Polo Rocha

A day after the regional bank's stock tumbled on tough fourth-quarter results and some austerity moves, observers debated whether management just needs time to build enough capital to catch up with growth or if it is still too overexposed in multifamily lending.

With tougher capital requirements looming, a number of regionals including U.S. Bancorp, Huntington and Santander are using these new instruments to share risk with nonbank investors and lighten their capital load. Experts point out the pros and cons.

The parent company of Flagstar Bank surprised investors by slashing its dividend, charging off two large real-estate loans and preparing for more trouble in the office and multifamily sectors.

The San Francisco-based bank warned for months that charge-offs were likely to start rising as some office-related loans went bad. It began to happen in the fourth quarter, which could be an omen for regional banks that have larger concentrations in the office sector.

Bank investors hope they can party like it's 1995, when the U.S. economy stayed healthy even after aggressive Federal Reserve rate hikes. But a few analysts are a bit more cautious over whether banks' loan books will hold up as well this time.

Remote work trends and high interest rates have substantially reduced the values of U.S. office buildings. A new academic paper estimates the extent of the deterioration, suggesting that there is perhaps more stress ahead for banks than is widely anticipated.

Morais, who leads the auto lender's consumer and commercial banking divisions, is preparing to leave as Ally Financial conducts a search for its next chief executive officer. She had been seen as a potential candidate to replace outgoing CEO Jeffrey Brown.

The BSBY interest rate benchmark was originally envisioned as a successor to the once-ubiquitous Libor rate. But it failed to gain much traction, and Bloomberg now plans to shut it down next year.

As the holiday shopping season approaches, late payments on credit cards have surpassed their pre-pandemic levels, according to a new VantageScore report. The consumers showing signs of deterioration include not only subprime borrowers, but also those with prime credit scores.

It's been a rocky few years for senior housing as the sector recovers from its COVID occupancy drop and its profitability takes a hit. But bankers see long-term opportunities amid an aging U.S. population and say their portfolios are healthy.

Thomas Nides, a former U.S. ambassador to Israel and longtime Morgan Stanley executive, will take over the megabank's public affairs division as its work to fix regulatory concerns continues. He succeeds Bill Daley, the former chief of staff to President Barack Obama, who recently announced his retirement from Wells.

When 55 banks were asked to provide metrics on the health of their commercial real estate borrowers, some of them gave data that was six months old. The survey by Moody's Investors Service also found that certain borrowers are already struggling, and others could hit trouble soon, since they'll need to refinance at high interest rates.

The Alabama-based regional bank didn't effectively track whether some loans complied with flood insurance regulations, according to the Fed. Regions said that it had fixed the issue by 2017.

The company is rolling out a special-purpose credit program to help address what it describes as "the biggest barriers to achieving homeownership." Such programs are gaining popularity among banks.

While financial markets wobbled after Fitch Ratings reduced the U.S. government's credit rating, analysts said the action should have little long-term impact, similar to a downgrade by Standard & Poor's in 2011. JPMorgan Chase CEO Jamie Dimon argued that Fitch's action "doesn't really matter that much."

The bank's allowance for losses on commercial real estate loans jumped to $3.6 billion in the second quarter — up 64% from a year earlier. The negative forecast could portend trouble for smaller banks that have bigger exposure to the office sector.

CEO Curtis Farmer said the warehouse sector, where Comerica provides lines of credit to mortgage banking companies, has not been providing much help as the company seeks to bolster deposits.

When the once-ubiquitous interest rate goes away at the end of June, some businesses that have older loans may see a sudden jump in their payments. Banks, lawyers and business leaders are doing last-minute work to avoid that scenario.

Once it is free to issue new debt, the Treasury Department is expected to quickly replenish its general account at the Fed. The move could lead to a shortage of reserves.

Balances reached nearly $1 trillion at the end of the first quarter, up 17% from a year earlier. The increase reflects higher spending by well-off consumers on travel and entertainment, as well as the pressure that lower-income households are facing from inflation and higher interest rates.