Failed bank First Republic is bought by JPMorgan Chase

A worker cleans the outside of a First Republic bank in San Francisco.

Justin Sullivan/Getty Images

JPMorgan Chase, one of the biggest banks in the U.S., is buying the troubled First Republic Bank’s deposits, a “substantial amount of their assets and certain liabilities,” JPMorgan Chase said in a press release Monday.

The California Department of Financial Protection and Innovation announced early Monday that the Federal Deposit Insurance Corp had taken possession of First Republic.

This marks the third time the U.S. government has taken control of a U.S. lender this year.

First Republic is the third — and biggest — U.S. bank to fail this year. In March, federal regulators swept in to protect customers of Silicon Valley Bank and Signature Bank. Citing potential risk to the broader financial system, they took unprecedented action to insure all deposits at the two banks — even deposits that exceeded the FDIC’s $250,000 threshold for insurance.

The government protected bank customers, but it didn’t bail out shareholders who were wiped out.

After Silicon Valley Bank and Signature Bank were taken into receivership, the FDIC solicited bids to buy the two lenders. A subsidiary of New York Community Bank bought most of Signature Bank, and First Citizens Bank acquired Silicon Valley Bank.

More bank runs didn’t come to pass, but First Republic was the exception

The twin failures of Silicon Valley Bank and Signature Bank threatened to spark more bank runs. But that hasn’t happened, according to other lenders’ recent earnings reports. By and large, deposits have stabilized.

“That fear, that mass exodus that people were concerned about just didn’t happen,” says Jared Shaw, a bank analyst at…