Another US bank has failed amid the ongoing banking turmoil in the world’s strongest economy. On Monday, First Republic became the third major US lender to fail in less than two months.
The struggling lender was seized by the California Department of Financial Protection and Innovation, following which JPMorgan Chase & Co. agreed to acquire First Republic Bank in a government-led deal, putting to rest one of the biggest troubled banks remaining after turmoil engulfed the industry in March.
JPMorgan took ownership of about $173 billion of First Republic loans, $30 billion of securities and $92 billion in deposits. JPMorgan and the Federal Deposit Insurance Corporation (FDIC) agreed to share the burden of losses, as well as any recoveries, on the firm’s single-family and commercial loans. In a statement, the FDIC estimated that the cost of the Deposit Insurance Fund would be around $13 billion.
