Smaller U.S. Banks Say the Crisis Is Contained but Fears Persist
The abrupt collapse of Silicon Valley Bank and Signature Bank threw the entire industry into turmoil and exposed fissures in the financial foundations of some smaller banks.
A month later, the nation’s biggest banks are raking in billions and will likely keep doing so even if the economy softens. But regional lenders are seen as more at risk. Deposits are falling and the cost of keeping customers is rising, eating into profits. And fears remain about the value of investments and loans, especially ones backed by real estate.
On Friday, Moody’s downgraded the ratings of 11 regional banks, citing “a deterioration in the operating environment and funding conditions.”
The downgrades came at the end of a week in which regional bank leaders, in calls with investors about their latest financial results, tried to cast the crisis as a moment that had passed. One of the banks attracting the most concern among investors, First Republic, is set to report its results on Monday after the markets close.
Source: The New York Times
