The biggest bank in America announced huge profits Friday after previously striking a deal with federal regulators to buy the failed First Republic Bank.
JPMorgan Chase reported $14.5 billion in net income for the second quarter of 2023, which is up 67% compared to the previous quarter and 40% excluding First Republic, according to JPMorgan’s earnings release. First Republic failed in May after a bank run, requiring federal regulators to seize the bank and have other large banks bid on its sale, leading JPMorgan to acquire the bank and maintain funds for depositors. (RELATED: Biggest Bank In The US Scoops Up Execs From Failed Climate Bank)
The banking giant reported a net income of $14.5 billion for the quarter, with JPMorgan attributing roughly one-third of the increase to the acquisition of First Republic, according to the JPMorgan earnings report. Net revenue was up 37% at $42.4 billion, with First Republic being responsible for 13% of that increase.
“Nearly all of the earnings increase was unrelated to First Republic. As you can see clearly broken out in our earnings report, our record earnings excluded First Republic,” a spokesperson for JPMorgan said to the Daily Caller News Foundation.
JPMorgan revenue soared to a record in the second quarter, boosted by the Fed’s rate hikes and its acquisition of First Republic Bank@sonalibasak breaks down the numbers https://t.co/laOHKa4qZL pic.twitter.com/bmX9deYvzo
— Bloomberg TV (@BloombergTV) July 14, 2023
Federal regulators reached a deal with JPMorgan in May to have the bank acquire First Republic’s assets, taking over $92 billion in deposits, $173 billion in loans and $30 billion in securities. The Office of the Comptroller of the Currency gave JPMorgan special permission to take over First Republic due to rules prohibiting banks that hold over 10% of U.S. deposits from purchasing competitors.
First Republic was formally the 14th-largest commercial bank in the country until it reported losing over $100 billion in deposits in a bank run and was sold to JPMorgan after being overtaken by federal regulators. The bank’s 84 branches across eight states were reopened as JPMorgan Chase following the deal where depositors gained access to their deposits.
Some experts, like Dr. Thomas Hogan, senior research faculty at the American Institute for Economic Research and former chief economist for the Senate Banking Committee, believe that the acquisition could be dangerous to the financial industry.
“The purchase of First Republic Bank by JPMorgan Chase increases concentration in the banking industry and further perpetuates the bank’s too-big-to-fail status,” Hogan said previously in statements to the DCNF.
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