Banks are at Risk, with Contracting Margins; Analyst Releases List

• Recent research discovered that more than 10 banks are at risk of contracting margins.
• The list included the banks such as Customers Bancorp Inc., Sandy Spring Bancorp Inc., and more.
• The platform also included the details of the banks that benefited from the interest hikes.

The recent research findings disclosed that almost 10 banks including Customers Bancorp Inc., and Sandy Spring Bancorp Inc., are at risk, “showing contracting margins”, after the debacle of the commercial banking giant, the Silicon Valley Bank (SVB).

Previously, on March 10, the SVB Financial Group was closed by the California Department of Financial Protection and Innovation (DFPI) based on some unrevealed reasons. The department appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver, immediately after which the latter transferred the insured deposits of SVB to the newly created Deposit Insurance National Bank of Santa Clara (DINB).

Significantly, the sudden collapse of the SVB Group sank the whole market, immersing investors and banks in fear and alarm. For instance, Maxine Waters, the Democrat on the House Financial Services Committee commented that she is “alarmed” by SVB’s fall that “marks the second largest bank failure in US history”.

Notably, the analytical platform Morningstar asserted that though there were many banks that profited with the interest hikes, there are exceptions. The platform provided a list of banks that have expanded their margins as well as the banks that have contracted their margins over the past year.

Subsequent to the report, the Chinese reporter Collin Wu shared a Twitter thread about the ten banks mentioned by Morningstar under the title of the banks with contracted margins:

Interestingly, as per the list, Customers Bancorp, First Republic Bank, Sandy Spring Bancorp, New York Community Bancorp, First Foundation, Ally Financial, Dime Community Bancshares, Pacific Premier Bancorp, Prosperity Bancshares, and Columbia Financial are the ten banks that show the “smallest expansion of margins”.

In addition, the analytical platform has also displayed the list of 10 banks that exhibited the “widest expansion of margins” which included Comerica Inc, First Horizon Corp., M&T Bank Corp., Stellar Bancorp Inc., Enterprise Financial Services Corp, Berkshire Hills Bancorp Inc., East West Bancorp Inc, Texas Capital Bancshares Inc., Wintrust Financial Corp., and WSFS Financial Corp.