San Francisco-based First Republic Bank is the third midsize bank to fail in two months.
A sign for a First Republic Bank location is shown in San Francisco, April 25, 2023.
The Federal Deposit Insurance Corporation said early Monday that First Republic Bank’s 84 branches in eight states will reopen as branches of JPMorgan Chase Bank and depositors will have full access to all of their deposits.Regulators worked through the weekend to find a way forward before U.S. stock markets opened. Markets in many parts of the world were closed for May 1 holidays Monday. The two markets in Asia that were open, in Tokyo and Sydney, rose.
Before Silicon Valley Bank failed, First Republic had a banking franchise that was the envy of most of the industry. Its clients — mostly the rich and powerful — rarely defaulted on their loans. The bank has made much of its money making low-cost loans to the wealthy, which reportedly included Meta Platforms CEO Mark Zuckerberg.
Those fears were crystalized in the bank’s recent quarterly results. First Republic experienced a modern day bank run as customers rushed to pull out more than $100 billion in deposits following the failure of Silicon Valley and Signature Bank. Unlike bank runs throughout history, First Republic’s demise was fueled by the speed of social media and digital withdrawals that can be made in seconds from a cell phone.
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