After regulators seized First Republic and sold the majority of the bank’s operations to JPMorgan Chase, JPMorgan Chase acquired $173 billion of loans and $30 billion of securities in the deal.
JPMorgan did not assume First Republic’s corporate debt or preferred stock, meaningJPMorgan nor the Federal Deposit Insurance Corporation have explicitly said what the purchase means for First Republic common shareholders. Those shareholders are not expected to be made whole either, though, according to the banking equity analyst team at Wedbush Securities.
“We expect a wipe-out of common shareholders following FRC entering receivership and being sold to JPM,” Wedbush Securities equity analyst David J. Chiaverini wrote in a note to clients on Monday. After entering the banking crisis at $115 per share, First Republic stock stopped trading on the New York Stock Exchange at $3.51 on Monday.First Republic early Monday morning and sold the majority of the bank’s operations to JPMorgan Chase. JPMorgan Chase acquired $173 billion of loans and $30 billion of securities in the deal. The largest banking failure since the 2008 financial crisis came less than a week after the company revealed deposit losses exceeding $100 billion in the first quarter.
Since FDIC seized the bank, investors would need to file their grievances with the agency, a former FDIC attorney John Popeo told Yahoo Finance.
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