The 11 Days of Turmoil that Brought Down Four Banks and Left a Fifth Teetering

Investors are reeling from the speed at which four banks failed, and one still struggles. Although the bank failures occurred in just 11 days, each of the situations that led to their collapse was unique.

Here are the details of the company’s turmoil and the regulators’ responses to it, amid concerns that the crisis could still spread.

Silvergate Capital Corp. became the first US bank to go bust due to its exposure to the meltdown of the crypto industry. The Federal Deposit Insurance Corp. was authorized to intervene and discussed with management how to avoid a shutdown.

Despite being under scrutiny by regulators and a criminal investigation of the Justice Department’s Fraud Unit into the dealings between Sam Bankman-Fried and Alameda Research, the California-based company couldn’t recover.

Although no wrongdoing was alleged, Silvergate’s problems grew as the bank sold assets at a loss in order to pay withdrawals from its customers. On March 8, it announced its plans to close its operations and liquidate the bank.

Silvergate’s final obituary has been completed. Investors and depositors in SVB’s Silicon Valley Bank were already nervous when, on March 8, the company announced that it would be selling $2.25 Billion of shares. It also made significant losses to its investment portfolio.

The company’s shares plunged 60% on the news and collapsed into FDIC receivership that day. After failing to find a buyer, US regulators began moving toward the bank’s dissolution. The FDIC received substantial interest from multiple buyers, and extended the bidding process on Monday.

First Citizens BancShares Inc. is one of the largest buyers of failed US lenders and still hopes to make a deal for Silicon Valley Bank. Bloomberg News reported Monday citing people who are familiar with the matter.

Signature Bank was the third-largest US bank failure on March 12. This happened after a surge of customer withdrawals which accounted for about 20% of the company’s deposits.

Four days before Silvergate’s collapse, clients were hesitant about depositing at Signature Bank. However, Signature Bank has a much lower exposure to crypto. Federal regulators declared that they had lost faith in Silvergate’s leadership and placed the bank under receivership. Under a provision known as the “systemic risks exemption,” both insured and uninsured customers had access to their deposits.

New York Community Bancorp took over Signature Bank’s loans and deposits late Sunday. The FDIC agreed to buy assets worth $38 billion, which included $25 billion in cash and $13 billion in loans. The acquirer also assumed liabilities worth $36 billion, which included $34 billion in deposits. Flagstar will operate Signature’s branches.

Credit Suisse Group AG collapsed Sunday after Swiss officials brokered an agreement with UBS Group AG to acquire UBS Group AG . This deal was intended to avoid a wider financial crisis. Only partial nationalization was an alternative option.

Ulrich Koerner, the chief executive officer of the bank, attempted to save it with extensive outreach to clients. The bank had received an unprecedented amount in funds last year. Unfortunately, the attempt was not enough to stop multiple scandals and multibillion dollar losses due to Credit Suisse’s dealings involving disgraced financier Lex Greensill as well as failed investment firm Archegos Capital Management.

The US Securities and Exchange Commission questioned the bank’s annual reports on March 9 and forced it to be delayed. After the collapse of US regional lenders, panic set in and the chairman of Saudi National Bank, decided to stop investing further in the company.

First Republic Bank was sunk by the same customer flight that ultimately sank three US competitors. One estimate of possible deposit outflows puts the figure at $89 Billion.

Eleven US lenders attempted to support First Republic Bank last week with a $30 billion cash injection. Despite multiple credit-rating downgrades, the San Francisco-based company that caters to tech’s elite and wealthy has fallen to an all-time low.

JPMorgan Chase & Co. Chief executive Officer Jamie Dimon devised a plan to help First Republic. It would convert some or all the $30 billion in deposit injections into a capital influx.