First Republic Bank

First Republic Bank was founded in 1985 and headquartered in San Francisco, with Jim Herbert as its founding president and CEO. It was a state non-member commercial bank and trust company with no holding company, serving mainly high-net-worth individuals through residential real estate lending, private banking, business banking, wealth management, trust, and brokerage services; single-family residential loans were its primary product, including nonconforming jumbo mortgages with interest-only terms, which the bank used to attract high-net-worth clients before extending the relationship into trust and wealth management.⁠[1][1][2][1][1][1][1]

During its 22 years of independence before its 2007 acquisition, First Republic was a public company for 21. The bank regularly published a list of “Business Activities Not Undertaken” identifying higher-risk activities it did not intend to pursue; a January 2023 investor presentation reported cumulative net losses of only 8 basis points on all loans originated since its founding in 1985.⁠[3][1][1][1]

On September 21, 2007, Merrill Lynch completed its merger with First Republic Bank, which was merged into Merrill Lynch’s wholly owned subsidiary Merrill Lynch Bank & Trust Co., FSB, and continued to operate as a division under the First Republic Bank brand. Robert J. McCann, president of Merrill Lynch’s Global Wealth Management group, said the deal would accelerate the growth of its high-net-worth private banking business. The purchase price was about $1.7 billion to $1.8 billion; under the merger consideration elections, about 69.7 percent of First Republic shares elected to receive cash.⁠[2][2][2][4][3][2]

In January 2009, Bank of America took over Merrill Lynch, and with it gained control of First Republic.⁠[4]

In mid-2010, First Republic’s management, backed by the private equity firms Colony Capital and General AtlanticGeneral AtlanticGeneral Atlantic is a global investment firm founded in 1980 that grew out of Chuck Feeney’s family investment business. Growth equity is at its core, and through GA Credit, BeyondNetZero and Actis it also invests in credit, the energy transition and infrastructure. As of June 30, 2026, its assets under management across all strategies were about $130 billion.Open the full entry, bought the bank back from Bank of America in a leveraged management-led buyout; the two private equity firms together owned just under 50 percent, and other investors included chairman James H. Herbert and chief operating officer Katherine August-deWilde. In July, the bank announced plans to list on the New York Stock Exchange.⁠[3][5][3][3][4]

On November 29, 2010, First Republic launched its initial public offering, with the company and certain existing shareholders planning to sell 11 million shares at an indicated price of $24 to $27 each; as of September 30, 2010, the bank had assets of $22 billion, deposits of $19 billion, and wealth management assets of $17.2 billion, with 62 offices. On December 9, its stock began trading on the New York Stock Exchange under the ticker FRC; the bank raised $95 million, and the shares rose 7 percent to more than $27, giving it a market value of about $3.5 billion.⁠[3][3][3][3][5][5][5]

From 2018 through 2022, First Republic’s total assets and loans grew at average annual rates of 21 and 22 percent respectively, about twice as fast as peer banks though slower than Silicon Valley Bank and Signature Bank; total assets rose from $99.2 billion at the end of 2018 to $212.6 billion at the end of 2022, and deposits from $79.1 billion to $176.4 billion. Its clients were typically educated, urban, coastal high-net-worth professionals, and it achieved about 20 percent penetration in its target market of households with $10 million or more in investable assets; its main markets included San Francisco and Silicon Valley, New York, Los Angeles, Boston, San Diego, Portland, and Palm Beach.⁠[1][1][1][1][1][1][1]

Throughout this period the FDIC gave it a composite CAMELS rating of “2” (satisfactory), with the top rating of “1” for asset quality and management. Its 2021 annual report showed that 61 percent of its single-family residential loans were interest-only; uninsured deposits were 75 percent of deposits at the end of 2021 and 68 percent at the end of 2022. By the end of 2022, the gap between the fair value and carrying value of its loans had widened to $22 billion.⁠[1][1][1][1][1][1]

On March 9, 2023, the day the run on Silicon Valley Bank began, First Republic still recorded a material net inflow of deposits, some of it likely from Silicon Valley Bank customers. After Silicon Valley Bank failed on March 10, the trend reversed: social media and short sellers began focusing on banks with large loan fair-value gaps and high shares of uninsured deposits, First Republic’s share price fell more than 50 percent intraday with trading halted several times, and the venture capital and private equity community as well as several large banks advised clients through social media and directly to pull funds from it. Deposit outflows that day reached about $25 billion, roughly 17 percent of total deposits, requiring heavy draws on its Federal Home Loan Bank and Federal Reserve lines.⁠[1][1][1][1][1][1][1][1]

On Sunday, March 12, the bank obtained additional liquidity through the Federal Reserve’s discount window. On March 13, its share price fell a further 62 percent with trading halted several times, and deposit outflows were about $40 billion; on March 15, the bank began working with outside firms to raise capital and restructure its balance sheet.⁠[1][1][1][1][1]

On March 16, 2023, 11 large U.S. banks placed a total of $30 billion in uninsured deposits at First Republic, including $5 billion from JPMorgan Chase. Treasury Secretary Janet L. Yellen, Federal Reserve Chair Jerome H. Powell, FDIC Chairman Martin J. Gruenberg, and Acting Comptroller of the Currency Michael J. Hsu issued a joint statement that day welcoming the large banks’ support as a demonstration of the banking system’s resilience. Other deposit withdrawals then slowed and stabilized during the week ending March 24; from March 10 through March 24, the bank lost $96 billion in deposits.⁠[1][1][6][7][7][1][1]

On March 20, the bank’s board approved a Go-Forward Plan, shared with regulators, setting seven goals including repaying Federal Reserve borrowings and the consortium deposits, raising more external capital, shrinking the balance sheet, cutting staff and expenses, rebuilding deposit relationships, revamping loan origination, and improving liquidity and interest rate risk management. On March 31, the FDIC and the California Department of Financial Protection and Innovation downgraded its composite rating to “3”; an FDIC problem bank memorandum judged the plan to carry a high degree of execution risk.⁠[1][1][1][1][1][1][1][1]

On April 24, 2023, First Republic reported first-quarter results disclosing that it had lost more than $100 billion in deposits during the quarter, triggering a sharp drop in its share price, and more than $10 billion in further deposits left between April 26 and April 28. The FDIC found that the bank had not executed any major component of the Go-Forward Plan. On April 28, the FDIC and the California Department of Financial Protection and Innovation downgraded the bank to problem status, with a composite rating of “5,” the lowest; its discount window status fell to secondary credit, which effectively ended its ability to keep borrowing from the Federal Reserve’s discount window.⁠[1][1][1][1][1][1][1][1][1][1][1]

On Monday, May 1, 2023, the California Department of Financial Protection and Innovation closed First Republic Bank and appointed the Federal Deposit Insurance Corporation as receiver. The FDIC entered into a purchase and assumption agreement with JPMorgan Chase Bank, National Association, which assumed all deposits and substantially all assets; the bank’s 84 offices in eight states reopened that day as JPMorgan Chase branches. As of April 13, the bank had total assets of about $229.1 billion and deposits of about $103.9 billion.⁠[8][9][9][9]

The FDIC said the resolution involved a highly competitive bidding process consistent with the statutory least-cost requirement, estimated the cost to the Deposit Insurance Fund at about $13 billion, and entered into loss-share agreements with JPMorgan Chase on single-family residential and commercial loans. Based on March 31, 2023 data, First Republic was the 14th-largest bank in the United States, and its failure was the second-largest bank failure in U.S. history. Unlike Silicon Valley Bank, its resolution did not invoke a systemic risk exception.⁠[9][9][9][1][1][1][10]

JPMorgan Chase announced that it was acquiring about $173 billion of loans and about $30 billion of securities and assuming about $92 billion of deposits (including the consortium’s $30 billion), but not First Republic’s corporate debt or preferred stock; the FDIC provided loss-share agreements and $50 billion of five-year fixed-rate financing. JPMorgan Chase expected a one-time post-tax gain of about $2.6 billion, plus about $2.0 billion of post-tax restructuring costs. Chairman and CEO Jamie Dimon said the government had invited JPMorgan Chase and others to step up, and that the deal modestly benefited the company overall and helped advance its wealth strategy; the acquired businesses were overseen by Consumer and Community Banking co-CEOs Marianne Lake and Jennifer Piepszak.⁠[10][10][10][10][10][10][10][10]

JPMorgan Chase’s own $5 billion deposit was effectively settled in the acquisition, and on May 9, 2023, it repaid the remaining $25 billion of consortium deposits, with interest, to the other banks. On May 31, the FDIC recorded a loss of $15.6 billion associated with First Republic’s failure, $2.6 billion more than its May 1 estimate, largely because insured deposits increased between the April 13 balance sheet data used for pricing and the failure date. About 4,500 people associated with First Republic formally became JPMorgan Chase employees on July 2, 2023.⁠[6][6][1][1][11]

Former CEO Michael Roffler told the House Financial Services Committee in May 2023 that contagion caused the bank’s failure, saying that until the “cataclysmic events” of March 10 First Republic had been in a strong financial position. Senator Elizabeth Warren criticized regulators’ choice of JPMorgan Chase as buyer, arguing that the nation’s biggest bank had gotten a bargain on a failing bank that made it even bigger.⁠[12][12][12][12]

On September 8, 2023, FDIC Chief Risk Officer Marshall Gentry released, at Chairman Gruenberg’s request, an internal review of the agency’s supervision of First Republic. It found that the primary cause of failure was a bank run following a loss of market and depositor confidence after the failures of Silicon Valley Bank and Signature Bank; First Republic’s rapid growth, loan and funding concentrations, overreliance on uninsured deposits and depositor loyalty, and failure to sufficiently mitigate interest rate risk made it more vulnerable to rate changes and contagion. The report also acknowledged that the FDIC could have been more forward-looking in assessing the impact of rising rates and pressed management harder to mitigate interest rate risk, and it identified eight items for further study.⁠[13][13][13][13][13][13]

On November 1, 2023, an FDIC spokesperson confirmed to ReutersReutersReuters is an international news agency founded in London in 1851 by Paul Julius Reuter and is now the news business of Thomson Reuters. It provides text, photo, video, and graphics coverage to media and institutional clients and distributes it through channels such as Reuters Connect.Open the full entry that the agency was investigating whether former First Republic directors and officers failed to act in the bank’s best interests; under federal law, if it finds decisions made with “willful or continuing disregard” for a bank’s interests, the FDIC can fine such individuals or ban them from the banking industry. As of October 2026, no public outcome of the investigation had been seen.⁠[12][12][12][12]

In January 2024, two brokers formerly at Morgan StanleyMorgan StanleyMorgan Stanley is an American global financial services firm that grew from an investment banking partnership into a publicly traded financial group spanning investment banking, securities trading, wealth management, and investment management.Open the full entry, Alexander Kadish and Nicholas Davey, sued the FDIC as receiver in California, alleging that First Republic executives induced them to join the bank weeks before its collapse with misrepresentations about its stability; the allegations have not been adjudicated by a court.⁠[14][14][14]

JPMorgan Chase’s preliminary estimate of the bargain purchase gain on the acquisition was $2.7 billion; after adjustments of $63 million in 2023 and $103 million in 2024, the final figure was $2.9 billion, and the measurement period ended on April 30, 2024. The consideration included a five-year, $50 billion secured purchase money note issued by JPMorgan Chase to the FDIC at a fixed rate of 3.4 percent; the commercial shared-loss agreement covers 80 percent of credit losses for 5 years plus a 3-year recovery period, and the single-family agreement covers 80 percent of credit losses for 7 years.⁠[6][6][6][6][6][6][6]

On January 17, 2025, JPMorgan Chase reached an agreement with the FDIC on outstanding items from the acquisition, paid the FDIC $609 million on January 31, and recognized a $588 million gain from the reduction of its payable; by June 30, 2025, all outstanding matters between the two relating to the final settlement of the purchase price had been resolved. As of its second-quarter 2026 report, JPMorgan Chase still listed the purchase money note among its long-term secured funding.⁠[6][6][6][15]

On June 9, 2025, U.S. District Judge Araceli Martínez-Olguín in California dismissed with prejudice a securities class action against former First Republic executives and its auditor, KPMG. The suit, begun in June 2023, accused founder James Herbert II, former CEO Michael Roffler, and others of making false or misleading statements about the bank’s financial condition; a Swedish pension fund later became lead plaintiff on behalf of investors who bought its securities between January 14, 2021, and April 27, 2023. The court held that because the plaintiffs had not first exhausted administrative remedies with the FDIC as receiver, it lacked subject matter jurisdiction over the case.⁠[16][16][16][16][16][16][16]