First Republic Bank shuts down, JP Morgan to take over assets

JPMorgan will “assume all deposits, including all uninsured deposits, and substantially all assets” of First Republic, the California Department of Financial Protection and Innovation said in a statement.

First Republic Bank’s 84 branches in eight states will reopen Monday as branches of JPMorgan Chase Bank.

First Republic specializes in private banking that caters to wealthier people, much like Silicon Valley Bank, which failed in March, focused on venture capital firms.

San Francisco-based First Republic has struggled since the collapse of Silicon Valley Bank and Signature Bank in early March, as investors and depositors grew increasingly worried the bank may not survive as an independent entity.

First Republic is the third major US bank to collapse in recent months.

The bank has been bought and sold several times over the years, with Merrill Lynch & Co. paying $1.8 billion to acquire First Republic in 2007. Ownership passed to Bank of America when it bought Merrill Lynch in 2009, and changed hands again in mid-2010, when investment firms including General Atlantic and Colony Capital purchased First Republic for $1.86 billion and then took it public.

Eleven US banks had tried to keep First Republic afloat by pledging $30 billion of fresh deposits on March 16, with JPMorgan, Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. pitching in $5 billion each. Goldman Sachs Group Inc. and Morgan Stanley and other banks offered smaller amounts as part of a plan devised along with US regulators.