The California Department of Financial Protection (DFPI) and Innovation seized First Republic Bank on Monday.
The regulator agreed to sell most of the troubled lender's assets to JPMorgan Chase & Co. for an undisclosed sum.
- The Federal Deposit Insurance Corporation (FDIC) will act as the receiver for First Republic following its seizure by the DFPI.
- JPMorgan agreed to take on $173B of First Republic's loans, $30B of its securities, and $92B in deposits.
- JPMorgan was one of several potential buyers to submit final bids on Sunday in an auction run by U.S. regulators.
- The FDIC said it expects the arrangement to cost its Deposit Insurance Fund about $13B.
- JPMorgan said it expects to receive a post-tax gain of about $2.6B after the deal, not taking into account an estimated $2B in post-tax restructuring costs.
- First Republic failed to reach a rescue deal with investors after losing over $100B in deposits in the first quarter of 2023.
- The run on deposits followed the seizure of Silicon Valley Bank and Signature Bank by federal regulators in March