The First Bank Failure of 2024 Won’t Be the Last

The First Bank Failure of 2024 Won’t Be the Last

Birch Gold Group

Breaking news: The Wall Street Journal announced the first bank failure of 2024…

Regulators are set to seize the troubled Philadelphia bank Republic First Bancorp and are near a deal to sell it to another lender, the fourth high-profile bank failure since last spring.

What happened to Republic First?

The same thing that happened to the others:

Republic First faced some of the same problems as the three regional banks that failed last year: paper losses on assets that lost value as interest rates rose and high proportions of uninsured deposits that can quickly flee

Why do I think this won’t be the last bank failure of 2024? WSJ captured the situation in a nutshell:

But regional banks are still on shaky ground. Two years of higher rates have forced them to pay more interest on deposits, which has increasingly eaten into profits. It will be harder for them to absorb the costs of potentially stricter regulatory requirements and technology updates, compared with megabanks… And some hold high concentrations of loans on offices and other commercial real estate that are under pressure.

I’m going to explain the issues banks are facing in greater detail, and then explain why I don’t think this will be the last bank failure of the year.

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