The liquidity crunch that emerged at a few institutions in March sent fears through the market and battered bank stocks but the selloff has left some trophy franchises on sale, according to KBW CEO Tom Michaud. In the latest Street Talk podcast, KBW CEO Tom Michaud discussed the liquidity crunch that emerged in March and battered bank stocks and offered his view on current valuations, bank liquidity levels, potential regulatory changes and M&A activity.
Apr 07, 2023•25 min
Economists had hopes that the Federal Reserve could achieve a soft landing as it worked to tame inflation but that prospect could be harder in light of the liquidity crunch facing the U.S. banking industry. In the episode, S&P Global Market Intelligence's news team highlights interviews with investors, analysts and economists say that the Fed remains laser-focused on reducing inflation and the latest jobs report and consumer price index reading provide further support for additional tighteni...
Mar 17, 2023•21 min
Higher rates have put deposits under pressure across the banking industry, but liquidity strains have been far more pronounced at a few banks, resulting in severe hits to their stock prices. Crypto-focused bank Silvergate announced plans to voluntarily wind down its operations after facing a liquidity crunch, but others like SVB Financial raised capital and purged its bond portfolio after seeing a higher cash burn among its clients. In the episode, Todd Baker, a senior fellow at the Richman Cent...
Mar 10, 2023•23 min
As deposit competition intensifies, banks should consider slowing or even stopping growing to mitigate credit risk and threats to their net interest margins, according to South State Bank Director of Capital Markets Chris Nichols. The episode features a discussion on the pitfalls of competing for deposits just with rates and why banks should rethink their growth goals at this point in the interest rate and credit cycle between Nichols and S&P Global Market Intelligence co-hosts Nathan Stoval...
Feb 16, 2023•21 min
An unforgiving stock market and declining cash reserves at startups should lead to a wave of U.S. fintech industry consolidation in 2023. Some companies will survive, but many others will throw in the towel or sell their operations at a significant discount to their peak valuations, according to Tom Mason, senior research analyst at S&P Global Market Intelligence. In the episode, Mason discussed the outlook for the banking tech space and what changes to the operating model could mean for ind...
Jan 24, 2023•17 min
Bank M&A activity fell considerably in 2022 but the push to obtain core deposits should encourage a steady stream of deals in 2023 as funding becomes more precious. In the episode, Bill Burgess, co-head of financial services investment banking at Piper Sandler said he is bullish that roughly 200 transactions could surface in 2023, up nearly 20% from 2022 levels as more and more acquirers seek to bolster their deposit base through M&A, particularly with core deposit premiums at near decad...
Dec 28, 2022•24 min
A spike in interest rates has created large amounts of unrealized losses sitting in banks' bond portfolios and sparked liquidity concerns in the investment community, according to Brett Rabatin, director of research at Hovde Group. In the episode, Rabatin discussed the merits of investors' concerns and the impact that deeply underwater bonds have on banks' liquidity, earnings, valuations and potential regulatory constraints on capital returns.
Nov 22, 2022•26 min
The slowdown in bank dealmaking in 2022 could reverse course in 2023 as institutions gain greater clarity over emerging liquidity and credit pressures and the regulatory environment, according to some of the most active investment bankers and attorneys focused on deals in bankland. The group, which featured the heads of investment banking from Keefe Bruyette & Woods and Piper Sandler and veteran attorneys from Sullivan & Cromwell, delivered that message during a recent webinar hosted by ...
Oct 28, 2022•24 min
After explosive growth that outperformed the rest of the industry's historic growth in 2021, Northwestern Mutual believes its long-term approach, digital investments to complement its financial advisor salesforce and focus on diversity and inclusion will allow the company to stand out against other life insurers, wealth managers and the biggest banks. In the episode, Michael Carter, executive vice president, CFO and chief risk officer at Northwestern Mutual, discussed the drivers of the historic...
Oct 21, 2022•25 min
Higher interest rates promise stronger net interest income for the banking industry, but bank stocks are trading at discounted prices because investors are concerned about potential threats to bank liquidity and credit quality, according to KBW CEO Tom Michaud. In the episode, Michaud discussed current bank stock valuations, the impact of higher rates on deposits, liquidity and credit quality, and how those factors are affecting M&A activity.
Oct 10, 2022•25 min
The Federal Reserve's aggressive tightening of monetary policy has pushed bank bond portfolios deep into negative territory, altered previously struck bank M&A deals and has given pause to some would-be buyers. In the episode, bankers and advisers from Piper Sandler's depository investment bank team and PNC's Financial Institutions Advisory Group discuss how higher rates have negatively impacted bank deal math, tangible book value and changed the way acquirers communicate with the Street. S&...
Aug 31, 2022•17 min
While deal discussions continue and community banks still see acquisitions as an attractive tool for growth, regulatory headwinds have made M&A a little less attractive for growth-mind companies. In the episode, Jonathan Hightower, partner at Fenimore Kay Harrison LLP, discussed the drivers of community bank M&A activity, the impact of rising rates on transactions, how most community banks already satisfy environmental, social and governance considerations and the changing regulatory lan...
Aug 02, 2022•23 min
Large banks' second-quarter results likely helped downplay recessionary fears but many investors will remain on the sidelines until it is clear that a severe recession is not on the horizon, according to Gerard Cassidy. In the episode, Cassidy, managing director and head of U.S. Bank Equity Strategy at RBC Capital Markets, discussed banks' second-quarter results, how institutions' deposit bases are reacting to rate hikes by the Federal Reserve, and what results suggest about the health of the US...
Jul 27, 2022•22 min
The Fed has committed to taming elevated inflation by tightening monetary at a rapid pace, stoking fears that the central bank will not be able to achieve a "soft landing" for the U.S. economy. In the episode, S&P Global Market Intelligence's news team highlights interviews with investors, analysts and economists who say that a recession is a real possibility in 2023 and that small businesses and households with lower incomes, in particular, could feel some pain if that occurred. But the mem...
Jun 14, 2022•29 min
The current economic headwinds might seem like a "hurricane" on the horizon to some, but advisers and bankers at S&P Global Market Intelligence annual community bankers' conference said institutions could navigate choppy waters. In the latest Street Talk podcast, we share the advice that bankers, advisers and investors offered at the event, including on how to prepare for unprecedented changes in rates and how to accelerate growth through recruitment, incentives and fintech partnerships. Con...
Jun 03, 2022•29 min
While recessionary fears have grown on the Street, S&P Global Ratings U.S. Chief Economist Beth Ann Bovino does not see a downturn developing this year. In the episode, the economist discussed her outlook for the U.S. economy and inflation, the possibility of a wage spiral and the Federal Reserve's plans to wind down its nearly $9 trillion balance sheet. She also discussed how the Fed likely will tighten monetary policy too much in their effort to get inflation under control and the likeliho...
May 12, 2022•25 min
While most banks are positioned for higher rates, institutions might be wise to consider the possibility that rates could turn the other way in the future, according to Darling Consulting Group President and CEO Matt Pieniazek. In the episode, Pieniazek discussed balance sheet positioning ahead of the rate hike cycle, the potential for securities portfolios to move further underwater as rates move higher, and how banks should evaluate how sensitive their deposit bases will be to the Fed's tighte...
Apr 28, 2022•25 min
After a busy year for dealmaking, Citizens Financial Group sees more opportunities for organic growth going forward, including through its digital bank where it plans to offer more consumer loan products, according to the company's Chairman and CEO Bruce Van Saun. In the episode, Van Saun discussed how elevated inflation and higher rates could impact loan growth and credit quality. He also discussed the company's appetite for additional M&A activity after closing a series of transactions in ...
Apr 24, 2022•22 min
While a number of investors are looking for higher interest rates to drive bank earnings and stocks higher, not all investors are sold on the prospect. Even with the recent selloff, Brad Rinschler, managing partner at Down Range Capital Management, said in the latest Street Talk podcast that he believes valuations of many regional banks remain too high. In the episode, Rinschler and Connor Labozzetta, a partner at Down Range, discussed year-to-date performance of bank stocks, why they think many...
Mar 31, 2022•24 min
Many banks have been hesitant to invest excess cash before the Federal Reserve raises short-term interest rates, but they are likely leaving money on the table given the strong move in immediate rates that has already occurred, according to Piper Sandler's Scott Hildenbrand. In the episode, Hildenbrand, chief balance sheet strategist and head of the financial strategies group at Piper Sandler, discussed how banks should view their excess liquidity, investment opportunities in the current market ...
Mar 15, 2022•25 min
A number of banks during fourth-quarter earnings season, including large players like Wells Fargo and Bank of America, unveiled plans to reduce overdraft and nonsufficient fees in 2022 as competitive pressure mounts from neobanks and regulators seek to increase their oversight of the issue. The group of banks that have cut or reduced their overdraft fees own close to 45% of U.S. deposits and likely will pressure many community banks and credit unions to follow suit, according to Lauren Seay, a b...
Feb 17, 2022•18 min
The Federal Reserve's plans to raise interest rates and the return of loan growth will boost bank profitability but the gains might not come as quickly as the Street hopes and that should encourage more bank M&A activity, according to Greg Hertrich, head of U.S. depository strategies at Nomura. In the episode, Hertrich discussed how Fed actions will impact bank profitability and liquidity, whether those results will meet current expectations from the Street and how the performance will alter...
Jan 31, 2022•23 min
The Federal Reserve might have to raise short-term rates sooner than expected and that could prompt the central bank to end the tapering of its bond purchases early in 2022, according to S&P Global Ratings Chief U.S. Economist Beth Ann Bovino. In the episode, Bovino discussed the outlook for economic growth, inflation and the labor markets, and how those factors will impact future Fed policy.
Dec 13, 2021•30 min
TD Bank never turned its focus away from growth during the pandemic and the company continues see to see organic and acquisition opportunities, both in and outside of its traditional U.S. retail footprint, according to CEO Greg Braca. In the episode, Braca discussed the company's outlook for growth, including through potential acquisitions, balancing physical distribution with digital channels and the potential threat from fintechs.
Dec 02, 2021•22 min
Bank stocks and bank M&A activity have rebounded strongly from the depths of the pandemic and the factors driving the resurgence remain in place, according to KBW CEO Tom Michaud. In the episode, the CEO of the Stifel Financial unit discussed current bank stock valuations, the Street's view of the group, the competitive threat of fintechs, recent bank M&A activity, the outlook for transactions in 2022 and how the banking and advisory business has changed during his 10-year tenure as the ...
Nov 29, 2021•32 min
The pandemic has put technology front and center for financial institutions as customers shifted transactions toward digital channels. Meanwhile, fintechs continue to attract even greater amounts of capital and have expanded their offerings to include more banking and insurance products, putting them in direct competition with traditional players. In the episode, three members of the S&P Global Market Intelligence financial institutions research team — Tim Zawacki, Tom Mason and Nimayi Dixit...
Nov 02, 2021•28 min
Some regional banks looking to divest branches have attracted buyers by splitting up the branches and selling them to multiple community banks at once. In the episode, DD&F Consulting President Randy Dennis, who has worked with banks on some of those deals, discussed his outlook for future branch sales, bank liquidity levels and how institutions are evaluating their branch networks in a post-pandemic world where digital adoption has grown.
Oct 26, 2021•21 min
Bank M&A activity has picked up as institutions face revenue pressures and increasing customer demands to improve technology offerings, and more institutions could pursue to sales as they see some of their strong peers decide to partner with other institutions. In the episode, Collyn Gilbert, director of strategy at Valley National Bancorp, discussed M&A activity, balancing branches against digital channels, competition from neobanks and operating with dual markets in the Northeast and F...
Sep 01, 2021•25 min
In the episode, Banc of California President and CEO Jared Wolff discussed his outlook for community bank M&A, the health of small business borrowers and their appetite for expansion, and the state of the economic recovery and the potential impact from the emergence of the COVID Delta variant. Wolff also discussed Banc of California's multi-year turnaround that has transformed the company's balance sheet composition, capital structure and management team.
Aug 05, 2021•26 min
Citizens Financial Group Inc. sees stronger organic growth opportunities than peers, the company remains on the pursuit for acquisitions after announcing plans to acquire the East Coast branches and national online deposit business of HSBC Bank USA NA. In the latest Street Talk podcast, Citizens Financial Chairman and CEO Bruce Van Saun discussed the HSBC deal, the company’s appetite for future acquisitions, balancing physical branches against digital offerings and the outlook for credit quality...
Jun 29, 2021•21 min
