Who may have seen that coming? (right here, right here, right here, and most detailed right here)
March will probably be lit:
1. Reverse repo ends
2. BTFP expires
3. Fed cuts (allegedly)
4. QT ends (allegedly)— zerohedge (@zerohedge) January 8, 2024
Admittedly, we had been a few weeks off, however bother has been brewing within the banking sector and tonight – after the shut – we get the primary financial institution failure of the yr.
The FDIC simply seized the troubled Philadelphia financial institution, Republic First Bancorp and and struck an settlement for the lender’s deposits and nearly all of its property to be purchased by Fulton Financial institution.
Republic Financial institution had about $6 billion of property and $4 billion of deposits on the finish of January, in line with the FDIC (significantly smaller than the $100-200BN property with SVB and Signature).
The FDIC estimated the failure will price the deposit insurance coverage fund $667 million.
As The Wall Street Journal reports, Republic First had for months struggled to remain afloat.
Round half of its deposits had been uninsured on the finish of 2023, in line with FDIC information.
Its whole fairness, or property minus liabilities, was $96 million on the finish of 2023, in line with FDIC filings.
That excluded $262 million of unrealized losses on bonds that it labeled “held to maturity,” which suggests the losses hadn’t counted on its steadiness sheet.
Its inventory, which was delisted from Nasdaq in August, had been close to zero.
Republic Financial institution’s 32 branches throughout New Jersey, Pennsylvania and New York will reopen as branches of Fulton Financial institution on Saturday, according to a statement from the FDIC.
Depositors of Republic Financial institution will change into depositors of Williamsport, Pennsylvania-based Fulton Financial institution, the regulator stated.
You shouldn’t be stunned provided that charges are larger now than they had been in the beginning of the SVB disaster – which suggests, except banks have hedged exhausting or dumped their bonds at a loss, they’re much more underwater…
U.S. Banks completed the yr with nearly $400 billion of unrealized losses on held-to-maturity property. The belief is that this would not be an issue as a result of the Fed would reduce A LOT this yr however what if that does not occur? pic.twitter.com/fsfMCisEd3
— Barchart (@Barchart) April 25, 2024
Add to this the truth that final week – seasonally-adjusted for tax-season – US banks noticed the most important deposit outflows since 9/11 (sure, that 9/11)…
…and, as we confirmed earlier, absent the $126BN excellent in The Fed’s BTFP bailout fund (which is now terminated and slowly working down because the time period loans mature)…
…the banking disaster is again and now the query is “who’s subsequent?”
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