First Republic became another American bank to fail this year as all attempts to resuscitate the ailing platform fell short. The California Department of Financial Protection and Innovation (DFPI) has now taken possession of the First Republic Bank.
The Federal Deposit Insurance Corporation (FDIC) was appointed as the receiver by the Californian financial regulator and even JPMorgan’s bid for the bank’s assets.
The financial services company, in a press release, confirmed the acquisition of all of First Republic’s deposits. These include approximately $173 billion of loans and $30 billion of securities, in addition to the assumption of nearly $92 billion of deposits, out of which $30 billion of large bank deposits. The latter will be repaid post-close or eliminated in consolidation.
As part of the deal, FDIC revealed that 84 offices of the First Republic in eight states will reopen as branches of JPMorgan Chase Bank, National Association.
All depositors of the lender will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits.
Commenting on the takeover, Jamie Dimon, Chairman and CEO of JPMorgan Chase, said,
“Our government invited us and others to step up, and we did. 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. This acquisition modestly benefits our company overall, it is accretive to shareholders, it helps further advance our wealth strategy, and it is complementary to our existing franchise.”
JPMorgan said it expects to recognize an upfront, one-time, post-tax gain of around $2.6 billion, which does not reflect the $2.0 billion of post-tax restructuring costs anticipated over the next 18 months.
The development comes a month after Big Banks’ – a consortium of 11 major US banks – injected $30 billion to stabilize First Republic.
The post JPMorgan to Acquire First Republic Bank After Californian Financial Regulator’s Seizure appeared first on CryptoPotato.
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