Regulators took possession of First Republic on Monday, resulting in the third failure of an American bank since March. JPMorgan Chase will get all of the ailing bank's deposits and a 'substantial majority of assets,' the New York-based bank said.
JPMorgan is getting about $92 billion in deposits in the deal, which includes the $30 billion that it and other large banks put into First Republic last month. The bank is taking on $173 billion in loans and $30 billion in securities as well.
Furthermore, the acquisition will add over $500 million of profit annually to JPMorgan, excluding the one-time costs. As part of the transaction, JPMorgan said it was making a payment of $10.6 billion to the FDIC. "First Republic Bank's 84 offices in eight states will reopen as branches of JPMorgan Chase Bank, National Association, today during normal business hours," the FDIC
"The banking system remains sound and resilient, and Americans should feel confident in the safety of their deposits and the ability of the banking system to fulfill its essential function of providing credit to businesses and families," a Treasury spokesperson said.
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