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  • Writer's pictureBy The Financial District

Small U.S. Banks Lost $120-B In Deposits

Small and mid-sized banks lost $120 billion in deposits in just one week as turmoil gripped regional banks, Federal Reserve data showed, while customers sought safer havens at the country's largest financial institutions, David Hollerith reported for Yahoo Finance.

Photo Insert: Toronto-based TD Bank Group announced in February 2022 that it intends t purchase First Horizon National Corp. for $13.4 billion, the deal projected to close by May 27, 2023. The sale, however, is not consequent to the contagion wrought by the recent US banking crisis.

The seizures of Silicon Valley Bank and Signature Bank on March 10 and March 12 sparked fears of potential runs at other banks.

While regional and community banks lost $120 billion during the week ending March 15, the 25 biggest banks raked in $67 billion in new deposits on a seasonally adjusted basis, the Fed said.

The net outflow from all banks was $98 billion, an annual drop of 5.8%. Total industry deposits of $17.5 trillion was the lowest count since September 2021.

The new numbers reinforce the big bank-small bank divide during this crisis as the giants of the industry escape some of the same investor pressure being applied to smaller rivals.

Banking & finance: Business man in suit and tie working on his laptop and holding his mobile phone in the office located in the financial district.

Deposits had been declining at small (and big) banks before the Silicon Valley failure, falling each of the first two months of the year. Deposits for all banks were also down 5% annually in the fourth quarter of 2022.

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