The California Department of Financial Protection and Innovation (DFPI) announced today that First Republic Bank has been taken over by regulators and will be sold to JPMorgan Chase. The DFPI “appointed” the FDIC as the receiver of First Republic, and said that JPMorgan will “assume all deposits, including all uninsured deposits, and substantially all assets.” Notably, it stated: “Deposits are federally insured by the FDIC subject to applicable limits.” (Assumedly, a lot of the deposits that fled the bank the last six weeks or so have been above the $250,000.)
The FDIC’s call for banks to submit bids had a Sunday, April 30, deadline, of which JPMorgan Chase was the highest bidder. The $30 billion injection in March evidently bought about six weeks of time—about $1 billion per banking day.
In their press release about the takeover, the FDIC stated that as of April 13, 2023, First Republic had $229 billion in total assets and $103 billion in deposits, making it the second largest bank failure in U.S. history. They estimated that the amount to be bailed out by the FDIC will be about $13 billion.
