JP Morgan to buy First Republic's assets, deposits including uninsured ones
The California Department of Financial Protection and Innovation announced early on Monday it had taken possession of First Republic and the Federal Deposit Insurance Corporation (FDIC) would act as its receiver
First Republic Bank has been sold to JP Morgan Chase & Co while US regulators announced on Monday that it had seized the bank.The Wall Street major bank will take most of First Republic's assets and all the deposits, including uninsured ones, the regulators said in a statement.JPMorgan was one of the most interested buyers among others like PNC Financial Services Group and Citizens Financial Group Inc. All of these banks submitted their final bids on Sunday in an auction being run by US regulators, sources familiar with the matter said over the weekend.The California Department of Financial Protection and Innovation announced early on Monday it had taken possession of First Republic and the Federal Deposit Insurance Corporation (FDIC) would act as its receiver.
The FDIC estimated in a statement that the cost to the Deposit Insurance Fund would be about $13 billion. The final cost will be determined when the FDIC terminates the receivership.
The rescue bid comes two months after Silicon Valley Bank and Signature Bank failed amid a deposit flight from US lenders, forcing the Federal Reserve to step in with emergency measures to stabilize markets. Those failures came after crypto-focused Silvergate voluntarily liquidated.
More from BusinessFirst Republic had total assets of $229.1 billion as of April 13 and $103.9 billion worth of deposits, the FDIC statement said.
"Our government invited us and others to step up, and we did," said Jamie Dimon, Chairman and CEO of JPMorgan Chase. “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.”
With inputs from agencies
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