(Bloomberg) -- A year after Silicon Valley Bank’s collapse, US lenders are still paying the price for cleaning up the mess — and it’s likely to get about $4.1 billion worse. 

The Federal Deposit Insurance Corp. now estimates $20.4 billion in losses arising from the failure of both SVB and New York-based Signature Bank, according to its annual report released late February. That’s a 25% bump from its $16.3 billion November estimate.

The upshot: Scores of institutions — megabanks like JPMorgan Chase & Co., regional lenders like PNC Financial Services Group and even some relatively local-leaning banks — may have to pay more to replenish the Deposit Insurance Fund. That’s the reserve that the FDIC uses to protect depositors when a bank collapses.

PNC, based in Pittsburgh, said on Tuesday that it expects to add $130 million in expenses this quarter on top of the $515 million it already booked in the fourth quarter. BNY Mellon said it adjusted its 2023 financial results to reflect an extra $127 million pretax expense after originally giving a $505 million estimate. Fifth Third Bancorp. and Comerica Inc. both said that they expect to pay more, too.

Quarterly Report

The FDIC may give more details on Thursday, when it’s scheduled to release its quarterly report on the collective health of the nation’s banks. The report typically includes a section on the status of the deposit insurance fund. A representative for the agency declined to comment.

The bigger bills come on top of a “special assessment” applied last year, when rapid-fire failures at some of the biggest regional lenders forced the FDIC to tap its insurance fund and keep damage to the economy from spreading.

Under normal circumstances, the fund gets refilled by all insured banks with quarterly fees. In this case, the massive FDIC payouts stressed the fund more quickly than usual, partly because US authorities decided to put an end to the tumult by covering all uninsured depositors at SVB and Signature.

The role of FDIC insurance in calming jittery depositors and heading off bank runs is widely acknowledged by regulators and lenders, but with the price tag rising, industry lobbying groups are weighing in. 

Bigger Tab

“Since last spring, we have called on the FDIC to do everything possible to limit the final cost of any special assessment on banks and ensure a transparent process,” Josh Britton, a spokesperson for the American Bankers Association, said in an email. “At a minimum, banks and the public deserve a full accounting of why the final cost is moving higher.”

For its part, the FDIC has said it anticipated that the number may fluctuate. In November, it said the projected loss would be “periodically adjusted” as the amount of uninsured deposits became clearer. The agency can also impose a final special assessment to cover the shortfall after the receiverships at Silicon Valley Bank and Signature Bank are completed, according to the regulator. 

Banks should be able to handle the added sums, analysts said. 

“It’s not that much capital that they are going to chew up. It’s quite manageable in the context of what the banks generate each quarter in earnings,” Jason Goldberg of Barclays said in an interview.

--With assistance from Bre Bradham and Katanga Johnson.

©2024 Bloomberg L.P.