JPMorgan Chase & Co has entered into a purchase and assumption agreement to acquire First Republic Bank, the U.S.-based lender facing headwinds since the collapse of Silicon Valley Bank.
First Republic Bank has been closed by the California Department of Financial Protection and Innovation which appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver. FDIC has since entered into a purchase and assumption agreement with JPMorgan Chase, according to a statement released by the FDIC on Monday.
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The FDIC estimates that the transaction will cost the Deposit Insurance Fund about $13 billion, the statement noted.
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As part of the transaction, First Republic Bank's 84 offices ineight states will reopen as branches of JPMorgan Chase Bank on Monday. All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank and will have full access to their deposits.
First Republic Bank held approximately $229.1 billion in total assets and $103.9 billion in total deposits as of April 13, the FDIC noted in its statement. JPMorgan Chase Bank has agreed to purchase substantially all of First Republic Bank's assets
The FDIC and JPMorgan Chase Bank have also entered into a loss-share transaction on single family, residential and commercial loans it purchased of the former First Republic Bank.
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