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An increasing number of US banks are finding themselves subject to heightened capital requirements as federal regulators zero in on commercial real estate. Already on high alert following the large bank failures in 2023, recent events such as New York Community Bancorp Inc.'s woes as well as increasing commercial real estate (CRE) credit issues have regulators acting out of an abundance of caution. Banks with high CRE concentrations, and particularly those above the regulatory guidance to not exceed 300% of CRE to total risk-based capital, are being required to hold more capital. #usbanks #CRE #capitalrequirement

Republic First seizure signals more bank failures to come, expert warns Fears of contagion reignited by first US bank failure of 2024. U.S. regulators have seized Republic First Bancorp and agreed to sell it to Fulton Bank, underscoring the challenges facing regional banks a year after the collapse of three peers. Philadelphia-based Republic First, which had abandoned funding talks with a group of investors, was seized by the Pennsylvania Department of Banking and Securities. The Federal Deposit Insurance Corporation (FDIC) , appointed as a receiver, said on Friday Fulton Bank Bank, a unit of Fulton Financial Corp will assume substantially all deposits and purchase all the assets of Republic Bank, which is the operating name for Republic First, to "protect depositors". Republic Bank had about $6 billion in total assets and $4 billion in total deposits, as of Jan. 31, 2024. The FDIC estimated the cost of the failure to its fund will be $667 million. Fulton said the deal almost doubles its presence in the Philadelphia market with combined company deposits of approximately $8.6 billion. As published by Reuters News Agency Read full article here: https://lnkd.in/dJi6CEzj #banking #bankingcompliance #usregulatorycompliance #financialregulation #assetliabilitymismatch #alco #federalreserve #sec #sarbanesoxleyact #republicfirst #fultonbank #depositinsurance

Stephanie Landsman, CNBC. Sheila Bair, former chair of the Federal Deposit Insurance Corporation (FDIC) (FDIC), expressed concerns about the stability of regional banks as their earnings reports are set to be released. Speaking on CNBC's "Fast Money," Bair highlighted ongoing vulnerabilities due to dependence on industry deposits, exposure to commercial real estate, and the instability of uninsured deposits, especially if further bank failures occur. She advocated for the reinstatement of the FDIC’s transaction account guarantee authority to help stabilize these deposits. So far in 2024, the performance of regional banks has been weak, with the SPDR S&P Regional Bank ETF (KRE) down nearly 13%, and most of its member banks showing negative returns. New York Community Bancorp, in particular, has seen a significant drop of over 71%. Bair pointed out the potential risk of another shock from uninsured deposits due to possible bank failures and noted that rising yields could increase pressure on commercial real estate loans, a sector where many regional banks are heavily invested. Despite these challenges, Bair suggested that troubles faced by regional banks could inadvertently benefit larger, money-center banks. #regionalbanks #bankearnings #banking #finance #SheilaBair #FDIC #bankfailures #financialstability #commercialrealestate #bankingcrisis #economicoutlook #investment #TreasuryYields #uninsureddeposits #bankregulation #financialmarkets #crisismanagement #bankETFs #interestrates #bankingindustry

Michael does a great job synthesizing the issues FRB faced. What is most interesting is that if the rapid rise in interest rates caught 30-year banking veterans off guard (similar to the pandemic in 2020) then what is over the horizon as the next "not Black swan" event? Will your risk management program provide for the risk monitoring and early warning indicators of emerging threats? If you aren't sure we can assist you so the answer is 'Yes'.

NYCB Regional Bank is in trouble as BTFP set to close. If you believed the banking problems were behind us then think again. Nothing has been fixed and the bandaid was temporary and flawed to begin with. Tonight another regional bank is tinkering at the brink of collapse. A long time ago and several times I have mentioned that banks have never learned their lessons and all the talk of standards and regulation were lipstick on a pig. NYCB bank had this doozy amendment to its fourth-quarter results: “As part of management’s assessment of the Company’s internal controls, management identified material weaknesses in the Company’s internal controls related to internal loan review, resulting from ineffective oversight, risk assessment and monitoring activities,” You don't fix greed with bailouts and expect regulation written by banks and most repealed since to avoid repeats. This isn't also just in CRE. Recessions with double digit unemployment and mass forbearance don't kick up credit scores. Junk corporate debt in bad times don't have spreads fall. Banks in the middle of a crisis of unknown length don't expand credit by themselves. Cheap money and easy quick profits create an environment of arrogance. #banks #banks #bankfailures #regulation #fed #markets #creditscores #btfp #banking

As we start the week, let's be better❗️ Republic Bank - PA, NJ, & NY was seized and sold to Fulton Bank, a stark reminder of the ongoing challenges in regional banking. As we reflect on this preventable crisis, let's recommit to proactive compliance and risk management practices to safeguard our banking system. This is our call to action. 🛡️ #banking #communitybanking #riskmanagement #lending https://lnkd.in/esCZ_aZF

🤥 FOOLED AGAIN: WAS THE CRE EXPOSURE SCRIPT AT REGIONAL BANKS A DIVERSION ? 🏦 THE NARRATIVE THAT CRE lending was concentrated amongst USA regional banks is now under debate. New FDIC data shows that past due loans on CRE at the largest banks (those with > $250 bn in assets) as of December 31 , 2023 spiked to 4.11 percent. That’s 1.66 percent higher than at the end of Q4 2008 when banks globally were imploding during the GFC. As the chart below [comment] indicates, CRE problems in the GFC era quickly became a lot worse at the largest banks, with the past due rate reaching 7.97 by the end of Q1 2010. 🏦🏦WHY LARGE BANKS ARE not provisioning fast and deep enough may come back to the old Basel III millstone: how can they meet higher Tier 1 buffer requirements at the same time as provisioning for the immense CRE disaster which is barely getting started? Never mind the other credit issues and defaults in other lines of business. 🏦🏦🏦COMPOUNDING THIS: THE FRB stopped providing aggregated quarterly data on loan loss reserves at commercial banks (as has been customary since 1984). The Fed data charts now come up with the words “DISCONTINUED.” Go to the links in the WSoP article here and take a look. Those largest banks may be woefully under-reserved for their potential real estate losses. And they don't want to advertise it. #fdic #megabanks #CRE #wallstreetonparade #provisioning #credit #regionalbanks

New York Community Bank (NYCB) losses reveal weakness of US bank regulation | Losses on #commercialrealestate loans at US regional #banks should surprise no one; risk at the heart of the US #financial system thanks to weak regulation should shock us all | #USbanking #financialregulation #CRE #realestate http://spr.ly/6048psJoe