Net interest income has surged thanks to rising rates, but noninterest income has lagged as trading revenue has weakened, refi demand has softened and fees from deposit service charges have barely budged. Is this the new normal?
The Michigan company, which lost more than $1.4 billion in the aftermath of the financial crisis, is trying to become more of a commercial lender. Its recent agreement to buy a deposit-rich franchise in California could help it get there.
A slight decline in core deposits in the second quarter stoked worries that tighter liquidity is around the corner. Bankers are exploring responses beyond the typical CD rate special if third-quarter results show the trend is continuing.
Doug Bowers said the company has moved beyond past issues, including corporate governance shortcomings and the abrupt departure of his predecessor, and is ready to bring in more loans and core deposits.
The online lender, which focuses on high-earning millennials, is offering assurances that it will also serve Americans who make less money. But the company has not convinced critics, who say the plans are inadequate.