Santa Clara, March 11 The Silicon Valley Bank's (SVB) troubles have dragged down a wide swath of the industry. Investors have dumped the shares of banks big and small, shaving $52 billion off the value of the four largest US banks alone.
The megabanks recovered on Friday but many of their smaller peers continued to plunge. Several were halted for volatility, The Wall Street Journal reported.
Investors are now worried about banks with a similar profile to SVB.
Shares of San Francisco-based First Republic Bank, which caters to businesses and wealthy individuals, have fallen about 30 per cent since Wednesday.
"First Republic's deposit base is strong," the bank said on Friday.
Shares of PacWest Bancorp have fallen 54 per cent in the past two days. More than two-thirds of its lending portfolio is tied to real estate, with a sizable portion lent to venture-capital firms, The Wall Street Journal reported.
Customers at SVB tried to withdraw $42 billion about a quarter of the bank's total deposits on Thursday alone, the California regulator said in a filing on Friday.
The flood of withdrawals destroyed the bank's finances; at close of business Thursday, it had a negative cash balance of nearly $1 billion and couldn't cover its outgoing payments at the Fed, according to the filing.
The bank was in sound financial condition on Wednesday, the regulator said.
A day later, it was insolvent, The Wall Street Journal reported.
Goldman bankers arranged for SVB to sell shares at $95 apiece on Thursday afternoon, according to people familiar with the offering.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor