JP Morgan to buy First Republic’s assets and assume deposit base By Reuters

(Reuters) – US regulators said on Monday First Republic Bank (NYSE:) was taken over and agreed a deal to sell the bank to JPMorgan Chase & Co (NYSE:), in what is considered the third major US institution to fail in two months.

Most of the First Republic’s assets and all deposits, including the uninsured, will be taken by the regulators, in a statement.

JPMorgan was one of several interested buyers including PNC Financial Services Group (NYSE:) and Citizens Financial (NYSE::) Group Inc, which placed final bids on Sunday in an auction run by US regulators, sources familiar with the matter said over the holiday. weekend.

The California Department of Financial Protection and Innovation announced early Monday that it has acquired First Republic and will serve as the recipient of the Federal Deposit Insurance Corporation (FDIC).

The Corporation estimated in a statement that the cost of the Deposit Insurance Fund would amount to about $13 billion. The final cost will be determined when the FDIC ends the receivership.

The rescue comes less than two months after Silicon Valley Bank and signature bank (OTC:) failed amid flight of deposits from US lenders, forcing the Federal Reserve to intervene with emergency measures to stabilize the markets. These failures came after cryptocurrency-focused Silvergate was voluntarily liquidated.

The FDIC statement stated that the First Republic had total assets of $229.1 billion as of April 13 and $103.9 billion in deposits.

“Our government and others have called on us to step up, and we have done so,” 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 that minimizes costs to the Deposit Insurance Fund.”

The rescue comes less than two months after the failure of Silicon Valley Bank and Signature Bank amid a flight of deposits from US lenders, forcing the Federal Reserve to intervene with emergency measures to stabilize the markets. These failures came after cryptocurrency-focused Silvergate was voluntarily liquidated.

The bank’s 84 failed offices in eight states will reopen as branches of JPMorgan Chase, the statement said, starting Monday.