Regulators seized troubled First Republic Bank early Monday, making it the second-largest bank failure in U.S. history, and promptly sold all of its deposits and most of its assets to JPMorgan Chase in a bid to end the turmoil that has raised questions about the health of the U.S. banking system. It's the third midsize bank to fail in less than two months. The only larger bank failure in U.S. history was Washington Mutual, which collapsed at the height of the 2008 financial crisis and was also taken over by JPMorgan in a similar government-orchestrated deal. Once the envy of the banking industry, First Republic has struggled since the March collapses of Silicon Valley Bank and Signature Bank. Investors and depositors had grown increasingly worried about the bank's large amount of uninsured deposits _ that is, deposits above the $250,000 limit set by the FDIC _ and exposure to low interest rate loans. A coalition of a dozen banks pulled together a $30 billion funding package for First Republic last month that, for awhile, seemed to stanch the bleeding out of the bank. But it became increasingly clear that First Republic was on borrowed time: it needed to find a buyer, or find new forms of funding to replace the deposits that were exiting the bank. First Republic planned to sell off unprofitable assets, including low interest mortgages that it provided to wealthy clients. It also announced plans to lay off up to a quarter of its workforce, which totaled about 7,200 employees in late 2022. But it was seen as too little, too late, by analysts.
Regulators seized troubled First Republic Bank early Monday, making it the second-largest bank failure in U.S. history, and promptly sold all of its deposits and most of its assets to JPMorgan Chase.
