May 1, 2023 – You have likely seen the news that JPMorgan Chase has purchased First Republic Bank and is planning to integrate its operations into Chase’s as seamlessly as possible. We wanted to provide you with our opinion on what this means both for markets and customers of First Republic.
From a market’s perspective, this is probably the best possible outcome. JPMorgan Chase is the largest bank in the United States and third largest in the world, as such, it brings tremendous stability and institutional resources necessary to successfully integrate First Republic. We believe that markets will move on from the regional banking concerns in the US and focus on other issues, and that this will likely be the end of the 2023 Banking Crisis.
However, we remind ourselves and our clients that there is no way to guarantee that is the case; there could be another shoe to drop, but we believe that risk is low.
From the standpoint of a First Republic Bank customer, which Waypoint and several of its employees are, we also believe this is a good outcome. Based on anecdotal evidence of JPMorgan Chase’s takeover of Washington Mutual during the Global Financial Crisis in 2008, we expect the transition to be a fairly smooth process. In other words, JPMorgan Chase has successfully navigated the transition of a bank takeover before, and while we’re ~15 years from that transition, there’s no reason to think this one won’t be similarly successful.
As a business, we expect our banking needs to carry on pretty much as normal in the short-term. Over the medium to long-term, we anticipate there will be changes to monthly statements, the website, and other logistical matters, but our belief is it will be fairly straightforward. Time will tell. We are not planning to change our primary banking relationship at this time.
As always, we welcome any questions and are happy to connect for a conversation at any time.