JPMorgan Chase Acquires First Republic Bank After Silicon Valley Bank Crisis
First Republic Bank was closed in just a few weeks, following the Silicon Valley Bank Crisis. Federal Deposit Insurance Corporation has announced that the bank will be shut down by the California Department of Financial Protection and Innovation. FDIC also purchased the assets of JPMorgan.
The total assets and deposits of the bank exceed $330 Billion.
In order to protect its depositors the FDIC has entered into an agreement with JPMorgan Chase Bank National Association in Columbus, Ohio, whereby it will buy all First Republic Bank deposits and assume substantially all assets.
JPMorgan Chase has acquired all assets and deposits of FRB as well as the 84 offices located in eight states. JPMorgan Chase now serves as the bank for all FRB depositors.
FRB's stock was in a downward spiral after weeks of speculation. JPMorgan PNC, among other banks, submitted bids at the weekend.
First Republic, together with Silicon Valley Bank, has been a significant partner of the growing technology industry. Its technology division provides current accounts and other banking services to investment companies.
The SVB collapsed and fell into the blast zone.
First Republic changed its message quickly to emphasize its own stability following the failure of SVB.
First Republic appeared to have accomplished the feat when shares prices bounced back after what seemed to be a solution of SVB crises.
This does not suffice. First Republic lost customers and investors due to a lack of trust towards SVB-dependent business.
FDIC had its own problems, critics and difficulties. Some blamed the collapse of SVB on U.S. regulators for not acting quickly enough.
JPMorgan Chase Bank National Association, the FDIC and other banks are also involved in a transaction for loss-sharing, according to a statement.
JPMorgan has been a victim of its own misfortunes in recent months and years.
In a press statement, JPMorgan Chase said that "By completing the transaction JPMorgan Chase supports the U.S. Financial System through its significant strength." "
Jamie Dimon said that JPMorgan Chase's CEO and Chairman, Jamie Dimon stated in a press release, "Our government asked us to step up and we did." "We were able use our financial strength and business models to create a bid that minimized costs for the Deposit Insurance Fund.
Dimon said, "This acquisition modestly benefit our company as a entire, is accretive for shareholders, advances wealth strategies, and complements our existing franchise. "
As the banking system shows its true self, we can only imagine what is to follow.