US regional banks reporting first-quarter earnings over the coming weeks will barely grow their customer deposits amid turmoil that engulfed the sector, according to data compiled by Bloomberg.
(Bloomberg) — US regional banks reporting first-quarter earnings over the coming weeks will barely grow their customer deposits amid turmoil that engulfed the sector, according to data compiled by Bloomberg.
The 60 regional banks still due to report are expected to add about $73 billion in net deposits from a year prior, the data show. Over the previous twelve quarters, these lenders have managed average inflows of around $426 billion. Fewer than half of the 60 firms are expected to show inflows for the period.
Banks saw deposits swell thanks to government stimulus money during the pandemic, but inflation and the allure of higher-yielding products reversed that trend. That was swiftly compounded by the collapse last month of three regional lenders, including Silicon Valley Bank and Signature Bank, after customers rushed to withdraw deposits.
First Republic Bank, despite receiving $30 billion from both Wall Street and Main Street banks, is expected to see outflows of about $25 billion from a year ago, according to estimates.
The KBW Regional Banking Index is down about 22% this year, falling 21% in March alone. The overall stock market is holding up despite the banking meltdowns, with the S&P 500 Index rising about 8% year-to-date.
US Bancorp and New York Community Bancorp are among the 26 banks forecast to grow their deposit bases, with analysts anticipating inflows of $66 billion and $51 billion, respectively. Both figures are well above average for those banks. NYCB transformed itself “overnight” after it agreed to acquire $34 billion of Signature Bank’s deposits, JPMorgan Chase & Co. analysts wrote, shoring up its funding profile and boosting its growth prospects.
Shares for M&T Bank Corp. rose after the regional lender issuing net interest income ahead of analysts’ expectations Monday morning. Each of PNC Financial Services Group Inc. and Washington Federal Inc. reported outflows amounting to 3% from the year prior in the first quarter.
Western Alliance Bancorp reports post-market Tuesday after reassuring investors its deposits shrank less than feared earlier this month.
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