(Reuters) – U.S. regulators said on Monday they have seized regional bank First Republic Bank and reached an agreement to sell the bank to JPMorgan Chase.
This is the third bankruptcy of a banking establishment in the United States in two months.
Regulators said in a statement that JPMorgan would take over most of First Republic Bank’s assets, as well as all deposits.
JPMorgan was among the banks – which also included PNC Financial Services Group and Citizens Financial Group Inc – to submit bids on Sunday after auctions initiated by US regulators, sources familiar with the matter said over the weekend.
The California Department of Financial Protection and Innovation (DFPI) announced on Monday that it has seized First Republic Bank and will be transferred to the federal deposit guarantee fund (FDIC).
According to the FDIC, the cost of the operation is estimated at around $13 billion.
The rescue of First Republic Bank comes less than two months after the bankruptcies of Silicon Valley Bank and Signature Bank after the voluntary liquidation of Silvergate, specialized in cryptocurrencies.
As of April 13, First Republic Bank had a balance sheet of $229.1 billion and $103.9 billion in deposits.
“Our government called on us and others to step in, and we did,” said Jamie Dimon, CEO of JPMorgan Chase. “Our financial strength, capabilities and business model enabled us to craft an offer to conduct the transaction in such a way as to minimize the costs to the Deposit Guarantee Fund.”
(Report Saeed Azhar, Nupur Anand, Tatiana Bautzer and Akriti Sharma, Matthieu Protard)
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