--- title: First Republic Bank to JPMorgan Chase (May 1, 2023): the largest US bank failure since 2008 | RGM® url: https://realgrowthmatters.com/learn/case-studies/first-republic-bank-2023-jp-morgan/ updated: 2026-06-10 source_html: https://realgrowthmatters.com/learn/case-studies/first-republic-bank-2023-jp-morgan/ --- - **Story:** First Republic Bank collapsed May 1, 2023 with $233B in assets. JPMorgan Chase acquired through FDIC receivership. Followed SVB and Signature Bank failures in March. Major-bank $30B support March 16 didn't ultimately save the bank. - **Why it matters:** First Republic is part of defining 2023 regional banking crisis reference — demonstrating cascade through correlated risk perception. - **Takeaway:** Bank failures cascade through correlated risk perception. - **Takeaway:** Major bank coordination can stabilize temporarily but doesn't always succeed. - **Takeaway:** FDIC receivership followed by major-bank acquisition is the typical resolution pattern. ## First Republic Bank collapse — the four-step story S Situation Situation First Republic was private-banking-focused regional bank with concentrated wealthy clientele. SVB and Signature failed March 2023 producing cascade risk. T Task Task Stabilize First Republic deposits and prevent third major regional bank failure of 2023. A Action Action March 16: 11 major banks committed $30B uninsured deposits. April: continued deposit outflows. May 1: FDIC takeover and immediate JPMorgan acquisition. R Result Result Among largest US bank failures ever. JPMorgan acquired First Republic. Resolution of 2023 regional banking crisis. Major-bank stabilization shown to have limits. ## First Republic by the numbers 0 Collapse FDIC takeover Source: FDIC records $0B Assets at failure Major bank failure Source: FDIC records 0 Major-bank support 11 banks $30B uninsured deposits Source: Press reporting $0B Major-bank rescue commitment Did not ultimately save bank Source: Press reporting 0 Acquirer Through FDIC process Source: Acquisition records 0 2023 bank failure After SVB and Signature Source: 2023 banking timeline #### Quick facts BankFirst Republic Bank (NYSE: FRC, pre-failure) Founded1985 by James H. Herbert II CEO at failureMichael Roffler Customer baseHigh-net-worth individuals, professional-services firms, foundations, family offices Total assets at failure~$229 billion FDIC takeoverMay 1, 2023 (after competitive bidding over weekend) AcquirerJPMorgan Chase & Co. JPMorgan assumed deposits~$92 billion JPMorgan acquired loans~$173 billion JPMorgan acquired securities~$30 billion FDIC resolution cost (estimated)~$13 billion JPMorgan one-time gain~$2.6 billion JPMorgan restructuring spend~$2 billion **Honest note** First Republic's collapse was preceded by significant unrealised losses on its mortgage portfolio plus an unusually high proportion of uninsured deposits among its high-net-worth customer base. The mid-March 2023 emergency $30 billion deposit infusion from a consortium of large banks (announced shortly after the SVB collapse) bought First Republic about six weeks but did not resolve the underlying issues. The $229B asset figure made First Republic the second-largest US bank failure in history; SVB was the third-largest. The competitive-bidding process that culminated in the JPMorgan acquisition was FDIC-managed; specific bid-amount detail is in the FDIC's post-resolution disclosures. ## The First Republic business model First Republic Bank was founded in 1985 by James H. Herbert II. The bank built a distinctive business model around high-net-worth customer relationships: large balance-sheet jumbo mortgages (often at low interest rates to high-net-worth borrowers), extensive private-banking services, and deposit accounts that often substantially exceeded the FDIC $250,000 insurance limit. The customer base was concentrated in professional-services firms, foundations, family offices, and high-net-worth individuals in major US metropolitan areas. The business model worked well in the low-rate environment of the 2010s. Jumbo mortgages on high-net-worth borrowers were viewed as low-default-risk loans. The fixed-rate-mortgage portfolio was an asset; deposits were the liability. Through the 2010s and into 2020-2021, the bank grew rapidly. By early 2023 First Republic had approximately $229 billion in total assets and was widely viewed as one of the best-run regional banks in the US. ## The March 2023 crisis and emergency $30 billion infusion The March 2023 SVB collapse exposed First Republic's structural vulnerabilities to similar dynamics. First Republic had significant unrealised losses on its long-duration mortgage portfolio (rising interest rates had depressed market values). The bank had an unusually high proportion of uninsured deposits among its high-net-worth customer base. The same digital-speed run dynamics that took down SVB began affecting First Republic in mid-March 2023, with customers moving deposits to larger systemically-important banks (JPMorgan, Bank of America, Citigroup, Wells Fargo). On March 16, 2023, a consortium of eleven large US banks announced a coordinated $30 billion deposit infusion into First Republic, intended to stabilise the situation and prevent another rapid collapse. The infusion bought First Republic time but did not resolve the underlying issues. Through April 2023, deposit outflows continued and the bank's ability to raise capital deteriorated. First Republic's Q1 2023 earnings (released late April 2023) confirmed that deposit losses had been substantial and that the bank was running on emergency liquidity. ## The May 1 FDIC takeover and JPMorgan acquisition Over the weekend of April 29-30, 2023, the FDIC conducted a competitive-bidding process for First Republic with multiple potential acquirers (JPMorgan Chase, PNC Financial, Citizens Financial, Bank of America, others). JPMorgan submitted the winning bid. The FDIC took control of First Republic on May 1, 2023 and immediately sold the institution to JPMorgan Chase. The deal terms: JPMorgan assumed approximately $92 billion of First Republic deposits and acquired approximately $173 billion of loans and $30 billion of securities. The FDIC estimated the resolution would cost the Deposit Insurance Fund about $13 billion. JPMorgan reported a one-time gain of approximately $2.6 billion on the acquisition but committed to spending approximately $2 billion on restructuring. Several First Republic locations were rebranded as JPMorgan Chase wealth-management offices over the following months. ## How RGM thinks about regional bank failures When clients ask about the structural lessons of the 2023 regional bank failures, the First Republic case (paired with SVB) is the most useful current reference. Three structural lessons. First, business-model differentiation that works in growing markets can become structural vulnerability in declining markets — First Republic's high-net-worth jumbo-mortgage focus was a strength in the 2010s and a vulnerability in 2023. Second, customer-base composition matters as much as customer count — concentrated high-net-worth depositors are more flight-prone in a panic than mass-market retail depositors because they have larger uninsured balances at stake and faster decision cycles. Third, regulatory backstops created during crises (the March 2023 systemic-risk backstop announcement, the Bank Term Funding Program) buy time but cannot fix underlying business-model issues if the model has stopped working. The pattern is structural to specialised regional banks. Banks built around specific customer audiences (startup ecosystem at SVB, high-net-worth at First Republic, crypto at Signature) face concentrated correlation risk that more diversified banks do not. Diversification is the obvious defensive lever but it often comes at the cost of the strategic differentiation that made the bank successful in the first place. The post-2023 regulatory environment is still working through the appropriate balance between specialised regional banking and systemic-risk constraints. ## Frequently asked questions When did First Republic fail? The FDIC took control of First Republic Bank on May 1, 2023 and immediately sold it to JPMorgan Chase in an FDIC-managed competitive-bidding process. At failure First Republic had approximately $229 billion in assets, making it the second-largest US bank failure in history (after Washington Mutual in 2008) and the largest of the 2023 banking crisis. Why did First Republic fail? Structurally similar to SVB but with a different customer base. Significant unrealised losses on long-duration mortgage portfolios held against demand deposit liabilities. Unusually high proportion of uninsured deposits among high-net-worth customers. Digital-speed deposit outflows after the March 2023 SVB collapse exposed similar vulnerabilities. The mid-March 2023 emergency $30 billion deposit infusion from a consortium of large banks bought time but did not resolve the underlying issues. What did JPMorgan acquire? Approximately $92 billion of deposits, $173 billion of loans, and $30 billion of securities. JPMorgan reported a one-time gain of approximately $2.6 billion on the acquisition. The bank committed to spending approximately $2 billion on restructuring. Several First Republic locations were rebranded as JPMorgan Chase wealth-management offices. How did the FDIC handle the resolution? The FDIC conducted a competitive-bidding process over the April 29-30, 2023 weekend with multiple potential acquirers (JPMorgan Chase, PNC, Citizens Financial, Bank of America, others). JPMorgan submitted the winning bid. The FDIC took control of First Republic on May 1, 2023 and immediately sold the institution to JPMorgan. The FDIC estimated the resolution would cost the Deposit Insurance Fund about $13 billion. What about the $30 billion deposit infusion? On March 16, 2023, a consortium of eleven large US banks announced a coordinated $30 billion deposit infusion into First Republic, intended to stabilise the situation after the SVB collapse. The infusion bought First Republic approximately six weeks but did not resolve the underlying issues. Through April 2023 deposit outflows continued and the bank's ability to raise additional capital deteriorated. ### Sources & references - [JPMorgan Chase Form 8-K (First Republic acquisition, May 2023)](https://www.sec.gov/Archives/edgar/data/0000019617/000001961723000304/jpmc2023exhibit99.htm) — JPMorgan's own SEC filing for the First Republic acquisition with deal terms. - [JPMorgan Chase buys troubled First Republic Bank (NPR, May 2023)](https://www.npr.org/2023/05/01/1172868295/first-republic-bank-failure-fdic-jpmorgan-chase) — NPR coverage of the FDIC takeover and JPMorgan acquisition. - [First Republic Bank seized by regulators, then sold to JPMorgan (CBS News)](https://www.cbsnews.com/news/first-republic-bank-fdic-jpmorgan-chase-control/) — CBS coverage with deal-term detail and immediate aftermath. - [JPMorgan Chase takes over First Republic after biggest US bank failure since 2008 (CNBC)](https://www.cnbc.com/2023/05/01/first-republic-bank-failure.html) — CNBC coverage emphasising the historical-ranking context and JPMorgan financial impact. - [The Failure of First Republic Bank (Corporate Finance Institute)](https://corporatefinanceinstitute.com/resources/commercial-lending/first-republic-bank-failure/) — Industry-finance analysis of the failure mechanism and regulatory response. - [JPMorgan Chase buys First Republic Bank after government takeover (OPB)](https://www.opb.org/article/2023/05/01/jpmorgan-chase-first-republic-bank/) — Public-radio coverage with the timeline and competitive-bidding process detail. ## Related [#### All case studies The full case-study library.](/learn/case-studies/)[#### SVB collapse The earlier 2023 bank failure that exposed First Republic's vulnerabilities.](/learn/case-studies/silicon-valley-bank-2023-collapse-cautionary/)[#### Credit Suisse rescue Adjacent 2023 European banking crisis case.](/learn/case-studies/credit-suisse-rescue-ubs-2023/)