Second Largest US Bank Failure In History: First Republic Bank Seized By FDIC, Sold To JPMorgan

• Second Largest US Bank Failure In History: First Republic Bank Seized By FDIC, Sold To JPMorgan
  by Tyler Durden, https://www.zerohedge.com/
  Heading into the weekend, US regulators were facing a dilemma over the fate of First Republic Bank: either let the insolvent California bank fail and bail-in some (or all) of the $30 billion in uninsured rescue deposits given to the bank by a consortium of banks including JPMorgan, BofA, Goldman and others so as not to appear like the Biden admin is bailing-out big, bad banks again a la 2008, but in the process restarting the bank run panic as an impairment of all bank depositors would reverse Janet Yellen’s vow not to do just that in the aftermath of the SVB collapse, or bail out FRC including all of its depositors, both retail and institutional, insured and uninsured, and spark a fresh political crisis where republicans accuse democrats of rescuing Jamie Dimon and his banker pals.
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  In the end, early on Monday morning, the US unveiled a hybrid solution – after all other attempts at a private rescue effort failed – one where the FDIC would seize the insolvent First Republic, the 14th largest US bank by assets, making it the second biggest bank failure in US history, and immediately sell the bulk of its assets and all of its deposits to JPMorgan after a sham but “highly competitive bidding process” had taken place over the weekend (one in which virtually nobody wanted to participate as nobody would buy FRC without explicit government backstops, which in the end is precisely what they ended up getting on FRC’s IO and CRE loan portfolio) while keeping FRC’s toxic Interest-only mortgages to Hamptons’ billionaires.
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  According to the FDIC announcement, JPMorgan would assume all of First Republic’s $92 billion in deposits — insured and uninsured, including the $5 billion in deposits gived by JPM to First Republic on March 16. It is also buying most of the bank’s assets, including about $173 billion in loans and $30 billion in securities.
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