Regional bank shares suffer double-digit losses despite JPMorgan Chase’s acquisition of troubled lender.

US regional banks on Tuesday suffered steep losses after the troubled lender’s sale to JPMorgan Chase failed to assure investors that the banking sector’s woes had passed.

Los Angeles-based PacWest Bancorp saw its share price plunge by nearly 30 percent, while Western Alliance Bank and KeyCorp fell by 21 percent and 10 percent, respectively.

Major lenders including Citigroup and Bank of America also took a hit, albeit suffering less steep declines.

“If a ‘confidence crisis’ can happen to First Republic, it can happen to any bank in this country,” Jake Dollarhide, chief executive officer of Longbow Asset Management, told the Reuters news agency.

“This is potentially a big deal, which hopefully won’t materialise to anything significant.”

The losses marked the second day of turbulence for banks on Wall Street despite the US government-engineered rescue of San Francisco-based First Republic, which has been under pressure since the collapse of Silicon Valley Bank last month.

The failure of First Republic marks the second-largest bank collapse in US history after Washington Mutual Bank in 2008.

JPMorgan Chase on Monday acquired most of First Republic in a deal overseen by the Federal Deposit Insurance Corporation (FDIC), which earlier took control of the troubled lender.

Under the rescue deal, JPMorgan Chase bought “the substantial majority of assets” at the lender without acquiring its corporate debt, and received $50bn in financing from the FDIC.

FDIC also agreed to cover 80 percent of any losses from certain loans held by First Republic for up to seven years.

Regional banks have been under heavy scrutiny since the collapse of Silicon Valley Bank and Signature Bank in March amid fears a crisis of confidence could engulf the wider banking sector.