JPMorgan Chase & Co (NYSE:JPM) will acquire $1.8 billion of single-family residential loans to assist Banc of California's (NYSE:BANC) acquisition of PacWest Bancorp, according to Reuters, citing an insider familiar with the deal.
The merger between Banc of California and PacWest, supported by a $400 million equity infusion from Warburg Pincus and Centerbridge Partners, will establish a bank with $36 billion in assets.
Banc of California, without disclosing the purchaser, has acknowledged a "contingent forward asset sale agreement" for its residential mortgage portfolio.
This consolidation signifies a rare event in the market, following several months of government-arranged failed bank sales and prolonged or abandoned bank mergers awaiting regulatory consent.
The merger and mortgage transaction are both projected to conclude by late 2023 or early 2024. Earlier this year, PacWest suffered a significant blow due to the collapse of three US regional banks.