What is the First Republic Bank? All you need to know

After the collapse of Silicon Valley Bank (the SVB) and Signature Bank, the sale of First Republic Bank marks the third major bank failure in the United States. The FRB was taken over by the Federal Deposit Insurance Corporation (FDIC), which took control of its bidding, and a sizeable portion of its assets were sold to the biggest lender in the US.

In a press release, JPM says that it “is supporting the U.S. financial system through its significant strength and execution capabilities. As part of the purchase, JPMorgan Chase is assuming all deposits – insured and uninsured.”

All you need to know about the First Republic Bank

• First Republic Bank is a publicly-traded bank that was founded in 1985 and is headquartered in San Francisco, California. 
• The bank provides personal and business banking services, private wealth management, investment management, and trust services to high-net-worth individuals and businesses.
• Its primary focus is on providing personalized banking services to high-net-worth individuals and businesses. This includes offering customized loan solutions, investment management services, and trust services.
• It has 85 offices located in major metropolitan areas in the United States, including California, New York, Boston, Florida, and Oregon.
• It had consistently received high ratings from third-party rating agencies. For example, it has been ranked as the "Best Private Bank in North America" and “Top Family Bank.”
• The bank's crisis is now said to be the second biggest bank failure in the history of US. 

BREAKING: JP Morgan Chase will acquire most of the assets of First Republic Bank after a deal was arranged by the FDIC the morning.

Details:

- First Republic Bank has become the 3rd bank to fail since March.

- First Republic Bank’s 84 offices will reopen as branches of… pic.twitter.com/kITZJoS1VD

— Brian Krassenstein (@krassenstein) May 1, 2023

The Crisis

• The US banking system has been in quite a turmoil ever since the collapse of the SVB and the Signature Bank. In the last week of April, First Republic Bank disclosed that it has lost about $100 billion in deposits in just three months, and that was when its troubles began.
• The bank’s stocks took a dive of over 97%. The New York Stock Exchange (NYSE) even had to stop the trading of the stocks many times. 
• After the two major bank failures, the regulators started identifying other banks that could face such a crisis and First Republic Bank was one of them. 
• The bank tried to sell itself to recover the losses, but it was all in vain. 
• Then, the government took over. The FDIC urged that various banks consider putting in bids, and JPMorgan Chase won. 
• US President Joe Biden has welcomed the sale and expects this to create “a safe banking environment” in the country. 

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84 branches of the bank have opened as branches of JPMorgan Chase Bank. The situation is a lot calmer now that the deposit outflow has stabilised. It remains to be seen whether or not the bank will rise to its former glory.