By KIMBERLEY HAAS
Leaders at JPMorgan Chase have announced they acquired the substantial majority of assets and assumed the deposits of First Republic Bank from the Federal Deposit Insurance Corporation.
According to a press release issued on Monday, JPMorgan Chase will assume about $92 billion of deposits, including $30 billion of large bank deposits, to be repaid post-close or eliminated in consolidation.
The financial services firm, with operations worldwide, will acquire about $173 billion of loans and about $30 billion of securities, according to the press release.
Jamie Dimon, chairman and CEO of JPMorgan Chase, said government officials invited them and others to step up and take over the troubled First Republic.
Shares of First Republic dropped on Friday and sources told CNBC’s David Faber that it was likely officials at the FDIC would take it into receivership.
In a statement, Dimon said their financial strength and capacity allowed them to develop a bid that minimizes 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, Dimon said.
Officials at the FDIC also put out a press release announcing the purchase and assumption agreement on Monday.
It said that as of April 13, First Republic Bank had approximately $229.1 billion in total assets and $103.9 billion in total deposits.
They estimate that the cost to the Deposit Insurance Fund will be about $13 billion.
“The resolution of First Republic Bank involved a highly competitive bidding process and resulted in a transaction consistent with the least-cost requirements of the Federal Deposit Insurance Act,” officials said.
Officials said the FDIC and JPMorgan are also entering into a loss-share transaction on single-family, residential, and commercial loans it purchased from the former First Republic Bank.
All of First Republic Bank’s 84 offices in eight states were expected to open on Monday for normal business hours.
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