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WASHINGTON, May 31 (Reuters) - U.S. banks saw total deposits decline by a record 2.5% in the first quarter of 2023, and industry-wide profits were relatively flat after taking into account the effects of two large bank failures, the Federal Deposit Insurance Corporation said Wednesday. The FDIC said the $472 billion in deposit outflows in the first quarter was the largest it had recorded since it began collecting such data in 1984. The decline was primarily from uninsured funds, as insured deposits actually rose $255.1 billion, or 2.5%, amid the failures of Silicon Valley Bank and Signature Bank. The decline in deposits was offset by increased wholesale funding, which rose 14.4% in the first quarter. The results showed banks shrinking the amount of unrealized losses on their books and maintaining strong capital ratios.

Persons: Martin Gruenberg, Gruenberg, Pete Schroeder, Sinead Carew, Nick Zieminski Organizations: Federal Deposit Insurance Corporation, FDIC, Valley Bank, Signature Bank, First Republic Bank, Comerica, Citizens, Thomson

☆ Wall Street's succession summer
▼ + stars: | 2023-05-30 | by ( Kaja Whitehouse | ) www.businessinsider.com time to read: +5 min

But first, it's the summer of succession — and no, we're not talking about the TV show. Wall Street CEOs pretend that succession planning is another chore, like hashing out the annual budget or organizing an earnings call. But behind the boring press announcing their succession plans is often a story of intrigue and drama. And then, of course, there's Jamie Dimon, Wall Street's longest-serving CEO. Earlier this week, Insider highlighted 17 young analysts poised to shine.

☆ JPMorgan cutting about 500 jobs this week
▼ + stars: | 2023-05-27 | by ( ) www.reuters.com time to read: +1 min

May 26 (Reuters) - JPMorgan Chase & Co (JPM.N) is cutting about 500 employees this week across its various departments, according to a person familiar with the situation who asked not to be identified discussing personnel matters. JPMorgan is the largest U.S. lender. On Thursday, a JPMorgan source said the lender was laying off nearly 1,000 First Republic Bank employees after acquiring the failed bank earlier this month. First Republic became the largest U.S. lender to fail since 2008 after it was seized by regulators and sold to JPMorgan in early May. JPMorgan's workforce stood at 296,877 at the end of the first quarter, up 8% from a year earlier, according to a filing.

☆ Famed economist David Rosenberg says home prices are set to fall further as buyers retreat to the sidelines and a hawkish Fed means stubbornly high mortgage rates
▼ + stars: | 2023-05-26 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

With mortgage rates unlikely to budge and incomes unlikely to grow, prices are due to drop. Housing affordability is calculated by accounting for three variables: home prices, mortgage rates, and incomes. Ian Shepherdson, the chief economist at Pantheon Macroeconomics who said in the 2005 that a housing downturn would spark a recession, made the same argument in recent weeks. Now that's quite striking because mortgage rates are no longer at peak, but applications are still falling. This would send interest rates — and therefore mortgage rates, which trade closely with Treasury rates — higher, further hurting demand and affordability, Moody's Chief Economist Mark Zandi recently told Fortune.

☆ How risky bank debt makes customers safer
▼ + stars: | 2023-05-25 | by ( Liam Proud | ) www.reuters.com time to read: +6 min

LONDON, May 25 (Reuters Breakingviews) - Bank watchdogs are mulling changes to deposit insurance schemes after a string of lenders failed. That’s a problem for depositors, since long-term debt acts as a buffer for customers too. Forcing the issuance of more long-term bank debt could make them cheaper too. The trickier part is figuring out who ultimately bears the cost of loss-absorbing debt. Relying more on loss-absorbing debt could make such giant ad-hoc bills less likely in the future.

☆ How JPMorgan plans to spend $15 billion this year on technology, including AI development, cyberattacks, and wage inflation
▼ + stars: | 2023-05-25 | by ( Emmalyse Brownstein | Hayley Cuccinello | ) www.businessinsider.com time to read: +3 min

It said it plans to spend $15.3 billion on tech this year, up $1 billion from last year. The bank's tech spending is estimated to grow by $1 billion this year to $15.3 billion, including salaries for engineers, stepped-up cybersecurity efforts, and AI innovation. The regional banking crisis, meanwhile, could end up costing it $6 billion, including the cost of First Republic Bank. He did, however, outline the qualities he thinks would make for a good replacement CEO, including grit and courage. JPMorgan unleashed hundreds of slides on Monday to reassure investors that its growth and spending strategy is on the right track.

☆ JPMorgan lays off 15% of First Republic employees, or about 1,000 workers
▼ + stars: | 2023-05-25 | by ( Emmalyse Brownstein | ) www.businessinsider.com time to read: +3 min

JPMorgan is laying off roughly 1,000 employees of First Republic Bank, which it acquired on May 1. On Monday JPMorgan said it will also be closing some First Republic bank branches. JPMorgan has notified roughly 1,000 employees of First Republic Bank, which it acquired earlier this month, that they won't be staying on with the bank. "The vast majority of First Republic employees will be offered employment at JPMorgan Chase – either through a transition period, or in many cases full-time," a JPMorgan spokesperson said in a statement. JPMorgan agreed to buy First Republic Bank after the FDIC seized control on May 1.

☆ Factbox: The JPMorgan executives who will update investors on First Republic, strategy
▼ + stars: | 2023-05-22 | by ( Nupur Anand | ) www.reuters.com time to read: +5 min

REUTERS/Marco... Read moreNEW YORK, May 22 (Reuters) - JPMorgan Chase & Co (JPM.N) executives will update investors on its takeover of failed First Republic Bank, which has made the biggest U.S. bank even bigger. CEO Jamie Dimon and other top executives will present their strategies at an investor day at its headquarters in New York on Monday. Lake and Piepszak are among the executives in charge of integrating First Republic Bank after it was shuttered by authorities on May 1. JEREMY BARNUM, CHIEF FINANCIAL OFFICERBarnum was promoted to CFO in 2021 after leading global research. The finance chief joined JPMorgan in 1994, serving in various roles including CFO and chief of staff for the investment bank.

☆ JPMorgan just unleashed hundreds of slides to investors. Here are 11 key graphs that lay out its strategy for managing rising costs, lower M&A, and its purchase of First Republic.
▼ + stars: | 2023-05-22 | by ( Emmalyse Brownstein | Hayley Cuccinello | ) www.businessinsider.com time to read: +2 min

One bright spot is First Republic Bank, which will boost net income interest by $3B this year. A tray of First Republic chocolate cookies served at JPMorgan's Investor Day Hayley CuccinelloOne bright spot was the bank's acquisition of First Republic Bank earlier this month. While the investment will increase the bank's costs by as much as $3.5 billion, the bank is already seeing the deal pay off. JPMorgan expects, for example, to generate $84 billion in net interest income this year, including $3 billion from the San Francisco bank. JPMorgan unleashed hundreds of slides on Monday to reassure investors that its growth and spending strategy is on the right track.

☆ JPMorgan finds jewels in US banking ashes
▼ + stars: | 2023-05-22 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, May 22 (Reuters Breakingviews) - JPMorgan (JPM.N) boss Jamie Dimon didn’t buy First Republic Bank in a crisis-hewn weekend deal just for the fuzzy glow from helping to stabilize the U.S. banking system. The giant lender laid out some of the impact of acquiring First Republic out of receivership in its investor day on Monday. There’s the $3 billion of contribution to net interest income from the deal, boosting this year’s expected total to $84 billion. More enticing, perhaps, is the $200 billion in wealth-management money the bank has taken from its defunct rival, along with roughly 200 advisers. JPMorgan is so big, with nearly $4 trillion of assets, it’s hard to move the needle in regular banking.

☆ JPMorgan expects $3 bln income boost from First Republic deal
▼ + stars: | 2023-05-22 | by ( ) www.reuters.com time to read: +1 min

NEW YORK, May 22 (Reuters) - JPMorgan Chase & Co's (JPM.N) net interest income would rise by $3 billion this year due to its purchase of failed First Republic Bank, according to a presentation published ahead of its investor day on Monday. The largest U.S. lender agreed to take into its books $173 billion of the failed bank's loans, $30 billion of securities and $92 billion of deposits after First Republic was shuttered by authorities earlier this month. The Wall Street giant is in the process of integrating First Republic, which will likely take about 12 months. First Republic was the third U.S. regional lender to fail since March in a sector-wide upheaval that roiled financial stocks, deepened worries of a crisis and heaped pressure on mid-sized banks. Reporting by Nupur Anand and Lananh Nguyen in New York and Mehnaz Yasmin in Bengaluru; Editing by Saumyadeb ChakrabartyOur Standards: The Thomson Reuters Trust Principles.

NEW YORK, May 22 (Reuters) - JPMorgan Chase & Co (JPM.N) is beefing up its commercial banking business that caters to tech startups and other early-stage companies, the company said on Monday. The largest U.S. lender plans to add staff after it hired more than a hundred bankers this year to serve companies in the so-called innovation economy in sectors such as technology, e-commerce and life sciences. Two other regional lenders were subsequently seized by banking regulators, including First Republic Bank, which JPMorgan bought earlier this month. JPMorgan's broader commercial bank has more than 18,000 clients, including mid-sized businesses and corporations, government entities and non-profits and more than 33,000 real estate investors or owners. It also aims to expand overseas to serve early-stage companies in the United Kingdom, Europe and Asia.

☆ Hedge funds piled into these stocks in the first quarter
▼ + stars: | 2023-05-22 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

The Wall Street firm analyzed hundreds of 13F filings last week to find the most popular stocks hedge funds picked up over the volatile quarter. Hedge funds piled into Victoria's Secret in the first quarter, buying the dip in the lingerie retailer, which has seen its shares fall 29% this year. Hedge funds also increased their ownership in financial names Western Alliance and Western Union last quarter. To be sure, it's possible that some of the hedge funds were covering their short bets in this position. A number of biotech names were also high-conviction bets for hedge funds, including Syneos Health , Horizon Therapeutics and Ginkgo Bioworks.

☆ JPMorgan may turn First Republic sites into 'special branches' for wealthy clients, report says
▼ + stars: | 2023-05-21 | by ( Jordan Hart | ) www.businessinsider.com time to read: +3 min

JPMorgan Chase bought the San Francisco-based First Republic Bank on May 1 after it failed. The Wall Street Journal reported that it wants to retain a hands-on approach to wealth management. The First Republic deal reignited concerns about big banks becoming too powerful. JPMorgan Chase's takeover of the failed First Republic Bank could boost efforts to develop its wealth-management business, . "The failure of First Republic Bank shows how deregulation has made the too big to fail problem even worse," Sen. Elizabeth Warren tweeted the day the deal was announced.

☆ JPMorgan investors to scrutinize First Republic takeover
▼ + stars: | 2023-05-19 | by ( Nupur Anand | ) www.reuters.com time to read: +4 min

Analysts will seek more details about the deal and JPMorgan's plans to integrate First Republic's business into the largest U.S. bank. FIRST REPUBLICJPMorgan has agreed to undertake $173 billion of the failed bank's loans, $30 billion of securities and $92 billion of deposits after First Republic was shuttered down by authorities. Dimon had said that he expects blowback from the FRC deal earlier this month in an interview on Bloomberg TV. loadingAn acquisition of this scale will raise question on integration, execution risks, employee retention among others, analysts believe. JPMorgan has made 19 acquisitions since 2020 but the last major purchase of this scale by the lender was in 2008 of Bear Stearns.

☆ US regional bank stocks fall after Yellen says more bank mergers necessary
▼ + stars: | 2023-05-19 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, May 19 (Reuters) - Shares of U.S. regional lenders fell on Friday after CNN reported that U.S. Treasury Secretary Janet Yellen told bank chief executives that more mergers may be necessary following a series of bank failures. Yellen also reaffirmed the strength and soundness of the country's banking system at the meeting with bank CEOs on Thursday in the aftermath of the collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank. The KBW Regional Banking Index (.KRX) fell 3%, with shares of PacWest Bancorp (PACW.O) and Western Alliance (WAL.N) among the biggest losers as they shed 4% each. The regional bank crisis has been partly blamed by some on aggressive interest rates by the U.S. Federal Reserve, which forced some lenders to seek new capital to make up for a fall in the value of assets linked to interest rates. The debt ceiling dispute has weighed on market sentiment, including for regional bank stocks.

☆ Federal Reserve officials are growing skeptical over suspending rate hikes
▼ + stars: | 2023-05-19 | by ( Bryan Mena | ) edition.cnn.com time to read: +7 min

Some officials are concerned inflation isn’t cooling fast enough, which could prompt an 11th consecutive rate hike when policymakers meet in June. Federal Reserve Board Chair Jerome Powell and former Federal Reserve Board Chair Ben Bernanke (R) participate in a discussion at the Federal Reserve Board building in Washington, DC, May 19, 2023. Saul Loeb/AFP/Getty ImagesEarlier this month, Fed officials voted unanimously to raise the benchmark lending rate by a quarter point to a range of 5-5.25%, while signaling a possible pause ahead. Of course, Fed officials’ thinking on monetary policy could drastically change if the United States defaults on its debt, which could happen as soon as June 1. Fed officials always mention that their views on interest rates largely depend on what economic indicators show, resisting taking an absolute stance on how they will vote.

☆ US banks rethink social media as a threat, not a marketing tool
▼ + stars: | 2023-05-18 | by ( Nupur Anand | ) www.reuters.com time to read: +5 min

Greg Becker, the former CEO of Silicon Valley Bank, blamed social media as an "unprecedented" factor in the lender's demise. The former CEO of First Republic Bank, Michael Roffler, also blamed social media for its collapse two months later. Bank executives and directors have ordered their companies to add social media into risk-management programs, according to regional bank executives who declined to be identified because the discussions are private. "NIP IT IN THE BUD"Banks are also contacting customers who complain on social media to address their issues quickly. The Financial Stability Board, an international body, is also investigating the role of social media in recent market turmoil, a source said.

Senator Elizabeth Warren is questioning federal bank regulators on their decision to sell First Republic Bank to the nation's largest bank, JP Morgan Chase. In a letter sent to the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation Wednesday, Warren said the deal was "deeply troubling," and sought details on how the agencies decided to arrange that particular sale, allowing JPM to grow even larger. This is a troubling outcome, leaving me with numerous questions," she wrote. The FDIC announced this month it had seized First Republic and sold it to JPM in a deal that it estimated would cost its deposit insurance fund $13 billion. Warren also pressed the matter with Michael Hsu, the acting Comptroller of the Currency, at a hearing Thursday.

☆ Sen. Elizabeth Warren presses regulators for answers on First Republic takeover
▼ + stars: | 2023-05-18 | by ( Chelsey Cox | ) www.cnbc.com time to read: +3 min

Sen. Elizabeth Warren, D-Mass., greets Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation, during the Senate Banking, Housing, and Urban Affairs Committee hearing in Dirksen Building on Tuesday, March 28, 2023. WASHINGTON — Sen. Elizabeth Warren is asking federal financial regulators for answers over what she called a "deeply troubling" deal that saw JPMorgan Chase take over First Republic Bank. "Our financial strength, capabilities and business model allowed us to develop a bid to execute the transaction in a way to minimize costs to the Deposit Insurance Fund." Instead, the insurance fund was allowed to take a multibillion-dollar loss after billions of dollars worth of the bank's uninsured deposits were rescued during the deal, Warren said. "The FDIC appeared to prioritize First Republic's uninsured deposits at the bank before the Insurance Fund," she said.

May 17 (Reuters) - Shares of U.S. regional lenders jumped on Wednesday on growing investor confidence that the worst of the banking crisis was likely over, following news of strong deposit growth at Western Alliance Bancorp (WAL.N). Arthur Hogan, chief market strategist at B. Riley Wealth, said Western Alliance's deposit growth disclosure was good news for worried investors. "Western Alliance, one of the most hard-hit banks, came out with a filing showing deposit increase. Western Alliance shares, which are down 41% year-to-date, surged 10% to $34.81, erasing losses recorded over the last two weeks. Other regional lenders closed higher: PacWest Bancorp (PACW.O), whose stock has lost nearly 76% of its value year-to-date, spiked 22%.

☆ Experian's outlook highlights North America lending woes
▼ + stars: | 2023-05-17 | by ( Eva Mathews | ) www.reuters.com time to read: +2 min

May 17 (Reuters) - Experian Plc's (EXPN.L) annual revenue growth forecast on Wednesday signalled a challenging economic backdrop, especially in North America, where the failure of three U.S. regional banks has hurt confidence in the sector. Experian's key customers include banks, non-traditional lenders and insurance providers, which use its credit reports and scores to analyse and make decisions around credit risk, fraud prevention and lending terms. "Tighter lending conditions (especially in North America) are impacting some of Experian's business lines with more direct volume exposure, including its core credit bureau and marketplace, which together account for about 17% of group revenue," Bank of America analysts said. About 67% of Experian's group revenue comes from the North America region. For the year ended March 31, Experian's organic revenue growth of 7% to $6.59 billion compared with analysts' consensus of $6.64 billion.

☆ First Republic Bank’s Ex-CEO Michael Roffler to Testify in Congress
▼ + stars: | 2023-05-17 | by ( Andrew Ackerman | ) www.wsj.com time to read: 1 min

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☆ Ex-First Republic CEO blames contagion for bank's collapse
▼ + stars: | 2023-05-17 | by ( ) www.reuters.com time to read: +1 min

May 16 (Reuters) - The former chief executive of the First Republic Bank Michael Roffler blamed the bank's collapse on the contagion from the failures of other regional banks and said regulators did not express concerns regarding the bank's strategy, liquidity, or management performance. "We could not have anticipated that Silicon Valley Bank and Signature Bank would fail, or that the failure of those banks would trigger substantial deposit outflows at our bank," he said. First Republic's financial position and strategy were regularly reviewed by the California Department of Financial Protection and Innovation (DFPI) and the FDIC, he said. California banking regulators shut down First Republic Bank on May 1 and sold its assets to JPMorgan Chase & Co (JPM.N), in a deal to resolve the largest U.S. bank failure since the 2008 financial crisis and draw a line under lingering banking turmoil. Reporting by Nilutpal Timsina in Bengaluru; Editing by Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

☆ Analysis: Overexposed US regional banks could sell commercial property loans
▼ + stars: | 2023-05-17 | by ( Matt Tracy | ) www.reuters.com time to read: +5 min

Still, previously unreported data from New York-based real estate data provider Trepp, shared with Reuters, show many regional banks' holdings exceed thresholds stipulated by regulators. While big banks have recently warned about CRE exposure, the new Trepp data underscores how acute and widespread the problem is across the banking sector. The regulatory guidance requires that banks exceeding these thresholds "should employ heightened risk management practices," including potential sales of specific loans. Meanwhile, New York Community Bancorp (NYCB.N) and Flagstar Bank [RIC:RIC:FBCANK.UL] were among the top five banks listed by Trepp that exceeded the CRE loan threshold. In Tuesday congressional testimony, FDIC chair Martin Gruenberg warned CRE loan portfolios "face challenges" should market conditions persist.

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