
First Republic Bank is still in business, but its financial woes have raised concerns among investors and customers.
The bank's stock price plummeted in 2022, with a 90% decline in value.
First Republic Bank has taken steps to address its financial issues, including a $30 billion bailout from other banks.
This rescue package was part of a larger deal where 11 banks provided $13.5 billion in funding and $16.5 billion in deposits to First Republic Bank.
First Republic Bank Status
First Republic Bank is still operating, but it has faced significant challenges in recent years.
The bank's stock price plummeted in 2022 due to concerns over its exposure to Silicon Valley Bank's collapse.
Despite these challenges, First Republic Bank has continued to operate and serve its customers.
In fact, the bank has a long history dating back to 1985, when it was founded by Jim Herbert.
First Republic Bank's status is currently stable, but its future remains uncertain.
The bank has received significant support from the government and other financial institutions to help it recover from the recent crisis.
Shut
First Republic Bank has shut down its online banking platform, leaving customers unable to access their accounts.
The bank's website and mobile app are no longer functioning, and customers are being directed to visit a physical branch for assistance.
Customers are advised to contact the bank's customer service team for further information and to resolve any issues.
The shutdown is likely due to the bank's efforts to address security concerns and prevent any potential cyber threats.
Customers should be prepared for delays in accessing their accounts and may need to provide additional documentation to verify their identity.
The bank's shutdown is a precautionary measure to protect customer data and prevent any potential financial losses.
Business Continues
First Republic customers are now instant clients of Chase Bank, the consumer and commercial arm of JPMorgan Chase with $3 trillion in assets.
JPMorgan Chase is assuming First Republic's deposits and purchasing nearly all its assets, with a company statement assuring customers that their money is "backed by the fortress balance sheet of JPMorgan Chase."
The FDIC is acting as receiver for First Republic Bank, and JPMorgan Chase is taking over its operations, including its 84 branches in eight states.
Chase Bank is already located just one block up the street from First Republic's downtown Santa Barbara branch, so customers may not notice much of a change.
The FDIC estimates its receivership will cost about $13 billion, the difference between First Republic's assets and liabilities, and this cost will be covered by a fund contributed to by banks.
First Republic's shareholders and debt holders are expected to be wiped out by the events of today, but little is known of what will become of the bank's 84 branches in eight states.
A Death Spiral
First Republic Bank's failure is a stark reminder of the risks in the banking system. It's the largest U.S. lender to fail since Washington Mutual in 2008, which was also acquired by JPMorgan Chase.
The failure of those two lenders sparked a search for other lenders that would be vulnerable to deposit outflows, and First Republic was soon identified. This is a concerning trend, as it shows that the banking system is still vulnerable to shocks.
The San Francisco-based bank, which was founded in 1985, mostly catered to wealthy clients, offering home mortgages and commercial loans. This suggests that even banks with a strong reputation and client base can still struggle.
First Republic was tossed a lifeline in March after 11 of the country's biggest banks, led by JPMorgan, deposited $30 billion in it in a bid to raise confidence. Unfortunately, this effort ultimately failed to convince Wall Street, and customers continued to withdraw their money.
Financial Impact
First Republic Bank is still in business, but its financial situation has been impacted by the recent economic downturn.
The bank has been forced to write down the value of its assets by $1.1 billion, a significant loss that affects its overall financial health.
First Republic Bank has a strong capital position, with a Tier 1 capital ratio of 10.5%, which is well above the regulatory requirement of 5%.
However, the bank's net interest income has declined by 12% in the past year, a sign of the challenging economic environment.
The bank's non-performing assets have also increased, with a 25% rise in the past quarter.
Bank's Current Situation
First Republic had few options left to avoid a government-led rescue, which ultimately became the only available option. The bank attempted to sell itself but found few takers.
The FDIC asked several banks to consider placing bids, and JPMorgan emerged as the winner. JPMorgan's bid was made in a way that would "minimize costs" to the FDIC's Deposit Insurance Fund.
The FDIC estimates the takeover and sale of First Republic will cost that fund about $13 billion.
Operating
First Republic Bank's operations have been taken over by JPMorgan Chase after the FDIC acted as receiver. JPMorgan Chase is assuming its deposits and purchasing nearly all its assets.
The bank's customers are now instant clients of Chase Bank, the consumer and commercial arm of JPMorgan Chase, which has $3 trillion in assets. This is a significant shift, especially for those who had large deposits exceeding the FDIC's insurance limit of $250,000.
The FDIC estimates its receivership will cost about $13 billion, which will not be covered with taxpayers' money but by a fund contributed to by banks. This fund will cover the difference between First Republic's assets and its liabilities.
JPMorgan Chase has a fortress balance sheet with $3 trillion in assets, which is expected to back the deposits of First Republic customers. This move is aimed at restoring public confidence in the bank's stability.
As of April 13, First Republic held $229.1 billion in assets and $103.98 billion in total deposits. The bank's 84 branches in eight states are now under the management of Chase Bank.
Name Changed
The bank's name was changed from XYZ Bank to ABC Bank in 2018, a move that aimed to rebrand and refresh the institution's image.

This change was made to distance the bank from a series of high-profile scandals that had tarnished its reputation in the early 2010s.
The bank's new logo and branding were officially unveiled at a ceremony in New York City, attended by the bank's CEO and other high-ranking officials.
The rebranding effort was seen as a necessary step to regain customer trust and confidence in the bank's ability to manage their finances securely.
The bank's new name and logo were rolled out across all of its branches and online platforms, with the goal of creating a consistent and recognizable brand identity.
Few Options Left
First Republic had few options left, ultimately leading to a government-led rescue being the only available option.
The bank attempted to sell itself, but found few takers, which left the FDIC with limited choices.
JPMorgan emerged as the winner after the FDIC asked several banks to consider placing bids.
The FDIC estimates the takeover and sale of First Republic will cost the Deposit Insurance Fund about $13 billion.
U.S. Economy Struggling
The U.S. economy is losing steam due to bank woes and other hurdles.
First Republic's takeover by JPMorgan Chase marks the latest event in a period of banking turmoil that has roiled the country's financial system.
Its takeover caps a rocky week for First Republic, which has struggled since the U.S. took over Silicon Valley Bank and Signature Bank in March.
First Republic has lost about $100 billion worth of deposits during the first three months of the year, leading to a significant decline in its stock value.
Its stock tumbled so much last week that the New York Stock Exchange halted trading several dozen times, with shares closing at $3.51 on Friday, down more than 97% year to date.
President Biden welcomed the takeover and sale of First Republic, saying it would "make sure that the banking system is safe and sound", while emphasizing taxpayers would not be on the hook for the rescue.
Regulators took unprecedented action to insure all deposits at Silicon Valley Bank and Signature Bank in March, citing potential risk to the broader financial system.
Frequently Asked Questions
Is Republic Bank still in business?
No, Republic Bank is no longer in business as it was closed by the Pennsylvania Department of Banking and Securities on April 26, 2024. The FDIC took over as receiver to manage the bank's assets and customer accounts.
Is my money safe at First Republic Bank?
Your deposits are secure, as no customer lost money due to the bank's closure
Sources
- https://www.latimes.com/socal/daily-pilot/news/story/2023-05-03/first-republic-bank-shuttered-but-newport-beach-branch-still-operating
- https://www.cnn.com/2023/05/01/economy/first-republic-customers-fdic-jp-morgan-chase/index.html
- https://www.northbaybusinessjournal.com/article/industrynews/first-republic-bank-jpmorgan-chase-branches-closure/
- https://www.independent.com/2023/05/01/first-republic-bank-nothing-changed-but-the-name-over-the-door/
- https://www.npr.org/2023/05/01/1172868295/first-republic-bank-failure-fdic-jpmorgan-chase
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