Banks Face Tough Accounting Questions as Second Quarter Dawns

The collapse of three banks and the urgent rescue of another hangs over US lenders and their auditors as they close the books on a tumultuous first quarter.

Questions loom about unrealized losses on long-term assets, the risks of spiking interest rates, and having too many customers in one industry—problems that contributed to the collapse of Silicon Valley Bank and Signature Bank and a banker bailout of First Republic Bank. Silvergate Financial Corp., which catered largely to crypto companies, faced an exodus of depositors after the failure of crypto exchange FTX and voluntarily shuttered in March.

Expect banks—and ...