A number of regional banks continued to see steep declines in their share prices on Wednesday in the wake of the abrupt failure of Silicon Valley Bank late last week that rattled investors and undercut confidence in the U.S. banking system.
San Francisco-based First Republic Bank, which has been closely watched since the Santa Clara-based Silicon Valley Bank’s collapse, saw its shares drop by more than 21 percent as of market closure on Wednesday.
Also in California, Los Angeles-based PacWest Bancorp shares declined by nearly 13 percent.
In Ohio, KeyCorp and Fifth Third Bancorp both fell nearly 4 percent and Huntington Bancshares was down just under 2 percent.
The falls were notably lower than some of the stark drops seen Monday, but still evidence of the impact of the recent bank failures on mid-sized institutions.
Silicon Valley Bank fallout continues to spread
Silicon Valley Bank’s closure last Friday was the largest bank failure since the 2008 financial crisis. When New York’s Signature Bank was shuttered on Sunday, it became the second-largest failure in that period.
The bank closures caused investor anxiety, and mid-sized banks slid significantly amid concerns that depositors would withdraw from regional institutions to put their funds into bigger banks.
The administration moved Sunday to assure customers at both banks that their deposits would be guaranteed, going beyond the federal insurance issued by the Federal Insurance Deposit Corporation of up to $250,000 per depositor.
President Joe Biden has also stressed that the U.S. banking system is safe amid the turmoil. He’s faced criticism from many on the right over the rescue operation for the Silicon Valley and Signature banks, but underscored that the American taxpayer won’t bear the cost.
Still, regional banks are feeling the ripple effects of the recent incidents.
S&P global concluded Wednesday that “the risk of deposit outflows is elevated” at San Fransisco’s First Republic Bank “despite actions by federal regulators,” as reported by CNN.