Unless the Fed lowers rates significantly in the coming months, banks' deposit costs are not likely to fall by much, S&P Global Market Intelligence wrote. NIMs should improve as fixed-rate assets reprice higher, though some CRE assets will struggle to find refinancing. Community banks will suffer loan losses as a result, though the problem won't be as bad as many fear, according to S&P. Check out the breakdowns of community banks' aggregate profitability metrics, deposit costs, CD balances, NIMs, and future credit costs.
Another S&P article discusses how capital raises are fueling bank M&A.
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Rob Blackwell
Chief Content Officer and Head of External Affairs
IntraFi
Arlington, VA
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Rob - we'll have to manage the repricing risk as it unfolds but here's hoping the Fed doesn't move rates down too fast.
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John Tyson
CFO;Chief Financial Officer - CFO
Altamaha Bank & Trust Company
Vidalia, GA
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Original Message:
Sent: 08-21-2024 13:45
From: Rob Blackwell
Subject: Community Banks to Feel 'Some Pain' in CRE; Capital Raises Drive Bank Deals
Unless the Fed lowers rates significantly in the coming months, banks' deposit costs are not likely to fall by much, S&P Global Market Intelligence wrote. NIMs should improve as fixed-rate assets reprice higher, though some CRE assets will struggle to find refinancing. Community banks will suffer loan losses as a result, though the problem won't be as bad as many fear, according to S&P. Check out the breakdowns of community banks' aggregate profitability metrics, deposit costs, CD balances, NIMs, and future credit costs.
Another S&P article discusses how capital raises are fueling bank M&A.
------------------------------
Rob Blackwell
Chief Content Officer and Head of External Affairs
IntraFi
Arlington, VA
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