Following the second-largest bank failure in U.S. history, JPMorgan Chase will acquire the majority of First Republic Bank’s assets in a deal announced early on Monday that will safeguard First Republic customers’ deposits.
The independent federal body that protects bank customers’ accounts, the Federal Deposit Insurance Corporation, declared that JPMorgan Chase had acquired “the substantial majority of assets” and taken over First Republic’s insured and uninsured deposits.
According to the agreement, over the next five to seven years, the FDIC will pay 80% of any losses on First Republic’s portfolio of single-family residential mortgage loans and commercial loans. Also refusing to take on First Republic’s corporate debt is JPMorgan Chase, which will instead receive $50 billion in funding from the FDIC to complete the transaction.