The Banker Next Door

The Federal Reserve Senior Loan Officer Opinion Survey (SLOOS) for April 2026 examines how bank senior lenders are feeling about loan demand and lending standards. This report is released on a quarterly basis. The report found tighter lending standards for C&I loans. Unchanged standards and weaker demand for CRE loans. Unchanged or easier terms for almost all loan policies across CRE loan categories, which is interesting given the increase in delinquency on construction and multifamily loans. Unchanged standards and weaker demand for RRE loans. Unchanged standards and stronger demand for HELOCs. Unchanged standards and weaker demand for credit cards and auto loans. The survey also asked some special questions about lending to NDFIs. The survey found tighter standards and stronger demand across all five lending categories for NDFIs. This episode examined the quarterly Federal Reserve SLOOS report. A link to the report is included below.   Link: The Fed - The April 2026 Senior Loan Officer Opinion Survey on Bank Lending Practices

Bank news: Failed Oklahoma Bank, First National Bank of Lindsey, ex-CEO Danny Seibel plead guilty to bank fraud and now faces up to 20 years in prison and a fine of up to $1 million. Cambridge Savings Bank has agreed to acquire First Seacoast Bank in an $80 million deal. BayFirst Bank makes a change at CEO and carries out an $80 million dollar capital raise. U.S. Bank takes a quieter approach to branch expansion. M&T Bank takes a patient approach to M&A. Kraken’s parent company Payward is acquiring a Hong Kong-based payments infrastructure platform named Reap in a $600 million deal. Anthropic continues to develop new AI offerings for financial services firms. Citi looks to scale AI agents across the bank. Citi is also making their pitch on improved performance. Chime found success with its AI agent Jade. Chime is also facing three lawsuits over a potential data breach incident. Finally, Fed is looking to launch a roundtable that would focus on fighting payment fraud. This episode reviewed multiple articles from Banking Dive.

Problems in the Private Credit Market continue to unfold as banks are now tightening lending standards around Nondepository Financial Institutions (NDFIs). As this is happening, Apollo Global Management is trying transparency by offering their investors daily valuations for their private-credit funds starting at the end of September. Most funds provide this information on a quarterly basis. Apollo is trying to calm down fears of larger credit issues within its funds. Meanwhile, HSBC is getting pulled into the Private Credit conversation through ‘back leverage’. When MFS failed in February (U.K. mortgage lender), investors were trying to figure out who was going to absorb the losses. Through a chain of special-purpose vehicles, HSBC turned out to be one of the most exposed banks and is now expected to take a $400 million dollar loss. HSBC made a loan to Apollo Global, which then lent the money to MFS. This episode examined two articles from The Wall Street Journal and one article from S&P Global Market Intelligence (subscriptions required).

China’s economy has been dealing with a number of issues over the last few years. Mainly a real estate bubble collapse and trade issues with the U.S. These issues are spilling over into the banking system in the form of rural banks. Forced mergers are being used to stem potential chaos. The banks being rolled up are known as “village and township banks”. Years of weak oversight, low capital, and risky lending have left these banks vulnerable. The pace of banks being rolled up is accelerating from 83 in 2024 to 226 in 2025 to 72 so far in 2026. The question is how long can the banking system in China continue to hide their underlying issues through forced mergers? This episode reviewed an article from The Epoch Times (subscription required) titled “Wave of rural bank closures exposes growing risks in China’s financial system, analysts say.”

This video is a clip from BND: Strategy Room Live Stream on May 9, 2026. The White House is starting to change its tune on how it deals with AI. We have moved from full steam ahead to hold up, wait a minute, something ain’t right! Mythos has the Pentagon circling the wagons and the White House putting together a new executive order on AI. Meanwhile on the banking front, Jamie Dimon has his concerns, Michelle Bowman confirmed that regulators are looking at a significant pivot on how they will oversee AI, investors are now urging community banks to step up their usage of AI, and Anthropic has partnered up with FIS to build AI agents for banks.

The Banker Next Door (BND) weekly live stream show. Strategy Room provides financial news, commentary, top stories in the business world, economic indicators, and all things banking for the week.

Community Bank & Trust became the second bank failure of 2026 and the first bank failure in the state of Georgia in 10 years. Community Bank and Trust – West Georgia was closed by the FDIC on May 1, 2026. The bank had $288 million in assets as of December 31, 2025. The Federal Reserve had ordered the holding company of the bank to bolster board oversight and increase its capital position in April. All the bank’s deposits and some of its assets have been taken over by Anchor Bank out of Florida. This bank failure is expected to cost the FDIC fund approximately $97 million. The first bank to fail in 2026 was Metropolitan Capital Bank & Trust in Chicago. This episode reviewed articles from S&P Global and Banking Dive.

U.S. bank capital offerings were down 35.7% from the same period one year ago but increased 125.7% compared to the previous quarter. On the equity side, there was a surge in preferred equity offerings, but this was mainly attributed to a large offering from Wells Fargo. Common equity offerings continued to be subdued. On the debt side, senior debt issuance was the largest component at $23.88B. However, this was the lowest issuance for senior debt in three years. Senior debt issuance increased 147% quarter over quarter but was down 38% year over year. Subordinated debt issuance declined 26% quarter over quarter and 72% year over year. Still debt issuance remains the largest component of U.S. bank’s capital stacks over the last few years. Additionally, we reviewed recent examples of a capital raise from BayFirst Financial Corp. and subordinated debt offerings from Fulton Financial and Renasant Bank. This episode reviewed multiple articles from S&P Global Market Intelligence (subscription required). 

Ford & GM are still recovering from major EV related losses, but Ford is seeking to create a midsize EV pickup truck for $30k. Meanwhile, dealerships are struggling with supply shortages due to a lack of aluminum. Carmakers are really counting on tariff refunds and service revenue to carry them due to a lack of sales. Despite these issues, local mom-and-pop car dealerships continue to consolidate, grow, and thrive. Used car values are seeing their highest point since the summer of 2023 with used EV sales really surging. 1 in 3 car buyers are now underwater on trade-ins, with the average amount of negative equity reaching $7,214. The number of borrowers with negative equity has increased 42% over the last five years. A third of car buyers are reaching out 84 months to make the financing numbers work on new car purchases. Additionally, foreign automakers continue to dominate the sedan market and Amazon is pushing into car sales. This episode reviewed multiple articles from The Epoch Times, The Wall Street Journal, and CNBC.  

Lots of news in the banking world these days. This episode covers stories about bank M&A, 1071 update, new AI tools, De Novo’s, and more. Wells Fargo is delving deeper into trading activities after their asset cap penalty was removed. Lending Club is changing its name to Happen Bank. Sezzle, a buy now, pay later provider, is looking to create a ‘super app.’ Mission Lane applies to become a credit card bank. Oregon has created a new law seeking to increase De Novo’s in the state. Fintech firm OppFi is set to buy Arizona Bank. Mercury receives conditional OCC bank charter. Indiana credit union is buying an Ohio bank. Citi creates an AI-powered advisor for wealth clients called Citi Sky. Customers Bank is deepening ties with OpenAI to create faster commercial lending. Banner Bank to purchase Pacific Financial for $177M. Fintechs are pushing a new law that would give them access to federal payment rails that include FedACH and FedNow. CFPB slims down 1071 rule in major win for community banks. This episode reviewed multiple articles from Banking Dive and The Wall Street Journal.

Delinquent loans in the Private Credit market continue to go bad as we have two new problems. Medallia, a software maker, can no longer repay about $3 billion in loans. Affordable Care, a dental service company, is in the process of restructuring a $1.4 billion loan to Blackstone and KKR. Overall delinquency in Blackstone’s largest private credit fund has spiked to 2.4% in the first quarter of 2026. In other Private Credit news, Barclays is pulling back on riskier lending after an increase in losses mainly related to MFS, UMB financial outlined its private credit exposure, family offices emphasize caution on private credit investments, and Business Development Companies (BDC) have used a law changed in 2018 to increase leverage, sometimes in ways that are not visible. This episode reviewed multiple articles from The Wall Street Journal and S&P Global (subscription required).

The Banker Next Door (BND) weekly live stream show. Strategy Room provides financial news, commentary, top stories in the business world, economic indicators, and all things banking for the week.

According to the Federal Reserve Small Business Credit Survey 2025 small to medium size businesses (SMBs) have some lending gaps. 49% of SMBs have unmet financial needs or experienced a financing shortfall. 46% felt lender requirements were too strict. Business lines of credit remain the most sought-after lending product. Community banks share of SMB lending market has been decreasing over the years, going from 39% in 2020 to 28% in 2025. Applicants who turned to online lenders prioritized the speed of the application process. Applicants regularly choose their lender based on relationship. Borrowers’ expectations and perceptions don’t always coincide with reality. This episode reviewed a blog post from PCBB titled “How CFIs can win back SMB lending.” A link to the blog post is included below. Link:  How CFIs Can Win Back SMB Lending

Banks received a reprieve at the end of 2025 as decreases in interest rates from the Federal Reserve coincided with a decrease in deposit pricing, helping to improve net interest margins. Banks can’t get complacent as competition is increasing and loan growth, while improving, remains somewhat spotty. Banks will have to make decisions about relationship value as it relates to tighter or looser pricing around deposits. Aside from deposit pricing, larger banks such as JPMorgan, Bank of America, and PNC have gone back to adding new bank branches to increase deposits and market share. Why are they doing this? What markets are they targeting? What is the enduring value of branches? This episode reviewed an article from Bank Director titled “What deposit relief is really telling banks about 2026” and a blog post from PCBB titled “Chasing deposits through branch openings.” Links to both the article and blog post are included below. Link: What Deposit Relief Is Really Telling Banks About 2026 | Bank Director Link: Chasing Deposits Through Branch Openings

Raising capital can be as much an art as it is a science. There are many factors to consider when deciding to raise capital such as the size of your institution, is your bank publicly traded or privately held, do you want to raise capital using debt or equity, if debt will it be senior debt or subordinated debt, and is raising capital cheap or expensive in the current environment? Before you do anything here are five questions your bank should consider before conducting the capital raise. 1) What are our strategic goals, and how do shareholder expectations shape our capital decisions? 2) How resilient is our capital structure across different interest rate scenarios? 3) What is the true cost of capital, and how can we offset it through improved performance? 4) What forms of capital are realistically available for our business model and profile, and who are the right investors or partners? 5) When is the optimal time to raise capital? This episode reviewed an article from Bank Director titled “Five questions every bank should answer before raising capital.” A link to the article is included below. Link: Five Questions Every Bank Should Answer Before Raising Capital | Bank Director