Re “painfully amusing … ” Spot-on @LewisBraham +1 Pogo couldn’t have said it better.
Gosh - The appearance of posts questioning the safety of cash & short-term deposits is also painfully amusing and sounds a lot like those that popped-up on the board (Fund Alarm?) in the first few months of the Great Financial Crisis of ‘07-‘09. Obviously there are stark differences between the two episodes.
From the network news sources, Etsy and Roku are a couple prominent businesses that had money at SVB. Kind of sounds like they’re not covered to the full extent by FDIC insurance. And several Etsy sellers appeared on air bemoaning that their payments for items sold weren’t being received. What say you J. Powell?

Team - I have to ask though, why did Schwab get hammered more so than most other financial instituitons last week?
I am more than nervous (although that is my nature...big propenent of Andy Grove Intel, only the paranoid survive)...what does the market know that we might not? Shoot first, ask questions later?
Schwab's capitalization ration was lower than both SVB and FRC...gives me pause..although SCHW likely has a more diverse deposit base...not sure, I just don't like to see the down 25% stock in a week...
Best,
Baseball Fan

For a small fee, IntraFi (old ICS/CEDARS) would auto-split your $stash into multiple FDIC insured banks, or you can do this yourself.
https://www.intrafi.com/solutions/depositors/

To a limited extent, some brokerages provide a similar service with their bank sweep accounts. Limited because they work with only a small set of banks. For example, Schwab works with five "program banks". See section 7 (B) of Schwab's Cash Features Disclosure.
Not surprisingly, the banks listed are:

• Charles Schwab Bank, SSB ("Schwab Bank") ...
  
• Charles Schwab Premier Bank, SSB ("Schwab Premier Bank")
  
• Charles Schwab Trust Bank ("Schwab Trust Bank")
  
• TD Bank, N.A. ("TD Bank")
  
• TD Bank USA, N.A. ("TD Bank USA")

Schwab Bank and Schwab Premier Bank are both Texas-chartered savings banks that are regulated by the Texas Department of Savings and Mortgage Lending and the Federal Reserve Board. Schwab Trust Bank is a Nevada-chartered savings bank that is regulated by the Nevada Financial Institutions Division and the FDIC. Schwab, Schwab Bank, Schwab Premier Bank, and Schwab Trust Bank are separate but affiliated companies and wholly owned subsidiaries of The Charles Schwab Corporation (and are referred to as the "Affiliated Program Banks"). The Charles Schwab Corporation is a savings and loan holding company, regulated by the Federal Reserve Board. TD Bank and TD Bank USA are national banks regulated by the Federal Office of the Comptroller of the Currency.

"The FDIC separately insures deposit accounts maintained in separately chartered IDIs [insured depository institutions], even if the IDIs are affiliated, such as belonging to a common holding company."
https://www.fdic.gov/resources/deposit-insurance/diguidebankers/general-principles/index.html#idi_basis

The rags are putting out lists of who they deem to be at risk of fallout from SVB. Most of the banks are ones I don't hear people saying they use. But Ally is on most lists that I have seen and has been popular. This messy list is from MSN since it isn't behind a paywall. I wonder if making such lists produces a run on the banks.

10 banks that may face trouble in the wake of the SVB Financial Group debacle

Here are the 10 showing contracting margins over the past year, or the smallest expansions of margins:
Bank Ticker City Net interest income/ avg. assets – Q4 2022 Net interest income/ avg. assets – Q3 2022 Net interest income/ avg. assets – Q4 2021 One-year contraction or expansion
Customers Bancorp Inc. West Reading, Pa. 2.61% 3.10% 4.03% -1.42%
First Republic Bank San Francisco, Calif. 2.28% 2.53% 2.50% -0.22%
Sandy Spring Bancorp Inc. Olney, Md. 3.10% 3.34% 3.29% -0.19%
New York Community Bancorp Inc. Hicksville, N.Y. 2.10% 2.06% 2.20% -0.11%
First Foundation Inc. Dallas, Texas 2.35% 2.98% 2.41% -0.07%
Ally Financial Inc. Detroit, Mich. 4.04% 4.20% 4.09% -0.05%
Dime Community Bancshares Inc. Hauppauge, N.Y. 2.98% 3.20% 2.95% 0.03%
Pacific Premier Bancorp Inc. Irvine, Calif. 3.34% 3.34% 3.27% 0.07%
Prosperity Bancshares Inc. Houston, Texas 2.72% 2.78% 2.65% 0.07%
Columbia Financial Inc. Fair Lawn, N.J. 2.69% 2.78% 2.60% 0.09%
Source: FactSet

I read on Twitter that SVB Financial also offered a money-market fund, and I thought OMG, this is going to be the next huge problem - if the m-mkt fund is tied up in bankruptcy.
BUT SVB used other m-mkt funds for its own m-mkt program, so people who used that should be OK.
https://www.svb.com/liquidity-management/deposits-and-investments/svb-cash-sweep
As for why it couldn't use IntraFi for the banking side for deposits well beyond its needs/wants, I would say that banking is a business of small bps, and SVS thought it was smart itself to pocket those bps.
There are too many "what could be...".

Well, I'm not the only one who questions the present banking oversight/systems failure situation.
Edited excerpts from a current Wall Street Journal article:

Silicon Valley Bank’s failure boils down to a simple misstep: It grew too fast using borrowed short-term money from depositors who could ask to be repaid at any time, and invested it in long-term assets that it was unable, or unwilling, to sell.
In addition, nearly 90% of SVB’s deposits were uninsured, making them more prone to flight in times of trouble since the Federal Deposit Insurance Corp. doesn’t stand behind them. The Federal Reserve was the primary federal regulator for both banks.
“A $200 billion bank should not fail because of liquidity,” said Eric Rosengren, who served as president of the Federal Reserve Bank of Boston from 2007 to 2021 and was its top bank regulator before that. “They should have known their portfolio was heavily weighted toward venture capital, and venture-capital firms don’t want to be taking risk with their deposits. So there was a good chance if venture-capital portfolio companies started pulling out funds, they’d do it en masse.”
To be sure, banks regularly borrow short-term to lend for longer periods of time. But SVB concentrated its balance sheet in long-dated assets, essentially reaching for yield to bolster results, at the worst possible time, just ahead of the Federal Reserve’s rate-hiking campaign. That left it sitting on big unrealized losses, making it more susceptible to customers pulling funds.
The banking industry as a whole had some $620 billion in unrealized losses on securities at the end of last year, according to the Federal Deposit Insurance Corp., which began highlighting those late last year.
Another regulatory issue: accounting and capital rules that allow banks to ignore mark-to-market losses on some securities if they intend to hold them to maturity. At SVB, the bucket holding these securities—consisting largely of mortgage bonds issued by government-sponsored entities—is where the biggest capital hole is.
The idea behind such a bucket is that it insulates an institution from short-term price volatility. The problem this poses is two-fold.
First, a bank may not be able to hold such securities to maturity if it faces a cash crunch, as happened at SVB. Yet selling the securities would force the bank to recognize potentially massive losses.
Second, the treatment of the securities means banks like SVB are discouraged from selling when losses emerge, potentially causing problems to fester and grow. That appears to have been the case at SVB and many other banks as rising interest rates in 2022 caused large losses in bond markets.
Banks have an additional incentive to pile into Treasurys. They have to hold less capital against such holdings, supposedly because they are risk-free. However, this means banks are holding less capital to absorb losses, and Treasurys can lose value due to changes in interest rates.
Others said monetary policy over the past decade played a role. The Fed “suppressed the yield curve and made it very clear to the banking industry that [it] would do this for a considerable period,” said Thomas Hoenig, former president of the Federal Reserve Bank of Kansas City and former vice chairman of the FDIC. “So bankers are making decisions based on that message and based on that policy, and they fill their portfolio up with government securities of varying maturities, and they say they’re going to hold them to maturity.”
That suggests the need for regulators to take a broader view of the risks in the financial system.

I’m not sure on this, but part of the issue may have to do with who legally owns the bank's assets because the bank is in the private sector, and what the FDIC and regulators are legally allowed to do with those assets in the event of a bank run and failure. It’s one thing for the FDIC/ regulators to sell those bonds immediately in its efforts to pay depositors in its standard insurance role. It is another thing for the government to hold onto those bonds potentially for years until they mature to recoup losses. That sounds like nationalization of the bank, which doesn’t happen in the U.S. historically.
Normally, in a bankruptcy there is a line of creditors with a hierarchy of who gets paid first. I could see there being legal wrangling here if the government held the bank’s bond portfolio after backstopping depositors. The argument could be that the bank investors want to seize that bond portfolio themselves to make themselves whole. A SVB stock or more likely bond investor could argue that the bank’s assets now that depositors are secure belong to investors. The government selling those assets immediately to pay depositors eliminates any potential legal ambiguity, even if that sale is at a loss.
I actually think nationalization of failing banks makes a lot of sense. Otherwise, you end up with capitalism on the way up and socialist taxpayer funded bailouts on the way down. Bailouts here are socialism for the rich. In Sweden when they had a similar banking crisis to our 2008 one in the 1990s, they conducted a structured bankruptcy of the failed banks and nationalized them:
https://en.m.wikipedia.org/wiki/Sweden_financial_crisis_1990–1994
Krugman recommended the government do the same thing here as Sweden in 2008 but was ignored. Instead, the financial sector got a big taxpayer funded gift with few long-term repercussions for any of the largest companies and the executives involved.
As for options to avoid “government-induced erosion” from rate increases, floating rate debt comes to mind. But then investors are trading duration or interest rate risk for credit risk.

Hi OJ, Not to answer your question, but I remain curious about why the Treasury couldn't (regs) or wouldn't provide a 'temp' bailout/backstop. Perhaps there is fear of setting a precedent. This is very complex without doubt.
As to part of what you noted about backstopping a business, versus backstopping/bailout of a financial institution that is part of the FDIC/banking system; I recall this from the market melt in 2008. The TARP program had particular criteria for receiving bailout monies. The list and description is here. The program went further into the economy other than financial institutions. Being from Michigan, I gave a lot of attention to what was taking place with the auto industry and the many ancillary organizations that supported this vast industry. If the big 3 auto were to melt away; the impact across the U.S. would be large in many industries, all the way to the local restaurants and bars.
Although insurance companies fall under state regs (to the best of my knowledge), there influence via many insurance products travel the entire country. One such very large insurance company, about 3 days before the TARP money window closed, had made and finalized the purchase of a savings and loan in Indiana, in order to qualify for TARP funds. Note: these 'loans' did carry interest and was expected to be repaid to the Treasury. The Treasury did have a profit when all was settled and done from the various loans.
The Troubled Asset Relief Program (TARP) was instituted by the U.S. Treasury following the 2008 financial crisis. TARP stabilized the financial system by having the government buy mortgage-backed securities and bank stocks. From 2008 to 2010, TARP invested $426.4 billion in firms and recouped $441.7 billion in return.

You are really not addressing my fundamental question, which is not primarily about SVB:
OK, I'm a business owner: why is it my responsibility to protect my cash reserves against government actions- ie, the Fed?
And if it is my responsibility, exactly how am 1 expected to do that? What financial mechanism exists that allows me to simply keep my company money safe from government-induced erosion while I try to run my business?

@msf, @yogibearbull-
I'm still hoping for some commentary by the MFO heavy-hitters on my real question regarding this:
The FDIC is expected to sell the bank’s remaining assets and use the proceeds to "partially" pay the uninsured depositors. Those assets have a reduced present value, which is a major part of the problem.
In more common banking situations the problem is that the value of bank loan assets has been significantly reduced by deterioration in the value of those assets (aka "stupid investing"). That is evidently not the case with Silicon Valley Bank- reportedly their problem is mostly due to the deterioration of the current value of otherwise secure government paper, including long-bonds, mainly due to the actions of another US government agency: the Fed.
Question: If a major source of the problem is that Silicon Valley Bank was forced to sell US Gov't securities at a loss because their current value is less than their maturity value, why would the FDIC or any other "rescue" authority do the same thing? Rather than take an immediate loss, why wouldn't a "rescue authority" provide immediate funding equal to the actual maturity value of the underlying assets, and then retain those assets until they actually mature, thus minimizing the loss due to the maturity problem?
I can see that the eventual recovery value of the government paper, especially the long bonds, might incur some eventual loss to the "rescue" authority, but that seems to me to be a lot better than the potentially disastrous alternative of immediately inflicting major losses on bank depositors.
The financial system doesn't appear to have any decent alternative for those types of business depositors to park the large amounts of cash necessary to maintain their operations. Where exactly were they supposed to keep that money safely? I just don't see any real "bad guys" in this one... and that's surely unusual.

Related from early Friday after the FDIC seizure:
Former Treasury Secretary Lawrence Summers warned that there will be “severe” consequences for the innovation sector of the US economy if regulators don’t smoothly work out the collapse of Silicon Valley Bank.
“It certainly is going to have very substantial consequences for Silicon Valley — and for the economy of the whole venture sector, which has been dynamic — unless the government is able to assure that this situation is worked through,” Summers said on Bloomberg Television’s “Wall Street Week” with David Westin.
Earlier Friday, regulators stepped in and seized the bank known as SVB after it mounted an unsuccessful attempt to raise capital and saw a cash exodus from the tech startups that had fueled its rise. The lender had plowed the tens of billions of dollars it took in from venture-capital-backed startups into longer-term bonds, a move that led to massive losses.
The Federal Deposit Insurance Corp., which has been appointed as SVB’s receiver, only insures bank deposits of up to $250,000. But a large share of the money deposited at SVB was uninsured: more than 93% of domestic deposits as of Dec. 31, according to a regulatory filing.
“There are dozens, if not hundreds, of startups that were planning to use that cash to meet their payroll next week,” according to Summers, a Harvard University professor and paid contributor to Bloomberg Television. “If that’s not able to happen, the consequences really will be quite severe for our innovation system.”
Summers said he hoped that regulators will be “aggressive about containing the problem and containing possible contagion.”
“I don’t think this is a time for moral-hazard lectures or for talk about teaching people lessons,” he said. “We have enough strains and challenges in the economy without adding the collateral consequences of a breakdown in an important sector of the economy.”
The sudden implosion of SVB delivered a deep blow to a sector already reeling from layoffs, falling stock prices and diminishing funding for startups. The bank is most known for its financing in the venture capital community but also serves as a financial supermarket for tech executives, providing mortgages on mansions, personal lines of credit and financing for vineyards.
Treasury Secretary Janet Yellen earlier in the day convened a meeting of top regulators, after which she issued a statement saying that the US banking system “remains resilient” and that regulators “have effective tools” to address developments around Silicon Valley Bank.
For his part, Summers said, “I don’t think this is likely to be a broadly systemic problem.”
The hammering of SVB’s stock triggered a broader selloff in US lenders, with the KBW Bank Index tumbling 16% for the week — the worst selloff since the March 2020 Covid shock to the financial system.
Summers said it doesn’t now look like the biggest banks had the kind of mismatch between the kind of deposits SVB had and “the ways in which they had invested their money in longer-term bonds.”
Earlier Friday, Summers said that “there may be a need for some consolidation” in the banking sector as a result of the latest developments. That could then pose a test for regulators, he said.
A number of Democrats have pushed to limit bank mergers. For example, Senate Banking Committee Chair Sherrod Brown last year called for “ensuring that bank mergers, if approved, serve American families, small businesses, and communities – not Wall Street and big corporations.”
Summers warned that “one of the mistakes the authorities could make would be — out of a fear of consolidation coming from some kind of populist concern about concentration — blocking combinations that would ultimately operate in the direction of financial stability.”
“That’s something I think that we’re going to need to be attentive to going forward,” the former Treasury chief said.
--

Well, after hearing from the MFO community, I've changed the title of this post, as well as my mind. The demise of SVB is multilayered and many faceted, and evidently the commonly encountered "greed and stupidity" factors were a major factor after all, as usual.
Below is a section containing severely abridged excerpts from a long article in The Washington Post.
From that section this excerpt is most pertinent to a question that I have:

The FDIC is expected to sell the bank’s remaining assets and use the proceeds to pay the uninsured depositors.

In more common banking situations the problem is that the value of bank loan assets has been significantly reduced by deterioration in the market value of those assets. That is not the case with Silicon Valley Bank- evidently their problem is mostly due to the deterioration of the PRESENT VALUE of otherwise secure government paper.
Question: If a significant source of the problem is that Silicon Valley Bank was forced, by a depositor bank run, to sell US Gov't securities at a loss because their current value is less than their maturity value, why would the FDIC or any other "rescue" authority do that? Rather than take an immediate loss, why wouldn't a "rescue authority" provide immediate funding equal to the actual maturity value of the underlying assets, and then retain those assets until they actually mature, thus minimizing the loss due to the maturity problem?
Excerpts from the WashPo article-

Federal officials faced growing pressure Saturday to bail out even the biggest customers of the collapsed Silicon Valley Bank, igniting a ferocious political debate over Washington’s role in tamping down potential threats to the broader U.S. financial sector.
Companies that did business with Silicon Valley Bank are already warning that the bank’s failure may force thousands of layoffs or furloughs, and prevent many workers from receiving their next paycheck.
Some experts worry that large numbers of companies could move to transfer their money from regional banks similar to SVB to safer giant commercial banks Monday, leading to a fresh round of destabilization.
“All the choices are bad choices,” said Simon Johnson, an economist at MIT who previously served as chief economist of the International Monetary Fund. “You don’t want to extend this kind of bailout to people. But if you aren’t doing that, you face a run of really big — and really hard to predict — proportions.”
But officials at the FDIC — which, in a stunning move Friday, took over Silicon Valley Bank during normal trading hours — are facing some calls to go beyond giving smaller customers their money back.
On Friday, the FDIC said in a statement that... uninsured depositors with accounts bigger than $250,000 — would get some of their money back, but it did not specify how much. Uninsured depositors make up the overwhelming majority of the bank’s customers.
A slew of federal regulators — including those with the FDIC, Federal Reserve and Treasury Department — have scheduled a number of private briefings with top lawmakers since the bank’s collapse, including members of the House Financial Services Committee, which oversees banking, according to two people familiar with the matter who spoke on the condition of anonymity to describe the conversations.
Unwinding the bank’s balance sheet will begin in the next few days if the FDIC can’t find another bank to take over all of SVB’s business. Customers who had uninsured deposits will receive some amount of money back by next week, the FDIC said, without specifying how much. The FDIC is expected to sell the bank’s remaining assets and use the proceeds to pay the uninsured depositors.
SVB held roughly $150 billion in uninsured deposits, according to the company’s latest financial statement, issued late last month. That amounts to more than 93 percent of the firm’s deposits, Bloomberg News reported. Many of the deposits came from wealthy venture capitalists or tech firms that Washington would face certain fury for aiding, although the precise percentage held by businesses is unknown. Roku, California vineyards and philanthropic efforts backed by venture capitalists were all among the firms that had money at SVB.

Like many others here we use Schwab as our primary financial house. We have no exposure to their banking arm other than a checking account, but I have no idea how or if a problem within the banking arm might possibly spread into the brokerage arm.
In addition to a couple of fund holdings and stock holdings the great majority of our other assets at Schwab are in bank CDs and short-term (2-year max) US Treasuries. No one bank carries anything close to the 250k FDIC limit, and none of the CDs are with the Schwab Bank, so that's about as safe as reasonably possible.
Assuming the worst possible situation... a failure of Schwab bank taking down the brokerage also, I'm wondering how and how long it might take for the mess to be reasonably brought under control. What entities, government and otherwise, would be involved in trying to take care of a situation like that? Who would be responsible for sorting out all of the ownership issues with respect to Schwab brokerage assets?

BTW
"Chief Executive Officer Greg Becker sold $3.6 million of company stock under a trading plan less than two weeks before the firm disclosed extensive losses that led to its failure.
The sale of 12,451 shares on Feb. 27 was the first time in more than a year that Becker had sold shares in parent company SVB Financial Group, according to regulatory filings. He filed the plan that allowed him to sell the shares on Jan. 26."

HSFNX has long been run by one of the smartest managers investing in the financial/banking sector—David Ellison. While investors are selling every bank, it wouldn’t surprise me if he is finding some good opportunities in this environment. He studies balance sheets fairly closely. His fund will behave differently however from the category as this one only buys small companies while the rest mainly buy large ones. He also still runs a much less interesting large-cap fund, I think.

I do have linked Schwab Bank account with my Schwab Brokerage account. I don't know too much specifically about the Schwab Bank, but Charles Schwab is #8 bank holding company (it is also included in annual Fed stress tests). Schwab Bank is also an important profit center for Schwab and it is integrally tied to its robo-advisors. So, I doubt that "Chuck" would let anything bad happen to it and have heaps of eggs on him. I am not worried. https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_United_States
There is good coverage of Silvergate/SI, SVB Financial/SIVB and banks in the current Barron's:
TRADER. The STOCK market has been hit by rising RATE expectations (after POWELL’s 2-day testimony) and falling BANKS/financials (after the failures of SI and SIVB). The problem faced by SIVB – a forced sale of Treasuries at huge loss – isn’t that unusual for banks facing runs (if there is no help from the Fed, FHLB, etc). These events may cause the FED to go slow on rate hikes. In a soft-landing scenario, the SP500 of 4,600 is possible.
UP AND DOWN WALL STREET. Silicon Valley Bank/SIVB is the 2nd largest bank failure in history; it was in part due to losses on forced sale of a huge portfolio of Treasuries. The fed fund futures projections were all over – up after POWELL’s 2-day testimony, and then down on the failure of 2 CA banks, the crypto-friendly Silvergate/SI and the venture-capital (VC)-friendly SIVB. The financials were stressed (KRE, KBE, XLF); credit conditions have tightened. As SIVB lent to tech startups and others burning cash, the prospects of those companies became gloomy. The 2-yr fell 48 bps from Wednesday and similar moves were seen in the past during 10/1987 crash, Lehman failure in 09/2008, 9-11 terrorist attacks. In all this drama, the jobs report was a minor sideshow. But coming are the CPI (Tuesday) and PPI (Wednesday).
All BANKS/FINANCIALS sold off last week (KRE, KBE, XLF). But most differ from SVB Financial/SIVB (and Silvergate/SI). The problem with SIVB was a large loss on huge forced-sale of available-for-sale (AFS, market-to-market) Treasuries, and its efforts for raising capital failed (and the Fed or the FHLB didn’t step in for the rescue). Most large banks have diversified businesses, are well capitalized and can tap multiple sources of funding. While rising RATES are generally good for banks, some overleveraged banks with poor quality loan-books get squeezed. DEPOSITS are also moving from banks into higher-rate Treasuries and money-market funds. SIVB was really a bank for venture-capitalists (VCs) who are sophisticated investors that can move large amounts of money (its sudden closure during the business hours may have been to limit that flight). In better times, SIVB just parked excess deposits into Treasuries that it had to sell suddenly at depressed prices (due to higher rates now). All banks now have large unrealized losses that may be hidden within their hold-to-maturity (HTM, not marked-to-market) portfolios – really, a permissible accounting trick. (In a bank run, the distinction between HTM and AFS basically disappears) Large banks also have tougher regulations and undergo annual stress-tests by the Fed. So, this general selloff offers opportunities in banks now – FITB, HBAN, JPM, KEY, MTB, PNC, RF, USB, etc.
https://www.barrons.com/magazine?mod=BOL_TOPNAV
See also open access LINK1 LINK2

May I ask some of the experts on the board to educate me/us on what they would look for pertaining to the financial strength of a bank? Texas ratio, capitalization, deposit growth etc? What does it all mean and how should one intrepret all that? What is BS and what is important?
Example that got me sideways, Schwab bank...poor capitalization ratio, I would not have guessed that..assets/equity is low...hmm.
YogiBB...looking at you...thoughts?
Best Regards,
Bob

@Sven "I agree that quality journalism has decline significantly and I try to read as much as I can from our local library’s online subscription to major newspapers". =+1
@Old_Joe From your wrap up. "Hopefully we all know or understand that holding bonds or CDs of various types can easily lead to a capital loss if we are required to sell those types of instruments before maturity, and if their value has meanwhile deteriorated due to overall financial market conditions.
So they held short term T-bills paying ? , while paying their customers 20 times less than the T-bills on the customers accounts !! 2% T-bill & customer gets paid .1% !?
Over extended I'd say.
Have a good day, Derf

@LarryB- There's this, from the WSJ:
Following are selected excerpts from a current article in the Wall Street Journal-

First Republic shares fell 52% in early trading before storming back to near the previous day’s closing level, only to then finish the day down 15%. Investors expressed concerns about unrealized losses on assets at the bank as well as its heavy reliance on deposits that could turn out to be flighty.
Addressing its liquidity, First Republic said: “Sources beyond a well-diversified deposit base include over $60 billion of available, unused borrowing capacity at the Federal Home Loan Bank and the Federal Reserve Bank.” Regarding its financial position, First Republic said it “has consistently maintained a strong capital position with capital levels significantly higher than the regulatory requirements for being considered well-capitalized.”
Investors have grown wary of First Republic for reasons similar to those that caused concern at SVB. Like SVB, First Republic showed a large gap between the fair-market value and balance-sheet value of its assets. Unlike SVB, where the biggest divergence is in its portfolio of debt securities, First Republic’s gap mostly is in its loan book.
In its annual report, First Republic said the fair-market value of its “real estate secured mortgages” was $117.5 billion as of Dec. 31, or $19.3 billion below their $136.8 billion balance-sheet value. The fair-value gap for that single asset category was larger than First Republic’s $17.4 billion of total equity.
All told, the fair value of First Republic’s financial assets was $26.9 billion less than their balance-sheet value. The financial assets included “other loans” with a fair value of $26.4 billion, or $2.9 billion below their $29.3 billion carrying amount. So-called held-to-maturity securities, consisting mostly of municipal bonds, had a fair value of $23.6 billion, or $4.8 billion less than their $28.3 billion carrying amount.
Another point of concern that echoes SVB is First Republic’s liabilities, which rely heavily on customer deposits. At SVB, those deposits largely came from technology startups and venture-capital investors, who quickly pulled their money when the bank ran into trouble.
First Republic’s funding relies in large part on wealthy individuals who increasingly have a range of options to seek higher yields on their cash at other financial institutions as interest rates have risen.
Total deposits at First Republic were $176.4 billion, or 90% of its total liabilities, as of Dec. 31. About 35% of its deposits were noninterest-bearing. And $119.5 billion, or 68%, of its deposits were uninsured, meaning they exceeded Federal Deposit Insurance Corp. limits.
Uninsured deposits can prove flighty since they can be subject to losses if a bank fails.

(Text emphasis added in above.)
For additional perspective, there's this from a post that I made earlier in this thread:

Hopefully we all know or understand that holding bonds or CDs of various types can easily lead to a capital loss if we are required to sell those types of instruments before maturity, and if their value has meanwhile deteriorated due to overall financial market conditions.
But I had never given any thought to the possibility of potential bank losses when they have parked substantial amounts of their money in "ultra safe" US Treasuries. An article in this morning's WSJ pointed out that banks are potentially in the same situation as we are.
A bank such as Silicon Valley Bank can have a significant amount of their capital in short-term "safe" Treasuries, but if they are faced with an unexpected run on their deposits, they can be forced to sell those Treasuries before maturity, and at a loss.
So even a reasonably run bank can get into trouble.

Both Silvergate Bank and Silicon Valley Bank are California state-chartered banks. Is there any reason to think oversight would have been better (or worse) if they had national bank charters?
https://dfpi.ca.gov/2023/03/08/dfpi-statement-silvergate-bank-to-begin-voluntary-liquidation/
https://dfpi.ca.gov/2023/03/10/california-financial-regulator-takes-possession-of-silicon-valley-bank/