Bank Failures Feed the Hungry

With $233 billion in assets, San Francisco-based First Republic was feeling itself as Q1 2023 closed. The future was bright indeed.

Then Silicon Valley Bank, a peer bank, went under following a good old-fashioned run. First Republic would be next. The bank lost $100 billion in deposits in March alone, followed by a total collapse of First Republic’s market value, with its share price falling by 89% in days.

Animal spirits were stirring: “Run, baby, run.”

The torment continued throughout April. Finally, on the first of May, the faiCalifornia Department of Financial Protection and Innovation closed the failed bank and promptly handed over control to the Federal Deposit Insurance Corporation (FDIC).

FDIC had a clear charge: find First Republic a new home – fast.

The government agency auctioned a still-fresh carcass to the street. Several bidders emerged. JPMorgan won, naturally, because Jamie Dimon has become a peerless guru on organizational strategy and corporate growth.

The result is that the world’s largest – and most ravenous – bank will add hundreds of billions to its book of business.

JPMorgan will assume all of First Republic’s $92 billion in deposits. It is also buying most of the bank’s assets, including about $173 billion in loans and $30 billion in securities. At the end of the first quarter, JPMorgan had $3.7 trillion in assets and $2.4 trillion in deposits.

Three out of four

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