First Republic Bank was California’s troubled local lender. It was taken over by US authorities and sold to JPMorgan Chase. This was part of an effort to end the two-month long banking crisis which has shaken up the financial system. JPMorgan Chase, the biggest bank in the US will take over all First Republic deposits and “almost all” of its assets. Federal agency estimates it will be required to pay $13 billion from the deposit-insurance fund to cover First Republic’s losses. First Republic’s branches can reopen their doors as normal.

First Republic Bank, the second largest bank in US history by assets, collapsed after reporting that it had lost more than $100 billion in deposits during the first quarter. After the bank failed to come up with a viable rescue plan and its stock continued to plummet, the authorities intervened, inviting bids and taking control of the bank last week. First Republic was in limbo after the collapse of Silicon Valley Bank in March, which raised fears of a domino-effect on other regional banks. JPMorgan CEO Jamie Dimon told reporters in a press conference before the US stock exchange opened that he hoped this would help stabilize everything.

The banking sector is in turmoil after the Federal Reserve changed its policy to combat inflation by raising interest rates aggressively, a move that has revalued assets significantly. Fed rates are expected to rise again this week. The FDIC announced the rescue package after rumors surfaced late last week. First Republic collapsed after a series of bank defaults, including those at Silvergate Bank and Signature Bank. First Republic’s assets, which stood at $233 billion by the end of march, are the second largest bank in US history. This excludes investment banks like Lehman Brothers.