Understanding Bank Collapses: Why 2023's Failures Stand Out

When Silicon Valley Bank crashed in March 2023, it shocked the financial world. Yet what many don’t realize is that bank failures are far more common than headline crises suggest. Since 2000, the U.S. has experienced 565 bank failures—averaging nearly 25 annually. But the back-to-back collapse of SVB and Signature Bank just days apart represents something genuinely unusual in modern banking history.

The Scale Makes All the Difference

To understand why these two recent bank collapses captured so much attention, consider the numbers. Silicon Valley Bank held $209 billion in assets when it failed—roughly 2,000 times larger than Almena State Bank of Kansas, which shut down in 2020 with just $69 million. Signature Bank followed with $110 billion in assets, making it the third-largest bank failure ever recorded.

For perspective: in 2010, when 157 banks failed in a single year, their combined assets didn’t even approach what SVB alone held. Most bank failures historically involve small, regional institutions that few people have heard of. Large-scale collapses are exceedingly rare.

The only comparable incident? Washington Mutual’s 2008 failure with $307 billion in assets—the largest in U.S. history and a marker of the financial crisis itself.

When Bank Failures Cluster

The timing of banking collapses reveals hidden patterns. The period from 2008 to 2012 was catastrophic: 465 of the 565 total failures (82%) occurred during this five-year window. The Great Recession hit hard, with 2010 alone seeing 157 institutions shut down.

By contrast, the years before 2007 remained calm. From 2001 to 2007, the U.S. averaged just 3.57 bank failures annually. Then the recession hit in December 2007, triggering an avalanche.

The resilience that followed was remarkable. From 2015 to 2020, annual bank failures dropped to fewer than five. In fact, 2021 and 2022 saw zero failures—until SVB’s March 10, 2023 collapse broke a 867-day streak.

Geographic and Seasonal Hotspots

Bank failures don’t distribute evenly across the nation. California, Florida, Georgia and Illinois dominate the list. Georgia and Florida alone account for 30% of all bank failures since 2000—driven largely by the 2008-2012 housing and lending crisis that devastated their banking sectors.

California reported 42 failures despite its size and prominence. New York, the nation’s banking capital, has seen only six since 2000—until Signature Bank’s failure changed that calculus.

There’s also a curious seasonal pattern: banks fail most frequently around quarterly turns—January, April, July and October. Friday afternoons are the typical execution time (95% of failures), allowing regulators the weekend to settle accounts and prevent panic. Signature Bank’s Sunday evening collapse on March 13, 2023, was a notable exception—the only Sunday failure on record—signaling regulators’ urgency to prevent a broader banking system contagion.

What Made 2023 Different

Two major bank collapses in one year seems alarming. Yet historically it’s still below-average. What distinguishes this moment is the magnitude. SVB was the 16th largest bank in America and the primary lender to tech startups and venture capital firms. Its sudden failure triggered immediate concern about systemic risk and deposit security across the entire financial ecosystem.

The speed mattered too. The SVB collapse triggered a rapid run on deposits at Signature Bank, forcing regulators to act overnight to prevent a domino effect. This back-to-back one-two punch tested market confidence in ways that typical small-bank failures never do.

The Longer View

While two bank collapses can feel like a crisis, the post-2008 financial system has proven resilient. Before SVB’s failure, America had gone over a decade without a bank holding more than $7 billion in assets shutting down. The longest period between any bank failures stretched from June 2004 to February 2007—nearly three full years.

The 2023 collapses remind us that banking system stability depends not just on the number of failures, but on their scale and interconnectedness. In modern finance, size, speed and systemic reach matter more than raw frequency.