Commercial lending

The parent company of Flagstar Bank surprised investors by slashing its dividend, charging off two large real-estate loans and preparing for more trouble in the office and multifamily sectors.

Experts predict the number of small businesses turning to an employee-ownership model will accelerate in the coming years. The would mean opportunities for banks that advise on such transitions.

Cullen/Frost in Texas, BankUnited in Florida and Bank OZK in Arkansas are among the banks that have, at least for now, allayed investors' fears about their exposure to the CRE sector.

Ten months after the Raleigh, North Carolina, company acquired a large chunk of Silicon Valley Bank, it says it is seeing good progress in keeping and winning back the latter's former customers. But the ongoing slowdown in private equity and venture capital activity will challenge the unit's growth.

The Oklahoma-based regional bank expects 6%-7% loan growth in the year ahead. Executives are also projecting that net interest income will start to improve after the metric hits a trough early this year.

The Salt Lake City bank says that it doesn't expect major losses, even though its problem loans grew at the end of 2023.

Several regional banks have projected minimal growth or even a decline in lending this year. But Connecticut-based Webster is bullish based on its pipeline of nonoffice commercial real estate, public finance and other credits, CEO John Ciulla says.

The Alabama bank's executives said commercial borrowers remain cautious amid high rates and economic uncertainty. During the fourth quarter, flat lending and higher deposit costs weighed down the company's net interest income.

The San Francisco-based bank warned for months that charge-offs were likely to start rising as some office-related loans went bad. It began to happen in the fourth quarter, which could be an omen for regional banks that have larger concentrations in the office sector.

The Senate on Wednesday fell short of the two-thirds majority needed to override President Biden's veto in December of a Republican-led resolution to gut the small-business data collection rule using the Congressional Review Act.