Regulators from the Federal Deposit Insurance Corporation seized the struggling First Republic Bank early on Monday, agreeing to sell the bulk of the bank’s operations to JPMorgan Chase. This constitutes the largest banking failure since the 2008 financial crisis.
JPMorgan agreed to seize $173 billion in assets, $30 billion in securities, and all $92 billion of First Republic Bank’s deposits. In exchange, the FDIC agreed to share some of First Republic’s losses on its residential and commercial loans, thereby giving JPMorgan Chase some protection when it comes to assets going bad.
The largest U.S. bank, JPMorgan Chase fought off the likes of Bank of America and PNC Financial Services Group to win the auction for First Republic Bank’s assets.
Data from the FDIC suggests that the failure of First Republic Bank will cost an estimated $13 billion. This is in addition to the $22 billion losses incurred from the failure of Silicon Valley Bank and Signature Bank in March.