Zelle®’s Post

The four largest U.S. banks—JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), and Wells Fargo (WFC)—are on track to claim their highest share of banking sector profits in nearly a decade, solidifying their dominant position in the industry. These institutions accounted for 44% of the sector’s earnings in the first nine months of 2024, highlighting their growing influence in a highly competitive market.

#BankofAmerica is on track to open more than 165 bank branches across 63 markets by the end of 2026, including 40 this year. How can community banks and credit unions compete? This is just one of the topics we will cover on tomorrow's webinar, Sept 24 at 2pm central, "How to Win and Retain Accounts" https://lnkd.in/e8RsxXG7 https://lnkd.in/eNzJQNrC

Toronto Dominion Bank's money laundering problems are well documented, but our Senior Financial Services Analyst, Nigel R. D'Souza, CFA, highlights another one, as is detailed in this Globe & Mail column by Ian McGugan. Of the Big Six Canadian banks, TD and Bank of Montreal have been most aggressive about expanding into U.S. banking, and it is not paying off. "Pursuing U.S. expansion is not a winning strategy long term for any Canadian bank," said Nigel, arguing that returns on equity from the U.S. personal and commercial (P&C) banking operations of TD and BMO are among the lowest of any major U.S. bank when adjusted to reflect unallocated corporate expenses and taxes. His numbers suggest that these Canadian banks' P&C operations in the U.S. actually dilute their shareholder value. As the Globe article says, the upshot of Nigel's analysis is that U.S. banks typically produce better risk-adjusted returns from their U.S. operations than Canadian banks do from their U.S. banking endeavours. Therefore, Canadian investors who want to bet on U.S. banking should consider investing directly in shares of U.S. banks. https://lnkd.in/g8U3zzTi #banks #investmentresearch #financialservices #investors

I read a fascinating article in Bloomberg (link in the comments) about the challenges facing the “Winners” of the 2023 banking crisis. The article compares First Citizens Bank, which bought Silicon Valley Bank a year ago, and New York Community Bank (NYCB), which faltered after slashing its dividend and reporting a fourth quarter loss. The article highlights a Catch-22 (a la The Office!) confronting many mid-sized and regional banks. These banks are under significant pressure to increase their size through mergers in order to absorb the increased costs of complying with regulatory requirements and the need to pay higher interest rates on deposits. As those banks bulk up, however, they run the risk of crossing balance sheet based regulatory thresholds that increase their regulatory burden, thereby neutralizing the efficiencies of getting bigger. The article quotes an industry observer as noting that the most difficult spot for a bank is to be between $50 billion and $250 billion in assets, because at that level the bank is subject to heavier regulatory burdens but is not nearly as big as the “too big too fail” banks like JPMorgan, Wells, BofA, etc. and therefore less able to absorb those higher costs. The most significant regulatory hurdles apply when bank assets exceed (i) $100 billion, (ii) $250 billion, and (iii) $700 billion. This pressure on mid-size and regional banks is particularly important in the #fundfinance industry, which has historically been led by regional and midsize banks. Consider the following list of #fundfinance market leaders and their balance sheets (as of FYE 2023): - PNC ($557 billion) - Goldman Sachs ($521 billion) - State Street ($293 billion) - Citizens (which hired much of the FRB #fundfinance team) ($221 billion) - First Citizens Bank (which acquired SVB) ($213 billion) - City National Bank ($93 billion) - East West Bank ($69 billion) - Banc of California (which acquired PacWest): $38 billion - EverBank ($36 billion) - Stifel Bank ($17 billion) The new Basel III endgame regulatory capital regs could lead to even further pressure on these banks, depending on the form they eventually take. While regulatory oversight is certainly necessary, there is a real danger from excessive regulation. Regional banks have often been leaders in #fundfinance because they are more open to experimentation and creative solutions than larger banks, and were more willing to lend to smaller and newer funds. I am concerned that tightening regulatory pressure could further reduce the ranks of these smaller and regional banks and make it more challenging for fund borrowers to access financing. For that reason, as the Basel III endgame regulations are debated and finalized, it is incredibly important for regulators to consider the unintended consequences that their regulations may have and attempt to use a targeted, light touch to improve the safety of the banking system while not stifling competition and innovation.

Largest Banks in the U.S. 2024 https://lnkd.in/gT2wubUJ The financial landscape of the United States is dominated by a few key players, each boasting significant assets and influence. As of 2024, the largest banks in the U.S. continue to play a crucial role in the global economy, shaping financial trends and policies. This article provides an in-depth look at the top banks in the country, highlighting their size, services, and impact on both the national and international stage. 1. JPMorgan Chase & Co. Overview JPMorgan Chase & Co. remains the largest bank in the United States by assets. Headquartered in New York City, JPMorgan Chase offers a comprehensive...

Analyzing Bank of America's Q2 2024 earnings report: positive indication - https://lnkd.in/gi-Fv9Gk If there’s one sector that’s crucial to keep an eye on, that’s banking. Today, we’ll zero in on the Bank of America’s (BofA) Q2 2024 earnings report. The data provides valuable insights into the general health of the economy, as well as the impacts of the interest rates and

Top performers in 2023 managed to thrive in a period of compressed margins and core deposit runoff - how did they do it? Capital Performance Group is excited to partner with the American Banker for another edition of the Top Performing Banks analysis. Check out the full details below. #banking #bankstocks

Big and #regionalbanks have led the decline. The fees have fallen 55% at #banks with more than $100 billion in assets, according to the KBRA Financial Intelligence(#KFI) data, compared with a 46.7% drop at midsize banks with between $10 billion and $100 billion in assets. #Communitybanks with less than $10 billion in assets have had a smaller decline, with overdrafts falling 11%. Read the full story on American Banker: https://lnkd.in/e6qzZ3Gu

Forbes 15th annual America’s Best Banks list for 2024 boosts First Citizens Bank to 20th on the list making us largest financial institution based on assets in the top 25 best banks! “Raleigh, North Carolina-based First Citizens Bank scooped up Silicon Valley Bank last March, taking on $110 billion in assets, and its shareholders continued to be rewarded handsomely with a 186% one-year return through March 18 of this year, the best among all the banks included on the list. The acquisition also helped First Citizens post the best-in-class return on average tangible common equity, return on average assets and operating revenue growth, boosting it to 20th on the list from 87th last year despite a higher proportion of nonperforming assets than most peers—0.64%, compared with a median of 0.4% for all banks eligible for this list.” Proud to work for such an amazing Finacial Institution! “Better banking. Better tomorrows.”

Capital Performance Group just released the top 20 community banks that were under $2B in assets. These banks often get overlooked in the press, when you think about the powerhouses that are out there and how a sniffle in the top three banks in the US can influence the economy. However, these smaller banks are rocking it when you look at the Return on Average Equity (ROAE) and how they are ran in comparison to some of their larger peers. The top ranked bank for 2024, FFB Bank out of Fresno, CA topped the list with an ROAE of 29.7%, roughly double the median of 14.87% for the top 100. That is even more impressive when it is almost triple the median of all publicly traded banks with under $2 billion of assets, where the median ROAE was 10.91%. I did some quick views into the annual reports of some of these banks and here are some common themes that I think set them apart: First, they had a passion for knowing the #smallbusinesses and clients beyond just looking at their financial statements. They focus on listening to those small business needs, and foster growth by linking their success to the clients. I was at a community event recently and someone very erroneously spoke out about how banks are there to “stick it to small businesses”. Not sure where they banked, but not it not at one of these 20 amazing banks. Second, they have a commitment to their communities that is unwavering. Customers and the communities that they reside in are at the heart of everything they do. They help their customers by finding the right fit for their lives and businesses so that it is not a transactional business, but one that helps to retain and deepen customer relationships. Lastly, they leveraged #fintech to make efficiency happen when the economy and the federal reserve (funny thing how higher interests rates do not always help) were not cooperating with their earlier growth plans. This investment in fintech also allowed many of them to maintain their community focus while at the same time expand the footprint to minimize risk and gain some new opportunities that they would not have had before. Congrats FFB Bank, FinWise Bank, Solera National Bank, The First National Bank and Trust Company of Newtown, CW Bancorp, Cornerstone Community, Thomasville National Bank, Plumas Bank, Truxton, FIRST IC BANK, Mission Bank, Bank7 Corp. , BEO Bancorp, KS Bank, Inc., Uwharrie Bank, Providence Bank - North Carolina, Esquire Bank, US Metro Bank, First Federal Community, and Central Savings Bank to making the cut above the rest. You can read the full article in American Banker. #banking #communitybanking