In this article, we will be taking a look at the 25 largest banks in the U.S. by asset size.
The collapse of SVB Financial Group (NASDAQ:SIVB) has sent shockwaves not just through the U.S. banking industry but has had global implications as well. For well over a decade now, banks have been considered infallible, especially the largest banks in the U.S. by asset size. Often deemed too big to fail, questionable bank practices have been continuing with largest risks taken by such banks with no fallout till now.
So how exactly did SVB Financial Group fall? The largest bank collapse since the 2008 Financial Crisis has come about as the perfect storm of a higher risk appetite of the bank, the economic conditions in the U.S. and the world, and stunning incompetence by the senior management of the bank. Several years ago, when near-zero interest rates abounded, SVB Financial Group, like many other financial groups, invested billions of dollars into long-term bonds which is considered to be a safe bet. What SVB Financial Group didn’t do was engage in interest rate swaps to hedge its risk, which came back to haunt the company. When inflation reached record levels, the Federal Reserve hiked interest rates to control inflation, and when interest rates are increased, bond prices start to fall. Hence, when interest rates continued to be increased consistently throughout 2022, and continuing through 2023, the bond portfolio of SVB Financial Group fell. This is also true for several of the other largest banks in the U.S. by assets as at the end of 2022, U.S. banks were sitting on unrealized losses worth $620 billion.
Photo by Bank Phrom on Unsplash
Another issue for tech companies, especially startups, which made up a large percentage of the bank’s clients, faced higher borrowing costs because of which more cash had to be used towards the repayment of debt, while also being unable to raise funding from venture capitalists because of economic uncertainty. Then came the move that company insiders have called “absolutely idiotic”, when the bank’s CEO stated in public the financial issues that the bank was facing even before lining up the requisite capital, thus resulting in a bank run that caused the second-biggest U.S. banking failure on record. One insider said “People are just shocked at how stupid the CEO is. You’re in business for 40 years and you are telling me you can’t raise $2 billion privately? Get on a jet and fly to Kuwait like everyone else and give them control of one-third of the bank.”
Even Jeff Sonnenfeld, CEO of the Yale School of Management’s Chief Executive Leadership Institute (CELI) said that considering SVB Financial Group had capital which was far in excess of regulatory requirements, and didn’t need to disclose its unsubscribed $2.25 billion capital raise. Meanwhile, Treasury Secretary Janet Yellen stated that the government would not be bailing out the bank, which means that even though deposits have been protected by the government to maintain public confidence, creditors and shareholders will definitely not be compensated for their huge losses.
Considering how recent this event is, the fallout from this failure resulted in the market value of banks plummeting in less than a week, with banks such as First Republic Bank (NYSE:FRC), First Horizon Corporation (FHN), PacWest Bancorp (NASDAQ:PACW) and Western Alliance Bancorporation (NYSE:WAL) seeing their share price fall between 23% to 66% on March 13th, with trading halted in some cases because of share prices plummeting. The ramifications have spread across the ocean to Europe as well, with European banks seeing their worst day in a year on March 13th. This is despite HSBC Holdings plc (NYSE:HSBC) announcing the purchase of Silicon Valley Bank UK for £1 which has been positive news for tech companies in the country.
The crisis will continue to impact some of the largest banks in the U.S. by assets, and smaller ones as well, with Signature Bank being closed by the state of New York on March 12, 2023, after customers withdrew over $10 billion in deposits. President Joe Biden has had to come out and attempt to rally confidence amid fears that this could lead to a massive banking failure, the likes of which haven’t been seen since the Great Recession. While overall stocks teetered as a result of these events, the Nasdaq Composite climbed yesterday, with confidence being restored mainly after the Biden administration stated that it would backfill customer deposits at both collapsed banks.
Whether there are any long-term impacts for some of the largest banks in the U.S. by assets remains to be seen, though these banks will definitely be more cautious in their dealings. To determine our list, we obtained all banks that appear in the Fortune 500 list, and checked their latest total assets from Yahoo Finance. So, let’s now take a look at the banks which are now looking over their shoulder, starting with:
25. Popular, Inc. (NASDAQ:BPOP)
Total assets of the company (in billions): $67.6
We kickoff our list with Popular, Inc. (NASDAQ:BPOP) with the Puerto Rican bank which recorded nearly $3 billion in trailing twelve month (TTM) revenue with its net profit from continuing operations in the same time period being $1.1 billion.
24. First Horizon Corporation (NYSE:FHN)
Total assets of the company (in billions): $79.0
First Horizon Corporation (NYSE:FHN) is one of the largest banks in the U.S. by asset size, with services in 12 states across Southeast United States. Corporation has been one of the worst impacted banks by the SVB collapse and questions have risen whether its merger with TD Bank will go ahead or not.
23. Comerica Incorporated (NYSE:CMA)
Total assets of the company (in billions): $85.4
Comerica Incorporated (NYSE:CMA) has been one of the worst-hit banks after the collapse of SVB, with its market cap falling by a third in the last 5 days. Comerica Incorporated is one of six banks that Moody’s has placed on downgrade watch falling the banking industry fiasco.
22. Zions Bancorporation, National Association (NASDAQ:ZION)
Total assets of the company (in billions): $89.5
While 14th March saw Zions Bancorporation, National Association (NASDAQ:ZION) post a strong recovery, over the past 5 days, the bank’s share price is still down by almost 30%. 85% of Zions Bancorporation, National Association’s (NASDAQ:ZION) share capital is owned by institution, thus showing it is one of the favorites among the big guns.
21. Discover Financial Services (NYSE:DFS)
Total assets of the company (in billions): $131.6
Discover Financial Services (NYSE:DFS) earned TTM revenue of $13.4 billion, with its net income crossing $4 billion. Recently, Moody’s upgraded Discover Financial Services to Prime-1.
20. Northern Trust Corporation (NASDAQ:NTRS)
Total assets of the company (in billions): $155,0
Northern Trust Corporation (NASDAQ:NTRS) is one of the oldest continually-operating bangs in the U.S., with offices in 20 U.S. states, while also maintaining locations across 23 countries.
19. Regions Financial Corporation (NYSE:RF)
Total assets of the company (in billions): $155.2
Regions Financial Corporation (NYSE:RF) is the largest bank headquartered in the state of Alabama, and was one of the banks whose trading was halted on 13th March after the price fell significantly.
18. Huntington Bancshares Incorporated (NASDAQ:HBAN)
Total assets of the company (in billions): $182.9
Huntington Bancshares Incorporated (NASDAQ:HBAN) is one of the largest banks in the U.S. by asset size, and has seen its share price decline by 15% in the last five days even as it posted a double digit recovery on 14th March.
17. KeyCorp (NYSE:KEY)
Total assets of the company (in billions): $189.8
KeyCorp (NYSE:KEY) has seen its share price fall by more than 25% in the last five days, despite a recovery of 14.6% on 14th March. According to Baird, KeyCorp has been upgraded to “Outperform”.
16. M&T Bank Corporation (NYSE:MTB)
Total assets of the company (in billions): $200.7
M&T Bank Corporation is one of the largest banks in the U.S. by asset size, and has over 1,000 branches across the country. Just two weeks ago, an independent director in M&T Bank Corporation purchased an additional 14% more shares.
15. Fifth Third Bancorp (NASDAQ:FITB)
Total assets of the company (in billions): $207.5
Fifth Third Bancorp (NASDAQ:FITB) is one of the biggest consumer banks in Midwestern U.S., recording over $8 billion TTM revenue. Recently, Ethisphere announced Fifth Third Bancorp as one of the most ethical companies in 2023, an award that the company has received for the fourth time.
14. First Republic Bank (NYSE:FRC)
Total assets of the company (in billions): $212.6
While First Republic Bank saw its share price fall massively initially after the SVB collapse but rose by over 50% the subsequent day as regional banks began to recover following a major sell-off on 13th March.
13. Citizens Financial Group, Inc. (NYSE:CFG)
Total assets of the company (in billions): $226.7
Citizens Financial Group, Inc. (NYSE:CFG) is one of the biggest banks in the U.S. by asset size, and like most banks, saw its stock plummet in the last 5 days, by almost 20%.
12. State Street Corporation (NYSE:STT)
Total assets of the company (in billions): $301.5
State Street Corporation (NYSE:STT) is one of the oldest operating banks in the United States. If you’re looking for a strong dividend stock, State Street Corporation seems to be a great pick.
11. The Bank of New York Mellon Corporation (NYSE:BK)
Total assets of the company (in billions): $405.8
The Bank of New York Mellon Corporation (NYSE:BK) earned $16 billion in TTM revenue, while its net profit from continuing operations was $2.6 billion. While not as bad as most banks, The Bank of New York Mellon Corporation saw its share price fall by over 10% in the last 5 days.
10. Capital One Financial Corporation (NYSE:COF)
Total assets of the company (in billions): $455.2
Capital One Financial Corporation (NYSE:COF) is one of the biggest banks in the U.S. by asset size, but even before the banking industry crisis began, insiders sold $1.4 million worth of stock, which might indicate bearish signals for the stock.
9. Truist Financial Corporation (NYSE:TFC)
Total assets of the company (in billions): $555.3
Truist Financial Corporation (NYSE:TFC) saw its share price plummet by 29.5% in the last 5 days even as Baird upgraded the stock to “Outperform”, according to Seeking Alpha.
8. The PNC Financial Services Group, Inc. (NYSE:PNC)
Total assets of the company (in billions): $557.3
The PNC Financial Services Group, Inc. (NYSE:PNC) maintains operations in 27 states and owns more than 2,500 branches and 9,500 ATMs. In the aftermath of SVB’s collapse, Citi has upgraded its rating for The PNC Financial Services Group, Inc., calling it a “strong pair of hands”.
7. U.S. Bancorp (NYSE:USB)
Total assets of the company (in billions): $674.8
U.S. Bancorp (NYSE:USB) has lost nearly a fifth of its total value in just the last 5 days.
6. Morgan Stanley (NYSE:MS)
Total assets of the company (in billions): $1,180.2
Morgan Stanley (NYSE:MS) is the first bank in our list of the largest banks in the U.S. by asset size to have more than $1 trillion in assets. Morgan Stanley also said in the immediate aftermath of the banking crisis to sell any gains made post-SVB stock bounces as banks are coming under earning pressures.
5. The Goldman Sachs Group, Inc. (NYSE:GS)
Total assets of the company (in billions): $1,441.8
The Goldman Sachs Group, Inc. (NYSE:GS) has seen its market price fall by 11.3% in the last 5 days, though the Biden administration’s promise to back customer deposits may see this price rebound. The Goldman Sachs Group, Inc. has also predicted that the banking industry crisis will result in further interest rate increases being scrapped to restore confidence.
4. Wells Fargo & Company (NYSE:WFC)
Total assets of the company (in billions): $1,881.0
Wells Fargo & Company has seen its share price fall by 16.8% in just the last five days as the banking crisis continues to impact major and minor companies in the industry.
3. Citigroup Inc. (NYSE:C)
Total assets of the company (in billions): $2,416.7
Citigroup Inc. (NYSE:C) has also been one of the banks which have been raking in deposits after Silicon Valley Bank’s collapse, according to Bloomberg. This positive news for Citigroup Inc. has overshadowed the bank reducing its investment banking headcount in Asia. Citigroup Inc. is also considered to be among the most hated companies in America.
2. Bank of America Corporation (NYSE:BAC)
Total assets of the company (in billions): $3,051.4
Bank of America Corporation (NYSE:BAC) has been one of the companies facing strong criticism from ESG investors, and the second-largest U.S. lander responded when its CEO Brian Moynihan stated to shareholders “We are capitalists”.
1. JPMorgan Chase & Co. (NYSE:JPM)
Total assets of the company (in billions): $3,665.7
Easily topping the list of the 25 largest banks in the U.S. by asset size is JPMorgan Chase & Co.. JPMorgan Chase & Co. has been one of the beneficiaries of the collapse of Silicon Valley Bank, being one of the banks that former Silicon Valley Bank clients have flooded to.
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This article is originally published at Insider Monkey.