JPMorgan rides to the rescue again, snapping up mortgages worth $1.8 billion as part of PacWest merger

• JPMorgan is set to buy mortgages worth nearly $2 billion in PacWest’s merger deal, per Bloomberg.

• The Wall Street bank will buy the single-family residential loans at a discount.

• PacWest and the Banc of California are merging in an all-stock deal to form a new, larger lender.

JPMorgan plans to buy mortgages worth $1.8 billion as part of PacWest Bancorp’s merger with the Banc of California, Bloomberg reported.

The Wall Street bank is set to buy the single-family residential loans at a discount, sources told the outlet. It’s unclear whether it plans to hold onto the loans or sell them on.

This isn’t the first time JPMorgan has come to the rescue of smaller US lenders. In May, it took over First Republic Bank and its deposits of nearly $104 billion.

On Tuesday, both PacWest and the Banc of California announced an all-stock merger to form a new bank. The new lender merger will have assets worth $36 billion and $30.5 billion in total deposits.

The agreement came two months after reports that PacWest was considering a sale as it’s been among the hardest-hit lenders following the collapse of Silicon Valley Bank.

PacWest also suffered from declining confidence during the banking crisis, with customer deposits plummeting 9.5% at the end of May.

The turmoil also resulted in a big sell-off in regional bank stocks as investors feared smaller lenders could suffer the same fate as Silicon Valley Bank.

According to Bloomberg, PacWest and the Banc of California aim to sell about $7 billion of loans, mortgage bonds and other assets.

Read the original article on Business Insider