JPMorgan buys First Republic: Bank shares rise as deal reached

JPMorgan, Wells Fargo, Bank of America, Citigroup shareholders respond to First Republic purchase

Shares of major U.S. banks are mostly higher after JPMorgan Chase announced Monday that it would purchase most of the assets of the struggling First Republic Bank.

JPMorgan, Wells Fargo, Bank of America and Citigroup are all in positive territory in morning trading.

Ticker Security Last Change Change %
JPM JPMORGAN CHASE & CO. 186.68 +1.39 +0.75%
FRC n.a. n.a. n.a. n.a.

As part of the deal, JPMorgan will make a $10.6 billion payment to the Federal Deposit Insurance Corp (FDIC) for most of the San Francisco-based lender's assets, after government regulators seized control of the failed bank over the weekend, securing the third major U.S. financial institution to collapse in 60 days.

JP Morgan Chase HQ

The JP Morgan Chase & Co. headquarters, in Manhattan, New York, on Jan. 27, 2014.  (Photo by Tim Clayton/Corbis via Getty Images / Getty Images)

FDIC ACCEPTS JPMORGAN CHASE'S BID TO BUY FIRST REPUBLIC BANK

JPMorgan 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.

Ticker Security Last Change Change %
WFC WELLS FARGO & CO. 55.85 +0.79 +1.43%
BAC BANK OF AMERICA CORP. 35.15 +0.80 +2.33%
C CITIGROUP INC. 56.14 +0.54 +0.97%
The Park Avenue location of First Republic Bank, in New York City

A person walks past the Park Avenue location of the First Republic Bank, in New York City, U.S., Mar. 10, 2023.  (Reuters/David 'Dee' Delgado / Reuters Photos)

First Republic came under intense pressure after disclosing last week that it had suffered more than $100 billion in outflows in the first quarter and was exploring options.

The acquired businesses will be overseen by JPMorgan’s Consumer and Community Banking co-CEOs, Marianne Lake and Jennifer Piepszak, the bank said in a statement.

The rescue comes less than two months after a deposit flight from U.S. lenders forced the Federal Reserve to step in with emergency measures to stabilize markets.

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Reuters contributed to this report.