First Republic Bank
| First Republic Bank | |
| Founded | 1985 |
|---|---|
| Key People | James H. Herbert II, Founder and Executive Chairman; Michael J. Roffler, CEO and President |
First Republic Bank was the second-largest bank by assets to fail in U.S. history. It was a commercial bank that provided wealth management services to primarily high-net-worth individuals. On Monday, May 1, 2023, U.S. regulators seized the bank and sold it to JPMorgan Chase.[1] First Republic's stock stopped trading as of May 1. Before it stopped trading, the bank had a market valuation of about $660 million, according to FactSet.[2]
In the aftermath of the collapse of Silicon Valley Bank and Signature Bank, the troubled First Republic Bank was initially bailed out by the private sector, receiving $30 billion in deposits in March 2023 from 11 of the country’s largest banks, including JPMorgan, Morgan Stanley and Wells Fargo. However, First Republic had been deteriorating for weeks, with depositors pulling out their money to put it in what they viewed as safer banks. First Republic's shares sank after it released earnings results saying that it had borrowed heavily from the Federal Reserve and government-backed lending groups.[3]
The California Department of Financial Protection and Innovation took over First Republic after determining that the bank was conducting its business in an "unsound manner." It then appointed the Federal Deposit Insurance Corporation (FDIC) as the bank's receiver. Like Silicon Valley Bank, a significant share of First Republic's deposits were uninsured because they exceeded the $250,000 insurance protection offered by the FDIC.[4]
History[edit]
First Republic was founded in 1985 by James Herbert with fewer than 10 employees and only one office. It was located at 201 Pine Street in San Francisco. It was one of the smallest banks in the U.S. out of about 14,000, with a value of $8.8 million. By July 2020, its 35th anniversary, First Republic had more than 5,000 employees and more than 80 offices in seven states. It eventually became the 14th largest U.S. bank with an enterprise value of more than $19 billion.[5]
The bank went public toward the end of 2010, and shares were priced at about $27.[6]
Products and Services[edit]
Key People[edit]
- James H. Herbert, II - Founder and Executive Chairman
- Michael J. Roffler - CEO, President and Board Member
- Susie Cranston - Executive Vice President and Chief Operating Officer
References[edit]
- ↑ First Republic Bank Is Seized, Sold to JPMorgan in Second-Largest U.S. Bank Failure. The Wall Street Journal.
- ↑ What happens to First Republic Bank's stock and deposits now?. CBS News.
- ↑ First Republic Is Sold: What to Know. The New York Times.
- ↑ What happens to First Republic Bank's stock and deposits now?. CBS News.
- ↑ Our Story. First Republic Bank.
- ↑ First Republic is suddenly in big trouble—but the structural issues date back when CEO Mike Roffler was CFO. Fortune.