JP Morgan has bought up the bulk of First Republic Bank as part of a rescue mission, as US regulators stepped in to try to stem the country's regional banking woes.

The US Federal Deposit Insurance Corporation yesterday (1 May) revealed it had closed First Republic and sold its deposits and most of its assets to JP Morgan.

First Republic's collapse is what regulators hope is the end of a weeks long saga of turmoil in the US regional banking sector.

First Republic shares plummet as bank haemorrhages deposits

The last two months have seen the sudden failure of Silicon Valley Bank in March, followed quickly by Signature Bank, a smaller lender, and now San Francisco-based First Republic, America's 14th largest bank at the end of December. 

Acquisition has been on the cards for First Republic since customers withdrew $100bn in deposits during the banking sector turmoil in March, news of which caused a 75% slump in its shares last week.

Ahead of Wall Street's open, the FDIC confirmed it had shut First Republic, enabling JPMorgan to take over its $92.4bn in deposits and assets, including $172.9bn in loans.

Jamie Dimon, chair and chief executive of JPMorgan, expressed confidence that other lenders of such size would not fail. 

"There are only so many banks that were offsides this way," he said. "There may be another smaller one, but this pretty much resolves them all."

JPMorgan is paying the FDIC $10.6bn to acquire the bulk of First Republic and will share losses on its loans with the agency. The FDIC estimated its insurance fund will take a $13bn hit.

First Republic sits on shaky ground following $30bn bailout

Founded in 1985, First Republic, which has 7,000 employees, capitalised on years of low interest rates, offering wealthy customers cheap mortgages and loans. 

The Federal Reserve's campaign to bring inflation down, which has resulted in rates rising rapidly over the past 14 months, piled pressure on this model. Higher rates left the bank with big unrealised losses on its loan portfolio.

In the UK, the Treasury said that the UK banking system remained "safe, sound and well-capitalised". It added First Republic was a "matter for US authorities".