Davis Polk Team Leads JPMorgan on Purchase of First Republic (1)

Wall Street law firm Davis Polk & Wardwell advised JPMorgan Chase & Co. in its Monday agreement to acquire First Republic Bank from the Federal Deposit Insurance Corp.

Davis Polk partners Margaret Tahyar, who leads the financial institutions and fintech team, led work on the agreement along with Randall Guynn, head of the firm’s financial institutions group, and Luigi De Ghenghi and Eric McLaughlin. The four previously advised 11 banks that deposited $30 billion in First Republic in March in an effort to rescue the regional lender and help stabilize the financial system.

Tahyar also led the Davis Polk team that advised Signature Bank in its March sale of assets to New York Community Bancorp’s Flagstar Bank and Silicon Valley Bridge Bank in its sale to First Citizens Bancshares Inc.

Davis Polk’s role cements its place as one of the go-to law firms during the most recent banking crisis. The position is a familiar one for the Wall Street firm that helped usher bank, financial institutions and the government through the 2008 financial collapse.

Davis Polk has also taken key roles in advising on the failures of Silicon Valley Bank and Signature Bank and UBS Group AG’s $3 billion buy of embattled rival Credit Suisse Group AG.

Firm partners Lee Hochbaum and Paul Marquardt also helped lead the Davis Polk team. It also included counsel Ledina Gocaj and Albert Zhu, and associates Dana Seesel Bayersdorfer and Steven Jaffe.

Following First Republic Bank’s issues back in March, a committee of the independent directors was convened and represented by O’Melveny & Myers, led by partners Daniel Petrocelli, Jarryd Anderson, Matthew Close, and Andor Terner. Petrocelli, chair of O’Melveny’s trial practice and the firm’s vice chair, is leading the Walt Disney Co.'s team in its lawsuit filed last week against Gov. Ron DeSantis.

The FDIC took possession of embattled San Francisco-based First Republic early Monday, making it the third failure of a midsize bank this year and the second largest in US history. JPMorgan promptly purchased the San Francisco-based lender in an auction.

As a part of the purchase, JPMorgan is acquiring approximately $173 billion of loans and approximately $30 billion of securities and will assume approximately $92 billion of deposits, including $30 billion of large bank deposits.

JPMorgan is also assuming all deposits, both insured and uninsured. The FDIC agreed to share losses on mortgages and commercial loans.