First Republic Bank

First Republic Bank was a San Francisco-based regional bank that failed on May 1, 2023, and was sold to JPMorgan Chase by the FDIC.^1371213 The bank suffered massive deposit outflows following the collapse of Silicon Valley Bank, with clients withdrawing over $100 billion in the first quarter of 2023.³⁶¹¹¹³ JPMorgan Chase acquired most of First Republic's assets and assumed its deposits, and the FDIC provided loss-sharing and financing to facilitate the transaction.³¹³

Timeline

Money raised

First Republic Bank ended 2022 with $212.6 billion of assets and $176.4 billion of deposits.¹⁰ In the first quarter of 2023, clients withdrew more than $100 billion in deposits, representing 41% of total deposits.³⁶¹¹¹³ On March 12, 2023, First Republic announced it had strengthened and diversified its liquidity by $70 billion.¹¹ On March 16, 2023, 11 large banks deposited $30 billion in uninsured deposits into First Republic.⁴¹¹ JPMorgan Chase assumed $92 billion in deposits and more than $200 billion in assets, including $173 billion in loans and $30 billion in securities.³ The FDIC estimated the deal would result in a $13 billion charge to its Deposit Insurance Fund.³ The FDIC provided $50 billion in financing to support the transaction.³ First Republic's loan-to-deposit ratio was 111%, indicating it had loaned out more money than it held in deposits.¹³

Investors named in the sources: JPMorgan Chase & Co.³, 11 large banks⁴¹¹.

What happened

First Republic Bank was founded in 1985 in San Francisco, California.¹³ It provided private banking, business banking, real estate lending, and wealth management solutions.¹³ The bank focused on high-net-worth individuals and offered tailored services.¹³ First Republic operated 84 branches in eight states.³ It had a dedicated technology group that worked with early-stage startups, venture capital funds, and private equity firms.³

The bank's business model relied on deposits from wealthy individuals and companies to fund large loans.¹³ First Republic held large positions in interest-rate sensitive assets including loans and securities with long maturities.¹¹ The bank had a high proportion of uninsured deposits, particularly from wealthy individuals and companies.¹³ First Republic's loan-to-deposit ratio was 111%, meaning it had loaned out more money than it held in deposits.¹³ In 2022, the Federal Reserve began rapidly raising interest rates.¹⁶

The market value of First Republic's long-term assets decreased as interest rates rose.¹¹¹³ On March 10, 2023, Silicon Valley Bank failed.⁴¹¹ Following SVB's collapse, concerned customers withdrew funds from midsized banks en masse.³ First Republic's clients withdrew more than $100 billion in deposits during the first quarter of 2023.³⁶¹¹¹³ The deposit outflow represented 41% of First Republic's total deposits.¹¹¹³

On March 12, 2023, First Republic announced it had strengthened and diversified its liquidity by $70 billion.¹¹ On March 13, 2023, First Republic's shares fell 60 percent before trading was halted.⁴ On March 16, 2023, a group of 11 large banks deposited $30 billion in uninsured deposits into First Republic.⁴¹¹ First Republic's liquidity ratio dropped more than 50% from Q4 2022 to Q1 2023.¹¹ The bank's debt to total assets ratio surged to 45.79% in Q1 2023 from 7.19% the previous quarter.¹¹

First Republic was forced to borrow from the Federal Home Loan Bank and the Federal Reserve.¹¹ The bank's pledged securities ratio was nearly 100%, meaning it could not tap its securities holdings further for additional funding.¹¹ On April 24, 2023, First Republic reported first-quarter earnings showing revenues down 13% year over year.¹¹ On April 25, 2023, First Republic was reportedly looking to sell as much as $100 billion of its loans and securities.¹¹ The FDIC invited other banks to submit acquisition offers for First Republic.³

On May 1, 2023, the California Department of Financial Protection and Innovation closed First Republic Bank and appointed the FDIC as receiver.⁷¹² The FDIC announced that JPMorgan Chase agreed to acquire most of First Republic's assets and assume its deposits.³ JPMorgan Chase assumed $92 billion in deposits and more than $200 billion in assets, including $173 billion in loans and $30 billion in securities.³ JPMorgan did not take on First Republic's corporate debt or preferred stock.³ The FDIC signed a loss-share agreement with JPMorgan covering single-family, residential, and commercial loans.³

The FDIC estimated the deal would result in a $13 billion charge to its Deposit Insurance Fund.³ The FDIC provided $50 billion in financing to support the transaction.³ First Republic's 84 branches reopened on May 1, 2023, under JPMorgan Chase management.³ First Republic customers had full access to their deposits.³ JPMorgan reportedly planned to turn some First Republic branches into wealth management centers.³

Shareholders faced losses as the bank's stock plummeted, resulting in their investments being wiped out.¹³ The FDIC assured depositors that all deposits would be made whole.¹³ The collapse of First Republic Bank raised concerns about the stability of the banking sector.¹³

Legal outcomes

• filedA securities fraud class action was filed against former executives of First Republic Bank and auditor KPMG LLP, alleging misrepresentations and omissions about risks.¹⁶
• dismissedThe securities fraud class action was dismissed on June 9, 2025, for lack of subject matter jurisdiction.¹⁵¹⁶
• pendingPlaintiffs in the securities fraud class action filed a notice of appeal on July 9, 2025.¹⁶
• dismissedA lawsuit by First Republic ex-employees against the FDIC was dismissed on July 12, 2024.¹⁸

Sources

1. JPMorgan Chase takes over First Republic after biggest U.S. bank failure since 2008, CNBC, 2023-05-01
3. Regulators shutter First Republic Bank and sell it to JPMorgan - SiliconANGLE, SiliconANGLE, 2023-05-01
4. After a Frantic Week, Startup Founders Hope Their Banking Drama Is Over, Observer, 2023-03-18
6. Checking your browser - reCAPTCHA, pmc.ncbi.nlm.nih.gov
7. FDIC's Supervision of First Republic Bank, fdic.gov, Sep 8, 202
10. First Republic Bank Emergency Liquidity Program, 2023, elischolar.library.yale.edu
11. First Republic’s Collapse by the Numbers: High Risk Factors, Balance Sheet & Liquidity Analysis, trepp.com, May 10, 20
12. Material Loss Review of First Republic Bank, fdicoig.gov, Dec 31, 20
13. First Republic Bank | TrendSpider Learning Center, trendspider.com, 2024-04-10
15. Judge dismisses case against First Republic execs, auditor, bankingdive.com, Jun 12, 20
16. First Republic Bank (NYSE: FRC) Securities Fraud Class Action | New Cases | Kessler Topaz, Kessler Topaz
18. First Republic ex-employees' lawsuit against US FDIC is ..., reuters.com, Jul 12, 20

How this case file was put together

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