Bank failure and loan sales accompany capital rule proposals

California regulators close Nano Banc; Sunwest Bank agrees to assume deposits. The FDIC was appointed receiver for the $736 million-asset bank. Sunwest Bank agreed to assume substantially all deposits and buy approximately $476 million of assets. The FDIC preliminarily estimates a $114 million cost to the Deposit Insurance Fund, subject to change as retained assets are sold.

Old Glory Bank faces an FDIC corrective action directive. Its Tier 1 leverage ratio was 2.69% as of June 30, and the FDIC classified it as severely undercapitalized after it did not respond to an earlier capital warning. The directive severely limits its growth prospects, and its ability to continue as a going concern is uncertain.

BCB Community Bank sells problem loans; its parent plans an equity offering. BCB Bancorp reported sales of approximately $205.3 million in problem-loan portfolios to six purchasers, with five transactions closed and an estimated $43.3 million pretax loss. The parent plans a discounted share offering and expects a third-quarter loss of $126.2 million to $136.1 million as it addresses troubled credits.

Gateway First Bancorp agrees to buy First Western Mortgage and Colonial Savings. Colonial Savings is a $502 million-asset Fort Worth institution. Gateway First plans the purchase for the first quarter; the price was not disclosed.

WestStar Bank agrees to acquire Southwest Capital Bank. The transaction would expand WestStar’s New Mexico footprint from one branch to seven and create a bank with about $3.8 billion in assets. Financial terms were not disclosed, and closing is expected in the first quarter of 2027 pending approvals.

SoFi Bank enters the top 50 by U.S. deposits. Its $46.8 billion in deposits at June 30 placed it 47th in the FDIC’s annual Summary of Deposits ranking. American Banker described it as the first bank with fintech roots to reach the top 50.

Truist Financial reportedly sells $5.5 billion of loans. Simply Wall Street described the sale as aimed at improving credit quality but did not identify the portfolio, buyer or sale economics. Those omissions limit what can be concluded about the transaction’s effect on credit losses or capital.

BMO targets a 12% U.S. return on equity. The bank expects to reach that target by October 31, 2027, following sales of lower-returning loan portfolios, U.S. leadership changes and divestitures of 138 branches. Its assessment that the U.S. revamp has turned a corner remains a management outlook.

Toronto-Dominion Bank reports $4.7 billion in third-quarter earnings. The reported fiscal 2026 result included earnings per share of $2.77, revenue growth of 8% and a 16% return on equity. Management plans to return more than $13 billion in capital by fiscal 2027 through share buybacks.

Proposed capital rules could lower risk weights on securitizations and corporate loans. The proposed revisions would reduce the senior securitization risk-weight floor from 20% to 15% and the corporate-loan risk weight for standardized-approach banks from 100% to 95%. American Banker reports that the changes could deepen banks’ ties to private credit, whose financing chains are difficult to assess fully.

Federal Reserve proposes rules for supervised payment stablecoin issuers. One GENIUS Act proposal would require permissible reserve assets backing payment stablecoins and set capital and risk-management requirements. A second would establish an application process for state member banks seeking stablecoin-issuing subsidiaries; both measures remain proposals.

Fed Governor Michael Barr sees further tightening as likely. Barr said the recent rate increase was a necessary recalibration and that further adjustments would likely be needed to bring inflation back to target. His comments describe his policy outlook, rather than a new committee decision.