Tech-forward Silicon Valley Bank collapsed in March, followed two days later by Signature Bank and this week First Republic Bank. Now, all eyes are on financial institutions such as Pacific Western Bank and Western Alliance Bank. 

PacWest and Western Alliance have each seen sharp declines in the market over the past month, as PacWest’s stock has fallen by 36% and Western Alliance’s stock has dipped by 15% over the past five days alone.

The $44 billion, Los Angeles-based PacWest is an active investor in the fintech industry, with clients that include New York-based digital card platform Extend, Reston, Va.-based AI monitoring company ScienceLogic and New York-based cloud platform provider DigitalOcean, according to Crunchbase. 

The $71 billion, Phoenix-based Western Alliance, while not an active investor, is the bank of choice for New York-based digital experience platform Optimizely, per the bank’s website. Western Alliance operates its “tech forward” initiatives through subsidiary Bridge Bank, with companies such as AI contact center company Observe.Ai and supply chain marketplace Deposco among its noted tech clients, according to the website. 

Historically, economic uncertainty in the banking industry typically has led to consolidations and acquisitions of smaller banks by larger entities, as seen with JPMorgan Chase’s purchase of First Republic, Gartner Senior Analyst Wellington Holbrook told Bank Automation News. 

“If you are a financial institution that you believe has some vulnerabilities, do you want to position yourself as a takeover candidate?” Holbrook said. “If you have some strengths right now, now’s a great time to perhaps take advantage of looking at some of those financial institutions that have vulnerabilities to take them over, but you have to do it right.” 

Consolidation is on the minds of regional bank leaders at the moment, Holbrook added. 

Notably, the Federal Reserve today announced a quarter of a percentage point rate increase, a signal that increased rates may be slowing down. 

BAN is monitoring the following banks: 

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