Biden’s Government SEIZES First Republic Bank Following Collapse — Forces Sale To J.P. Morgan

Reports of a potential government seizure of the First Republic Bank were confirmed early Monday morning as federal regulators took control of the financial institution and forced the sale of all its assets and deposits to JPMorgan Chase Bank.

The Washington Post described the move as “a deal aimed at quelling renewed weakness in the nation’s banking industry.”

According to a Monday statement cited by the outlet, the Federal Deposit Insurance Corp. (FDIC) said that all of First Republic Bank’s depositors will become depositors of JPMorgan and promised full access to their deposits.

Reportedly the forced sale of the bank was accomplished through a “highly competitive bidding process,” however the bidding was not made public and the FDIC did not reveal what JPMorgan is paying to assume the failed bank’s deposits and debts.

The FDIC said in the statement,

“As of April 13, 2023, First Republic Bank had approximately $229.1 billion in total assets and $103.9 billion in total deposits.  In addition to assuming all of the deposits, JPMorgan Chase Bank, National Association, agreed to purchase substantially all of First Republic Bank’s assets.”

To protect depositors, we entered into an agreement with JP Morgan Chase Bank to purchase and assume all deposits and assets of First Republic Bank. Read more ➡️ https://t.co/8KCKgJ2ZWR. pic.twitter.com/FRrIZk5aBY

— FDIC (@FDICgov) May 1, 2023

Jamie Dimon, CEO of JP Morgan Chase, told The BBC the government had “invited” the massive bank, along with other competitors, to “step up, and we did”.

“This part of the crisis is over,” Dimon claimed.

“Down the road – rates going up, recession, real estate – that’s a whole different issue. For now, we should take a deep breath.”

BBC News reported that JPMorgan Chase said it would pay $10.6 billion to the FDIC after the shutdown of First Republic Bank. All 84 branch offices across eight states will reopen as JPMorgan Chase Bank branches effective Monday.

Biden, who already presided over the second- and third-largest bank failures in American history, announces regulators have “taken action to ensure the sale of First Republic Bank” — the latest bank failure under his administration. pic.twitter.com/cT3CRAYBYv

— RNC Research (@RNCResearch) May 1, 2023

President Joe Biden announced Monday morning that regulators have, “taken action to ensure the sale of First Republic Bank.” RawsAlerts noted that this action represents “the 2nd largest bank failure in U.S. history.” RNC Research observed that Biden “already presided over the second-and third-largest bank failures in American history.”

The FDIC said in its press release that JPMorgan Chase Bank will absorb $229.1 billion in total assets and $103.9 billion in total deposits. The BBC broke this down as $173bn of loans, about $30bn of securities, and $92bn of deposits.

The move will cost the FDIC approximately $13 billion according to an estimate from the fund, the final figure will be determined after receivership. The quasi-government corporation will share the losses on some of First Republic’s lending with JP Morgan and finance it to the tune of $50 billion.

The US Treasury Department of the Biden administration told reporters that was “encouraged” that the deal was done in a manner “that protected all depositors.”

“The banking system remains sound and resilient, and Americans should feel confident in the safety of their deposits and the ability of the banking system to fulfill its essential function of providing credit to businesses and families,” a Treasury spokesman claimed.