Watch: Breaking down First Republic’s seizure and sale to JPMorgan

“It’s not a complicated model,” First Republic founder Jim Herbert told investors late last year. “And it works in all environments.”

That is, until it doesn’t.

The FDIC on Monday seized First Republic Bank and sold its assets to JPMorgan Chase after a bidding process that reportedly also included Bank of America and PNC Financial Services Group. 

The second-largest bank failure in U.S. history could have a sizable impact on real estate, including the housing market. Nearly 60 percent of First Republic’s loans were single-family mortgages, according to the firm’s 2022 annual report.

JPMorgan is buying about $173 billion of the bank’s loans — presumably including its commercial real estate loan book — and $30 billion in securities.

So what could it all mean for the industry? The Real Deal’s Senior Vice President of content, Hiten Samtani, breaks it all down in the video above.

Further, Samtani looks back at Signature Bank, which was seized by regulators in March. Like First Republic, it was also known as a relationship-driven institution with a special status in the real estate industry.

The similarities of these failed institutions raise further questions about the future: Will a behemoth like JPMorgan, with arms that extend across several sectors, “get” real estate the same way banks that cater to the sector do? Will it be as willing to go the extra mile when it comes to issuing construction loans, refinancings and workouts?