- Western Alliance Bancorp shares plunged more than 80% in premarket Monday after SVB’s failure.
- The Arizona lender tried to ease worries last week when it made a statement about its “strong” finances.
- First Republic, PacWest and other small lenders are also seeing shares fall as investors fret about banks’ health.
The Arizona-based bank’s stock plunged 83% to $7.84 on Monday, following a 21% slide on Friday.
That poor showing comes despite efforts to ease investor concerns that other banks would be hit by the same problems suffered by SVB. On Sunday, Signature Bank became the third lender to shut its doors in the space of a week, after crypto-friendly bank Silvergate closed voluntarily.
On Friday, SVB was closed by regulators and put under the control of The Federal Deposit Insurance Corporation after That followed a tumultuous few days for SVB, which saw a call for capital fail and a rush of depositors withdrawing their funds.
A former top banking regulator believes SVB will be the first of several banks to fold in the weeks ahead.
“There’s no doubt in my mind: There’s going to be more. How many more? I don’t know,” William Isaac, the former chairman of the FDIC, told Politico on Sunday.
Last week, Western Alliance said their liquidity and deposits “remain strong” in an updated financial statement. It reported total deposits of $61.5 billion, up nearly $8 billion from the end of 2022. It also said it held $2.5 billion cash on its balance sheet.
In a move to calm nerves, the US Treasury, Federal Reserve and the FDIC made a joint statement late Sunday, effectively saying they would make all depositors in SVB and Signature whole. They also said they would set up a new facility, the Bank Term Funding Program, to provide liquidity for banks under stress.