⚠ Being the Buyer of Last Resort Is Also Being the Only One LeftLow threat

JPMorgan Chase (JPM) — threat to the moat

Every crisis acquisition makes the too-big problem worse and requires a regulator to make an exception, which is a favour rather than a right.

The transaction that most flatters JPMorgan's moat is the one that most strengthens the case against it.

Total deposits at year end ($bn)$1,562bn2019$2,144bn2020$2,462bn2021$2,340bn2022$2,401bn2023$2,406bn2024$2,559bn2025SEC EDGAR XBRL and Form 10-K, FY2025
Deposits jumped 37% in 2020 and grew in 2023, the year First Republic was absorbed.

Each time the firm absorbs a failing institution, its deposit share, its systemic footprint and its GSIB surcharge all rise. The 2023 acquisition of First Republic required a specific regulatory exception, because JPMorgan already exceeded the nationwide deposit cap that ordinarily prohibits such deals.

That is a favour, and favours are political. A firm whose growth in crises depends on regulators making exceptions is a firm whose strategy has a constituency problem, and the political environment for large banks has not historically been stable across administrations.

There is also a straightforward financial version of the risk: crisis acquisitions are underwritten in days, on assets whose value is uncertain precisely because the seller failed. The gains booked have been large1, and they are estimates.

What makes the trade attractive anyway is that the alternative buyer is usually the government.

Watch the deposit cap and how it is treated. If exceptions stop being granted, the most reliably profitable transaction in this bank's history stops being available.

References
  1. ReportedAn estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition.
    JPMorgan Chase & Co., Form 10-K FY2025 — consolidated financial statements and management's discussion (SEC, CIK 19617). Total net revenue $182,447M (2024 $177,556M, 2023 $158,104M); total noninterest expense $95,640M (2023 $87,172M); pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M; diluted EPS $20.02; ROE 17%, ROTCE 20% (2024 22%, 2023 21%); overhead ratio 52% (2024 52%, 2023 55%); loans-to-deposits 58% (56%, 55%); deposits 63% of total liabilities. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M, tangible common equity $290,018M, book value per share $126.99, tangible book value per share $107.56, dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: CCB $76,029M / $71,507M / $70,148M; CIB $78,454M / $70,114M / $64,353M; AWM $24,073M / $21,578M / $19,827M. Banking & Payments by client coverage: Global Corporate Banking and Global Investment Banking $25,285M, Commercial Banking $11,851M. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M); US interest-bearing demand $321,145M at 3.26%; US savings $875,519M at 1.41%; total deposits 1.80% (2024 2.08%, 2023 1.70%). An estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition, with a further $588M First Republic-related gain in the first quarter of 2025; 2024 revenue included a $7.9bn net gain on Visa shares. — FY2025 · publ. 2026-02-13 · source ↗
Sources
Generated September 23, 2026