First Republic Bank facts for kids
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The building housing the headquarters of First Republic Bank, in San Francisco's Financial District (2022)
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| Public company | |
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| ISIN | ISIN: [https://isin.toolforge.org/?language=en&isin=US33616C1009 US33616C1009] |
| Industry | Financial services |
| Successors | JPMorgan Chase (acquisition of most First Republic Bank assets) |
| Founded | February 5, 1985 |
| Defunct | May 1, 2023 |
| Headquarters | San Francisco, California, U.S. |
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Areas served
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Key people
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| Products | Consumer banking Commercial banking Wealth management Mortgages |
| Revenue |  US$6.75 billion (2022) |
| US$1.67 billion (2022) |
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| Total assets | US$212.6 billion (2022) |
| Total equity | US$17.45 billion (2022) |
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Number of employees
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7,213 (2022) |
| Parent | JPMorgan Chase |
| Subsidiaries | Gradifi |
| Capital ratio | Tier 1 8.51% (Q4 2022) |
First Republic Bank was a bank based in San Francisco, California. It offered services like regular banking and helping people manage their money. The bank mostly served wealthy individuals. It had 93 offices in 11 different states. These states included New York, California, Massachusetts, and Florida. In May 2023, the bank faced problems during a time of banking trouble in the U.S. The FDIC, which protects bank customers, closed First Republic. Its assets were then sold to another big bank, JPMorgan Chase.
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About First Republic Bank
First Republic Bank was founded in February 1985 by Jim Herbert. It started as a company that offered loans in California. In August 1986, the bank became a public company. This means its shares could be bought and sold on the stock market. People could buy shares for $10 each on the Nasdaq stock exchange.
In 1993, First Republic bought another company called Silver State Thrift in Nevada. Later, in 1997, First Republic changed its Nevada company into a state-chartered bank. This allowed it to offer more banking services.
Growing Through Acquisitions
Over the years, First Republic Bank grew by buying other companies. In 1998, it acquired Trainer Worthman & Co. In 2001, it bought Starbuck, Tisdale & Associates. The bank also bought investment firms like Froley, Revy Investment Company Inc. in 2000 and 2002.
In 2004, First Republic acquired a part of Bay Isle Financial. In 2006, it bought Bank of Walnut Creek. These purchases helped the bank expand its services and reach more customers.
Changes in Ownership
In September 2007, a large financial company called Merrill Lynch bought First Republic for $1.8 billion. However, Merrill Lynch was later acquired by Bank of America.
In July 2010, Bank of America sold First Republic Bank. A group of private investors bought it for about $1 billion. This group included companies like Colony Capital and General Atlantic. The bank's chairman, James Herbert, was also part of this group. In December 2010, First Republic Bank became a public company again. It raised $280.5 million by selling its shares to the public.
More Growth and New Services
First Republic continued to grow after becoming public again. In November 2012, it acquired Luminous Capital. This was a company that managed money for wealthy clients. In 2015, it acquired Constellation Wealth Partners.
In December 2016, the bank acquired Gradifi. This was a new company that helped employees pay off their student loans. This showed the bank was looking into new ways to help its clients. In 2018, the bank also invested in CommonBond, another student loan company.
Why First Republic Bank Failed
In March 2023, there were some problems in the U.S. banking system. This led to a crisis for several banks. Financial rating companies like Fitch Ratings and S&P Global Ratings lowered First Republic's credit rating. They were worried because many of the bank's customers were wealthy. These customers had large deposits that were not fully protected by the government.
This meant that if the bank had problems, these wealthy customers might quickly take their money out. This is called a bank run. First Republic also had lent out more money than it had in deposits. To help the bank, eleven other big American banks deposited $30 billion into First Republic. This was meant to show support and prevent a bank run.
However, the bank's problems continued. Its stock price kept falling. On March 19, S&P lowered the bank's credit rating even more. They said the bank faced big challenges with its money and business. The bank had a capital shortfall, meaning it didn't have enough money to cover its potential losses.
In its next financial report, First Republic announced that customers had withdrawn $104.5 billion in deposits. This was a huge amount of money. Most of these withdrawals were from wealthy clients whose deposits were not insured by the FDIC. The FDIC only protects deposits up to $250,000.
The bank tried to find ways to fix its problems. It planned to sell some of its investments, even if it meant losing money. It also started laying off employees. Many financial advisors also began to leave the bank.
On April 28, 2023, it was announced that the FDIC was thinking about taking over the bank. This caused First Republic's stock price to drop even more. The next day, the FDIC asked other banks to bid on First Republic. On May 1, the FDIC officially closed First Republic Bank. Its assets were then sold to JPMorgan Chase for $10.6 billion. This marked the end of First Republic Bank.
Images for kids
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First Republic Bank logo
