco company by giving it $30 billion, but that did nothing to boost First Republic’s stock price.
The California regulator DFPI has now seized the bank and appointed the FDIC as receiver. In a press release, the latter reports that JPMorgan Chase, the world’s largest bank, is buying all credits and almost all assets of First Republic. The major bank and the American guarantee fund also agree to divide the losses among themselves. That would cost the FDIC about $13 billion.
All 84 First Republic offices will open Monday as JPMorgan branches and customers of the bankrupt bank will be able to access their funds without any problems.