Small Banks Are Crashing

on March 13, 2023

BY TYLER DURDEN

JPM’s Michael Cembalest – whose bank is poised to benefit the most from the ongoing carnage – chimed in with the following chart, which added an additional axis looking at loans plus securities as a % of total deposits, but which after the new BTFP bailout facility is irrelevant since the Fed and TSY are effectively backstopping unrealized losses on securities.

Wall St ends year with biggest annual drop since 2008

So we are really down to which banks have the most bank run risk, which as we explained, are primarily America’s small, regional banks.

How are they holding up today? Well, not good: here is the KRE index…

… while its consttiuent members are having a very bad day as the following headlines reveal:

*FIRST REPUBLIC BANK HALTED FOR VOLATILITY, DOWN 65%
*PACWEST HALTED FOR VOLATILITY; DROPPED 41% TO LOWEST ON RECORD
*REGIONS HALTED FOR VOLATILITY AFTER PARING 31% DROP TO 20%
*WESTERN ALLIANCE SINKS A RECORD 76%; HALTED FOR VOLATILITY

And this is how the various small banks are doing today.

The take home here is that, unfortunately, Joe Biden’s 9am pep talk did little to boost confidence in small US banks.

Or, as we put it earlier, “”It would be the Savings and Loan 2.0 Crisis but we regret to inform you there are no savings.” Meanwhile, all hail JPMorgan, pardon, JPMega, which is about to have some $18 trillion in deposits.

Source: https://www.zerohedge.com/markets/small-banks-are-crashing