Flagstar isn’t the only institution to win twice in this year’s banking crisis. Now JPMorgan Chase can join it in the two-win column.
The nation’s largest bank has agreed to buy $1.8 billion of single-family residential loans from Banc of California at a discount, sources with knowledge of the matter told Bloomberg and Reuters on Wednesday.
Banc of California, in a presentation Tuesday outlining its proposed acquisition of PacWest, said it had entered into a “contingent forward asset sale agreement” for its residential mortgage portfolio, but didn’t name the buyer.
It’s unclear whether JPMorgan will keep the loans or sell them to other investors.
The $1.8 billion transfer represents a sizable chunk of the $7 billion of loans, mortgage bonds and other assets — collectively yielding less than 4% — that Banc of California and PacWest aimed to sell to help pay off $13 billion in borrowings that are costing the banks upward of 5%.
JPMorgan’s move comes just a couple of months after it acquired most of First Republic’s assets, deposits and liabilities after the Federal Deposit Insurance Corp. seized the failing lender.
Flagstar, too, began its crisis win streak by picking up the remains of a failed midsize bank. The New York Community Bank subsidiary in March bought much of Signature Bank for $2.7 billion in March. The spoils there included $38.4 billion in assets, $25 billion in cash, $12.9 billion in loans and 40 former Signature branches.
Flagstar followed that up last week by announcing it’s hiring dozens of private-client bankers from First Republic to serve high-net-worth individuals and private-equity and venture-capital firms.
A representative for JPMorgan declined to comment to Bloomberg on Wednesday. Banc of California did not immediately respond to requests for comment from the wire service.
