First Republic Bank has become the third major U.S. bank to collapse this year, according to a press release from the Federal Deposit Insurance Corporation (FDIC).
All of its assets will be taken over by JPMorgan Chase Bank, which submitted a bid for the troubled bank’s deposits.
As part of the transaction, First Republic Bank’s offices will reopen Monday morning as branches of JPMorgan Chase Bank. “All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to their deposits,” the FDIC statement said.
According to its website, the California-based First Republic Bank has 12 locations in Manhattan and one in Scarsdale, and 86 offices in eight states nationwide.
As of April 13 of this year, First Republic Bank had over $200 billion in total assets and over $100 billion in deposits.
The FDIC report said that the agency will enter into a loss share transaction on single family, residential and commercial loans from First Republic Bank, a provision expected to minimize disruptions for those loan customers.
Previous banks to fail this year are Silicon Valley Bank, based in California, on March 10, and Signature Bank, based in New York City, on March 12.
But despite grim headlines, banking expert J.D. Koontz says former First Republic customers might not notice much of an impact as they become JPMorgan Chase clients overnight.
“The acquiring bank is committed to ensuring a seamless transaction for customers,” Koontz said, adding that deposits like Social Security and paychecks will not change. For borrowers, the same is true, as existing loan agreements cannot be broken or changed without the borrower’s consent.
Koontz said that some former First Republic customers could even benefit from the acquisition, since JPMorgan Chase has more New York City branches and may offer additional products and services.
