Each quarter for the previous a number of years, Ken Vecchione printed out a spreadsheet evaluating the expansion of the financial institution he runs, Western Alliance, with its three principal opponents: First Republic, Signature Financial institution and Silicon Valley Financial institution.

And every time, Mr. Vecchione was aggravated as a result of the evaluation would present that Western Alliance’s loans and deposits have been rising equally to the others — its whole belongings tripled in 5 years — however its inventory value wasn’t hovering as excessive.

“We have been, I’ve to confess, a bit envious of them,” stated Mr. Vecchione, who has been chief government of the Phoenix financial institution since 2018.

Now all three of these opponents are kaput, felled by runs on deposits throughout the largest banking disaster in a decade and a half. Western Alliance and different banks that only a few months in the past have been removed from family names are preventing to show they’re not like their collapsed rivals. “We actually didn’t see this coming,” Mr. Vecchione admitted in an interview.

Three months after Silicon Valley Financial institution’s collapse, the banking trade is engaged in collective soul-searching. Although the trade turmoil damage all of them by shaking religion from debtors and alluring new scrutiny, the panic unfold manna among the many largest lenders in the US. JPMorgan Chase, the most important financial institution within the nation, grew even bigger after taking on fallen First Republic and scooping up tens of billions of {dollars} in deposits from nervous savers at smaller banks.

Left within the lurch are roughly 4,100 different banks, from big-city regional establishments like Western Alliance to tiny, rural group banks that function out of a single department. These lenders have lengthy pitched themselves because the crux of the U.S. economic system, doling out loans and financing to small companies that will in any other case be ignored. They maintain roughly two-thirds of all deposits in rural areas.

These banks obtain comparatively lax remedy from regulators, who require them to reveal much less about their funds and put aside much less cash as a buffer in opposition to deposit runs, in contrast with their bigger counterparts.

This 12 months’s tumult, nevertheless, has raised new questions concerning the knowledge of that strategy. Although simply three midsize banks failed, concern of economic contagion unfold throughout the banking system. On the first indicators of bother, depositors pulled cash from regional banks — and lots of haven’t come again.

Authorities officers can’t appear to determine what they need banks like Western Alliance to do. For the reason that 2008 monetary disaster, policymakers have put the brakes on “too large to fail” establishments, saying they would favor danger to be distributed extra evenly throughout lenders. Now, although, there’s skepticism concerning the grow-at-all-costs ambitions of smaller banks, and hints of an openness to mergers between lenders.

In a non-public assembly final month with financial institution chiefs, together with Jamie Dimon of JPMorgan, Treasury Secretary Janet L. Yellen stated she would welcome extra lenders merging with each other, in line with an individual who participated within the briefing, partly as a result of it will make it simpler for regulators to conduct oversight.

Mr. Vecchione stated he had by no means spoken to Ms. Yellen or her employees earlier than this 12 months, and now he receives check-in calls from the deputy Treasury secretary, Wally Adeyemo. Mr. Vecchione stated that he was not in opposition to extra regulation, however that it will add to the financial institution’s prices and, finally, confer one other benefit on bigger opponents who might higher stand up to the expense.

He stated he had been asking regulators these days, “Do you even need us to exist?”

There’s a mannequin for a extra concentrated banking sector. In Canada, six banks dominate 90 p.c of the market, versus about 50 p.c for the six largest banks in the US. Consultants say there’s little incentive for banks in Canada to take outsize dangers, although there’s additionally comparatively little competitors, which implies debtors might face increased rates of interest.

“I don’t assume we need to get to the purpose of six banks, as a result of that will actually stifle lending,” stated Ben Gerlinger, a regional financial institution analyst at Hovde Group.

Bruce Van Saun, chief government of Residents Financial institution, stated that for the primary time in his profession he was making an attempt to make his lender smaller, partly by discouraging depositors who could be more than likely to shut their accounts within the first indicators of a disaster. He hopes that may persuade traders that the financial institution, the nation’s 14th-largest, is secure. (One indicator that the US is suffering from banks: Residents, which relies in Windfall, R.I., is separate from First Residents, the North Carolina lender that took over Silicon Valley Financial institution’s former branches, in addition to a whole lot of different lenders with “Residents” of their identify.)

“It’s important to present deposits shrinking, or else you go on the record of ‘drawback banks,’” Mr. Van Saun stated. “Is the treatment going to be worse than the illness?”

Western Alliance has change into accustomed to shrinking in a rush. The financial institution’s inventory is down about 50 p.c from its excessive level in February. Different regional lenders, like PacWest, which has been shrinking aggressively by promoting packages of loans, are down in that vary or extra.

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

Based in 1994, for many of Western Alliance’s historical past it was led by the billionaire Robert Sarver, who was pressured to promote the Phoenix Suns final 12 months after the N.B.A. discovered that he had used racial slurs and verbally abused workers, amongst different transgressions. Mr. Sarver stepped down as chairman of Western Alliance amid the league’s investigation.

Mr. Vecchione, a Queens native, seems to be as if he might play a banker in a film. He sports activities Hermès ties and collects high-end watches (not together with Rolexes, which he says are too frequent). His pay over the previous three years was price practically $22 million, together with inventory.

Till lately, the financial institution was in a ravenous enlargement mode. In 2015, Western Alliance acquired Bridge Financial institution, a San Francisco lender that competed with Silicon Valley Financial institution for enterprise from enterprise capital corporations. Like Silicon Valley Financial institution, Bridge Financial institution marketed its skill to finance start-ups and different companies that usually maintain greater than $250,000 of their financial institution accounts — a dangerous proposition, provided that the federal authorities insures deposits solely as much as that quantity, making such accounts flighty.

A so-called business lender, Western Alliance principally lends to companies, like time-share firms, real-estate builders and hoteliers. It has a set of branches throughout the West below manufacturers like Financial institution of Nevada, Torrey Pine Financial institution and Alliance Financial institution of Arizona.

As of 12 months finish, Western Alliance’s $68 billion in belongings made it the Fortieth-largest lender within the nation. The financial institution’s board of administrators had authorised a plan to develop as massive as $100 billion by increasing exterior of the West, an initiative that included new Manhattan workplaces on Madison Avenue whose partitions are lined with marble.

Silicon Valley Financial institution’s demise hit like an “explosion,” stated Western Alliance’s chief monetary officer, Dale Gibbons. Within the hours after it was shuttered, Mr. Gibbons, Mr. Vecchione and their group watched gape-mouthed as their financial institution’s accounts dwindled. Longstanding purchasers put in withdrawal requests with out a lot as a check-in name.

Across the workplace, Mr. Vecchione noticed his workers splitting their consideration between twin monitor screens. On one was their extraordinary work; on the opposite have been charts displaying the financial institution’s cratering inventory value.

The bleeding stopped solely after the financial institution provided some main depositors a glance inside its operations in trade for signing nondisclosure preparations. Some took up on the provide.

“I really feel for the depositors — they didn’t signal as much as be financial institution fairness analysts,” Mr. Gibbons stated.

On the finish of the primary quarter, Western Alliance had misplaced roughly 12 p.c, or $6 billion, of its deposits, but it surely was slowly seeing some cash come again. Its enterprise mannequin, nevertheless, was now out of fashion. What the financial institution’s executives prided themselves on — attending to know clients and dealing with them individually on loans, a so-called high-touch strategy — raised uncomfortable similarities to First Republic and Silicon Valley Financial institution, which maintained cozy relationships with their well-heeled purchasers.

Mr. Vecchione expressed a shade of frustration in any respect the eye his financial institution was receiving. On the top of the disaster, when information studies circulated that the financial institution was weighing a merger or sale, he reacted angrily, ordering his group to disclaim the studies (which he says have been unfounded), lest the general public assume that the regional financial institution was weak.

And he doesn’t even settle for the moniker of regional financial institution, preferring as a substitute to explain Western Alliance as a “nationwide financial institution with a regional footprint.”

Mr. Vecchione stated he wouldn’t enable his financial institution to change into a “sufferer.” He’s persevering with to instruct underwriters to compete fiercely for lending enterprise, and Western Alliance has boosted the quantity it pays on financial savings accounts to only over 5 p.c per 12 months, among the many highest within the nation.

“Individuals like confidence — they wish to see should you’re sheepish,” he stated. “We matter. We aren’t going anyplace.”