JPMorgan Chase agreed Monday to assume most of First Republic Bank’s assets, along with its deposits and certain liabilities as part of an intervention after the San Francisco-based lender lost nearly 97% this year.
“Our government invited us and others to step up, and we did,” JPMorgan CEO Jamie Dimon said in a statement. “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.”
California’s Department of Financial Protection and Innovation closed First Republic on Monday and appointed the Federal Deposit Insurance Corp. as receiver, the FDIC said.
The FDIC orchestrated the sale to JPMorgan, which is taking in roughly $173 billion of First Republic’s loans, $30 billion of securities, and $92 billion in deposits.
That $92 billion figure includes the $30 billion that 11 big banks, including JPMorgan, infused into First Republic last month. That portion will be repaid after the deal closes, or will be eliminated in consolidation, JPMorgan said.
As part of the deal, JPMorgan and the FDIC have agreed to share the losses and recoveries on First Republic’s single-family and commercial loans.
First Republic Bank’s 84 locations in an eight-state footprint are set to reopen under the JPMorgan banner Monday, the FDIC said.
The bank failure, which supplants Silicon Valley Bank as the second-largest in U.S. history, is expected to cost the Deposit Insurance Fund $13 billion, the regulator said.
