WASHINGTON—The former chief executive officer of
First Republic Bank
plans to tell House lawmakers on Wednesday that his company was the victim of industrywide panic about the health of midsize banks, triggered by the rapid March failures of Silicon Valley Bank and Signature Bank.

“Despite herculean efforts by my incredible colleagues at First Republic… investor and depositor confidence never recovered,”

Michael Roffler
wrote in testimony prepared for the hearing.

The testimony marks the first time Roffler is appearing publicly since regulators seized his bank and struck a deal to sell the bulk of its operations to
JPMorgan Chase
on May 1. He will be joined by former executives of
and Signature, who testified on Tuesday in the Senate. 

San Francisco-based First Republic, the second-largest bank to fail in U.S. history, lost $100 billion in deposits in a March run following the collapse of fellow Bay Area lender SVB. It limped along for weeks after a group of America’s biggest banks came to its rescue with a $30 billion deposit.

“Up until the cataclysmic events of March 10 and the ensuing days…First Republic was in a strong financial position,” Roffler said.

The March failures touched off a crisis of confidence across the sector that has continued despite federal backstops and assurances from regulators that the system is safe. Shares of midsize banks have been badly battered, as investors try to exit institutions they think are positioned similarly to those that failed and as shortsellers look to seize on dramatic swings in financial stocks.

At Tuesday’s hearing, former SVB CEO

Greg Becker
apologized and said the bank was caught off guard as the Federal Reserve raised interest rates over the past year at the fastest pace in decades. The increases led to sharp declines in the value of securities held by banks, which ultimately led to a giant loss for SVB when it attempted to restructure its balance sheet.

Senate Democrats and Republicans blamed both SVB’s and Signature’s’ management for the way they handled rapid growth and rising interest rates before collapsing. 

“You made a really stupid bet that went bad,” Sen.

John Kennedy

(R., La.) said to Becker. “Unless you were living on the International Space Station, you could see that interest rates were rising and you weren’t hedged.”

Write to Andrew Ackerman at [email protected]