As featured on the website Travilliannext.com on October 6, 2022
We’ve noticed a recurring theme in meetings between bank stock investors and bank management teams over the past several months.
In recent months, commentary from regional and community bank management teams in conversations with investors has been uniformly positive. Local economies are healthy with employment resiliency, loan growth remains solid (if not robust), deposit outflows have been slower to materialize than anticipated, margins are up, and there are no indications of material credit-related stress. When pressed on the outlook, bankers acknowledge the potential challenges ahead, including the darkening macro picture, negative news flow, and the reality that it simply takes time for recent actions (like rapid interest rate hikes) to filter through the system. That said, discussion of the challenges seems more hypothetical in nature, rather than a reflection of what bankers are seeing in their day-to-day business and local market economies today.
