Financial regulators have shut down First Republic Bank, a midsized financial institution that counts startups and venture capital firms among its clients.

The Federal Deposit Insurance Corp., or FDIC, announced the move today. The FDIC is a government agency responsible for addressing bank failures and insuring client deposits against losses. The agency stated that JPMorgan Chase & Co. has agreed to buy most of First Republic’s assets.

Prior to its closure, First Republic operated 84 branches in eight states. It provided financial services to both individuals and businesses. It reportedly maintained a dedicated technology group that worked with early-stage startups, as well as venture capital funds and private equity firms.

The company’s woes began following the collapse of another midsized financial institution, Silicon Valley Bank, earlier this year. SVB’s implosion led concerned customers to withdraw their funds from midsized banks en masse. Last week, First Republic disclosed that its clients had withdrawn more than $100 billion during the first quarter.

Reports emerged soon thereafter that the company could be closed by the FDIC. In the days leading up to the move, the agency invited other banks to submit acquisition offers for First Republic. JPMorgan’s winning bid is reportedly one of several that the FDIC has received.

“Our government invited us and others to step up, and we did,” said JPMorgan Chase Chief Executive Officer Jamie Dimon. “Our financial strength, capabilities and business model allowed us to develop a bid to execute the transaction in a way to minimize costs to the Deposit Insurance Fund.”

JPMorgan will assume $92 billion in deposits that First Republic managed for customers, as well as more than $200 billion worth of assets. Those assets include $173 billion in loans and $30 billion worth of securities. However, JPMorgan is not taking on First Republic’s corporate debt or preferred stock.

The FDIC has signed a loss-share agreement with the company in connection with the acquisition. The agency will share any losses that JPMorgan may incur on single-family, residential and commercial loans issued by First Republic. The deal is expected to result in a $13 billion charge to FDIC’s Deposit Insurance Fund, which the agency uses to protect bank deposits against losses.

The FDIC will also provide $50 billion in financing to support the transaction. Earlier this year, amid concerns over First Republic’s balance sheet, JPMorgan and several other banks injected $30 billion into the company. JPMorgan plans to reimburse the other banks in the group for the $25 billion they contributed.

The FDIC said First Republic customers will have full access to their deposits. The bank’s 84 branches reopened today under the management of JPMorgan. In the future, JPMorgan reportedly plans to turn some First Republic branches into wealth management centers.

Photo: First Republic Bank