Regional bank

Now, the promise comes as regional communities face a wave of branch closures driven by more people switching to online and mobile banking.

The federal government says around 36% of regional bank branches have closed since 2017.

That's in excess of a third closed since 2017.

That's a lot.

The real exposure sits in suburban class B and class C office parks, secondary strip retail, and Sunbelt apartment deals built by syndicators on short-term floating rate debt.

And most of that is sitting on the books of small and regional banks, not the institutions getting the headlines.

Guys...

The real reason you haven't heard this part of the story is because it doesn't show up on a cover photo of a glass skyscraper.

Commercial real estate loans equal to 300% or more of a bank's total risk-based capital.

Academic research tracking this across the regional banking sector found that as of the most recent full year counted, 54.8%.

Did you get that? 54.8% of regional banks are over that threshold.

line that I just described.

Silicon Valley Bank is now under FDIC control, and the FDIC has since moved SVB deposits to a newly formed holding bank and named Tim Mayopoulos as CEO.

On March 12th, 2023, another regional bank, Signature Bank, collapsed.

Meanwhile, Signature Bank marks the third largest bank failure in US history.

Seeing more possible bank failures on the horizon, the Federal Reserve had to do something unprecedented.

In another announcement on the same day, the Treasury, Federal Reserve, and FDIC stated that all depositors, even the uninsured ones, will be made whole without the expenditure of taxpayer money.

Some financial commentators have said that this is an inflationary move.

A lot of regional banks who use the same style of banking as SVB saw worried depositors piling up outside to get their money out.

The Fed and US government had to do these drastic moves to avoid bank runs and a cascade of bankruptcies.