Second-Largest Bank Failure in US History Underway, Regulators Seize and Strike Multibillion-Dollar Deal

A San Francisco-based bank collapsed on Monday and was seized by the federal government and quickly sold to JPMorgan Chase following for billions of dollars in what was the second-largest bank failure in U.S. history.

First Republic Bank operated 84 locations in eight states but did not have the capital to hand to handle withdrawals during a bank run that commenced following the collapse of two other mid-size banks in March, the Associated Press reported.

The bank was founded in 1985 and, similarly to Silicon Valley Bank and New York-based Signature Bank, catered to mostly wealthy investors.

Both banks went insolvent in March after a bank run put SVB into turmoil — which led to panic for Signature’s customers.

The collapse of First Republic began after the Federal Deposit Insurance Corporation seized SVB and days later Signature when questions were raised about its ability to operate.

The bank invested deposits in low-interest loans but the value of its loans took a hit when the Federal Reserve began to hike interest rates in order to tackle inflation.

Once the other banks failed, panic among investors sent the institution reeling.

The FDIC