Link to Article: FDIC: US bank deposits dropped by most in 39 years to start 2023 Are Banks in trouble or not? If you do not have time to read the entire article, please allow me to extract and apply the relevant.
"US banks lost $472 billion in deposits in the first quarter, according to a new quarterly report from the Federal Deposit Insurance Corporation (FDIC)."
We need another data point for perspective.
"The deposit decline was the largest since the FDIC began collecting quarterly industry data in 1984 and marked the fourth consecutive quarter of industry outflows."
What does this mean for the banking sector?
"The number of banks on the FDIC's "problem list" increased by four to 43, and assets held by banks on that list rose to $58 billion."
Forty-three sounds like a big number, how does it compare?
"That list swelled into the hundreds during the industry's last big crisis which began in 2008."
Not so bad, why sound the alarm now?
"What was also clear from the FDIC's new report is that a core measure of profitability declined during the first quarter as interest rates rose and depositors began moving their money elsewhere."
Most financial firms are experiencing declines, still not really a fire alarm.
"The industry also ended the quarter with a sizable amount of unrealized losses on securities held by banks. But that amount, $515 billion, was down 16.5% from the prior quarter."
Wait, better than last quarter!
Another great headline, but definitely not the full narrative. Remember my friends, if you are going to read a headline, read the entire story before reaching a conclusion. If you do not have time, I got you covered.
Contributed by: Kyle Nagy
About Kyle:
Kyle Nagy is a founder and Director of CommCap Advisors. Kyle started his commercial real estate career in 1999 as the Real Estate Analyst for the Las Vegas office of GMAC Commercial Mortgage, an international real estate finance company. Prior to leaving and forming CommCap, Kyle was instrumental in the growth and success of the Las Vegas GMAC office and was one of the youngest Vice Presidents within the company. During his finance career, Kyle has successfully originated, underwritten, and closed over $900 million in loans with Life insurance Company, Wall Street Conduit, Bank and Agency Lenders.
As your exclusive advisors, CommCap utilizes proprietary systems, market expertise, and years of experience to secure aggressive financing options that best fit your property. Exclusive correspondent and servicing relationships with Life Insurance Company, CMBS, and Agency lenders ensure a broad and in-depth representation of current market conditions. Our team of advisors craft a loan structured to enhance revenue and allow you to focus on increasing cash flow.
We do not list, sell, manage, or lease property. We only arrange financing and are the best at what we do.