The Banker Next Door

Lending for community banks started off good in 2026 despite higher interest rates, geopolitical headwinds, and tariff uncertainty. Now banks must consider the current interest rate environment, further rate cuts are unlikely in 2026, and economic caution, the Iran conflict, oil prices, and inflation. Community banks should focus on staying disciplined with credit underwriting and focus on relationship banking. There is some potential good news on the horizon as changes to Basel III capital rules could help increase residential mortgage lending. What lending products should community banks focus on? SBA lending, CRE, C&I, farm lending, and residential mortgage lending. This...

Italian bank Monte Dei Paschi (BMPS) has had quite the saga over the last 9 months. It all started back in September 2025, when BMPS initiated a hostile takeover of investment bank Mediobanca for $19B. BMPS CEO, Luigi Lovaglio, then presented a plan for delisting Mediobanca and expanding the bank into international markets. The departing board for the bank did not like this plan and decided to remove Luigi as CEO, revoke his powers and cancel his contract. Then, in a surprise move, the banks shareholders voted to reinstall Luigi as CEO and picked a new board and chairman. However, in...

This video is a clip from BND: Strategy Room Live Stream on June 13, 2026. Data center development problems have emerged. As big tech companies continue to build up their piles of cash to fund data center development, the build-out is falling behind. Local communities are starting to question just how many real jobs these data centers will create? One of the main companies at the heart of the electric grid, PJM Interconnect, is struggling to keep up with demand and bring new energy generation online. What does this mean for America’s electric grid? This clip examined articles from The Bu...

This video is a clip from BND: Strategy Room Live Stream on June 13, 2026. Elon Musk has become the world’s first Trillionaire! At least on paper. With the IPO for SpaceX dropping this week we look at how much money Elon is worth. We examine a couple of articles from The Wall Street Journal that measure Elon’s wealth and consider just how large a trillion dollars is.

Bank News: FDIC outlines 5 potential changes that it is considering. Fed Governor Michael Barr is concerned about deregulation. FinCen is directing banks to report suspicious activity around customers immigration status following a recent EO. JPMorgan sees a longer timeline to Agentic AI usage by retail customers. Senator Warren blasts Goldman Sachs CEO for keeping disgraced legal council as and “advisor.” Oklahoma’s BancFirst to purchase SpiritBank. PNC and U.S. Bank CEOs dismissed concern around customer usage of AI. According to a recent study half of bank CEOs are over the age of 65. Citizens Bank losing deposits over ICE ties...

This video is a clip from BND: Strategy Room Live Stream on June 13, 2026. What are tokens? How do companies purchase AI usage through tokens? How are tokens valued from a dollar perspective? These are important questions to understand as the AI price wars have begun. Anthropic and OpenAI have both filed for an IPO, but will they make it? The government forced Anthropic to put the brakes on some of their new models. At the same time, OpenAI is slashing prices to compete against Anthropic and prevent companies from seeking cheaper alternatives. As the AI bill comes due, companies...

This video is a clip from BND: Strategy Room Live Stream on June 13, 2026. The SpaceX IPO has taken flight delivering approximately $75 billion in fresh capital and a $2 trillion dollar valuation. This clip looks back at SpaceX’s beginnings in 2002 and the journey that brought them to today. Elon’s goal was to spark people’s imagination and get them invested in space again. He achieved that and so much more! This clip examined articles from CNBC and The Wall Street Journal.

The Banker Next Door (BND) weekly live stream show. Strategy Room provides financial news, commentary, top stories in the business world, economic indicators, and all things banking for the week.

Metropolitan Capital Bank & Trust (MCB) failed in January 2026. I covered the failure in a previous episode, but this episode covers the FDIC Office of Inspector General (OIG) report that reviews what they believe caused the failure. The ongoing problems at MCB have been documented. The OIG report concluded that bad loans from poor internal oversight, governance, and risk management led to critically deficient capital levels and thus bank failure. The FDIC identified suspicious activity associated with bank insiders confirming their misuse of position and the self-dealing of senior bank officials, and yet none of the individuals involved will be...

Is the Private Equity industry destroying our economy and thus capitalism? This is a very deep question that cuts to the very heart of what is ailing our economic system. Small business owners don’t want to grow their companies anymore; they just want to sell. There is no thought of building for the next generation, there is only the unicorn status, possible IPO, and then the sale. Private Equity is built on debt financing that promotes short-termism and financialization. This episode seeks to consider how and why this happened? What does it mean for our economy? What does th...

Prominent Wall Street short seller Andrew Left was convicted of securities fraud on June 1st. Prosecutors alleged that Mr. Left used his TV appearances and website, Citron Research, to make certain assumptions about various stocks and then match these comments to his own trading positions. The problem is, he would use these tactics to pump up the stocks, while at the same time placing trades in the opposite direction. The big question here is what does this ultimately mean for Wall Street and other prominent short sellers that may engage in similar behavior? This episode reviewed an article from...

The FDIC Quarterly Banking Profile covers key financial activity for the banking industry, community banks, and the Deposit Insurance Fund (DIF). For the 1Q 2026, Net Income rose, Net Interest Margin decreased, loan growth continued, domestic deposits increased for the seventh consecutive quarter, and asset quality metrics remained generally favorable. Additionally, provision expense rose from the previous quarter, unrealized losses on securities increased from 4Q 2025, and banking industry assets increased. The number of problem banks decreased in the quarter. The DIF reserve ratio increased to 1.43%. This episode examined the FDIC Quarterly Banking Profile report for the 1st quarter of 2026. A...

Bank News: CFPB orders all remote workers to return to DC headquarters by August 31st. CFPB directs BILT Technologies to reimburse any customers affected by card transition. CFPB faces lawsuit over Regulation B rule change. California judge rules in favor of OppFi. LendingClub sees a learning curve for fintechs that are seeking a bank charter. First National bank buys Blue Ridge Bancshares. OceanFirst seeks to retain customers and employees after acquisitions. Chime is getting sued by J.D. Power over alleged improper use of #1 ranking. The fintech C-suite round robin has begun. Fifth Third to close 81 branches. This episode...

The Banker Next Door (BND) weekly live stream show. Strategy Room provides financial news, commentary, top stories in the business world, economic indicators, and all things banking for the week.

The Department of Labor recently reported that the labor force participation rate for prime age men (age 25 to 54) dropped to 66%! About 1/3rd of men or approximately 7 million have dropped out of the labor force all together. This is a shocking statistic. There is no doubt that the country, overtime, will feel the absence of these men in a very profound way. The big question right now is how did this happen? There is not one single issue or event but a compounding of changes over many decades that led to this point. The loss of America’s manufacturing base in...

As consumer usage of Buy Now, Pay Later (BNPL) continues to increase, should banks consider offering this product for their customers? 50 million consumers have used BNPL over the last 12 months. Total transaction value increased to $70 billion in 2025. Problems with BNPL persist. There are concerns with consumers around delinquency and behavior finance issues. There are considerations internally regarding offering a product like this such as compliance, credit risk, and consumer protection. Despite the challenges, should a bank decide to offer BNPL to their customers there are several options available. Embedded partnerships, debit-based BNPL, and BNPL checking accounts are three options...

This episode is an update on Private Credit. The failure of U.K. mortgage lender MFS continues to ripple through markets as banks and financial firms in the U.K. and the U.S. sustain losses. Investors should be very careful about buying shares of Business Development Companies (BDCs) because what may seem like a bargain but could be a disaster. Banks lending to NDFIs decreased in the 1Q of 2026. Regulators required the largest banks to start disclosing their exposure to NDFIs at the end of 2024. NDFI lending is broken down into 5 categories. Regulators are considering if banks should...

We have all seen the movie It’s a Wonderful Life with Jimmy Stewart. Jimmy plays the President of a small savings and loan bank and in one of the pivotal scenes of the movie he prevents a bank run by talking to the customers and explaining how the bank works. Bank runs have been prevalent in the U.S. since the founding of the country as noted in various panics throughout the 19th and 20th centuries. But will a bank run today be like the bank runs we have experienced in the past? The answer, probably not. In a...

The FDIC released a report titled “Dissecting Depositor Flight: An analysis of the Spring 2023 Bank Failures.” This report is about the three regional banks that failed during the Spring banking crisis of 2023. The three banks in question include Silicon Valley Bank (SVB), Signature Bank, and First Republic Bank (FRB). This report sought to examine the deposit flow of each back and attempts to determine if a ‘bank run’ is what caused their failure. The report found that the largest depositors were the ones that moved all their money and did it quickly. Small depositors that were covered by FDIC insuranc...

Banks are constantly challenged in the fintech era, not with loosing accounts, but with maintaining day-to-day financial engagement. Consumers continue to diversify away from bank offerings to multiple fintech platforms, mainly for P2P payments and digital wallets. Bank’s share of the financial relationship with fintechs is shrinking. Speed, flexibility, and control are the main items that customers are looking for. Payments are the front door for customer engagement. Right now, Venmo and Cash App are winning the race, but banks have options such as Zelle. Bank’s can retain financial engagement with their customers, but it will requ...

Bank News: Standard Charter CEO Bill Winters apologized for his ‘lower-value human capital’ remarks that he made about his employees. Flagstar CEO Joseph Otting will stay until 2028 when a successor will be named. Federal Reserve and FDIC approve US banks’ living wills. Senator Warren wants charter details from OCC. Jay Gould justifies conditional trust charter approvals. Senator Warren questions Morgan Stanley exemption allowing them to fold their German investment bank into their holding company. President Trump directed the Federal Reserve to review how it grants access to central bank payment rails for fintechs. Chime is definitely in the market for a...

The CAMELS rating system is used by bank regulators to assess a financial institution. The rating system evaluates six key factors – capital adequacy, asset quality, management, earnings, liquidity, and sensitivity. Banks are then rated on a scale of 1 (Best) to 5 (Worst). This scale helps examiners to determine which banks require closer supervision because of poor performance. The CAMELS framework was originally created in 1979 but has not been updated since 1996. Federal regulators are now looking to make changes by shifting the focus to material financial risk and bolster ratings transparency. The focus of the changes will be related to composite ra...

What has AI unleashed on the banking industry? Anthropic’s development of Mythos has sent shockwaves through banking executives. Palo Alto Networks tech chief Lee Klarich sees a small window before hackers begin to use programs like Mythos to launch attacks against software vulnerabilities. Banks should consider this a wake-up call. Think about your current platforms and technology stacks. Consider shifting from static cybersecurity models to dynamic monitoring. This threat is only about to begin. This episode covered an article from S&P Global (subscription required) titled “Anthropic’s new AI model pushes banks to shore up cyber defenses” and an a...

Customers Bank CEO Sam Sidhu caused quite a stir when he used an AI clone for the first 25 minutes of the bank’s most recent earnings call to provide prepared remarks. Mr. Sidhu was trying to display how adept the bank has become at using AI technology. Mr. Sidhu showed how the bank has been able to deploy AI and decrease the efficiency ratio from 62% in 2024 to 49% in 2026. Mr. Sidhu is also hoping that AI will help to shrink the time it takes to close a loan and open a deposit account. This episode reviewed an article from S&P...

This video is a clip from BND: Strategy Room Live Stream on May 24, 2026. The American citizen is revolting against AI. From the job losses to the data centers being put in our back yards to the amount of overall danger posed from this new technology, Americans are pushing back. President Trump pulled his executive order on AI due to a split in his administration over how tightly AI development should be regulated. Anger is simmering as Eric Schmidt, former Google CEO, was booed off the stage at a recent Arizona graduation commencement over his comments around AI. Standard Charter...

The Banker Next Door (BND) weekly live stream show. Strategy Room provides financial news, commentary, top stories in the business world, economic indicators, and all things banking for the week.

The Financial Stability Report is the Fed’s current assessment of the stability of the U.S. financial system. The Fed seeks to assess vulnerabilities using four broad categories, which include asset valuations, borrowing by businesses and households, leverage in the financial sector, and funding risks. Asset valuations remain elevated. Vulnerabilities from business and household debt remained moderate. Vulnerabilities associated with financial leverage remained notable (Private Credit). Funding risks have remained moderate. Additionally, the report looks at salient risks to the financial system. Survey respondents had concerns about geopolitical risks, oil shock, artificial intelligence, private credit, and persistent inflation. Th...

With Jerome Powell existing and Kevin Warsh coming in as the new Fed Chair, he must walk a tight rope across an already strenuous economy. Is the situation hopeless? This seems a fair question given that any action the Fed takes could lead to dire circumstances. Inflation remains elevated, fiscal debt and deficits are out of control, yields are rising in the bond market to compensate for these risks, and the American consumer is running on fumes. Raising rates increases pressure on consumers, banks, and the federal government. Holding rates steady means waiting until something breaks. Decreasing interest rates...

Jerome Powell’s tenure as the Chairman of the Federal Reserve is coming to an end after 8 years. What has he left us? To say he has left us a mess would be an understatement. The Fed has lost approximately $240B in the last three years. The Fed has unrealized losses in their bond portfolio around $1T. Inflation remains well above the Fed 2% target. Powell has NEVER brought inflation below 2% in his 8-year tenure. The Fed balance sheet is back up to $6.7T, over 2T higher then when he started as Chairman. Powell drained all the liquidity out of th...

Bank News: Fintech company Parker files for bankruptcy. JPMorgan is investing $14M in anti-fraud projects. White House names John Crews to NCUA board. Credit Union membership growth returns to positive territory in 1Q 2026. Payward, the parent company of Kraken, is seeking to get a bank charter from the OCC. Augustus Bank receives conditional charter approval from the OCC. Stellantis follows Ford and GM by receiving an ILC banking charter from the FDIC. In M&A news, Hancock and Whitney acquires One Florida Bank in a $377.6M transaction and NexTier buys Bank of Dublin. SBA 7(a) lending rebounded in the 1...

This video is a clip from BND: Strategy Room Live Stream on May 16, 2026. This is an update on Private Credit. Private Equity has a problem as the industry has a glut of over $3 trillion in companies that need to be offloaded from their portfolios. PE net asset values are also being called into question. This leads us to Blue Owl. The valuation of their funds is coming into question. The Private Credit hot streak is officially over as defaults continue to rise. KKR’s private credit fund takes a $560 million loss. The defaults in the fund increased to 8.1% in th...

This video is a clip from BND: Strategy Room Live Stream on May 16, 2026. Rents for apartments are down for the 33rd straight month. April home sales disappointed. Only 11% of new construction is in urban areas. The majority of newly built residential homes are in the suburbs. If you do want to build a new house in an urban area the cost is very high. According to research from the National Association of Realtors, America has a surge of foreign buyers in the form of Chinese nationals buying with cash!  

The Banker Next Door (BND) weekly live stream show. Strategy Room provides financial news, commentary, top stories in the business world, economic indicators, and all things banking for the week.

The semiannual OCC report on risks to the U.S. banking system found that bank financials remain sound but risks around cyber threats and fraud continue to be a concern.  Bank earnings, balance sheets, liquidity, and capital levels remain strong by historical standards. Credit risk is manageable but there are concerns such as the maturity wall and private credit. Past-due, nonaccrual, and charge-offs remain below long-term averages. Cyber and various types of fraud threats remain a concern. Recent developments in AI present opportunities and challenges. This episode reviewed the OCC Semiannual Risk Perspective report for Spring 2026. A link to t...

The Federal Reserve Senior Loan Officer Opinion Survey (SLOOS) for April 2026 examines how bank senior lenders are feeling about loan demand and lending standards. This report is released on a quarterly basis. The report found tighter lending standards for C&I loans. Unchanged standards and weaker demand for CRE loans. Unchanged or easier terms for almost all loan policies across CRE loan categories, which is interesting given the increase in delinquency on construction and multifamily loans. Unchanged standards and weaker demand for RRE loans. Unchanged standards and stronger demand for HELOCs. Unchanged standards and weaker demand for credit cards...

Bank news: Failed Oklahoma Bank, First National Bank of Lindsey, ex-CEO Danny Seibel plead guilty to bank fraud and now faces up to 20 years in prison and a fine of up to $1 million. Cambridge Savings Bank has agreed to acquire First Seacoast Bank in an $80 million deal. BayFirst Bank makes a change at CEO and carries out an $80 million dollar capital raise. U.S. Bank takes a quieter approach to branch expansion. M&T Bank takes a patient approach to M&A. Kraken’s parent company Payward is acquiring a Hong Kong-based payments infrastructure platform named Reap in a $600 mi...

Problems in the Private Credit Market continue to unfold as banks are now tightening lending standards around Nondepository Financial Institutions (NDFIs). As this is happening, Apollo Global Management is trying transparency by offering their investors daily valuations for their private-credit funds starting at the end of September. Most funds provide this information on a quarterly basis. Apollo is trying to calm down fears of larger credit issues within its funds. Meanwhile, HSBC is getting pulled into the Private Credit conversation through ‘back leverage’. When MFS failed in February (U.K. mortgage lender), investors were trying to figure out who was...

China’s economy has been dealing with a number of issues over the last few years. Mainly a real estate bubble collapse and trade issues with the U.S. These issues are spilling over into the banking system in the form of rural banks. Forced mergers are being used to stem potential chaos. The banks being rolled up are known as “village and township banks”. Years of weak oversight, low capital, and risky lending have left these banks vulnerable. The pace of banks being rolled up is accelerating from 83 in 2024 to 226 in 2025 to 72 so far in 2026. The question is how lo...

This video is a clip from BND: Strategy Room Live Stream on May 9, 2026. The White House is starting to change its tune on how it deals with AI. We have moved from full steam ahead to hold up, wait a minute, something ain’t right! Mythos has the Pentagon circling the wagons and the White House putting together a new executive order on AI. Meanwhile on the banking front, Jamie Dimon has his concerns, Michelle Bowman confirmed that regulators are looking at a significant pivot on how they will oversee AI, investors are now urging community banks to step up...

The Banker Next Door (BND) weekly live stream show. Strategy Room provides financial news, commentary, top stories in the business world, economic indicators, and all things banking for the week.