Larry McDonald, founder of the Bear Trap Report, said the New York Community Bank failure speaks to a larger economic problem with “making money.”
Republic First Bank is a regional lender based in: of philadelphiawas shut down by Pennsylvania banking regulators on Friday, with the Federal Deposit Insurance Corporation (FDIC) taking control, making it the first bank failure of 2024.
The FDIC quickly struck a deal for Fulton Bank to acquire Republic First’s assets, but financial reform and bank failure experts say the collapse could be a harbinger of things to come. There is.
Joseph Linyak, a banking lawyer at Dorsey & Whitney, said of the seizure of Republic First by U.S. regulators, “This bank failure signals that more failures are to come, and the scope is small.” They range from regional banks to large banks.”
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| Hult | fulton financial corporation | 16.80 | +1.18 | +7.55% |
“There are two reasons for this: high cost of deposits that exceed the yields on low-yield government bonds and similar investments that banks hold, and a deterioration in the commercial real estate market and commercial real estate loans.” said Mr. Rignac, who specializes in administration and insolvency. .
Commercial real estate foreclosures rose 117% in March as trouble looms
Local banks are struggling to hold on to deposits as customers seek the safety of “too big to fail” rivals, and loan books are shrinking as rising interest rates increase unrealized losses and lower commercial real estate values. The value of is decreasing.
Employees told people that Silicon Valley Bank’s headquarters in Santa Clara, California, will close on March 10, 2023. The bank was shut down by California regulators and placed under the control of the Federal Deposit Insurance Corporation. (Justin Sullivan/Getty Images)
Investors have been concerned about the potential for further contagion in the sector since the collapse of three prominent financial institutions in early 2023: Silicon Valley Bank, First Republic and Signature Bank.
Before the Republic First acquisition, the last U.S. bank to fail was Iowa-based Citizens Bank in November 2023.
Former FDIC chief: There will be more bank failures
Then in January, New York Community Bank (NYCB) came under pressure over concerns about its exposure to the struggling commercial real estate sector, but last month NYCB raised $1 billion from investors including: We were able to. Former Treasury Secretary Steven Mnuchin Liberty Strategic Capital.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| new york cb | NEW YORK COMMUNITY BANCORP INC. | 2.79 | -0.18 | -6.06% |
New York Community Bancorp, Inc.
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“The FDIC has indicated that banks may have significant unrealized losses on their investment portfolios, and many banks will ultimately need additional capital to address these unrealized losses. Deaf,” Rignac said.
FOX Business’ Eric Revell and Reuters contributed to this report.
