It looks like a third bank has tanked under the Biden administration as well in less than two months. First Republic Bank has been taken over by federal regulators and will be handed off to JPMorgan.
The Federal Deposit Insurance Corporation (FDIC) announced Monday morning that it had seized the bank and that JPMorgan Chase, the largest bank in the United States, would be taking it over, purchasing almost all the bank’s assets and deposits.
“In carrying out this transaction, JPMorgan Chase is supporting the U.S. financial system through its significant strength and execution capabilities,” the bank said in a statement.
The fall of First Republic Bank will cost the FDIC a pretty penny – about $13 billion. The nation’s banks will reportedly pay the funds, which pay premiums to support the agency.
According to CNBC, its stock has fallen 97% this year with most of the losses coming after investors lost confidence in the bank following the failure of two regional lenders in March. With $229.1 billion in total assets at the time of closure, First Republic Bank became the second largest bank failure in American history.
First Republic told CNBC’s David Faber on Friday, “We are engaged in discussions with multiple parties about our strategic options while continuing to serve our clients.”
Shares of First Republic closed at $16 on Monday before the bank reported its first-quarter results, showing a decline in deposits of about 40%. The stock hit an all-time low after it fell more than 60% these last two days.
The nation’s largest banks have already helped out First Republic Bank with $30 billion in time deposits.
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