The shares of Silicon Valley Bank, formerly known as SVB Financial Group, tumbled for a second day Friday before the bank was shut down by regulators. There were fears that more banks would suffer heavy losses on their bond portfolios due to the failure. Following a 60% decline in the stock, SVB’s CEO, Greg Becker, held a call with clients Thursday afternoon to ease their concerns. During pre-market trading on Friday, the shares declined another 62% before being halted for pending information. They did not open for trading with the market at 9:30 a.m. ET. Regulators shut down the bank on Friday afternoon and said the FDIC would protect insured deposits.
News reports showed that the bank was in talks to sell itself after attempts to raise capital failed, citing familiar sources. However, rapid deposit outflows outpaced the sale process, which made it difficult for any buyer to do a realistic assessment. The SPDR S&P Regional Banking ETF, which tumbled 8% on Thursday, fell another 4% on Friday as news of SVB’s failure hit. Signature Bank, known to cater to the crypto sector, declined 22% following a 12% tumble Thursday. First Republic Bank fell 15% following a 17% slide Thursday. PacWest Bancorp lost 38%. Many of these bank shares were halted repeatedly for volatility on Friday. Major banks outperformed regional banks. Bank of America lost 0.9%. The Financial Select SPDR Fund dropped 1.8%, following a 4% decline Thursday. “Current pressures facing SIVB are highly idiosyncratic and should not be viewed as a read-across to other banks,” wrote analysts Manan Gosalia and Betsy Graseck with Morgan Stanley in a note Friday.