How Much Of Regional Bank Deposits Are Not FDIC Insured?

Silicon Valley Bank (SVB) and Signature Bank's balances were mostly uninsured—and other regional banks have less, but still significant, uninsured deposits.

More than 90% of the deposits at Silicon Valley Bank and Signature Bank were uninsured, according to data collected by Wedbush Securities. That means almost all deposits at those banks were greater than the $250,000 Federal Deposit Insurance Corporation (FDIC) insured limit—most likely a function of the kind of customers the firms attracted.

The Federal Reserve made an exception last week, saying depositors would be made whole, an intervention that sent a strong message: The banking regulator wouldn't let the system collapse. Yet no one can guarantee that the Fed will make the same exception for depositors of other regional banks in case of a failure.

Events of last week sparked worries about whether other regional banks had high uninsured deposits that would be in danger during a broader crisis in the regional banking sector.

Regional banks such as First Republic (FRC), PacWest Bankcorp. (PACW), Zions Bankcorp. (ZIONS), Comerica (CMA) and Western Alliance Bankcorp. (WAL) faced extreme volatility. Customers and investors in these banks wondered if their money was safe. The chart below shows that uninsured deposits range from 68% at First Republic to 47% at Keycorp.

A bank becomes insolvent when it doesn't have enough money to pay what its customers had deposited it with it. Ideally, a bank's risk management system should ensure that never happens—but sometimes it does. The past two weeks have featured the second- and third-largest bank failures in U.S. history with the collapse of Silicon Valley Bank and Signature Bank.

If a bank is insured by the FDIC, up to $250,000 per depositor is insured. Any amounts over that $250,000 limit is considered 'uninsured deposits' by the FDIC.That means, in case of a bank failure, you will not get any amount in excess of $250,000 you had in your account.