The New York Stock Exchange has suspended trading in all shares of First Republic Bank (NYSE: FRC) a day after JPMorgan Chase & Co (NYSE: JPM) became its new owner.
Pro reacts to JPMorgan-First Republic deal
On Tuesday, the exchange said it will delist shares of the collapsed lender – both common and preferred.
The stock market news arrives shortly after JPMorgan snapped up all of the bank’s deposits and majority of its assets. Speaking with Yahoo Finance Live, Dylan Ratigan who hosts “Truth or Skepticism” on tastytrade said:
JPMorgan can’t lose on the First Republic deal, similar to when it purchased Bear Stearns. All of the risks reside with the taxpayer or really with the FDIC and JPM ends up with a creative deal immediately.
JPMorgan stock is still down nearly 2.0% today.
JPMorgan will see a boost to annual profit
Remember that the said deal leaves majority of the losses on commercial loans and residential mortgages with the Federal Deposit Insurance Corporation (FDIC) that’s also providing a $50 billion credit line to the buyer.
Integration will cost about $2.0 billion to JPMorgan over the next eighteen months. The financial services behemoth expects this acquisition to deliver a $2.60 billion one-time gain and a $500 million boost to annual profit.
Moving forward, First Republic Bank will operate its locations under the JPMorgan brand name. For the FDIC, the transaction means an estimated $13 billion hit versus $20 billion in the case of the previously failed Silicon Valley Bank as Invezz reported HERE.
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