First Republic Bank was the 'safe' bank — and it died three weeks after SVB

First Republic Bank, a San Francisco-based lender known for serving wealthy clients with jumbo mortgages and personalized service, was considered one of the safest regional banks in the US. Its loan portfolio was high-quality, and its clients were affluent.

But when SVB collapsed in March 2023, First Republic's depositor base — concentrated in wealthy individuals and businesses with deposits above the $250,000 FDIC insurance limit — panicked. Despite a $30 billion rescue deposit from major banks, First Republic lost over $100 billion in deposits in the first quarter of 2023.

On May 1, 2023, the FDIC seized First Republic and sold it to JPMorgan Chase for $10.6 billion. It was the second-largest bank failure in US history. The case illustrated how the perception of safety can be as fragile as the reality: First Republic's loans were safe, but its depositors were not insured, and in a panic, the quality of the loan book does not matter — the speed of the withdrawal does.