Business & Investing
Sponsored by

Health of your regional bank??

6,020 Views | 51 Replies | Last: 9 mo ago by Azeew
BoDog
User Profile
Private Message
Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
11:27a, 2/4/24
AG
Good, bad, or indifferent I have all my cash (much more than FDIC insured) with a small regional bank. Are there sources or some sort of "score" I can reference that indicates how solid (or not) their books are? I am obviously concerned how leveraged they are against CRE.

Of course my contacts there say they are doing great, business never better, etc ect... but I would rather just do my own due diligence.
Reply Quote
LOYAL AG
User Profile
Private Message
Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
11:32a, 2/4/24
AG
If you're asking this question then you know you have exposure that needs to be addressed. In an era where moving money between banks has never been easier why take the risk?
A fearful society is a compliant society. That's why Democrats and criminals prefer their victims to be unarmed. Gun Control is not about guns, it's about control.
Reply Quote
8
BoDog
User Profile
Private Message
Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
11:45a, 2/4/24
AG
Im all ears... What would you suggest? A larger regional?

I refuse to stash it with a BofA, Wells, etc.

Can anyone tell me what they know about Veritex?
Reply Quote
aggie_wes
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
12:02p, 2/4/24
AG
Keep multiple banks with amounts below the FDIC limit
Reply Quote
27
1 edit
Petrino1
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to BoDog • 1:24p, 2/4/24
BoDog said:
Im all ears... What would you suggest? A larger regional?

I refuse to stash it with a BofA, Wells, etc.

Can anyone tell me what they know about Veritex?


You should stash the majority of your cash in high yield savings accounts earning 4-5%. Open up several accounts so that each is below the FDIC limit.
Reply Quote
5
Kyle Field Shade Chaser
User Profile
Private Message
Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to BoDog • 1:34p, 2/4/24
AG
You need to do multiple accounts under the FDIC limit regardless of which bank you use if you are just storing this money in a savings account. Or you could invest some of it in other places
Reply Quote
permabull
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
2:37p, 2/4/24
AG
Transfer all your money to a brokerage account and buy either short term treasuries or 1 month CDs. Treasuries obviously don't need insurance since they can just print more money and you get 250k insurance on each CD you buy as long as you buy each one from a different bank.
Reply Quote
2
Bonfire.1996
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
3:34p, 2/4/24
Are you married? Do you have kids? If you are married you can insure up to and beyond $1 million based upon account types and account stylings. Your bank's retail staff can assist you.
Reply Quote
1
MRB10
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
4:06p, 2/4/24
AG
I understand the mental programming but I don't understand why the FDIC is a factor in where people put their money. They have enough to cover something like 1% of deposits as it currently stands. The tax payer will end up bailing out the FDIC if SHTF. Talk about inflation.
“There is no red.
There is no blue.
There is the state.
And there is you.”

“As government expands, Liberty contracts” - R. Reagan
Reply Quote
14
LOYAL AG
User Profile
Private Message
Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to MRB10 • 4:08p, 2/4/24
AG
Pepper Brooks said:
I understand the mental programming but I don't understand why the FDIC is a factor in where people put their money. They have enough to cover something like 1% of deposits as it currently stands. The tax payer will end up bailing out the FDIC if SHTF. Talk about inflation.


Would you rather be bailed out by the taxpayers or lose everything above $250k? That seems like an easy choice.
A fearful society is a compliant society. That's why Democrats and criminals prefer their victims to be unarmed. Gun Control is not about guns, it's about control.
Reply Quote
5
LOYAL AG
User Profile
Private Message
Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to BoDog • 4:10p, 2/4/24
AG
BoDog said:
Im all ears... What would you suggest? A larger regional?

I refuse to stash it with a BofA, Wells, etc.

Can anyone tell me what they know about Veritex?


Banks coordinate sweeps above FDIC limits for their business customers though I don't know if they do it for individuals. What they set up is a situation where everything above $250k is placed with as many other banks as necessary so that your exposure is spread out and you don't have to manage it yourself. My first call would be to my bank to eee if they have this option.
A fearful society is a compliant society. That's why Democrats and criminals prefer their victims to be unarmed. Gun Control is not about guns, it's about control.
Reply Quote
2
Heineken-Ashi
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to LOYAL AG • 4:36p, 2/4/24
LOYAL AG said:
Pepper Brooks said:
I understand the mental programming but I don't understand why the FDIC is a factor in where people put their money. They have enough to cover something like 1% of deposits as it currently stands. The tax payer will end up bailing out the FDIC if SHTF. Talk about inflation.


Would you rather be bailed out by the taxpayers or lose everything above $250k? That seems like an easy choice.


It will likely be neither. Research bail ins.
Reply Quote
2
MRB10
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to Heineken-Ashi • 8:01p, 2/4/24
AG
I'd like to think the powers that be wouldn't have the stones to try a bail in here. Lawyers could fund their own central bank from the proceeds of that class action. If chase bank goes down the US govt will have to bail out the tax payer. The banking industry is unofficially nationalized as it stands and that would just make it official.

The easier to stomach route, in my opinion, is banks get run on… FDIC is revealed to be insolvent… and US govt(tax payer) says they'll cover all deposits via the money printer.

Regardless, I don't see how the US taxpayer doesn't end up holding the bag
“There is no red.
There is no blue.
There is the state.
And there is you.”

“As government expands, Liberty contracts” - R. Reagan
Reply Quote
1
1 edit
TxAG#2011
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
8:16p, 2/4/24
Why would you have that much cash in a regional bank much less any bank?

I don't understand this. Put it in a money market fund with a brokerage firm.
Reply Quote
1
Bonfire.1996
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to TxAG#2011 • 8:25p, 2/4/24
TxAG#2011 said:
Why would you have that much cash in a regional bank much less any bank?

I don't understand this. Put it in a money market fund with a brokerage firm.
Brokerage firms are waaaaay more likely to be overleveraged than a regional bank. Additionally, bank runs on brokerage firms are going to take place 10x as fast as everyone has ACH capability attached to their brokerage accounts.
Reply Quote
2
Heineken-Ashi
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to MRB10 • 8:37p, 2/4/24
Pepper Brooks said:
I'd like to think the powers that be wouldn't have the stones to try a bail in here. Lawyers could fund their own central bank from the proceeds of that class action. If chase bank goes down the US govt will have to bail out the tax payer. The banking industry is unofficially nationalized as it stands and that would just make it official.
Let's break it down.

How and with what funds will the US govt be able to bail out any bank, much less Chase?
Quote:
The easier to stomach route, in my opinion, is banks get run on… FDIC is revealed to be insolvent… and US govt(tax payer) says they'll cover all deposits via the money printer.
This is the typical playbook over history, but its not a current one. And it's never been executed from a position of immense weakness as our current financial position. If this were to happen, we're looking at Argentina status as the next step. While you may be right that they have no other option, there is no money to bail out anyone. Not even when the printer starts up. This is why they will inevitably have to turn to bail ins. Printing money with the FED's earning remittances (the magical "deffered assets that are booked as a cumulative total and that will prevent the FED from being able to give a dime to the treasury until this money is first paid off) deepening every single month on an expontential downward curve would lead to immediate hyperinflation and the complete destruction of a dollar that cant sustain any more without failing completely.

https://fred.stlouisfed.org/graph/?g=1fCSh
Quote:
The other myth is a very popular one - and it can even be a fun one too. Every time the Fed spends another hundred billion or trillion dollars, then those in the know just say "Money printer goes Brrrrrrrr....!". There are some great memes that go with it, and I particularly enjoy the animated GIF that has Fed Chairman Powell literally cranking on a printer that is sending the dollars flying. It is fun and well done.

But, it just isn't true, and believing that it is true is not a harmless error, but could be called a dangerous mistake.

I write this knowing that confirmation bias rules for most people, and that cognitive dissonance - however factual - is going to be unpopular. So, my apologies, as I don't mean to offend, but there are times when the truth needs to be spoken. This isn't a matter of opinion or differing views, it really is just the facts as can readily be seen on the consolidated balance sheet of the Federal Reserve Banks every week.

The Federal Reserve did not print the money for QE to buy government bonds from 2010 to 2014. The Fed borrowed the money to fund quantitative easing. While the money was spent by the government long ago, most of those debts are still outstanding. It isn't just that the government is still paying interest on its debts. The Fed is also still paying interest on most of the money it borrowed, on what is usually a daily basis with overnight borrowings, and those interest payments have been rising fast.

The Fed did not print the money for the pandemic stimulus checks. It borrowed the money, by the trillions of dollars. That money too has all been spent by the government. However, the Federal Reserve still owes all the money that it borrowed, and it has to continue to make what are usually daily interest payments on that debt, even as it sending those interest rates higher and higher in the attempt to combat inflation.

Each time that the Federal Reserve spends the money to fund the national debt - it creates what is effectively a one-way ratcheting mechanism on the cumulative amount of money that it has borrowed to fund that spending. Each time the Fed raises interest rates, it increases the cash that it pays out. A similar process is happening with the government debts - a one way ratcheting process with steadily more fantastic amounts of debt that are subject to interest rate risk.

The Federal Reserve used the trillions of dollars it borrowed to fund vast amounts of long-term government debt and mortgage-backed securities at very low interest rates, in what it thought was an act of economic genius. That money is long gone, and the interest payments made to the Fed are quite low (by design). However, the rising interest payments made by the Fed still have to be paid daily, and they have now reached the point where the money is going out the door faster than it is coming in, which has the Fed relying on some quite unusual accounting tactics. This would not typically be considered an act of economic genius.
Fed Forced To Use Negative Liabilities by Daniel Amerman
Reply Quote
3
3 edits
MRB10
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to Heineken-Ashi • 8:52p, 2/4/24
AG
Borrow from the taxpayer to reimburse the taxpayer. I have to think the risk of major revolt/social unrest, would deter limiting withdrawals or outright theft, no?

“There is no red.
There is no blue.
There is the state.
And there is you.”

“As government expands, Liberty contracts” - R. Reagan
Reply Quote
BoDog
User Profile
Private Message
Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to TxAG#2011 • 8:55p, 2/4/24
AG
TxAG#2011 said:
Why would you have that much cash in a regional bank much less any bank?

I don't understand this. Put it in a money market fund with a brokerage firm.
Not sure if serious...?
Reply Quote
Heineken-Ashi
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to MRB10 • 9:51p, 2/4/24
Pepper Brooks said:
Borrow from the taxpayer to reimburse the taxpayer. I have to think the risk of major revolt/social unrest, would deter limiting withdrawals or outright theft, no?



There's nothing they can do limit mass fear ultimately. They can certainly try. But again, this isn't like previous times. There's no wiggle room. And the taxpayers never get paid back. Once they are borrowed from, it's immediately spent and inflationary.
Reply Quote
1
insulator_king
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
10:03p, 2/4/24
AG
I have personally been pleased with Cap One 360 for its Hi Yield savings account.
CIT Bank [NOT CitiBank] is OK, but their web site is klunky.
PenFed CU is good.
My mom uses Discover bank.

There are a few ideas for the OP.

I just opened HSA account at Fidelity, they are paying a bit over 5% right now for their Money Market. It's worth considering.
Reply Quote
OldArmyCT
User Profile
Private Message
Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
4:45a, 2/5/24
AG
My brokerage offers an FDIC insured money market with no limit, your cash is spread amongst different institutions, none over $250K, but all you see is the total amount in one account. Online transfers to your banking accounts too. Or call your banker, tell him/her your concerns and they can tell you how to retitle some of the money into different accounts.
Nowadays customers at risk are warned before the FDIC swoops in, generally the ones caught with their pants down are those who never listened to their bankers until it was too late.
Reply Quote
MRB10
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to Heineken-Ashi • 6:29a, 2/5/24
AG
Do you think Americans roll over and take it in 2024? Maybe I'm naive, but I don't see what happened in Cyprus happening here.
“There is no red.
There is no blue.
There is the state.
And there is you.”

“As government expands, Liberty contracts” - R. Reagan
Reply Quote
1 edit
redaszag99
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
7:53a, 2/5/24
Fidelity cash management account spreads your cash out out to up to 10 banks for 2.5MM coverage
Reply Quote
2
Heineken-Ashi
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to MRB10 • 8:27a, 2/5/24
Pepper Brooks said:
Do you think Americans roll over and take it in 2024? Maybe I'm naive, but I don't see what happened in Cyprus happening here.
No, not in 24. But pretty much any action by the FED outside of their standard, slow, controlled drop of rates over multiple years is going to be the first signal. And I think it's a long sustained bear market moving forward from that point. Either they are going to break the market via forcing real estate and corporate wall of debt refinances at higher rates, or they are going to slash hard and fast and create immediate fear. Remember, when rates are slashed hard and fast, it's usually the beginning, not the end. And banks are not in a position to weather any fear.

Like I've been saying, the FED will try everything in the playbook, even printing. But I just don't see how it doesn't make things immediately worse. The arsonist is not who you want as the firefighter.
Reply Quote
1
MRB10
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to Heineken-Ashi • 8:35a, 2/5/24
AG
I agree with all of that. I was simply trying to understand your conviction for why they would try a bail in. I'm reading this post as you think it will be their last resort, which seems more probable than 1st, 2nd, or third resort.

I don't see them doing it without them feeling like they can effectively turn the military on the American public. The odds of social unrest, following that type of power play, seem to be too high to me.
“There is no red.
There is no blue.
There is the state.
And there is you.”

“As government expands, Liberty contracts” - R. Reagan
Reply Quote
1 edit
Sims
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
9:26a, 2/5/24
AG
For those of you who carry CDs and have some concerns about FDIC backing, you can ask if your bank or their correspondent bank offers a CDAR program.

It's similar to the Fidelity cash management program redaszag99 mentioned but places multiple CDs at various banks and only has you sign a single account agreement.
Reply Quote
TxAG#2011
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to BoDog • 9:48a, 2/5/24
BoDog said:
TxAG#2011 said:
Why would you have that much cash in a regional bank much less any bank?

I don't understand this. Put it in a money market fund with a brokerage firm.
Not sure if serious...?
Yes that is serious. You think your small regional bank has better financial health than say Fidelity or Vanguard cash management?

The FDIC coverage is usually a million + in those.
Reply Quote
Heineken-Ashi
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to MRB10 • 10:05a, 2/5/24
Pepper Brooks said:
I agree with all of that. I was simply trying to understand your conviction for why they would try a bail in. I'm reading this post as you think it will be their last resort, which seems more probable than 1st, 2nd, or third resort.

I don't see them doing it without them feeling like they can effectively turn the military on the American public. The odds of social unrest, following that type of power play, seem to be too high to me.
Last resort meaning they will go through the standard playbook first. Maybe we are saying the same thing here. I just know bail outs aren't in the cards if a contagion can't be contained to a handful of smaller banks. If a team is on the 50 with 1 second left. The hail mary is the clear play. But what do they do if they are on their own 25? Hail Mary is off the table and all that's left is the ole scramble lateral prayer play. Not the best analogy as the fans would be ecstatic if the prayer worked. But you also can't discount Americans ability to lay down and take whatever is shoved their way.
Reply Quote
1 edit
Heineken-Ashi
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
10:44a, 2/5/24
LOLOLOLOL

Commercial real estate a 'manageable' problem but some banks will close: Powell (yahoo.com)

Quote:
Federal Reserve chair Jerome Powell is predicting that more small banks will likely close or merge due to commercial real estate weaknesses, but that the problem is ultimately "manageable."

The central bank official made this point during a 60 Minutes interview that aired Sunday night. It was Powell's first comments about the industry following a new bout of turmoil cascading through the stocks of many regional banks.
Quote:
Powell acknowledged in his 60 Minutes interview that some smaller banks will "have to be closed" or merged "out of existence" due to losses tied to the falling values of properties across the US that are suddenly worth much less due to the Fed's elevated interest rates and the effect of a pandemic that emptied out many city-center buildings.
Quote:
"There's some smaller and regional banks that have concentrated exposures in these areas that are challenged. And, you know, we're working with them. This is something we've been aware of for, you know, a long time, and we're working with them to make sure that they have the resources and a plan to work their way through the expected losses."
Talking out of both sides of his mouth. Comical. Regional banks should be sweating bullets right now. They're screwed.

Quote:
But "we looked at the larger banks' balance sheets, and it appears to be a manageable problem," Powell said on 60 Minutes.
This one has been discussed plenty. PLENTY. The FED is either incompetent here or they are doing this on purpose. The FED's own stress tests are more aggressive than the banks themselves.

Bank of America (BAC) Stock: In Worse Shape Than Before? | Seeking Alpha

Quote:
On July 3, Bank of America issued quite a surprising statement, saying that "Bank of America initiated dialogue with the Federal Reserve to understand differences in Other Comprehensive Income over the 9-quarter stress period between the Federal Reserve's CCAR results and Bank of America's Dodd-Frank Act stress test results."

There were several significant discrepancies between the Fed's tests and BAC's own tests. First, BAC's internal stress test shows that the bank would post a loss of $52.2B under the severely adverse scenario, while the Fed expects the bank to lose only $23.0B. Second, BAC estimates that its other comprehensive income would be $12.5B, while the Fed's tests show it would be $22.3B. Due to a combination of a bigger loss and lower other comprehensive income, BAC expects its CET1 capital ratio to fall to 8.3%, while the Fed said the ratio would decline to 10.6%.

As we said earlier, it looks odd. This implies that the Fed is much less conservative than the banks that it regulates. Needless to say, a banking regulator should be as conservative as possible in such an important exercise as a stress test. At the end of the day, the results of these tests are used to determine how much capital the banks need.

Obviously, this makes many question the reliability of the Fed's tests.
Anyone want to remind me the last time the FED was adamant that things were "manageable" and "contained"?
Reply Quote
1
1 edit
MRB10
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to Heineken-Ashi • 11:38a, 2/5/24
AG
I think we're generally saying the same thing. The difference seems to be around our assessment of the odds of them getting to the last resort and pulling the trigger.
“There is no red.
There is no blue.
There is the state.
And there is you.”

“As government expands, Liberty contracts” - R. Reagan
Reply Quote
Troglodyte
User Profile
Private Message
Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to BoDog • 12:33p, 2/5/24
AG
BoDog said:
Im all ears... What would you suggest? A larger regional?

I refuse to stash it with a BofA, Wells, etc.

Can anyone tell me what they know about Veritex?
You can open an account at Fidelity or equivalent and invest in their money market funds (SPAXX at Fidelity). The current return is 5%. They aren't FDIC insured, but they are backed with assets.

You can look up the call report for the bank to see their financials. I'm not 100% sure how to do it, but I can probably find out if you need help.
Reply Quote
BoDog
User Profile
Private Message
Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
1:08p, 2/5/24
AG
Banker is suggesting an Insured Cash Sweep. Would only cost me about 25 bps. Seems pretty cheap for peace of mind and ease. I like SPAXX but the fee is almost double and at the end of the day it still isnt guaranteed (although in reality what is?).
Reply Quote
1
Sims
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
1:21p, 2/5/24
AG
Unless you're transacting in excess of $250k on probably a 3 day rolling basis I don't really see the need to pay for a sweep.

Couldn't just open several diff accounts and move the money yourself for free?


For our corporate operating cash I keep 3 diff buckets.
  • An operating account that usually has a balance of 1.2x avg weekly accounts payable + 1.5x average weekly payroll
  • Money market account with the above + serves as a clearing for treasury bill purchases/maturities
  • use treasury direct to purchase short term bills to soak up excess liquidity

If I translated that to personal use, I would probably structure it this way:

  • 1.2x expected monthly expenses
  • money market with a the above + emergency fund
  • some type of higher yield less liquid account (savings, cd, tbill etc) with rolling maturities
Reply Quote
BoDog
User Profile
Private Message
Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
In reply to Sims • 1:30p, 2/5/24
AG
Sims said:
Unless you're transacting in excess of $250k on probably a 3 day rolling basis I don't really see the need to pay for a sweep.

Couldn't just open several diff accounts and move the money yourself for free?


For our corporate operating cash I keep 3 diff buckets.
  • An operating account that usually has a balance of 1.2x avg weekly accounts payable + 1.5x average weekly payroll
  • Money market account with the above + serves as a clearing for treasury bill purchases/maturities
  • use treasury direct to purchase short term bills to soak up excess liquidity

If I translated that to personal use, I would probably structure it this way:

  • 1.2x expected monthly expenses
  • money market with a the above + emergency fund
  • some type of higher yield less liquid account (savings, cd, tbill etc) with rolling maturities
Valid point, but for the sake of argument lets say it is considerably more than $250k. Would the ICS make more sense?
Reply Quote
Sims
User Profile Ignore User Stop Ignoring
How long do you want to ignore this user?
24 hours One week Permanently Cancel
1:46p, 2/5/24
AG
It's a fine option. Comes down to what your time is worth at some point. If that 25 point fee keeps you freed up to make more than that and keep your peace of mind sounds like a good way to go.

See if they'll do it for 12 points
Reply Quote
Page 1 of 2 ▼
 
×
subscribe Verify your student status
See Subscription Benefits
Trial only available to users who have never subscribed or participated in a previous trial.