Quick Take
- According to the Kobessi letter, JP Morgan said its acquisition of First Republic would generate a one-time gain of $2.6 billion.
- Not only that, JP Morgan also expects over $500 million in profit per year from the acquisition.
- First Republic Bank is the second largest bank to have failed in the U.S. It is now behind Washington Mutual.
- The FDIC estimated that the cost to the deposit insurance fund would be about $13 billion.
- However, JP Morgan should be ineligible to acquire FRB under U.S. regulation as they have already amassed more than 10% of its nationwide deposits. Authorities have made an exemption.
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