![]() “Treasury is encouraged that this institution was resolved with the least cost to the Deposit Insurance Fund, and in a manner that protected all depositors,” said a Treasury Department spokesperson. JPMorgan will record a one-time gain of $2.6 billion on its books from the deal, although it expects to spend $2 billion on restructuring through the end of 2024.īesides being good news for JPMorgan Chase and First Republic’s worried customers, it was also cheered by Treasury Department officlals, who are worried about a loss of confidence in the banking system causing damage to the US economy. Under terms disclosed by JPMorgan Chase, it will make a $10.6 billion payment to the FDIC, return $25 billion in funds that other banks deposited with First Republic in March in a lifeline negotiated with Treasury at that time, and will eliminate a $5 billion deposit it had made with First Republic. ![]() JPMorgan Chase also will not assume First Republic’s corporate debt, and it will receive $50 billion in financing from the FDIC to complete the deal. Under the deal, the FDIC will cover 80% of any losses incurred on First Republic’s portfolio of single-family residential mortgage loans and commercial loans over the next five to seven years. He said the deal is also a good one for his bank’s shareholders, adding to its expected earnings going forward. ![]() “Our government invited us and others to step up, and we did,” said JPMorgan Chase CEO Jamie Dimon. JPMorgan Chase said it had acquired “the substantial majority of assets” and assumed the deposits, insured and uninsured, of First Republic from the Federal Deposit Insurance Corporation, the independent government agency that insures deposits for bank customers. JPMorgan Chase is buying most assets of First Republic Bank after the nation’s second-largest bank failure ever, in a deal announced early Monday that protects the deposits of First Republic’s customers.
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