In the early morning hours of Monday, May 1, 2023, the California Department of Financial Protection and Innovation closed First Republic Bank (“FRB”) and appointed the Federal Deposit Insurance Corporation (“FDIC”) receiver for FRB. JPMorgan Chase Bank, N.A. (“Chase”) won a competitive, non-public auction to acquire FRB.

Chase is entering a purchase and assumption agreement with the FDIC to buy all of FRB’s deposits and “substantially all” of FRB’s assets. The purchase and assumption agreement between the FDIC and Chase will be made publicly available in the near term.

All FRB deposits have been assumed by Chase and depositors may access all of their funds immediately from Chase (as long as the deposits are not pledged as collateral for loans). All of FRB’s branches are opening as usual today as branches of Chase. All direct deposits will continue as usual. The routing number and account numbers will remain the same until Chase provides written notification.

All transferred deposits will be separately insured from accounts already held at Chase for at least six months. Chase will honor checks drawn on FRB that did not clear before closure.

Included in the FRB assets purchased by Chase are all of FRB’s “qualified financial contracts,” which includes securities contracts, commodity contracts, forward contracts, repurchase agreements, swap agreements, and any similar agreements. Chase is not acquiring FRB’s subordinated debt or common stock.

FRB customers should continue to make payments, including escrow payments, as usual. Loans continue to be enforceable according to their original terms. The FDIC advises customers with lines of credit or loans in process to contact their loan officer. Some customers may receive notice that the FDIC has retained their loan and should contact the FDIC’s website for additional information.

Unlike, for instance, Silicon Valley Bank, FRB is not owned by a holding company – FRB itself is the top-level company in the organization. Accordingly, FRB owns all of the entities in the structure, including First Republic Investment Management (an investment adviser registered with the Securities and Exchange Commission (“SEC”)) and First Republic Securities (an SEC-registered broker-dealer). These entities are wholly owned subsidiaries of FRB, not divisions of the bank, and it is unclear at the moment whether the subsidiaries are included in the sale to Chase.

FRB has replaced Silicon Valley Bank as the second largest bank to fail in U.S. history.