JP Morgan to purchase First Republic's assets and take over deposit base

On May 1st, regulators in the United States announced that First Republic Bank (FRC.N) has been taken over and a deal has been agreed upon to sell the bank to JPMorgan Chase & Co (JPM.N), marking the third major U.S. institution to fail in just two months. According to a statement released by regulators, JPMorgan will acquire most of First Republic's assets and all of its deposits, including uninsured deposits. Sources familiar with the matter stated that JPMorgan was one of several interested buyers, including PNC Financial Services Group (PNC.N) and Citizens Financial Group Inc (CFG.N), who submitted final bids on Sunday in an auction being run by U.S. regulators. Early on Monday, the California Department of Financial Protection and Innovation announced that it had taken possession of First Republic, with the Federal Deposit Insurance Corporation (FDIC) acting as its receiver. The FDIC estimated that the cost to the Deposit Insurance Fund would be around $13 billion, with the final cost being determined when the FDIC terminates the receivership. The acquisition comes after Silicon Valley Bank and Signature Bank failed within the past two months due to a deposit flight from U.S. lenders, with the Federal Reserve implementing emergency measures to stabilize markets. The failed bank, First Republic, had total assets of $229.1 billion as of April 13th and $103.9 billion worth of deposits, according to the FDIC statement. JPMorgan's Chairman and CEO, Jamie Dimon, stated that the government invited JPMorgan and others to step up, and they did so by developing a bid to execute the transaction in a way that would minimize costs to the Deposit Insurance Fund. The failed bank's 84 offices in eight states will reopen as branches of JPMorgan Chase Bank from May 1st, according to the statement.