Weekly Report – August 2nd, 2023

Graph 2023.08.02

Highlight of the Week

Regional Banks Report Q2 Earnings

  • Regional and mid-sized banks have been focused on retaining and growing their deposit bases since March. These banks largely beat expectations and held steady capital and liquidity levels in the second quarter.
  • Banks that were not as successful at maintaining their deposit bases have sought consolidation with other institutions in order to strengthen their balance sheet.
  • Last week, Banc of California agreed to buy PacWest, Dream First Bank purchased Heartland Tri-State Bank out of FDIC receivership, and Atlantic Union announced acquisition of American National Bank.
  • As outlook shifts to a “soft landing” scenario, regional banks continue to navigate through the rising interest rate environment. Expect to see more banking M&A in a few categories: (1) “Going Smaller” transactions – i.e. combining two entities and simultaneously selling off/writing down assets (2) FDIC-assisted transactions and (3) Traditional M&A activity for banks looking to capitalize on depressed values.

Rate Curves

Graph 2023.08.02
Category: Market Updates
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