Hundreds of banks are vulnerable to collapse. Here's the latest outlook [View all]

San Francisco Chronicle / May 15, 2023

In the wake of the collapses of Silicon Valley Bank, Signature Bank and First Republic Bank, customers at some midsize regional banks have withdrawn money, potentially setting up those banks for similar scenarios as the failed banks, where they are forced to sell underwater assets for quick cash to satisfy their depositors.

“It’s fair to say that scores and possibly hundreds of banks are vulnerable in this way,” said Robert Hockett, a Cornell University professor of law and public finance. “As more and more banks get into trouble or fail, increasingly depositors in the remaining banks think, ‘Maybe I should move my money into the too-big-to-fail banks.’ We’ve had a massive drain from community and retail banks into the JPMorgan Chase-type banks.”

SNIP

Plenty of smaller banks reported an outflow of deposits in the first quarter, although only a few are in double-digits.

PacWest of Los Angeles, Western Alliance of Phoenix and Comerica of Dallas are the largest ones experiencing this phenomenon — but all are a fraction of the size of the three banks that have already failed, meaning their collapses wouldn’t be seismic events. Likewise, their quarter-over-quarter deposits declines (16.9% at PacWest, 11.3% at Western Alliance and 9.4% at Comerica) fall short of the 40.8% decline that triggered First Republic’s collapse.)

LINK (paywall for some): https://www.sfchronicle.com/us-world/article/bank-collapse-18094067.php

From the link:

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Banks with biggest deposit declines in Q1 vs. prior quarter
A table showing the 11 U.S. banks with the biggest declines in deposits this quarter
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Company / Total assets / Total deposits / Change in deposits since last quarter / Change in deposits since last year

First Republic*, San Francisco / $232.9B / $104.5B / −41% / −36%

PacWest, Los Angeles / $44.3B / $28.2B / −17% / −15%

Eagle, Bethesda, Md. / $11.1B / $7.5B / −14% / −22%

Western Alliance, Phoenix / $71.1B / $47.6B / −11% / −9%

Macatawa, Holland, Mich. / $2.6B / $2.3B / −11% / −10%

Comerica, Dallas / $91.1B / $64.7B / −9% / −17%

Bank of Marin, Novato / $4.1B / $3.3B / −9% / −16%

Riverview, Vancouver, Wash. / $1.6B / $1.3B / −7% / −18%

Northfield, Woodbridge, N.J. / $5.7B / $3.9B / −7% / −11%

Parke, Sewell, N.J. / $2.0B / $1.5B / −7% / −13%

Independent Bank Group, McKinney, Texas / $18.8B / $14.1B / −7% / −5%

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Data compiled May 3, 2023, based on quarterly GAAP filings. Analysis limited to U.S. banks that reported calendar first-quarter 2023 earnings and were listed on a major exchange through April 28, 2023.

*First Republic Bank failed on May 1, 2023, and was purchased by JPMorgan Chase.