Comerica Bank, other financial institution stocks plunge after Silicon Valley Bank collapse

Bank stocks fell Monday, including those of institutions with a large presence in Michigan.

The drop comes in light of the closure of Silicon Valley Bank as investors withdrew billions of dollars from the bank within hours on Friday.

The stock prices of banks with a large local presence in Michigan were down overall on Monday, with some faring better than others.

As of close Monday, Comerica Bank stock was at 42.53 a share, down 27.6%.

Huntington Bancshares stock was at $11.12 a share at close, down 16.8%.

Stock shares for New York Community Bancorp, Inc., which owns Flagstar Bank, were at $6.41, down 13.03%.

Grand Rapids-based Independent Bank's stock was at $18.40 a share, down 8.09%.

Grand Rapids-based Mercantile Bank's stock was at $30.16 a share, down 7.68%.

JPMorgan Chase & Co. was at $131.25 a share, down 1.8%.

U.S. regulators closed Silicon Valley Bank after it was hit by a bank run. It is the second largest bank failure in U.S. history, behind only the 2008 failure of Washington Mutual. New York-based Signature Bank also failed.

President Joe Biden sought Monday to reassure bank customers that the nation’s financial systems and their deposits were safe: “Your deposits will be there when you need them," he said.

Banking experts say that Silicon Valley Bank had a set of challenges that would not carry over to other banks. Those issues include poor balance sheet management, said Chenxi Wang, founder and general partner of California-based Rain Capital.

“However, the Silicon Valley Bank's immediate ecosystems, its customers, partners and suppliers, are impacted and the stock dip today is the market's reaction to that,” she said.

Wang said she doesn’t expect banks more diversified than Silicon Valley to experience the same issue long term.

Tim Nash, an economist at Northwood University, said the stock market drop on Monday shows that investors are taking a closer look at banking institutions.

“The stock market tends to have savvy investors that are looking at the stock of a bank and saying, ‘Are we certain that everything is in good shape?,’” he said.

Nash said he expects a stock price recovery for institutions such as Comerica Bank, PNC Bank and Fifth Third Bank. He said that Comerica Bank, which is he familiar with having previously served on a regional board, is a well-managed bank.

"I think that those are all good banks and I think that they will all recover," he said. "I don't think that any of the banks are in difficult shape."

Nash noted that as of Monday afternoon, the stock price for JP Morgan Chase had fallen about 1.5%.

“That's not bad at all,” he said.

cwilliams@detroitnews.com

Twitter: @CWilliams_DN