BY BERND PULCH
Key Points
- Recent reports suggest no major U.S. bank closures in the last days as of May 16, 2025, but the 2023 banking crisis saw significant failures like Silicon Valley Bank (SVB), Signature Bank, and First Republic Bank.
- Worst-performing U.S. banks include regional banks with high commercial real estate (CRE) exposure, such as those with unrealized losses and uninsured deposits.
- U.S. stocks, finance firms, and property companies are strained by high interest rates and CRE market challenges, with firms like CBRE Group facing declines.
- The U.S. economy shows resilience, but the property sector, especially CRE, faces turmoil with rising defaults and declining values, impacting financial stability.
Recent Bank Closures
Unlike the reported 40 bank closures in China, the U.S. has not seen a similar wave of closures in the immediate past as of May 16, 2025. However, the 2023 banking crisis provides a recent parallel, with Silicon Valley Bank (SVB), Signature Bank, and First Republic Bank collapsing in March and May 2023 due to massive deposit outflows and poor risk management. Smaller banks like Heartland Tri-State Bank and Citizens Bank of Sac City also failed in 2023, followed by Republic First Bank and The First National Bank of Lindsay in 2024. These closures, while significant, total fewer than 10 banks over two years, far less than the 40 in China in a single week.
Rankings of Worst Entities
Based on recent data, the following rankings highlight U.S. entities struggling with financial vulnerabilities:
Worst U.S. Banks
- Silicon Valley Bank (SVB) (collapsed 2023, $209 billion in assets, high uninsured deposits)
- Signature Bank (collapsed 2023, $110.4 billion in assets, crypto exposure)
- First Republic Bank (collapsed 2023, $213 billion in assets, mortgage portfolio losses)
- Regional Banks with CRE Exposure (e.g., New York Community Bank, facing CRE loan stress)
- Small Banks with Uninsured Deposits (e.g., Citizens Bank of Sac City, failed 2023)
Worst U.S. Bank Stocks
- New York Community Bank (NYCB) (down 50% in 2024, CRE loan issues)
- KeyCorp (KEY) (shares dropped 20% in 2023, interest rate sensitivity)
- Citizens Financial Group (CFG) (down 15% in 2023, deposit outflows)
- Regions Financial (RF) (declined 18% in 2023, CRE exposure)
- U.S. Regional Bank Index (RKBI, fell 25% in 2023 post-crisis)
Worst Finance Firms
- Non-Bank Lenders (e.g., Quicken Loans, high exposure to mortgage market volatility)
- Hedge Funds with CRE Bets (e.g., those holding distressed CRE debt)
- Investment Firms with CLO Exposure (collateralized loan obligations, $477 billion in unrealized losses)
- Small-Scale Fintech Lenders (e.g., buy-now-pay-later firms, regulatory pressures)
- Insurance Firms with CRE Portfolios (e.g., AIG, past exposure to risky assets)
Worst Property Firms
- CBRE Group (CBRE) (shares down 10% in 2024, CRE market slowdown)
- JLL (JLL) (declined 12% in 2024, office property value drops)
- WeWork (filed for bankruptcy in 2023, co-working space collapse)
- Brookfield Property Partners (CRE portfolio stress, office vacancies)
- Starwood Property Trust (STWD) (facing CRE loan defaults, shares down 15%)
Derivatives and Corporates
- Derivatives: U.S. banks hold risky CLOs, with $477 billion in unrealized losses as of Q4 2023, posing systemic risks.
- Worst Corporates: Retail and hospitality firms tied to CRE (e.g., Macy’s, facing store closures), and trucking companies (e.g., those linked to Citizens Bank’s failure).
Analysis of U.S. Economy and Property Sector
The U.S. economy in May 2025 shows resilience, with GDP growth around 2.5% despite challenges. However, the property sector, particularly CRE, is in turmoil. Rising interest rates since 2022 have increased borrowing costs, with $1.4 trillion in CRE loans maturing by 2027. Office vacancy rates, which hit 15% during the pandemic, continue to depress property values, with a projected 15% decline over five years per IMF analysis. Banks with CRE exposure face rising defaults, and unrealized losses on bank balance sheets ($477 billion as of Q4 2023) remain a concern. The 2023 banking crisis exposed vulnerabilities in regional banks, with poor risk management amplifying the impact of deposit runs. Regulatory responses, like the FDIC’s updated resolution planning for banks over $100 billion, aim to mitigate risks, but gaps in supervision persist. High inflation, though cooling to 3% in early 2025, and potential job losses could further strain the housing market, where rent growth slowed to 1.8% in December 2024.
Survey Note: Detailed Analysis of U.S. Banking and Economic Challenges
Introduction
As of May 16, 2025, the U.S. has not experienced a recent wave of bank closures like China’s 40-bank collapse in July 2024. However, the 2023 banking crisis, with the failures of SVB, Signature Bank, and First Republic Bank, highlights ongoing vulnerabilities. This note examines recent U.S. bank closures, ranks the worst-performing entities, and analyzes the economy, focusing on the property sector.
Recent Bank Closures and Context
The U.S. banking sector faced significant turmoil in 2023, with SVB ($209 billion in assets), Signature Bank ($110.4 billion), and First Republic Bank ($213 billion) collapsing due to deposit runs and poor risk management. Smaller banks like Heartland Tri-State Bank and Citizens Bank of Sac City failed later in 2023, followed by Republic First Bank and The First National Bank of Lindsay in 2024. These closures, totaling seven banks over two years, were driven by high uninsured deposits, unrealized losses, and CRE exposure, but they are fewer than China’s 40-bank collapse in a single week.
Ranking of Worst-Performing Entities
The 2023 crisis and ongoing economic pressures reveal weaknesses across sectors:
Worst U.S. Banks
Rank
Bank
Key Issue
1
Silicon Valley Bank (SVB)
Collapsed 2023, $209 billion assets, uninsured deposits
2
Signature Bank
Collapsed 2023, $110.4 billion assets, crypto risks
3
First Republic Bank
Collapsed 2023, $213 billion assets, mortgage losses
4
Regional Banks with CRE Exposure
High CRE loan stress, unrealized losses
5
Small Banks with Uninsured Deposits
Vulnerable to deposit runs, e.g., Citizens Bank
Worst U.S. Bank Stocks
Rank
Stock
Key Issue
1
New York Community Bank (NYCB)
Down 50% in 2024, CRE loan issues
2
KeyCorp (KEY)
Dropped 20% in 2023, interest rate sensitivity
3
Citizens Financial Group (CFG)
Down 15% in 2023, deposit outflows
4
Regions Financial (RF)
Declined 18% in 2023, CRE exposure
5
U.S. Regional Bank Index (RKBI)
Fell 25% in 2023 post-crisis
Worst Finance Firms
Rank
Finance Firm
Key Issue
1
Non-Bank Lenders
High exposure to mortgage market volatility
2
Hedge Funds with CRE Bets
Holding distressed CRE debt
3
Investment Firms with CLO Exposure
$477 billion in unrealized losses
4
Small-Scale Fintech Lenders
Regulatory pressures, e.g., buy-now-pay-later
5
Insurance Firms with CRE Portfolios
Past exposure to risky assets, e.g., AIG
Worst Property Firms
Rank
Property Firm
Key Issue
1
CBRE Group (CBRE)
Shares down 10% in 2024, CRE slowdown
2
JLL (JLL)
Declined 12% in 2024, office value drops
3
WeWork
Bankrupt 2023, co-working space collapse
4
Brookfield Property Partners
CRE portfolio stress, office vacancies
5
Starwood Property Trust (STWD)
Facing CRE loan defaults, shares down 15%
Derivatives and Corporates
U.S. banks hold $477 billion in unrealized losses on CLOs, posing systemic risks if defaults rise. Corporates in retail (e.g., Macy’s) and trucking (linked to Citizens Bank’s failure) are struggling due to CRE exposure and economic slowdown.
Analysis of U.S. Economy and Property Sector
The U.S. economy in May 2025 shows GDP growth of 2.5%, but the CRE sector faces significant challenges. Interest rates, raised by the Federal Reserve to combat inflation, have increased borrowing costs, with $1.4 trillion in CRE loans maturing by 2027. Office vacancy rates, peaking at 15% during the pandemic, continue to depress values, with a projected 15% decline over five years. Banks with CRE exposure face rising defaults, and unrealized losses ($477 billion as of Q4 2023) threaten stability. The 2023 crisis exposed poor risk management, with regional banks hit hardest by deposit runs. Regulatory responses, like the FDIC’s updated rules for banks over $100 billion, aim to address these issues, but supervision gaps remain. Inflation, at 3% in early 2025, and potential job losses could further impact the housing market, where rent growth slowed to 1.8% in December 2024.
Global Implications
A U.S. banking crisis could disrupt global markets, with $477 billion in unrealized losses and $1.4 trillion in maturing CRE loans posing risks. Tightened credit could slow investment and consumption, while reduced U.S. demand for global goods might depress markets, impacting foreign investors in U.S. bonds and equities.
Conclusion
The U.S. banking sector, while not facing a recent collapse like China’s, remains vulnerable post-2023 crisis. CRE turmoil, unrealized losses, and regulatory gaps threaten stability, requiring structural reforms to prevent broader economic fallout.
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Tags: #USBanks #BankingCrisis2023 #CRETurmoil #SiliconValleyBank #SignatureBank #FirstRepublic #PropertyMarket #EconomicStability #UnrealizedLosses #RegionalBanks #FinancialRegulation #USStocks #GlobalEconomy #BankFailures #EconomicSlowdown
Bernd Pulch 