First Republic Is Sold: What to Know (2024)

The federal government seized First Republic Bank and sold it to JPMorgan Chase on Monday, ending the lender’s six-week-long free fall and reassuring depositors that their money is safe.

First Republic Bank’s failure had much the same roots as the collapses of Silicon Valley Bank and Signature Bank — spooked depositors and investors pulling their money and selling their shares in droves.

Here are some answers to questions you may have about what comes next for the bank and for your money.

Why was First Republic seized?

In the turmoil set off by Silicon Valley Bank’s collapse, First Republic was initially bailed out by the private sector. In March, it received $30 billion in deposits from 11 of the country’s largest banks, including JPMorgan, Morgan Stanley and Wells Fargo.

But First Republic struggled nonetheless, and its condition had been deteriorating for weeks. It had seen a large outflow of funds as depositors rushed to pull their money and park it in institutions they viewed as safer.

Its shares had been pummeled — they dropped 75 percent just last week — as investors feared that it would fail. That drop came after the company released earnings results saying that it had borrowed heavily from the Federal Reserve and government-backed lending groups, the financial industry’s lenders of last resort.