As interest rates have risen, many banks have become more profitable because the spreads between what they earn on loans and investments and what they pay for funding has widened. But there are always exceptions.
Below is a screen of banks that are bucking the industry trend of expanding net interest margins, followed by another list of banks whose margins have widened the most over the past year.
On March 8, SVB Financial Group
ស៊ីវីប៊ី
-60.41%
sold $21 billion in securities for a loss of $1.8 billion. SVB is the holding company for Silicon Valley Bank of Santa Clara, Calif. It had $212 billion in assets as of Dec. 31.
The bank said it was repositioning to “increase asset sensitivity, to take advantage of the potential for higher short-term rates, partially lock-in funding costs, better protect net interest income (NII) and net interest margin (NIM), and enhance profitability.”
In light of the loss on the securities sales, SVB will raise $2.25 billion in new capital through two offerings and a private placement. The prospect of dilution to shareholders’ ownership positions resulted in the company’s shares sliding as much as 62% on March 9.
The entire banking industry seemed to take it on the chin on March 9, with the KBW Nasdaq Bank Index
BKX,
-7.70%
sinking 8%.
See Tomi Kilgore’s coverage for more details on SVB’s offerings, the securities sale and reaction.
Red margin flags
Before SVB Financial decided to take such a dramatic step, the movement of its net interest margin was signaling that the bank wasn’t well positioned for the combination of rising interest rates and slowing loan growth in the venture capital space.
A bank’s net interest margin is the spread between its average yield on loans and investments and its average cost for deposits and borrowings. This is an annualized calculation. Here’s how the NIM moved for SVB Financial over the past year:
| ធនាគារ | Ticker | NIM – Q4 2022 | NIM – Q3 2022 | NIM – Q2 2022 | NIM – Q1 2022 | NIM- Q4 2021 |
| អេសប៊ីប៊ីគ្រុបគ្រុប | ស៊ីវីប៊ី
-60.41% | 2.00% | 2.28% | 2.24% | 2.13% | 1.91% |
| ប្រភព: FactSet |
SVB’s net interest margin narrowed considerably during the fourth quarter, and it widened only slightly from the year-earlier quarter.
So now the question is which other banks might face pressure because their net interest margins have contracted, or because their margins have only expanded slighlty?
Starting with a list of U.S. banks with total assets of at least $10 billion, and removing purer investment banks, such as Goldman Sachs Group Inc.
អេស។ អេស។
-2.06%
និង Morgan Stanley
អេស។
-3.86%,
we looked at 108 banks.
A uniform set of net interest margins for the past five quarters isn’t available from FactSet for the full group — it is only available for 56 of the banks. So instead, we screened for net interest income (total interest income less total interest expense) divided by average total assets.
By this screen, 102 of 108 banks showed expanding margins for the fourth quarter from a year earlier.
Here are the 10 showing contracting margins over the past year, or the smallest expansions of margins:
| ធនាគារ | Ticker | រាជធានី ខេត្ត | Net interest income/ avg. assets – Q4 2022 | Net interest income/ avg. assets – Q3 2022 | Net interest income/ avg. assets – Q4 2021 | One-year contraction or expansion |
| អតិថិជន Bancorp Inc. | CUBI
-8.93% | West Reading, ប៉ា។ | 2.61% | 3.10% | 4.03% | -1.42% |
| ធនាគារសាធារណរដ្ឋទីមួយ | អេហ្វ។ ស៊ី។
-16.51% | សាន់ហ្វ្រាន់ស៊ីស្កូកាលីហ្វ័រញ៉ា។ | 2.28% | 2.53% | 2.50% | -0.22% |
| សាន់ឌីនិទាឃរដូវបាកឃ្យូអិលធីឌី | SASR
-7.13% | Olney, Md. | 3.10% | 3.34% | 3.29% | -0.19% |
| New York Community Bancorp Inc. | NYCB,
-6.33% | Hicksville, NY | 2.10% | 2.06% | 2.20% | -0.11% |
| First Foundation Inc. | FFWM,
-8.80% | ដាឡាសរដ្ឋតិចសាស | 2.35% | 2.98% | 2.41% | -0.07% |
| Ally Financial Inc. | ALLY
-7.00% | ក្រុង Detroit, Mich ។ | 4.04% | 4.20% | 4.09% | -0.05% |
| Dime Community Bancshares Inc. | DCOM,
-2.15% | Hauppauge, NY | 2.98% | 3.20% | 2.95% | 0.03% |
| ក្រុមហ៊ុន Pacific Premier Bancorp Inc. | PPBI,
-7.50% | Irvine, កាលីហ្វញ៉ា | 3.34% | 3.34% | 3.27% | 0.07% |
| Prosperity Bancshares Inc. | PB,
-4.51% | ហ៊ូស្តុនរដ្ឋតិចសាស់ | 2.72% | 2.78% | 2.65% | 0.07% |
| Columbia Financial Inc. | CLBK,
-3.54% | Fair Lawn, NJ | 2.69% | 2.78% | 2.60% | 0.09% |
| ប្រភព: FactSet |
ចុចលើសញ្ញាធីកសម្រាប់បន្ថែមអំពីធនាគារនីមួយៗ។
អាន មគ្គុទ្ទេសក៍លម្អិតរបស់ Tomi Kilgore ចំពោះទ្រព្យសម្បត្តិនៃព័ត៌មានដែលអាចរកបានដោយឥតគិតថ្លៃនៅលើទំព័រសម្រង់ MarketWatch ។
SVB Financial ranked 11th worst in the screen, with net interest income/average assets of 1.93% in the fourth quarter, up from 1.83% in the year-earlier quarter.
Most margin improvement
To end on a positive note, these banks showed the widest expansion of margins, based on net interest income divided by average assets:
| ធនាគារ | Ticker | រាជធានី ខេត្ត | Net interest income/ avg. assets – Q4, 2022 | Net interest income/ avg. assets – Q3, 2022 | Net interest income/ avg. assets – Q4, 2021 | One-year expansion |
| ក្រុមហ៊ុន Comerica Inc. | ស៊ីអិមអេ,
-8.01% | ដាឡាសរដ្ឋតិចសាស | 3.54% | 3.31% | 1.91% | 1.63% |
| ក្រុមហ៊ុន First Horizon | FHN,
-1.97% | Memphis, Tenn ។ | 3.57% | 3.21% | 2.24% | 1.33% |
| M&T Bank Corp. | MTB,
-4.80% | Buffalo, NY | 3.68% | 3.34% | 2.37% | 1.31% |
| Stellar Bancorp Inc. | STEL,
-4.11% | ហ៊ូស្តុនរដ្ឋតិចសាស់ | 4.16% | 3.95% | 2.85% | 1.31% |
| Enterprise Financial Services Corp. | EFSC,
-5.28% | Clayton, Mo. | 4.28% | 3.78% | 3.08% | 1.20% |
| Berkshire Hills Bancorp Inc. | BHLB,
-5.69% | បូស្តុន, ម៉ាស។ | 3.61% | 3.26% | 2.43% | 1.18% |
| ក្រុមហ៊ុន East West Bancorp Inc. | EWBC,
-8.36% | Pasadena រដ្ឋកាលីហ្វ័រញ៉ា | 3.77% | 3.50% | 2.61% | 1.16% |
| Texas Capital Bancshares Inc. | TCBI
-4.51% | ដាឡាសរដ្ឋតិចសាស | 3.22% | 3.01% | 2.08% | 1.14% |
| ក្រុមហ៊ុន Wintrust Financial Corp. | WTFC,
-5.73% | Rosemont, អ៊ីល. | 3.51% | 3.17% | 2.41% | 1.10% |
| WSFS Financial Corp. | WSFS,
-5.59% | Wilmington, Del ។ | 3.90% | 3.50% | 2.81% | 1.09% |
| ប្រភព: FactSet |
កុំនឹក: ភាគហ៊ុនបង្កើតប្រាក់ចំណូលចំនួន 20 ដែលលេខនិយាយថាអាចក្លាយជាអភិជន Dividend Aristocrats
ធនាគារចំនួន 10 ដែលអាចប្រឈមមុខនឹងបញ្ហានៅពេលមានជម្លោះ SVB Financial Group
As interest rates have risen, many banks have become more profitable because the spreads between what they earn on loans and investments and what they pay for funding has widened. But there are always exceptions.
Below is a screen of banks that are bucking the industry trend of expanding net interest margins, followed by another list of banks whose margins have widened the most over the past year.
On March 8, SVB Financial Group
-60.41%
ស៊ីវីប៊ី
sold $21 billion in securities for a loss of $1.8 billion. SVB is the holding company for Silicon Valley Bank of Santa Clara, Calif. It had $212 billion in assets as of Dec. 31.
The bank said it was repositioning to “increase asset sensitivity, to take advantage of the potential for higher short-term rates, partially lock-in funding costs, better protect net interest income (NII) and net interest margin (NIM), and enhance profitability.”
In light of the loss on the securities sales, SVB will raise $2.25 billion in new capital through two offerings and a private placement. The prospect of dilution to shareholders’ ownership positions resulted in the company’s shares sliding as much as 62% on March 9.
The entire banking industry seemed to take it on the chin on March 9, with the KBW Nasdaq Bank Index
-7.70%
BKX,
sinking 8%.
See Tomi Kilgore’s coverage for more details on SVB’s offerings, the securities sale and reaction.
Red margin flags
Before SVB Financial decided to take such a dramatic step, the movement of its net interest margin was signaling that the bank wasn’t well positioned for the combination of rising interest rates and slowing loan growth in the venture capital space.
A bank’s net interest margin is the spread between its average yield on loans and investments and its average cost for deposits and borrowings. This is an annualized calculation. Here’s how the NIM moved for SVB Financial over the past year:
SVB’s net interest margin narrowed considerably during the fourth quarter, and it widened only slightly from the year-earlier quarter.
So now the question is which other banks might face pressure because their net interest margins have contracted, or because their margins have only expanded slighlty?
Starting with a list of U.S. banks with total assets of at least $10 billion, and removing purer investment banks, such as Goldman Sachs Group Inc.
-2.06%
-3.86% ,
អេស។ អេស។
និង Morgan Stanley
អេស។
we looked at 108 banks.
A uniform set of net interest margins for the past five quarters isn’t available from FactSet for the full group — it is only available for 56 of the banks. So instead, we screened for net interest income (total interest income less total interest expense) divided by average total assets.
By this screen, 102 of 108 banks showed expanding margins for the fourth quarter from a year earlier.
Here are the 10 showing contracting margins over the past year, or the smallest expansions of margins:
ចុចលើសញ្ញាធីកសម្រាប់បន្ថែមអំពីធនាគារនីមួយៗ។
អាន មគ្គុទ្ទេសក៍លម្អិតរបស់ Tomi Kilgore ចំពោះទ្រព្យសម្បត្តិនៃព័ត៌មានដែលអាចរកបានដោយឥតគិតថ្លៃនៅលើទំព័រសម្រង់ MarketWatch ។
SVB Financial ranked 11th worst in the screen, with net interest income/average assets of 1.93% in the fourth quarter, up from 1.83% in the year-earlier quarter.
Most margin improvement
To end on a positive note, these banks showed the widest expansion of margins, based on net interest income divided by average assets:
កុំនឹក: ភាគហ៊ុនបង្កើតប្រាក់ចំណូលចំនួន 20 ដែលលេខនិយាយថាអាចក្លាយជាអភិជន Dividend Aristocrats
Source: https://www.marketwatch.com/story/the-10-banks-that-may-face-trouble-in-the-wake-of-the-svb-financial-group-debacle-50d6e49e?siteid=yhoof2&yptr=yahoo