JPMorgan buys First Republic Bank, Dimon declares ‘this part of the crisis is over’

The Federal Deposit Insurance Corporation’s (FDIC) acceptance of JPMorgan Chase’s bid to buy troubled First Republic Bank means “this part” of the U.S. banking “crisis is over,” JPM chief executive Jamie Dimon said Monday.

“This part of the crisis is over,” Dimon told reporters after an overnight deal was reached for JPMorgan to pay $10.6 billion for most of the San Francisco-based lender’s assets. “For now, let’s take a deep breath.”

Dimon went on to say JPMorgan’s purchase of First Republic has not changed the odds of a recession, but has stabilized the banking system.

First Republic has struggled since the collapse of Silicon Valley Bank and Signature Bank in early March, and it was widely seen as the bank most likely to collapse next.

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Dimon said JPMorgan, the largest bank in the U.S., did not seek out the deal and was invited by the FDIC to make a bid along with other lenders in a competitive process.

The CEO said the bank would not keep First Republic’s name.

First Republic used to be the envy of most of the industry and its clients mostly included the rich and powerful, who rarely defaulted on their loans.

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Many of the bank’s deposits, however, were uninsured as they were above the $250,000 limit set by the FDIC. If First Republic were to fail, its depositors might not get all their money back, worrying analysts and investors alike.

These fears materialized in April when the bank’s recent quarterly results showed that depositors pulled more than $100 billion out of the bank as the banking crisis was affecting Silicon Valley Bank and New York’s Signature Bank.

FOX Business’ Lawrence Richard and The Associated Press contributed to this report.