Cybiont Capital, LLC

November 12, 2026

Signed Off, Not Safe

The reported solvency ratio was 13.85 percent. It was never really that. Continue reading

Commentary
November 10, 2026

The Sufficiency of Upstart’s Capital Is Vulnerable to a Few Unexpected Points of Additional Losses

Even on the risk weights most generous to Upstart, a modest miss on loss rates uses up its cushion Summary In previous analysis, we made a strong case for very high risk-weights for proposed Upstart HoldCo securitization assets. In this analysis, we give Upstart the most favorable risk weights available, and demonstrate that its 13.2%… Continue reading

Bank Regulation & Supervision, Industry Analysis
November 7, 2026

Cybiont: Commercial Real Estate Credit at U.S. Banks, 3Q26

Median formation of underperforming ComRe loans at banks over $10 billion fell to 0.04% in 3Q26, but the weakest large books got worse and community and mid-size banks reached new highs. Continue reading

Commentary, Industry Analysis
November 7, 2026

Long SOFI, Short UPST: A long and painful journey

On December 2, 2023, we argued that the short case against SoFi was wrong and paired a long SOFI position against a short in Upstart. Almost three years later the pair is up 140.78%, nearly double the Nasdaq-100, but it was down 88% along the way. Continue reading

Investment Opportunity, Talking Our Book
November 6, 2026

Upstart’s recovery still depends on the forecast

Upstart’s September quarter looked like a recovery, with originations of $4.1 billion and GAAP net income of $36.6 million. Set aside management’s fair-value estimates of retained claims and Cybiont core tangible equity is negative $19.8 million; on the same basis core earnings have been negative every quarter since early 2022. Continue reading

Bank Regulation & Supervision, Industry Analysis
November 5, 2026

Reevaluating Upstart’s Capital After the “First-Loss” Pushback

Upstart says its risk-sharing positions would carry risk weights between 100 and 1,250 percent, which points to the SSFA. But the SSFA ignores expected loss, and at Upstart’s likely attachment point it assigns about 78 percent. Three of four alternative measures show Upstart needing roughly $0.4 billion to $2.0 billion of new equity. Continue reading

Bank Regulation & Supervision, Industry Analysis
November 2, 2026

Upstart’s Long Road to Becoming a Bank

The OCC’s conditional approval sets a 12 percent leverage floor and a 15 percent total risk-based floor for Upstart Bank. For a lender whose capital sits largely in Level 3 first-loss positions, that is too low, and the FDIC and Federal Reserve have the authority and precedent to require much more. Continue reading

Bank Regulation & Supervision, Industry Analysis
October 31, 2026

Responsibility Without Authority: The Fed Just Diagnosed the FDIC’s Oldest Problem

The Fed just fixed its own principal-agent problem by consolidating supervision under accountable regional leaders. The FDIC has a worse version it cannot reorganize away: it pays for bank failures it does not supervise. It should trade its primary supervision of state nonmember banks for real backup authority. Continue reading

Bank Regulation & Supervision, Commentary, Industry Analysis
October 31, 2026

Why Emerging Risk Analysis Hasn’t Prevented Bank Failures

A new BPI paper finds that central bank financial stability reports miss the risks that matter. From my years in the FDIC’s Division of Insurance, I think I know why: when offsite risk analysis disagrees with examiners, the examiners win. That is the case for trading the FDIC’s primary supervision for real backup authority. Continue reading

Bank Regulation & Supervision, Commentary
October 31, 2026

Count the Loss, Don’t Reweight the Assets

SVB’s problem was not that its required capital was too low. It was that its reported regulatory capital (the numerator) ignored losses that had already happened as if they had not. The remedy is to stop hiding the losses, and regulators can do that with authority Congress gave them in 1991. Continue reading

Bank Regulation & Supervision

Relaunch

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