First quarter reports showed which US banks' deposit bases were hit hardest by the turmoil in March, with more than two dozen seeing declines in excess of 5%.

Despite a liquidity crunch that has led to several high-profile failures, publicly traded banks in the US actually posted a median 0.1% sequential increase in deposits in the first quarter, according to S&P Global Market Intelligence data, a sign that many institutions navigated the environment relatively well.

But those that did report hefty declines included banks with particularly sharp stock drops in the days after JPMorgan Chase & Co. acquired most of First Republic Bank and Chairman and CEO Jamie Dimon declared his hope that "our mini bank crisis is over."

Largest declines

First Republic failed after posting a 40.8% sequential drop in period-end deposits, the biggest decline among publicly traded banks that had reported through April 28.

PacWest Bancorp, which logged a 16.9% sequential decline in deposits in the first quarter, and Western Alliance Bancorp., which notched an 11.3% decline, both share some of the characteristics that put a number of banks at the center of market scrutiny. Those common traits include relatively high levels of uninsured deposits, sharp fair-value marks against assets after interest rates soared in 2022 and exposure to the venture capital industry.

They also differ from First Republic in several notable ways. First Republic reported that its deposits continued to decline early in the second quarter, while Western Alliance and PacWest reported that severe outflows in the middle of March were followed by recoveries that extended into the next month. Both also have diverse business units; outflows were concentrated in technology and venture banking segments. Also in contrast with First Republic, which declined to take questions during a brief call for its first-quarter results, both PacWest and Western Alliance provided concrete guidance for metrics, including their net interest margins.

Western Alliance reiterated its guidance for $2 billion in quarterly deposit growth this year in a business update after the First Republic failure and said there had not been unusual flows following the news. In a similar update, PacWest said it had not experienced out-of-the-ordinary deposit flows after the First Republic failure and that its board is reviewing strategic options as it normally would after being "approached by several potential partners and investors." Both also reiterated that they have moved rapidly to improve deposit insurance coverage of their portfolios to about 75%.

Neither PacWest nor Western Alliance are First Republic, Wells Fargo analyst Jared Shaw said in a May 2 research note, but there is a risk that falling share prices will "ultimately dictate the fate of the companies."

Biggest banks

A majority of the largest US banks posted quarter-over-quarter declines in total deposits, but some bucked the trend.

Period-end deposits were up 1.6% at JPMorgan Chase, including about $50 billion of inflows that the bank estimated had emanated from the turmoil in March and remained at the end of the month. Average deposits were down 2.5% sequentially, however, and the bank said it still anticipates modest outflows, reflecting factors like the Federal Reserve's tightening of monetary policy.

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Stabilizing industrywide

Weekly industrywide data from the Fed has shown a stabilization in flows since the sharp fluctuations in the middle of March.

Of the $289.04 billion drop in seasonally adjusted deposits at domestically chartered banks from March 8 to April 19, $255.57 billion flowed out in the first two weeks, according to the most recent data.

Surges in other borrowing and the most liquid assets have also subsided. Cash assets jumped $412.37 billion, or 25.3%, during the week that ended March 15 but subsequently drifted down by $72.27 billion through April 19.

Though there are signs that stress in the banking industry is not getting any worse, "it is hard to conclude it is getting better quickly," BofA Global Research analysts said in a May 2 note.