Finance

Community bank credit trends are particularly confusing these days. While the credit picture is rarely crustal clear, we are witnessing historic low net charge offs coupled with high industry concentrations. For example, trucking is a dominant sector in some watch lists, and contractors are at the top of others’ watch lists. Amitabh Bhargava analyzed Q1 2026 earnings transcripts from 65 community banks and compiled the following key themes for banks under $200B in assets: The…

Solid credit is one of the pillars of strong bank management, as well as one of the two main causes for bank failures (the second being poor interest rate risk management). The year 2023 was a notable exception to the rule, when SVB and others failed due to liquidity concerns. In my opinion, those failures were associated with the same critical principle that causes credit-based failures - concentrations. Diversification of risk is the bedrock of…

Finance is, appropriately, a highly regulated industry. Unfortunately, political and ideological forces shaped much of the regulatory agenda over the years, and thousands of unintended consequences occurred.  The new administration brought with it the storms of change, and a somewhat euphoric reaction by many banks and other institutions impacted by the commitment to reduce regulatory burden and complexity. At the same time, safety and soundness remain non-negotiable foundational elements to our regulatory infrastructure, as well…