First republic will now be sold to JP Morgan. This is the 3rd bank failure in the recent months after SVB and Signature bank. The Fed reserve will insist this is a buyout and avoid the terminology of Bailout. This makes JP Morgan even bigger especially after the increased inflow of deposits which came in after investors were spooked by the potential failure of the regional banks.
The FDIC confirms that they would be providing $50bn as a part of the financing for this deal. JP Morgan expects a $2.6bn gain and a $500mn increase in net income. Shares are up 3.8%.
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