Net interest margin

With high deposit and borrowing costs persisting amid the Federal Reserve's campaign against inflation, lenders face stress on their net interest margins and the potential of troubled loans ticking up.

The Fed’s decision to cut its benchmark interest rate amid growing coronavirus concerns is bound to have an impact on banks, but just how broad and how deep remains to be seen.

David Becker, who founded First Internet Bank two decades ago, says traditional banks' digital-only ventures are only making his bank look more mainstream.

Count Citizens Financial’s Bruce Van Saun among those who think interest rate cuts could halt by mid-2020. The key, he says, is to focus on delivering services customers are willing to pay fees for and to skillfully reprice deposits until then.

For the third time in five months, the San Francisco bank made a downward revision Monday to its guidance on net interest income. An executive cited the impact of lower interest rates.

With long-term interest rates at historic lows, mortgage refinancing is coming on strong. But that additional revenue may not be enough to offset net interest margin pressures and lost servicing income.

Bank of America says rate cuts could reinvigorate mortgages and that its digital and cards strategies will help it grab more market share to offset shrinking margins.

The Minneapolis bank reported growth across several lending and noninterest income categories in the second quarter, which offset net interest margin pressures and declining deposit service fees.

Selling $1.6 billion in mortgages, and paying off a similar amount of wholesale borrowings, will allow the company to expand its net interest margin in 2019.

The Cincinnati bank reported strong profits, but its efforts to lower credit risk curbed lending as expenses rose in the first quarter.

The Providence, R.I., company reported a double-digit increase in quarterly profits despite a year-over-year decline in fee-based revenue.

Total loans fell 1.6% at the North Carolina-based regional bank, which has been scaling back in key segments such as residential mortgages and auto. Wider margins offset that reduction, but earnings were flat and revenue growth small.

The Pittsburgh company benefited from loan growth and higher interest rates, though fee income fell and expense rose in the third quarter.

The regional bank reported an 8% gain in fee income and trimmed costs amid 1% loan growth.

The Atlanta company's profits rose on stronger net interest income and investment banking income as well as a tax maneuver.

Executives at BB&T, KeyCorp and Citizens are milking commercial lending niches and balancing cost control with new investments while waiting for more rate hikes to fatten margins.