First Republic Bank suffered a major blow when wealthy clients began pulling their deposits, leading to its downfall. This focused the US regional banking crisis in late March. The bank, which attracted high net-worth customers with preferential rates on mortgages and loans, had a high level of uninsured deposits, making it vulnerable. Furthermore, its loan book and investment portfolio became less valuable as the US Federal Reserve bank raised interest rates, limiting its chances of a capital raise. Eventually, First Republic’s mounting losses and loan books comprised mostly of single-family residential mortgage loans led to its acquisition by JPMorgan Chase & Co for $10.6 billion. JPMorgan’s acquisition will see First Republic’s 84 offices in eight US states reopen as branches of the giant financial group.
