Is the worst of the banking crisis over or has it just begun? First Republic collapse sparks regional bank shares sell-off and Moody's downgrades 11 regional banks citing commercial real estate exposure

• Depositors fled regional lenders on Monday over fears of more banks tanking
• Moody's downgraded 11 banks in April - including collapsed First Republic Bank
• Concerns remain for midsize banks with investment in commercial real estate

After the crash of First Republic on Monday - the third bank failure in the past two months - experts and consumers have been anxious to determine whether it spelt the end of turmoil, or the start of a worsening crisis. 

Despite JPMorgan Chase buying out the bank, shares in several regional lenders fell at the start of the week, sparking fears that more banking pain could be to come. 

Officials announced Monday that they have closed San Francisco-based First Republic Bank, following Silicon Valley Bank and Signature Bank crumbling in March.

While experts have urged calm, saying consumers do not need to worry that we are headed to a similar crisis faced in 2008, there are suggestions that greater instability could mean further grief for midsized firms. 

Late last month, the credit ratings firm Moody's also downgraded 11 regional banks, including Zions Bank, Western Alliance Bank and Bank of Hawaii. The firm specifically cited fears over commercial real estate portfolios, with midsize banks bearing the brunt of high interest rates and stress in the market. 

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

Echoing the failures of Silicon Valley Bank and Signature Bank earlier in the year, the bank collapsed after investors abandoned the institution and pulled their shares in large numbers. 

While financial markets were calmer as the bank headed towards failure, depositors fled regional lenders on Monday over fears of more banks tanking. 

The KBW Regional Banking Index, an index of smaller regional lenders in the US, shed 2.7 percent, hitting a session low.

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

It comes after Moody's downgraded 11 regional banks on April 21 - including the now-collapsed First Republic Bank, which had its stock-rating cut.

In March, the credit ratings firm reported it was reviewing six banks for potential downgrades following the Silicon Valley Bank failure.

The downgrades hit lenders including US Bancorp, Zions Bancorp and Bank of Hawaii Corp.

Western Alliance Bancorp received a two-notch downgrade. 

Moody's expressed concerns over regional banks being more exposed to the commercial real estate market, which is being hard-hit by higher interest rates.

Midsize banks are the nation’s largest lenders for projects like apartment buildings, office towers and shopping centers.

According to the New York Times, vacancy rates are climbing nationwide with office blocks empty as more staff work from home.  

More than $1 trillion in commercial real estate loans will come due before the end of 2025, and as banks tighten their underwriting, many borrowers may struggle to refinance their debts, the outlet reports. 

However some experts believe that any immediate fallout from First Republic is contained. 

'Right from the beginning, when Silicon Valley started to collapse, the screens were run and the weak players were identified,' Steve Biggar, an analyst who covers JPMorgan at Argus Research, told the outlet. 'I think the conclusion of First Republic at this point should alleviate a lot of the concerns about the banking crisis. All these banks are in stronger hands now.'

Thanks in part to stricter regulations that were put in place in the wake of the Global Financial Crisis, fewer banks have gone under.

But higher interest rates have chipped away at the value of assets on the balance sheets of banks, putting pressure on the financial system and making it more difficult for banks to pay back depositors if they decide they want to withdraw their money.

Plus, the three American banks that have failed so far this year are bigger than the 25 that collapsed in 2008, data shows.

The three banks held a combined total of $532 billion in assets, which - according to the New York Times and when adjusted for inflation - is more than the $526 billion held by all the US banks that collapsed in 2008 at the peak of the financial crisis.

First Republic had approximately $213 billion in total assets and, at the end of last year, the Federal Reserve ranked it 14th in size among US commercial banks.

Silicon Valley Bank, meanwhile, had $209 billion total assets, while Signature bank had $110 billion - taking the combined asset total to $532 billion.