“Do you want us to exist?” A bank manager fights to survive.

For the past few years, Ken Vecchione has published a quarterly spreadsheet comparing the growth of the bank he leads, Western Alliance, to its three main competitors: First Republic, Signature Bank and Silicon Valley Bank.

And every time mr. Vecchione argued because the analysis would show that Western Alliance’s loans and deposits grew in the same way as the others — total assets tripled in five years — but the share price didn’t rise that much.

“We were, I must admit, a little jealous of them,” said Mr. Vecchione, who has been CEO of the Phoenix bank since 2018.

Now all three of those competitors are dead, felled by runs on deposits during the biggest banking crisis in a decade and a half. Western Alliance and other banks that were far from household names just a few months ago are fighting to prove themselves different from their collapsed rivals. “We certainly didn’t see this coming,” said Mr. Vecchione admits in an interview.

Three months after the collapse of the Silicon Valley Bank, the banking industry is engaged in collective self-examination. While the industry turmoil hurt them all by shaking borrower confidence and inviting new scrutiny, the panic spread manna among the largest lenders in the United States. Especially JPMorgan Chase, the nation’s largest bank, which grew even bigger after taking over the fallen First Republic and scooping up tens of billions of dollars in deposits from nervous depositors at smaller banks.

Some 4,100 other banks have been abandoned, from regional institutions in major cities such as Western Alliance to small rural community banks operating out of a single branch. These lenders have long envisioned themselves as the core of the US economy, doling out loans and financing to small businesses that would otherwise be ignored. They own about two-thirds of all rural deposits.

These banks are treated relatively lax by regulators, who require them to disclose less about their finances and set aside less money to buffer against deposit runs, compared to their larger counterparts.

However, this year’s tumult has raised new questions about the wisdom of that approach. Although only three medium-sized banks failed, fears of financial contagion spread throughout the banking system. At the first sign of trouble, depositors raised money from regional banks – and many have not returned.

Government officials can’t seem to decide what they want banks like Western Alliance to do. Since the 2008 financial crisis, policymakers have put the brakes on institutions that are too big to fail. Now, however, there is skepticism about smaller banks’ ambitions to grow at all costs, and there is evidence that they are open to lender mergers.

At a private meeting last month with bank chiefs including JPMorgan’s Jamie Dimon, Treasury Secretary Janet L. Yellen said she would welcome more lenders merging, according to one person who participated in the briefing, in part because it makes it easier for regulators. able to supervise.

Mr Vecchione said he had never spoken to Ms Yellen or her staff before this year, and now he is getting check-in calls from Deputy Finance Minister Wally Adeyemo. Mr Vecchione said he was not against more regulation, but that it would increase the bank’s costs and ultimately provide another benefit to larger competitors who could better bear costs.

He said he’s been asking regulators lately, “Do you even want us to exist?”

There is a model for a more concentrated banking sector. In Canada, six banks dominate 90 percent of the market, versus about 50 percent for the six largest banks in the United States. Experts say there is little incentive for banks in Canada to take big risks, although there is also relatively little competition, meaning borrowers can get higher interest rates.

“I don’t think we want to get to the six-bank point because that would really hamper lending,” said Ben Gerlinger, a regional banking analyst at Hovde Group.

Bruce Van Saun, CEO of Citizens Bank, said that for the first time in his career he was trying to shrink his lender size, in part by discouraging savers who were likely to close their accounts at the first sign of a crisis. He hopes this will convince investors that the bank, the country’s 14th largest bank, is stable. (An indication that the United States is littered with banks: Citizens, based in Providence, RI, is separate from First Citizens, the North Carolina lender that took over Silicon Valley Bank’s former branches, as well as hundreds of other lenders with “Citizens” in their name.)

“You have to show that your deposits are shrinking or you will end up on the list of ‘problem banks’,” Mr Van Saun said. “Is the cure getting worse than the disease?”

Western Alliance has become accustomed to shrinking rapidly. The bank’s stock is down about 50 percent from its February high. Other regional lenders, such as PacWest, which has been aggressively downsizing by selling packages of loans, are in that range or more.

“We hate to be put in the same sentence as PacWest,” Mr. Vecchione said.

Founded in 1994, for most of Western Alliance’s history it was led by billionaire Robert Sarver, who was forced to sell the Phoenix Suns last year after the NBA discovered his use of racial slurs and berated employees, among other things. Mr. Sarver stepped down as chairman of Western Alliance during the league’s investigation.

A Queens native, Mr. Vecchione looks like he could play a banker in a movie. He wears Hermès ties and collects luxury watches (excluding Rolexes, which he says are too common). His pay over the past three years was worth nearly $22 million, including stock.

Until recently, the bank was in a voracious expansion mode. In 2015, Western Alliance acquired Bridge Bank, a San Francisco lender that competed with Silicon Valley Bank for venture capital business. Like Silicon Valley Bank, Bridge Bank advertised its ability to fund startups and other companies that typically have more than $250,000 in their bank accounts — a risky proposition, since the federal government only insures deposits up to that amount, making such accounts volatile. .

Western Alliance, a so-called commercial lender, mainly lends to companies, such as timeshare companies, real estate developers and hoteliers. It has a collection of branches in the West under brands such as Bank of Nevada, Torrey Pine Bank, and Alliance Bank of Arizona.

At the end of the year, Western Alliance was the nation’s 40th largest lender with assets of $68 billion. The bank’s board of directors had approved a plan to grow to as much as $100 billion by expanding beyond the West, an initiative that would include new Manhattan offices on Madison Avenue with marble-clad walls.

Silicon Valley Bank’s demise hit like an “explosion,” said Western Alliance CFO Dale Gibbons. In the hours after the shutters closed, Mr. Gibbons, Mr. Vecchione, and their team watched in awe as their bank accounts dwindled. Long-standing customers submitted withdrawal requests without even a check-in call.

Throughout the office, Mr. Vecchione how his employees divided their attention between two screens. One had their regular work; on the other side were charts showing the bank’s stock price.

The bleeding only stopped after the bank offered some big depositors a look into its activities in exchange for signing non-disclosure agreements. Some accepted the offer.

“I sympathize with the savers – they haven’t signed up to be bank stock analysts,” Mr Gibbons said.

At the end of the first quarter, Western Alliance had lost about 12 percent, or $6 billion, of its deposits, but it was slowly seeing some money flow back. However, the business model was now out of fashion. What the bank’s executives prided themselves on — getting to know customers and working with them individually on loans, a so-called high-touch approach — bore uneasy similarities to First Republic and Silicon Valley Bank, which maintained cozy relationships with their affluent clients.

Mr. Vecchione expressed some frustration at all the attention his sofa was getting. At the height of the crisis, when news reports circulated that the bank was considering a merger or sale, he reacted angrily and ordered his team to deny the reports (which he said were unfounded) lest the public think that the regional bank was weak. .

And he doesn’t even accept the moniker of regional bank, preferring to describe Western Alliance as a “national bank with a regional footprint.”

Mr. Vecchione said he would not allow his bank to become a “victim.” He continues to instruct insurers to compete fiercely for lending, and Western Alliance has increased the amount it pays into savings accounts to just over 5 percent a year, one of the highest in the country.

“People like confidence — they want to see if you’re sheepish,” he said. “We matter. We’re not going anywhere.”