Banking

There's limited evidence of trouble in credit portfolios currently, but the worst is yet to come, according to a recent IACPM survey.

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.

Following the end of a long moratorium for federal student loan borrowers, monthly payments are expected to total $18 billion. Much of that money will come from checking and savings accounts, which will put more pressure on banks' deposit bases.

The notes have the same final scheduled repayment date of Oct. 22, 2035, an initial credit enhancement that ranges from 43.85% on the class A notes to 13.15% on the class E notes.

Notes will repay investors on a sequential basis, S&P said. One of S&P's rationales for assigning its ratings is the available credit support, including excess spread of 49.0%, 44.7%, 37.3% and 31.5% on classes A, B, C and D notes.

In a deal arranged by the Federal Deposit Insurance Corp., the Pittsburgh bank has bought a portfolio from the wreckage of Signature Bank. The purchase should help PNC expand its fund banking business, which helps private equity firms manage liquidity and finance investments in the short term.

Federal Deposit Insurance Corp. Chairman Martin Gruenberg said despite earlier proposals for reforming deposit insurance following this spring's bank failures, congressional interest in major reforms has waned and prospects for legislative changes are dim.

Credit unions and banks are lending more to merchants based in the Western U.S., reflecting trends reported in the Umpqua Bank 2023 Business Barometer and running against broader economic pessimism.

The deal is the eleventh this year for Pagaya AI Debt Selection Trust, and is slated to close by September 29.

Purchases of new single-family homes fell 8.7% to a 675,000 annualized pace following an upward revision to July's figures, government data showed Tuesday, marking the largest drop in nearly a year.