BankRegData

WaFd Bank (Washington Federal) delinquencies jumped $64.18 Million in 2025 Q3 resulting in their delinquency rate climbing to 0.83% from 0.51% in Q2. Loan modifications are elevated and are likely higher if not for the recent permanent rule change allowing banks to remove loans from modification reporting provided they make 12 consecutive payments. Looking at WAFD's Coverage Ratio it's clear they are managing earnings through lower Provision expenses. Reserves compared to NPLs reveal that WAFD is not well reserved.

Does Morgan Stanley Capital Relief Make Sense? The Fed voted unanimously to lower Morgan Stanley's capital buffer requirement due to an improving stress test result. MS's deteriorating Asset Quality & Allowance figures are hard to reconcile with the Fed's decision. Learn more: youtu.be/CTjbc28yYlc

'Fortress Balance Sheet' JPMorgan Chase just showed a remarkable drop in 30-89 Days Past Due delinquencies for their 1-4 Family First Liens (mortgages) portfolio. Just ignore the fact that the reduction in early stage delinquencies corresponds to a massive increase in 1-4 Family Loan Modifications (lower payments). Housing prices will never come down if we just keep lowering payments on borrowers who likely could sell their house for a profit and downsize to a payment they can afford. Learn more at BankRegData.com.

U.S. Banks' exposure to Adjustable Rate Mortgages hit an all-time high of 40.91% in 2025 Q2. Since 2022 Q2 all new net Bank Mortgage growth has been Adjustable Rate Mortgages.

Is BCB Community Bank (BCBP) the next EagleBank? BCBP delinquencies just hit 5.51% in Q2 and they have restructured (lowered payments) on another 4.09% of their book. A full 9.60% of BCBP's loan portfolio is either delinquent or been modified and left off Nonaccrual. The bank has just 0.22 cents of reserves against their collective NPLs + Performing Loan Mods. Last in the country for banks their size. To learn more: youtu.be/iA2s488QObU

Here are the Top 20 Home Equity Loan (HELOC) bank lenders as of 2025 Q1:

Continuing the Northpointe Bank review from last week, today's post focuses on NPB's Home Equity Line (HELOC) portfolio - which has grown from $279.04 Million three years ago to $753.68 Million in 25Q1. That's a considerable amount of growth in a small time frame and, not surprisingly, NPB is starting to see serious delinquency growth in the portfolio.

Yesterday we showed that Northpointe Bank has a deteriorating delinquency issue where delinquencies continue to climb across their loan book. Today's first exhibit details late stage NPLs and reviews aggregate NPL %, Government Guarantees and Adjusted NPLs. Late stage NPL rate has dropped from 1.70% in 24Q4 to 1.62% in 25Q1. This is misleading, however, as actual NPLs climbed $7 million to $86.95 Million. The rate is going down due to NPB growing their loan portfolio $710 Million in just 1 quarter. Loans are growing faster than increasing delinquencies. We do see that the taxpayer (government) is guaranteeing $30.10 Million of the NPLs bringing NPB's portion down to $56.85 Million (1.06%). The second chart shows how quickly the NPLs they are responsible for are increasing. Fast loan growth typically has a delayed delinquency rate of 15-18 months. Sort of makes you wonder about the $710 Million of 25Q1 lending now.

This week, BankRegData reviews Northpointe Bank, a $5.86 Billion Assets bank in Grand Rapids, MI that went public earlier this year (NPB). The first exhibit details Northpointe's Loan Portfolio mix and reveals substantial exposure to housing. We also see elevated NPL rates (90PD+NA column) for nearly every portfolio. Note the very large All Other Loans portfolio that makes up 46.10% of NPB's loan book and currently carries no NPLs. I believe this is their Mortgage Purchase Program (MPP) loans that are booked as Nondepository Financial Institution loans. The second chart details Total Delinquencies for the past 3 years. A couple things to note: 1) NPB's residential portfolios are deteriorating, and 2) the rates would be alarmingly worse if they weren't propped up by the massive increase in NDFI lending. Tomorrow's post will cover how much of this is guaranteed by the government/taxpayer and how well reserved NPB is relative to increasing delinquencies.

Yesterday, we reviewed how Sallie Mae delinquencies have moderated due to very high levels of loan modifications (6.58% of portfolio). Today, we look at SouthEast Bank (Farragut, TN) which has a large student loan refinance portfolio through their elfi Division. The Individuals: Other portfolio (primarily student loans) saw considerable growth in Q1 increasing to $1.62 Billion. The periodic drops likely correspond with securitizations. The second chart tracks Total Delinquencies on the portfolio and we see a considerable increase from 7.94% to 10.81%. While the delinquency rate is up it's important to note that these are 100% guaranteed so SouthEast Bank is at no risk. In fact, since these loans are not on nonaccrual the bank makes money on interest/fee income over principal pay down when payments come in. The final chart in red shows that the recent 2020-24 delinquency rate was likely the out-of-pattern figure and, if history is any guide, it's likely Q1's 10.81% will go higher. We're not trying to highlight SouthEast Bank, but rather their portfolio, combined with large Sallie' modifications, are indicative of increasing consumer stress.

Today BankRegData reviews Sallie Mae Bank's Individuals: Other Loan portfolio. Essentially, this is Sallie Mae's Student Loan portfolio. The first chart tracks Total Delinquencies and we see that, while elevated, delinquencies are coming down hitting 2.25% in 2025 Q1. Correspondingly, the second chart reveals that Charge Offs are also dropping hitting a recent low of 1.54%. How is Sallie Mae accomplishing this? Is it due to an improving borrowers credit situation? No, Sallie Mae is restructuring an increasingly large % of the portfolio. Total Loan Modifications (lowering payments) is no 6.58% of their entire loan book.

Today we review Webster Bank's recent increase in Multifamily NPLs. In 2024 Q3 Webster had just $167,000 in MFR NPLs and the portfolio looked spectacular. In the past 6 months Multifamily NPLs have skyrocketed to $55,487,000 which is 0.77% of the portfolio. What's especially interesting about this figure is that NPLs continue to rise despite recent elevated Charge Offs.

Today's post reviews the continued increase in NPLs for Webster Bank's Non Owner Occupied CRE portfolio. A year ago Webster had $13.01 Million of Non Owner NPLs for an NPL % of 0.13%. Today, Webster's Non Owner CRE NPLs have skyrocketed to $202.80 Million and 2.12%. This figure does not include the $76.19 Million (0.80% of portfolio) that has been modified to avoid delinquency.

KeyBank had a $45,894,000 increase in Q1 Non Owner CRE 30-89 Days Past Due bringing the 30-89 PD rate to 0.89% (98th percentile). What is extremely interesting about this increase is that $35,236,000 of the $45,894,000 is modified (payment lowered). So, did Key modify a delinquent loan? Or, did a previously modified loan fall back into delinquency? It's highly likely the later. Modified loans have a high likelihood of falling back into delinquency within 12-18 months. In this case it looks to be less than 6.

KeyBank has dramatically reduced funding from FHLB Advances dropping from $9.84B in 2024 Q1 to just $1.33B today. The majority of the funding delta was made up by nice growth in Core Deposits increasing $6.4B since 24Q1. The majority of the Core Deposit growth was from Individuals deposit growth climbing nicely the last 2 quarters.

Today's post on KeyBank focuses on their recent growth in their Securities holdings. From a cycle low of $41.88 Billion in 2024 Q3 Key has added $6.03B of securities. Key is shedding Treasuries, Agency and Asset Backed and significantly growing their MBS portfolio (up 24.96% since 24Q3). Huge growth in KeyBank's GNMA holdings. Up $12 Billion from just $168 Million last year. GNMAs now make up 6.62% of Key's total assets - 97% of large banks have less exposure.

This week BankRegData will do a series of posts on KeyBank. Today's post will focus on Key's OREO and OREO liquidation. OREO is Other Real Estate Owned and it's the estimated residual value of the real estate loan that charged off. In the first chart we see that KeyBank has liquidated $7.38 Million in the past year ($5 million 1-4 Family Residential and $2.4 million CRE). The second chart is the Non Interest Income gain/loss from REO Sales and it's clear that Key is selling REO at a discount to what it's holding on it's books (thus the subsequent loss when they sell). REO levels have dropped $7.38 Million and the NII Sale losses during this time add up at $1.51 Million.

Today's post reviews Penn Woods Bancorp's use of Negative Provision to manage earnings. Provision is an expense that banks take to increase their Allowance (Reserves) which are used to offset future charge offs. Since Provision is an expense it lowers the current quarter income figure. In the past two years Penn Woods has taken 4 negative provisions which are indicated by circles. In the second slide we can see how the last three negative provision events resulted in higher than typical income. The last exhibit details PWOD's Adjusted Coverage Ratio which shows that they are hardly well reserved considering increasing delinquencies & modifications.

JPMorgan Chase's 1-4 Family Construction portfolio is experiencing significant increases in both Early Stage Delinquencies and NPLs. JPM is the second largest 1-4 Construction lender among all U.S. Banks. It's highly likely the 1-4 Family Construction issues are related to the acquired First Republic portfolio.