Jim Dobbs

As part of a settlement with the Justice Department, Patriot Bank must invest more than $1 million of the total in a loan subsidy fund for minority homeowners and take other corrective steps in its everyday business. The bank denied any wrongdoing.

Funding pressures moderated in recent months, but loan charge-offs climbed. With festering concerns about a vulnerable economy, the potential for elevated credits costs could loom large over the upcoming bank earnings season.

The lawsuit accuses Navy Federal of violating the Fair Housing Act and the Equal Credit Opportunity Act after a CNN report that the lender approved a lower percentage of Black and Latino mortgage applicants.

The Pittsburgh-based regional bank expects to save $325 million next year as it reduces its staff by 4%. Executives said the cuts are necessary because revenue has fallen amid a surge in interest rates and a decline in loan volumes.

The American Bankers Association's Economic Advisory Committee said access to loans is likely to further soften, while defaults and credit losses could increase in the second half of the year.

The beleaguered bank said it is selling 74 loans totaling about $2.6 billion to a subsidiary of Kennedy-Wilson Holdings. The move is part of a plan to pursue strategic asset sales, trim expenses and shore up its balance sheet.

Community banks tapped the brakes during the first quarter, citing higher interest rates, recession threats and fallout from regional-bank failures. Fed data shows the trend has continued into May, and executives are preaching caution.

The Tennessee bank confirmed in its earnings report that the deal, already delayed by several months amid heightened regulatory scrutiny, likely would not close by a May 27 deadline. No new target date has been set.

The American Bankers Association's latest Credit Conditions Index points to a drop in lending and a rise in loan delinquencies through the second and third quarters.

The two banks are now targeting May 27, three months later than their previous goal. The transaction, which would create a top-six U.S. bank by asset size, was originally expected to be completed last fall.