U.S. banks’ fourth-quarter 2023 earnings demonstrated continued pressure on funding costs and minimal slippage in credit quality. The Street largely took the results in stride, but management teams were hopeful that net interest margin pressure could subside in the second half of 2024 and credit quality would hold up in the face of a higher for longer rate environment, according to Gerard Cassidy, co-head of global financials research at RBC Capital Markets. In the episode, the veteran analyst said he shares that optimistic outlook and believes the current environment is more similar to 1995 when the U.S. economy digested sharp rate hikes by the Federal Reserve and likely will not result in a severe downturn like some investors fear. Cassidy believes bank stocks are a show me story but does see further catalysts on the horizon. The analyst also offered his outlook for bank M&A activity.
Ep. 107 - Lessons learned from a modern day bank run
Ep. 106 - Banks may want to shrink rather than pay up for loan growth
Ep. 105 - Banks could see opportunity in fintech's cleansing fire
Ep. 104 - Deposits king of the bank M&A mountain amid funding hunt
Ep. 103 - Investors worry about bank liquidity, earnings drag from underwater bonds
Ep. 102 – Hopes that the bank dealmaking cool front could break in 2023
Ep. 101 - D&I focus helps Northwestern Mutual nearly double industry's blockbuster growth
Ep. 100 - KBW CEO offers optimism for bears fearful of bank liquidity, credit
Ep. 99 - Higher rates punish bond portfolios, weigh on bank M&A
Ep. 98 - Regulatory scrutiny having cooling effect on community bank M&A
Ep. 97 - Recessionary fears still keeping bank investors on the sidelines
Ep. 96 - Considering recession risks, prospects that the Fed achieves a 'soft landing'
Ep. 95 - Strategies for community banks to grow, navigate the upcoming "hurricane"
Ep. 94 - Recessionary fears in '22 overblown, Fed could overtighten
Ep. 93 - How to predict deposit betas, avoid betting too much on rate hikes
Ep. 92 - Citizens CEO discusses impact of inflation, growth through digital bank
Ep. 91 - Formerly bullish bank investor turns contrarian, saying stocks are "out of gas"
Ep. 90 - Banks should not wait on the Fed to put cash to work
Ep. 89 - Big bank cuts to overdraft fees could trickle down to small banks, spur M&A
Ep. 88 - Bank returns could fall short of Street's expectations, sparking more M&A
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