JPMorgan Chase & Co. will buy $2 billion worth of Banc of California’s mortgages as part of a merger. The deal is set to close in 2023 or 2024.
Banc of California aims to reduce its exposure to residential mortgages with this asset swap. Regulators have pressured the bank to lower its risk profile.
JPMorgan is purchasing the mortgages at a discount, ensuring potential profits. Acquiring a California mortgage portfolio also gives the bank a strategic advantage.
This deal indicates the mortgage market’s recovery after a slow period. JPMorgan’s involvement signals confidence in the market’s resurgence.
Key deal details:
- The purchased mortgages are all single-family residential loans.
- The loans carry an average balance of $1.1 million.
- The mortgages are being sold at a 10% discount.
- The deal’s expected closing date is between late 2023 and early 2024.
By participating in this merger, both JPMorgan and Banc of California seek to strengthen their positions in the mortgage market. The move aligns with JPMorgan’s expansion strategy, gaining a foothold in a crucial home lending market like California.
