Top banking news this month: June 2023

June 30, 2023 1:09 PM

In June's roundup of American Banker's favorite stories: Attempts to steal consumer data target a growing number of banks, credit unions secure deposits outflowing from other financial institutions, Citizens recruits 50 former private banking employees of First Republic and more.

Click here to read last month's roundup of banking industry news.

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The 20 top-performing banks with $2B to $10B in assets

List by Jackie Stewart

American Banker's annual ranking takes a look at how larger community banks are performing in terms of a number of key metrics.

Banks with assets between $2 billion and $10 billion of assets were ranked based on their three-year average return on average equity. For the top 20 banks in this asset category, the average of this figure came in at 21.11%. That soundly beat all the banks in this asset class, which posted 11.61% for this metric.

These top 20 institutions also held more core deposits compared with their total deposit base, reported a higher median return on average assets and posted a stronger efficiency ratio compared with the entire peer group.

Click here to view the full list.

10 banks alleged victims of ransomware attacks on file transfer software

List by Carter Pape

There's a growing list of institutions victimized by a supply chain cyberattack by a ransomware gang that exploited a weakness in file transfer software popular with enterprises. To date, the sector with the largest share of victims has been financial services — specifically banks and credit unions.

On May 27, ransomware gang Cl0p started exploiting a zero-day vulnerability in Progress Software's product MoveIt to steal data from at least 91 organizations, including state and federal agencies and at least 10 U.S. banks and credit unions. Data compromised in the leaks included names, addresses, birthdates, Social Security numbers and more.

Progress notified customers about the vulnerability on May 31 and released a patch for it two days later. The company has since identified and remediated two other vulnerabilities in its products. All three are SQL injection vulnerabilities, which according to the cybersecurity nonprofit OWASP Foundation is the third most common type of vulnerability in web applications.

Click here to view the full list.

How credit unions gained some of the deposits banks lost

Article by Ken McCarthy

Many of the deposits that moved out of banks in the wake of recent failures have resurfaced in credit union accounts.

While U.S. banks lost 2.5% of their deposit base in the first quarter compared to the end of 2022, total shares and deposits increased 2.1% at credit unions, according to an S&P Global Market Intelligence analysis of call report data. This translates to credit unions picking up $39.85 billion of shares and deposits compared to the $481.79 billion that banks and thrifts lost, according to S&P Global.

Credit unions' growth in shares and deposits in the first quarter also outpaced growth in total loans and leases for the first time in two years, according to S&P. This followed a period of slow deposit growth across the credit union industry last year. Credit union executives say that a combination of savvy marketing — and little exposure to the recent banking crisis — helped them reverse that slowdown.

Click here to read the full story.

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Big commercial real estate downturn could sink 300+ banks: Report

Article by Kyle Campbell

LAS VEGAS — A sharp downturn in commercial real estate performance could have a big impact on the banking sector, but not big enough to destabilize the financial system, according to analysis from one of the top real estate economists in the country.

More than 300 banks have enough commercial real estate loans on their books to see their tier 1 capital wiped out under a worst-case scenario, Richard Barkham, chief economist and head of research at CBRE, said earlier this month during a conference hosted by the National Association of Real Estate Editors.

Barkham said the real estate advisory firm analyzed Federal Deposit Insurance Corp. data on the balance sheets of 4,800 insured banks to identify the banking sector's total exposure to commercial real estate. It then applied a hypothetical stress scenario in which property values and net operating incomes fell enough to result in a total loss.

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These banks have lots of office loans. Here's why they say it's OK.

List by Kevin Wack

Loans backed by office buildings are currently drawing major scrutiny, as the rise of remote work has led to higher vacancy rates and sparked fears that some lenders will face big losses in the coming years.

Much of the focus has been on smaller regional banks, which tend to have greater exposure to the commercial real estate sector than their larger counterparts.

At banks with between $10 billion and $100 billion of assets, commercial real estate loans accounted for 33.2% of total loans at the end of the first quarter, compared with 12.8% at bigger banks, according to a recent analysis by S&P Global Ratings.

Click here to view the full list.

Five issues to watch when Chopra goes to Congress

Article by Kate Berry

Rohit Chopra, the director of the Consumer Financial Protection Bureau, testified before Congress this month on a wide range of issues from credit card late fees to small-businesses lending.

Chopra is a composed public speaker, having honed his skills at testifying as a former Democrat on the Federal Trade Commission during the Trump administration and as the CFPB's first student loan ombudsman. As CFPB director, he is required to appear before the Senate Banking Committee and House Financial Services Committee semiannually to report on the agency's efforts, and his testimony in the House marks the first time he testified since Republicans took the lower chamber after the 2022 election.

Click here to view the full list.

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Citizens hires 50 ex-First Republic private bankers

Article by Jordan Stutts

Citizens Financial Group has hired dozens of private bankers from the now-shuttered First Republic Bank — the latest step in an ongoing effort to build out its wealth management business.

The Providence, Rhode Island, bank added 50 senior private bankers and related support staff who previously worked at First Republic, which closed in May.

The hires expand the bank's wealth management business in Boston, Florida and New York and establish a presence in the San Francisco market, Citizens said in a press release.

Click here to read the full story.

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Re-rebranding: TIAA Bank will again be EverBank following latest sale

Article by Charles Gorrivan

Out with the new, in with the old.

TIAA Bank will rebrand as EverBank — the name that it used prior to its 2017 acquisition by New York-based retirement giant TIAA — following a pending sale that's expected to close later this summer.

The rebranding will be effective as soon as TIAA finalizes the sale of its Jacksonville, Florida-based bank unit to investors, said company spokesperson Michael Cosgrove, who did not provide an estimated cost for the rebranding.

Click here to read the full story.

JPMorgan Chase branch built in partnership with Gallaudet University

Voice cards, video calls: 5 innovations in accessibility and banking

List by Miriam Cross

Banks are finding creative ways to make their "offline" services — from branches to debit cards to contact centers — more accessible to people with disabilities.

They are using technology to go beyond their responsibilities under Title III of the Americans with Disabilities Act, which prohibits discrimination based on disability in "places of public accommodation." JPMorgan Chase designed a branch that prioritizes the needs of customers who are deaf and hard of hearing, and introduced one of its key features into the bank's other locations last year. Regions Financial in Birmingham, Alabama, upgraded the wheelchair lift in its portable branch when it replaced its old vehicle in 2019. A challenger bank in Turkey developed a debit card that gives users a verbal heads-up on what they are about to spend.

These advances are significant because digital banking has replaced only some of the needs for customers with disabilities to navigate branches, ATMs, contact centers and in-store spending. Moreover, "Disability impacts all of us, either temporarily or permanently," said Marsha Schwanke, a specialist at the Southeast ADA Center, which provides technical guidance on the ADA.

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Bloomberg News

Banks' climate disclosures are incomplete, misleading: Report

Article by Jordan Stutts

Banks lack both reliable climate data and standardized disclosure guidelines that would enable them to fully account for the greenhouse gas emissions tied to their financing activities, according to an environmental group's new report.

Delays in obtaining climate disclosures from banks' corporate clients and data providers are creating a lag effect in the industry's reporting of its financed emissions, the Environmental Defense Fund said in the report.

In some cases, banks are using climate data from the previous year in calculations that also rely on their most recent financial statements, the advocacy group found.

Click here to read the full story.