Dive Brief:
- JPMorgan Chase will close 21 First Republic branches by the end of this year, a bank spokesperson told Reuters on Thursday.
- Roughly 100 employees affected by the closures will be offered six-month transition assignments. After that, they’ll be eligible to apply of other roles at JPMorgan, the wire service reported.
- Locations earmarked for closure “have relatively low transaction volumes and are generally within a short drive from another First Republic office," the JPMorgan spokesperson told Reuters.
Dive Insight:
The branch closures, covering 25% of First Republic’s 84 locations, answer a question that has gnawed at employees and observers since JPMorgan acquired the failed San Francisco-based lender last month in a sale orchestrated by the Federal Deposit Insurance Corp.
Most of First Republic’s full-service branches sit within a mile of existing JPMorgan Chase locations, according to FDIC data from late April.
About 60% of First Republic branches are a five-minute walk from a Chase location, and 16 are within 0.1 mile, Bloomberg reported. More than a dozen have five Chase branches within a half-mile, according to the wire service.
In a call with analysts on the day the acquisition by JPMorgan was announced, the bank’s CFO, Jeremy Barnum, said some First Republic locations would be converted into wealth centers.
“They are a critical part of First Republic’s well-known value proposition and outstanding customer service and we are committed to treating them with respect, care and transparency,” Barnum said at the time, adding there would be “many opportunities for career redeployment,” according to Bloomberg.
JPMorgan has roughly 13,000 open positions, Reuters reported Thursday. But often, in economic downturns, big banks opt to close those roles (unfilled) before reducing headcount outright.
JPMorgan notified 1,000 First Republic employees last week that they would not receive work offers from the acquiring bank. Those employees will receive 60 days of pay and benefits, as well as packages that include lump-sum payments, according to the Financial Times. Other First Republic employees have been offered temporary roles that span three months to a year, Reuters reported.
