JPMorgan Snaps Up First Republic's Assets In U.S. Auction  

• JPMorgan Chase & Co said on Monday it will buy most of First Republic Bank's assets after regulators seized the troubled lender over the weekend, marking the third failure of a major U.S. bank in two months. Under the deal, which came after an auction, JPMorgan will pay $10.6 billion to the U.S. Federal Deposit Insurance Corp (FDIC) for most of the assets of the San Francisco-based bank, whose failure is the largest since Washington Mutual in 2008.
• JPMorgan, already the biggest bank in the United States, has also entered into a loss-share agreement with the FDIC on single-family, residential, and commercial loans it bought, but will not take First Republic Bank's corporate debt or preferred stock. The deal allows for an orderly failure of First Republic and avoids regulators having to insure all the bank's deposits, as they had to do when two others collapsed in March.
• JPMorgan has been on a buying spree since 2021, acquiring more than 30 companies in deals totalling more than $5 billion. U.S. regulators have been slow to approve large bank deals in recent years, while the Biden administration has also cracked down on anti-competitive practices.
• First Republic disclosed last week that it had suffered more than $100 billion in outflows in the first quarter and was exploring options, increasing stress in the banking sector. Global banking has been rocked by the closure of Silicon Valley Bank and Signature Bank in March, while Switzerland’s Credit Suisse had to be rescued by rival UBS. First Republic shares tumbled 43.3% in premarket trading on Monday before they were halted. The bank’s stock has lost 97% of its value this year. JPMorgan shares rose 2.7%.

(Source: Reuters)