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2024 bank failure predictions
Posted on 1/25/24 at 11:31 am
Posted on 1/25/24 at 11:31 am
12 months ago the failures of Silicon Valley Bank, First Republic Bank and others were not on anyone’s radar. Let’s use this thread to discuss potential failures this year and how to profit. I’ll start by calling for the downfall of Truist. US Bank will cherry pick the assets and branches in an FDIC assisted deal and greatly expand their footprint in the south. Do not post material non-public information in this thread.
Disclosure: I own KRE.
Disclosure: I own KRE.
6
Posted on 1/25/24 at 12:27 pm to Flowbe209
Just like the bank failures of last year the majority were related to crypto exposure. Where fraud is rampant and withdraws can be quick.
I would not expect the shakeup like last year where all 3 of the giant crypto banks all failed. Signature Bank (SBNY), Silvergate, and Silicon Valley Bank.
Probably the most obvious one for this year is Cross River Bank. Massive exposure to what is left of the crypto space via Coinbase/USDC. Under investigation for massive PPP fraud. FDIC has already issued a consent order against them for unsafe banking practices, especially related to their fintech business.
I would not expect the shakeup like last year where all 3 of the giant crypto banks all failed. Signature Bank (SBNY), Silvergate, and Silicon Valley Bank.
Probably the most obvious one for this year is Cross River Bank. Massive exposure to what is left of the crypto space via Coinbase/USDC. Under investigation for massive PPP fraud. FDIC has already issued a consent order against them for unsafe banking practices, especially related to their fintech business.
Posted on 1/25/24 at 4:58 pm to Flowbe209
Why do you predict Truist to fail?
I missed the reasoning.
I missed the reasoning.
Posted on 1/25/24 at 5:14 pm to meansonny
Truist will not fail.
Posted on 1/25/24 at 5:29 pm to UltimaParadox
What’s the stock ticker for Cross River .. assuming it is publicly traded ?
Posted on 1/25/24 at 6:59 pm to BigApple
quote:
Truist will not fail
SunTrust has been involved in rumor every year for the past 25.
I was wondering if this is some continuation of that rumor mill or if something is different this time.
Posted on 1/25/24 at 8:41 pm to meansonny
Their CRE time bomb is ticking and they have been in expense cutting mode for a while. Shut down entire lines of business. But it hasn’t been enough and eventually you have to pay the piper.
Posted on 1/25/24 at 8:51 pm to Flowbe209
quote:
Their CRE time bomb is ticking and they have been in expense cutting mode for a while. Shut down entire lines of business. But it hasn’t been enough and eventually you have to pay the piper.
Seems like if Truist was as worried as you may be they’d cut the dividend a bit. Still yielding north of 5.5%.
Posted on 1/25/24 at 9:20 pm to Flowbe209
quote:
I’ll start by calling for the downfall of Truist.
I work for an insurance broker owned by Truist. We are about to get sold off because they need the money to raise liquidity. It’s not a secret. It’s in all of the trade journals.
Posted on 1/26/24 at 5:20 am to slackster
FRCB and SBNY both paid a dividend 12 months ago. Where are they today?
This post was edited on 1/26/24 at 5:21 am
Posted on 1/26/24 at 7:07 am to Flowbe209
quote:
FRCB and SBNY both paid a dividend 12 months ago. Where are they today?
Yeah but their demise was pretty rapid. If Truist is taken out by CRE it’s been the slowest collapse ever.
Posted on 1/26/24 at 7:34 am to mule74
Truist has $37b in cash and $10b cash inflow with total long term debt of $67b. They don’t need liquidity. They’re extremely profitable. The only negative to them is their revenue growth contracted recently.
Posted on 1/26/24 at 8:05 am to Shepherd88
Their CRE exposure is not terrible. In a worse spot than a JPM, but by no means in an awful spot. Footprint matters here and their heavy southeast exposure is a CRE positive.
Now, a Valley National Bank, with a northeast footprint and a heavy non residential CRE loan portfolio…..that might be one to watch
Now, a Valley National Bank, with a northeast footprint and a heavy non residential CRE loan portfolio…..that might be one to watch
Posted on 1/26/24 at 9:33 am to Shepherd88
quote:
Truist has $37b in cash and $10b cash inflow with total long term debt of $67b. They don’t need liquidity. They’re extremely profitable. The only negative to them is their revenue growth contracted recently.
I am telling you what we are being told. They are concerned about the new reserve requirements that are being imposed by the feds.
There is also an issue that we are undervalued on the balance sheet, and they can get a high multiple return by selling us.
Posted on 1/26/24 at 11:24 am to mule74
The entire industry is competing for liquidity. It’s not coming from deposit growth so it has to come from somewhere. In addition to the planned insurance company sale, Truist shut down fixed income sale & trading in 2023. It was a profitable business for them so the reasons why remain unclear other than the ambiguity of “strategy review and alignment.”
Posted on 1/26/24 at 11:36 am to mule74
quote:
I am telling you what we are being told. They are concerned about the new reserve requirements that are being imposed by the feds.
There is also an issue that we are undervalued on the balance sheet, and they can get a high multiple return by selling us.
Doesn't Truist have a bigger insurance business than most other comparable banks?
Maybe it's also a factor of simplification.
Posted on 1/26/24 at 11:56 am to Shankopotomus
quote:
What’s the stock ticker for Cross River .. assuming it is publicly traded ?
It is still privately owned, rumors of an IPO next year. Guessing owners/investors trying to get one last cash out
Posted on 1/26/24 at 12:05 pm to LSUFanHouston
quote:
Doesn't Truist have a bigger insurance business than most other comparable banks? Maybe it's also a factor of simplification.
That is correct. They have the largest remaining bank owned insurance operation. Pretty much everyone else has sold out.
Unlike Europe, US banks have never been able to successfully incorporate insurance into their platform in the way they thought they could.
Posted on 1/27/24 at 11:04 pm to Flowbe209
PNC has openly stated that they MUST grow. Question is, who will they buy or merge, they are huge and it will shake things up regardless if they make a move.
Posted on 1/31/24 at 12:19 pm to Klondikekajun
NY Community Bank had a terrible earnings report. At first glance, it appears to be a kitchen sink quarter to set the stage for 2024, rather than a troubled bank concern.
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