(NewsNation) — The Federal Deposit Insurance Corp. said Monday that JPMorgan Chase Bank will take over deposits and most of the assets of troubled First Republic Bank after a race over the weekend to rescue the bank before markets open.
The banking giant will acquire all of First Republic’s deposits, including those that are uninsured, and a “substantial majority of assets,” JPMorgan said in a statement. It is not assuming the bank’s corporate debt or preferred stock.
San Francisco-based First Republic is the third midsize bank to fail so far this year and the second-largest lender to collapse in U.S. history.
Regulators worked through the weekend to find a way forward before U.S. stock markets opened. Financial leaders hope this sale eases concerns with the banking system and prevents another crisis.
Markets in many parts of the world were closed for May 1 holidays Monday. The two markets in Asia that were open, Tokyo and Sydney, rose.
This sale comes less than two months after Silicon Valley Bank and Signature Bank collapsed.
Over the last year, First Republic has seen its stock value plummet from $170 a share to over $3.50 a share at close on Friday.
First Republic has attracted wealthy customers, but it has struggled since the collapse of the two other banks, and investors and depositors had grown increasingly worried it might not survive because of its high amount of uninsured deposits and exposure to low-interest-rate loans.
Earlier this month, First Republic received $30 billion in deposits from some of the biggest banks in the country to help it stay off the ground.
The announcement of the sale to JP Morgan Chase comes on the heels of a report issued by the Federal Reserve that blamed the failure of Silicon Valley Bank on mismanagement by the bank as well as slow reaction time from federal regulators and a social media frenzy.
As part of this report, the Federal Reserve called for more supervision and regulations of mid-size banks to avoid another similar situation from happening again.
The Federal Deposit Insurance Corporation said early Monday that First Republic Bank’s 84 branches in eight states will reopen as branches of JPMorgan Chase Bank and depositors will have full access to all of their deposits.