Q2 Holdings Discloses That First Republic Was a Customer

Q2 Holdings has disclosed that First Republic Bank was one of its customers.

First Republic Bank — which was seized by the Federal Deposit Insurance Corp. (FDIC) and acquired by JPMorgan Chase over the weekend — accounted for 2.5% of Q2 Holdings’ total revenue for 2022, the provider of cloud-based digital solutions for financial services providers said in a Monday (May 1) filing with the Securities and Exchange Commission (SEC).

“Q2 is actively monitoring the financial services and broader financial markets and assessing the impacts that events may have on Q2’s customers, third-party relationships and operations,” the company said in the filing. “Q2 has a diversified customer base with no individual customer representing more than 4% of total revenue, and Q2’s top 20 customers collectively accounting for less than 25% of its total revenue, each for the year ended December 31, 2022.”

As PYMNTS reported Monday, regulators seized control of First Republic Bank and sold it to JPMorgan Chase after several weeks of uncertainty surrounding the future of First Republic.

When the banking crisis began in March with the failures of Silicon Valley Bank and Signature Bank, First Republic found itself downgraded by ratings agencies due to its large percentage of uninsured deposits, held by its wealthy customer base.

Many of those customers fled to larger banks during the crisis, taking more than $100 billion in deposits with them during the first quarter, and news of this “unprecedented” level of withdrawals left the bank on even shakier ground.

Its collapse marks the third bank failure to happen in the last eight weeks and was the second largest in U.S. history.

Q2 Holdings’ announcement of its relationship with First Republic comes about 11 months after it was reported that the FinTech firm had contemplated acquisition offers and decided to hold off on selling due to bids coming in lower than expected.

More recently, in August 2022, the firm partnered with Rocket Mortgage to offer a digital home loan application process to banks and credit unions.

The partnership is meant to solve the challenge faced by financial institutions that want to advance their digital strategies and offer new conveniences to customers but are wary of the cost of implementation or subscriptions.