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JPMorgan Chase & Co. (JPM) recently announced that it has agreed to acquire select deposits of First Republic Bank’s operations in California, Oregon, and Texas. The acquisition comes after a significant step taken by U.S. regulators in providing support to First Republic Bank to ensure retail deposits remain safe.
It was stated that the acquisition will be made by JPMorgan through its unit JPMorgan Chase Bank, which is the largest U.S. bank by assets. The acquisition will mainly include deposits from First Republic Bank’s commercial retail operations in California, Oregon, and Texas.
The Federal Reserve Bank of San Francisco and the Office of the Comptroller of the Currency have both authorized JPMorgan to perform the acquisition and to provide assistance to First Republic Bank. These U.S. regulators also believe that this assistance will ensure that the retail deposits remain secure while JPMorgan and First Republic Bank work out a long-term solution.
The acquisition involves JPMorgan purchasing approximately $20 billion in deposits from First Republic Bank, while First Republic Bank will continue to provide its services in California, Oregon, and Texas. Further details of the agreement have not been revealed by either company.
It is not uncommon for U.S. regulators to step in to protect deposits and ensure that consumers remain safe in these difficult times. This acquisition is yet another example of the Reserve Bank and Office of the Comptroller of the Currency actively taking steps to protect its citizens in an unstable economic period.
JPMorgan and First Republic Bank have not yet released a statement regarding the acquisition. It is unclear what the long-term plans for the deposits acquired by JPMorgan will be, but it is clear that the U.S. regulators are taking measures to ensure that the retail deposits of First Republic Bank do not become compromised.
