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3 Failed Banks This Year Were Bigger Than 25 That Crumbled in 2008

A bar chart of U.S. bank failures since 2001, showing that First Republic Bank’s collapse was the second-biggest in U.S. history in terms of assets. The three banks that failed this year were worth more in inflation-adjusted assets than the 25 that collapsed in 2008.

U.S. bank failures in each year, sized by total assets and adjusted for inflation

$550

billion

500

$110 billion

$94 billion

Signature Bank

24 other banks

450

400

$432 billion

Washington Mutual Bank

350

$209 billion

Silicon Valley Bank

300

250

200

150

$213 billion

100

First Republic Bank

50

’01

’03

’05

’07

’09

’11

’13

’15

’17

’19

’21

’23

U.S. bank failures in each year, sized by total assets and

adjusted for inflation

$550

billion

500

$94 billion

$110 billion

24 other banks

Signature Bank

450

400

$432 billion

Washington Mutual

Bank

350

$209 billion

Silicon Valley Bank

300

250

200

150

$213 billion

100

First Republic Bank

50

’01

’02

’03

’04

’05

’06

’07

’08

’09

’10

’11

’12

’13

’14

’15

’16

’17

’18

’19

’20

’21

’22

’23

Source: Federal Deposit Insurance Corporation Note: Assets data is as of Dec. 31, 2022. Chart includes failures of federally insured U.S. banks and does not include investment banks. By Karl Russell

Government regulators seized and sold off First Republic Bank on Monday, making it the third bank to fail this year after Silicon Valley Bank and Signature Bank collapsed in March.

The three banks held a total of $532 billion in assets. That’s more than the $526 billion, when adjusted for inflation, held by the 25 banks that collapsed in 2008 at the height of the global financial crisis.

The implosion that year of Washington Mutual, as well as the investment banks Lehman Brothers and Bear Stearns, was followed by failures throughout the banking system. From 2008 to 2015, more than 500 federally insured banks failed.

Most were small or midsize regional banks and were absorbed into other institutions, a common outcome for banks that have been put under government control. Washington Mutual, which was heavily involved in risky mortgages and became the largest bank to fail in U.S. history, was sold to JPMorgan Chase.

In recent years, fewer banks have gone under, thanks in part to stricter regulations that were put in place in the wake of the financial crisis. Before Silicon Valley Bank, the last bank to fail did so in late 2020, as the coronavirus was ravaging the country.

The collapses of Silicon Valley and Signature Bank in March led to fears of fallout for the broader industry. Higher interest rates have eroded the value of assets on banks’ balance sheets, stressing the financial system and making it harder for banks to pay back depositors if they decided to withdraw their money.

A bar chart listing the top 30 U.S. banks by assets at the end of 2022. First Republic Bank ranks 14th, Silicon Valley Bank ranks 16th and Signature Bank ranks 29th.

Biggest U.S. banks by total assets

1.

JPMorgan Chase

$3.20

trillion

2.

Bank of America

2.42

3.

Citibank

1.77

4.

Wells Fargo

1.72

5.

U.S. Bank

$585

billion

6.

PNC Bank

552

7.

Truist Bank

546

8.

Goldman Sachs

487

9.

Capital One

453

10.

TD Bank

387

11.

Bank of New York Mellon

325

12.

State Street Bank and Trust

298

13.

Citizens Bank

226

14.

First Republic Bank

213

15.

Morgan Stanley Private Bank

210

16.

Silicon Valley Bank

209

17.

Fifth Third Bank

206

18.

Morgan Stanley Bank

201

19.

M&T Bank

200

20.

KeyBank

188

21.

Huntington Bank

182

22.

Ally Bank

182

23.

BMO Harris Bank

177

24.

HSBC Bank

162

25.

American Express

155

26.

Northern Trust

155

27.

Regions Bank

154

28.

Discover Bank

129

29.

Signature Bank

110

30.

First Citizens Bank

109

JPMorgan Chase

1.

$3.20

trillion

Bank of America

2.

2.42

Citibank

3.

1.77

Wells Fargo

4.

1.72

U.S. Bank

5.

$585

billion

PNC Bank

6.

552

Truist Bank

7.

546

Biggest U.S.

banks by

total assets

Goldman Sachs

8.

487

Capital One

9.

453

TD Bank

10.

387

Bank of New York Mellon

11.

325

State Street Bank and Trust

12.

298

Citizens Bank

13.

226

First Republic Bank

14.

213

Morgan Stanley Private Bank

15.

210

16.

Silicon Valley Bank

209

Fifth Third Bank

17.

206

Morgan Stanley Bank

18.

201

M&T Bank

19.

200

KeyBank

20.

188

Huntington Bank

21.

182

Ally Bank

22.

182

BMO Harris Bank

23.

177

HSBC Bank

24.

162

American Express

25.

155

Northern Trust

26.

155

Regions Bank

27.

154

Discover Bank

28.

129

Signature Bank

29.

110

First Citizens Bank

30.

109

Source: Federal Reserve Board Note: As of Dec. 31, 2022. By Karl Russell

First Republic received a temporary $30 billion infusion from the nation’s biggest banks in March as a way to restore clients’ confidence. But customers withdrew a staggering $102 billion in customer deposits over the first quarter of this year, according to the bank’s quarterly earnings report filed on Monday.

By the close of trading on Friday, the company’s stock price had dropped more than 75 percent last week.

Similar to Silicon Valley Bank, First Republic had many start-up industry clients, and many of its accounts held more than $250,000, the amount covered by federal insurance.

Top 50 banks by share of deposits that are not federally insured

Excludes banking giants considered systemically important

A bar chart showing the share of deposits that were not federally insured at 50 U.S. banks as of the end of last year. At both Silicon Valley Bank and Signature Bank, more than 90 percent of deposits were uninsured. At First Republic, this number was more than 67 percent.

Greater share of deposits uninsured

25%

50

75

100

Silicon Valley

94% of $161 billion total deposits

Signature

90% of $89 billion

Bar heights are proportional to each bank’s total domestic deposits

First Republic

68% of $176 billion

Greater share of deposits uninsured

25%

50

75

100

Silicon Valley

94% of $161 billion total deposits

Signature

90% of $89 billion

Bar heights are proportional to each bank’s total domestic deposits

First Republic

68% of $176 billion

Sources: Federal Financial Institutions Examination Council; Financial Stability Board Notes: Data is as of Dec. 31, 2022. Includes domestic deposits only. Excludes global systemically important banks, which are subject to more stringent regulations, including tougher capital requirements. By Ella Koeze

The regulations put in place for the nation’s biggest banks after the financial crisis include stringent capital requirements, which means they must have a certain amount of reserves for moments of crisis, as well as stipulations about how diversified their businesses must be.

But midsize banks like First Republic, Silicon Valley and Signature do not have the same regulatory oversight. In 2018, President Donald J. Trump signed a law that reduced scrutiny for many regional banks. Silicon Valley Bank’s chief executive, Greg Becker, was a strong supporter of the move. Among other things, the law changed the requirements for the amount of cash that these banks had to keep on their balance sheets to protect against shocks.

In a review of the Fed’s oversight of Silicon Valley Bank released on Friday, Michael S. Barr, the central bank’s vice chair for supervision, said the Fed would “re-evaluate” its rules for banks that were similar in size to Silicon Valley Bank.

Mr. Barr called the bank’s failure a “textbook case of mismanagement.” But he faulted Fed supervisors, too, for not understanding the extent of the bank’s vulnerabilities, and for failing to take decisive action when they did identify problems.

He also noted the real threat of contagion from Silicon Valley Bank. “A firm’s distress may have systemic consequences through contagion — where concerns about one firm spread to other firms — even if the firm is not extremely large, highly connected to other financial counterparties, or involved in critical financial services,” he wrote.