First Republic Bank took a beating after the closure of Silicon Valley Bank and Signature Bank, but now the nation’s largest banks have united to save it in a $30 billion deal. File Photo courtesy of Aquintero82/Wikimedia Commons
March 16 (UPI) — First Republic Bank, which took a beating after the closure of Silicon Valley Bank and Signature Bank, will be saved in a $30 billion deal with 11 of the largest banks in the United States.
Bank of America, Citigroup, JPMorgan Chase and Wells Fargo announced Thursday that each would make a $5 billion uninsured deposit into First Republic Bank.
Joining them, Goldman Sachs and Morgan Stanley will each make an uninsured deposit of $2.5 billion, while BNY-Mellon, PNC Bank, State Street, Truist and U.S. Bank will each make a $1 billion deposit.
“This action by America’s largest banks reflects their confidence in First Republic and in banks of all sizes, and it demonstrates their overall commitment to helping banks serve their customers and communities,” the banks said in the statement.
“Regional, midsize and small banks are critical to the health and functioning of our financial system.”
The collapses of Silicon Valley Bank and Signature Bank marked the second — and third-largest bank failures in United States history — which led customers to move money from smaller and regional banks into larger national banks.
The larger banks also tried to shore up support for midsize and community banks, adding that they “do an extraordinary job” in serving the needs of their customers.
“The banking system has strong credit, plenty of liquidity, strong capital and strong profitability. Recent events did nothing to change this,” the statement reads.
According to The Hill, First Republic’s stock fell 66% over the last week and about 68% of deposits with the bank are uninsured.
The news came as Treasury Secretary Janet Yellen also expressed confidence in the nation’s banking system in remarks to the Senate Finance Committee.
Yellen offered assurances that billions in savings and deposits at Silicon Valley Bank and Signature Bank were safe from any loss, as the government has agreed to step in and bail out depositors.
She was joined by Federal Reserve Board Chair Jerome Powell, FDIC Chairman Martin Gruenberg and acting Comptroller of the Currency Michael Hsu in praising the banks for their move.
“Today, 11 banks announced $30 billion in deposits into First Republic Bank,” the statement reads. “This show of support by a group of large banks is most welcome, and demonstrates the resilience of the banking system.”
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