“This part of the crisis is over”

The crisis that led to the collapse of three regional US banks in recent weeks is largely over after the decision of First Republic, according to JPMorgan Chase CEO Jamie Dimon.

JPMorgan emerged as the winner of a weekend auction for First Republic after regulators decided time had run out for a private sector solution. The Federal Deposit Insurance Corporation seized the bank and New York-based JPMorgan announced early Monday that it was buying nearly all of the deposits and most of the assets of First Republic.

“There are only so many banks that were offsides like this,” Dimon told analysts on a call shortly after the deal was announced.

“There might be another minor one, but this pretty much solves all of them,” Dimon said. “This part of the crisis is over.”

In the wake of the sudden collapse last month of Silicon Valley Bank and Signature Bank, investors have punished other lenders that had similar characteristics to SVB. Companies with the highest proportion of uninsured deposits and losses on the balance sheet were the most scrutinized.

The turmoil in March exposed the mismanagement of some medium-sized banks that essentially bet that interest rates would not rise; when interest rates rose, the banks were caught “offside” with unrealized losses from bonds on their balance sheets.

But the $30 billion injection of deposits into First Republic last month bought time for the industry, allowing mid-sized banks to report first-quarter results in recent weeks that in many cases showed a stabilization of deposits. That eased investors’ fears that many more lenders would soon fail.

Shares of regional banks including PacWest and Citizens Financial fell in premarket trading.

Down the road, investors remain exposed to risks created by the Federal Reserve’s rate hikes and their impact on assets including real estate, Dimon added.

This story is in development. Please check back for updates.