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.
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.
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.
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.
CLICK HERE TO READ MORE ON FOX BUSINESS
Reuters contributed to this report.