May 1, 2023

First Republic Bank FAQ

This FAQ was last updated at 3 pm EST on May 1, 2023. This is an evolving situation, and we will update this FAQ as more information becomes available. 

What happened with First Republic Bank?

On May 1, 2023, First Republic Bank was placed in receivership, and the deposits and substantially all the assets of First Republic Bank were acquired by JPMorgan Chase Bank, N.A. (“JPM”). The FDIC’s announcement is here.

The FDIC has posted additional information for First Republic Bank customers here.

Do depositors of First Republic Bank have access to all their deposits?

Yes, all deposits of First Republic Bank were assumed by JPM, and according to the FDIC’s statement, depositors will have access to all their deposits. In addition, all brokered deposits, excluding Cede & Co deposits, have been assumed by JPM.

First Republic Bank customers should bank at their First Republic Bank branch until they receive notice from JPM that they are able to bank at all JPM branches.

If you are a customer who has a First Republic Bank deposit through a broker, you must contact your broker with any questions.

How can I access my deposits at First Republic Bank?

Depositors should be able to access deposits in the same manner as when they were First Republic Bank customers.

I was a depositor at both First Republic Bank and JPM. What is my deposit insurance coverage?

If you had deposit accounts at both First Republic Bank and JPM, the accounts will be insured separately for at least six months.

I have a mortgage with First Republic Bank. What can I expect?

The mortgage has likely been acquired by JPM, and should continue to be paid in accordance with its terms.

I have student loans from First Republic Bank. What can I expect?

The student loan has likely been acquired by JPM, and should continue to be paid in accordance with its terms.

I’ve heard the FDIC has entered into a loss-share transaction with JPM. Does this transaction affect my loan with First Republic Bank?

The loss-share agreement between JPM and the FDIC should not affect your rights and obligations under your loan agreement with First Republic Bank.

The FDIC and JPM entered into a loss-share arrangement with respect to the First Republic Bank single family, residential, and commercial loans that JPM purchased. In a loss-share arrangement, the FDIC and the bank agree to share the losses and potential recoveries on loans. A loss-share arrangement is one of the tools the FDIC has to enhance the marketability of a failed bank, and its existence should not affect the terms of your loan.

I have a relationship with First Republic Bank’s Wealth Management function. What is the status?

First Republic Bank operated its Wealth Management function through a variety of entities in the bank’s corporate family. Investments held by First Republic Bank, or one of its subsidiaries, on your behalf should not have been treated as assets of the receivership estate and should be available to you. We recommend that you reach out to your bank representative to discuss.

I’m a borrower of First Republic Bank. Can I draw on my committed line of credit or other committed credit facility?

We recommend that you reach out to your bank representative to discuss this.

I am a service provider to First Republic Bank. What is the status of my contract?

When an insured depository institution fails, the FDIC as receiver has the ability to disaffirm or repudiate any contract or lease to which the failed institution was a party. The FDIC must determine whether or not to exercise its repudiation right within a reasonable period of time following its appointment as receiver for the failed institution.

Typically, the FDIC allows an institution that acquires assets and assumes deposit liabilities of the failed depository institution to decide within a certain period of time which service provider contracts and leases the acquirer will assume, following which the FDIC may repudiate the contracts that are not assumed.

In general, when the FDIC repudiates a contract to which a failed institution was a party, damages are limited to actual compensatory damages determined as of the date of the appointment of the FDIC as receiver. Special rules apply with respect to qualified financial contracts.

With respect to leases where the failed institution was lessee, the lessor is generally entitled to contractual rent accruing before the later of the date on which notice of disaffirmance or repudiation was mailed or the disaffirmance or repudiation of the lease became effective, and the lessor also has a claim for unpaid rent due as of the date the FDIC was appointed as receiver. However, the lessor is not entitled to claim damages under any acceleration clause or penalty provision under the lease.

If a service provider has a claim against the FDIC, it is important to file a claim against the receivership estate before the claims bar date, which is the date specified by the FDIC that is not less than 90 days after the FDIC publishes a notice to the closed institution’s creditors.

Allowed claims against the FDIC for repudiated contracts are general unsecured creditor claims against the receivership estate, and such claims rank behind claims of secured creditors, the FDIC’s administrative expenses as receiver, and claims for deposit liabilities (including claims of the FDIC to the extent it is subrogated to depositors as a result of paying deposit insurance or arranging for assumption of deposit liabilities).