Commercial banking

A $13.5 billion advance to Silicon Valley Bank months before its collapse is another sign that the Home Loan banks encourage risk-taking that can burden the Federal Deposit Insurance Corp. or even the system itself, critics say.

Recent clashes over how much investors should get paid when borrowers switch to a new benchmark are a small part of a much larger struggle by global regulators to shift markets away from the scandal-tainted London interbank offered rate.

The top five have over seven billion dollars in total assets as of June 30, 2022.

The acquisition, which was originally expected to close at the end of last year, ultimately took more than 18 months to receive regulatory approval. It is now expected to close on Dec. 1.

Eighteen months after the $2.6 billion deal was announced — and five days before the Oct. 31 deadline — New York Community is still waiting for regulatory approval to buy the Michigan bank. On their joint earnings call, the companies wouldn't say where the deal stands.

Banks including Wells Fargo, Bank of America and JPMorgan Chase have pulled back on financing for offices and other commercial real estate following a record burst of lending in the first half of this year. 

Federal Reserve Chair Jerome Powell's speech in Jackson Hole reaffirmed that the end of accommodative monetary policy is coming to an end. This is a boon to banks, but only those that have managed their balance sheets just right.

The $369 billion directed toward climate preparedness in the Inflation Reduction Act is expected to reverberate through the economy for years to come and could supercharge private investment in the nation's clean energy sector. 

The rating agency has revised the long-term issuer default rating for PacWest Bancorp and its banking subsidiary, Pacific Western Bank, from "BBB" to "BBB-" and says it doesn't expect the bank's common equity Tier 1 ratio to bounce back anytime soon.

The company says it’s making progress on other parts of its business-model revamp — including a shift to lower-cost deposit sources — while regulators weigh its application to buy Flagstar Bancorp in Troy, Michigan.

The move away from the scandal-plagued London interbank offered rate is going smoothly, according to a new survey of lenders and corporate borrowers. But many customers still face operational challenges ahead of a mid-2023 deadline for switching older loans.

Multifamily and specialty finance loans, which were highlights during the fourth quarter, should increase further in 2022, company executives said.

Alternative lenders, which often use aggressive underwriting tactics to generate high returns, were closing in on banks even before the pandemic. Now they've pulled ahead.

The deal for Michigan-based Flagstar Bancorp, announced in April, was originally expected to be completed by the end of the year. The New York bank’s CEO expressed optimism that it will still get regulatory approval.

The San Francisco bank reported a 26% increase in its third-quarter earnings, thanks to robust single-family, multifamily and commercial real estate loan activity in New York, Boston and its home city.

Climate First Bank in St. Petersburg, Florida, is offering loans for condominium improvements that will reduce carbon emissions while fortifying buildings against serious weather events. More banks may implement similar programs in the years ahead.

The acquisition of Sabal Capital Partners, which has been growing its footprint in commercial mortgage-backed securities lending, will help the Alabama bank build out its capital markets business.

Many banks are still making loans tied to the scandal-plagued benchmark despite years of preparation for its demise. The end of 2021 could prove hectic as bankers scramble to implement changes and explain them to commercial borrowers.

Already contending with stressed retail, hotel and restaurant loans, bankers are beginning to view office lending — historically a safe bet — as increasingly risky as companies of all types rethink their space needs.

The company is exploring a range of options to diversify its balance sheet, but new CEO Thomas Cangemi says the best plan of attack is to merge with or acquire another institution.