11 days of bloating that brought down 4 banks and left the 5th totter

Here’s how the turmoil played out in companies and how regulators reacted amid fears that the crisis could still spread:

Silvergate

Silvergate Capital Corp. was the first American bank to collapse due to being subjected to the collapse of the crypto industry. Courtesy of the Federal Reserve Federal Deposit Insurance Corporation. tried to intervene by discussing with management ways to avoid shutdown.

But the La Jolla, California-based company was unable to bounce back due to a regulatory scrutiny and a criminal investigation by the Department of Justice Fraud Unit into deals with fallen Sam Bankman-Freed crypto giants FTX and Alameda Research.

While no wrongdoing was alleged, Silvergate’s problems worsened as the bank sold off assets at a loss to cover withdrawals by frightened customers. On March 8, he announced plans to wind down his operations and liquidate his bank.

Bank of Silicon Valley

With Silvergate’s obituary mostly written, SVB Financial Group Silicon Valley Bank’s investors and depositors were already on edge when the company announced a $2.25 billion share sale plan on March 8, as well as a significant loss to its investment portfolio.

The company’s stock fell 60% the next day on the news, and it crashed into the FDIC the next day. US regulators moved to split the bank when they couldn’t find a suitable buyer. But more encouraging news came on Monday when the FDIC extended the bidding process after receiving “significant interest” from several potential buyers.

First Citizens BancShares Inc., one of the largest buyers of bankrupt US lenders, is still hoping to secure a deal for the entire Silicon Valley bank, Bloomberg News reported Monday, citing people familiar with the matter.

Signature Bank

On March 12, Signature Bank became the third-biggest bank failure in U.S. history after a spike in customer withdrawals that accounted for about 20% of the company’s deposits.

The collapse of Silvergate four days earlier made customers wary of holding their deposits with Signature Bank, despite the cryptocurrency’s much lower exposure. Federal regulators said they had lost faith in the company’s management and turned the bank over to a receiver. Both insured and uninsured clients have been given access to all their deposits under a provision that regulators have used known as “systemic risk exemption”.

Signature Bank deposits and some of its loans were transferred to Flagstar Bank New York Community Bancorp late Sunday evening. The buyer agreed to purchase $38 billion in assets from the FDIC, including $25 billion in cash and about $13 billion in loans. It also made commitments of about $36 billion, including $34 billion in deposits. Signature branches will now operate as Flagstar locations.

Credit Suisse

Shares of Credit Suisse Group AG fell on Sunday after Swiss officials brokered a 3 billion franc ($3.2 billion) acquisition with UBS Group AG aimed at averting a wider financial crisis. The only other option considered was full or partial nationalization.

The end of the 166-year-old Swiss institution follows Chief Executive Officer Ulrich Körner’s attempt to save the bank through extensive customer service, which pulled an unprecedented amount of funds out of the bank last year. Ultimately, this attempt was not enough to counter multiple scandals and multibillion-dollar losses from Credit Suisse deals with disgraced financier Lex Greensill and bankrupt investment firm Archegos Capital Management.

On March 9, the US Securities and Exchange Commission requested the bank’s annual report, forcing it to delay its publication. Panic spread after the collapse of US regional creditors, and the chairman of the bank’s largest shareholder, the National Bank of Saudi Arabia, ruled out further investment in the company.

First Republic

First Republic Bank fell victim to the same customer flight that eventually sank three of its US competitors, with one estimate of potential deposit outflows putting the figure at $89 billion.

Last week, eleven US lenders tried to support First Republic Bank with a $30 billion cash injection. But the San Francisco-based company, which caters to the personal banking needs of the tech elite and other wealthy individuals, nevertheless fell to an all-time low amid multiple credit downgrades.

J.P. Morgan Chase & Co. Chief Executive Jamie Dimon has developed a new First Republic bailout plan that would convert some or all of the 11 banks’ $30 billion in deposit injections into capital injections, Bloomberg reported Monday, citing people familiar with the situation.