Regulators on Monday seized First Republic Bank and announced a deal to sell all deposits and most of the assets of the troubled lender to JPMorgan Chase, making it the second-largest bank failure in U.S. history

In a bid to head off further banking turmoil in the U.S., the Federal Deposit Insurance Corp. (FDIC) said early Monday that California regulators had closed First Republic and appointed it as a receiver.

As a result, JPMorgan Chase will assume "all of the deposits and substantially all of the assets of First Republic Bank," it said in a statement.

San Francisco-based First Republic is the third midsize bank to fail in two months. The only larger bank failure was Washington Mutual, which collapsed at the height of the 2008 financial crisis and was also taken over by JPMorgan.

First Republic has struggled since the collapse of Silicon Valley Bank and Signature Bank. Investors and depositors had grown increasingly worried it might not survive because of its high amount of uninsured deposits and exposure to low-interest-rate loans.

The Federal Deposit Insurance Corporation said First Republic Bank’s 84 branches in eight states would reopen as branches of JPMorgan Chase Bank, and depositors will have full access to all of their deposits.

Regulators worked through late last week and this weekend to find a way forward before U.S. stock markets opened. They solicited bids for First Republic Bank’s assets and once again turned to JPMorgan Chase, the nation’s biggest bank, with a reputation as a dealmaker during times of crisis.

Treasury officials also enlisted JPMorgan last month to spearhead a $30 billion funding package for the First Republic.

"Our government invited us and others to step up, and we did," said Jamie Dimon, chairman and CEO of JPMorgan Chase.

As of April 13, First Republic had approximately $229 billion in total assets and $104 billion in total deposits, the FDIC said. The FDIC estimated its deposit insurance fund would take a $13 billion hit from taking the First Republic into receivership. Its rescue of Silicon Valley Bank cost the fund a record $20 billion.

Before Silicon Valley Bank failed, First Republic had a banking franchise that was the envy of most of the industry. Its clients – mostly the rich and powerful – rarely defaulted on their loans.

The bank has made much of its money-making low-cost loans to the wealthy, which reportedly included Meta Platforms CEO Mark Zuckerberg.

Flush with deposits from the well-heeled, First Republic saw total assets more than double from $102 billion at the end of 2019’s first quarter, when its full-time workforce was 4,600.

But the vast majority of its deposits, like those in Silicon Valley and Signature Bank, were uninsured – that is, above the $250,000 limit set by the FDIC. And that worried analysts and investors. If the First Republic were to fail, its depositors might not get all their money back.

Those fears were crystalized in the bank’s recent quarterly results. First Republic said customers rushed to pull out more than $100 billion in deposits following the failure of Silicon Valley and Signature Bank.

Unlike bank runs throughout history, First Republic’s demise was fueled by the speed of social media and digital withdrawals that can be made in seconds from a cell phone.

San Francisco-based First Republic said the $30 billion in funding it received in mid-March from a group of large banks helped it stanch the bleeding. To turn itself around, the bank planned to sell off unprofitable assets, including the low-interest mortgages that it provided to wealthy clients. It also announced plans to lay off up to a quarter of its workforce, which totaled about 7,200 employees in late 2022.

Investors were skeptical, and the devastating quarterly report sent them running for the exits. First Republic shares fell 75% last week and closed Friday at $3.51. Any remaining shareholders are likely to get wiped out. The shares traded at $115 on March 8, right before Silicon Valley Bank failed.

The Federal Reserve and FDIC, which regulate the banking industry along with the Office of Comptroller of the Currency, could face renewed criticism over their handling of the First Republic. Both acknowledged Friday in separate reports that lax supervision had contributed to the failures of Silicon Valley Bank and Signature Bank.

For Dimon and JPMorgan, there may be a sense of deja vu: Back in 2008, Dimon was the go-to banker for Washington to find private solutions for that banking crisis and JPMorgan acquired both Bear Stearns and Washington Mutual.

In a statement, JPMorgan portrayed the First Republic deal as beneficial both to the financial system and the company. As part of the agreement, the FDIC will share losses with JPMorgan on First Republic’s loans.

JPMorgan expects the addition of First Republic to add $500 million to its net income per year, although it expects to incur $2 billion in costs integrating First Republic into its operations over the next 18 months.