First Republic collapse sparks regional bank shares sell-off – fueling fears banking crisis could engulf other midsized firms

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Shares of several regional lenders fell on Monday after the collapse of First Republic Bank, the third major casualty of the biggest crisis to hit the US banking sector since 2008.

The banking turmoil erupted from the closure of Silicon Valley Bank and Signature Bank in March, causing depositors to flee regional lenders and fueling fears that the crisis could engulf other midsized banks.

The KBW Regional Banking Index shed 2.7 percent on Monday, hitting a session low, while shares of Citizens Financial Group, PNC Financial Services Group, Truist Financial Corp and U.S. Bancorp fell between 3 percent and 7 percent.

Valley National Bankcorp, which owns Valley National Bank, lost more than 20 percent.

A deal was announced earlier on Monday that allows for an orderly failure of First Republic, following the announcement that JPMorgan Chase purchased the bank.