德银-美股-银行业-美国中型银行业4季度结果-20171113-DEUTSCHE_BANK_RESEARCH-Mid_Cap_Banks_Bank_B_S_EOP_Loan_Dep._Gr._Returns_in_4Q17_42页_1mb

Summary of Bank Balance Sheet Trends for 4Q17

Core Content

This report provides an analysis of the balance sheet trends for banks in the United States, focusing on the performance of mid-cap banks as of 13 November 2017. It includes insights from the Federal Reserve H8 data and St. Louis Fed deposit data, highlighting changes in loan and deposit growth, liquidity, and other key metrics for both small and large banks.

Main Trends

Loan Growth

• Small Banks:

  • Q/Q Growth: 0.4% (vs. 0.5% in 4Q16), slightly below the 10-year median of 0.6%.
  • EOP Growth: 0.4% QTD.
  • Y/Y Growth: 4.7% (vs. 4.3% in 3Q17).
  • C&I Loans: Turned positive QTD, with growth of 0.6%.
  • Real Estate Loans: Continued growth, with C&I and CRE showing positive trends.
  • Consumer Loans: Grew at 2.0% QTD, with credit card loans showing strength (+2.3%).
  • Weaker Trends: Auto loans (-1.0%), HELOCs (-0.3%).

• Large Banks:

  • Q/Q Growth: 0.3% (vs. -0.1% in 4Q16).
  • EOP Growth: 0.3% QTD.
  • Y/Y Growth: 3.9% (vs. 3.8% in 3Q17).
  • C&I Loans: Grew at 1.4% QTD.
  • Real Estate Loans: CRE and multifamily loans showed weaker growth, with CRE at 0.1%.
  • Consumer Loans: Grew at 0.6% QTD, with credit card loans showing a slight increase (+0.3%).
  • Weaker Trends: Auto loans (+1.0%), HELOCs (+0.3%).

Deposit Growth

• Small Banks:

  • Q/Q Growth: 1.2% (vs. 0.9% in 4Q16).
  • EOP Growth: 1.2% QTD.
  • Y/Y Growth: 4.8% (vs. 4.6% in 3Q17).
  • Core Deposits: Grew at 1.3% QTD, with demand deposits growing at 7.9% and checking at 4.4%, offset by savings deposits decreasing at -1.6%.
  • Large Time Deposits: Grew at 1.5% QTD.

• Large Banks:

  • Q/Q Growth: 1.7% (vs. 1.6% in 4Q16).
  • EOP Growth: 1.7% QTD.
  • Y/Y Growth: 3.9% (vs. 3.8% in 3Q17).
  • Core Deposits: Flat EOP QTD, with Y/Y growth at 3.2%.
  • Large Time Deposits: Grew at 4.4% Y/Y.

Liquidity

• Small Banks:

  • Securities: Grew by 0.1% QTD, with a -0.2% average.
  • Cash: Increased by 11.9% QTD, with a 3.0% average.
  • Total Liquidity: Grew by 3.0% QTD, with a 0.2% average.

• Large Banks:

  • Securities: Grew by 0.9% QTD, with a 1.7% average.
  • Cash: Decreased by -0.9% QTD, with a -4.1% average.
  • Total Liquidity: Grew by 0.6% QTD, with a -0.1% average.

Borrowings

• Small Banks:

  • EOP Growth: 0.2% QTD, with a -4.2% average.

• Large Banks:

  • EOP Growth: -4.3% QTD, with a -0.5% average.

Implications for Bank Fundamentals

• C&I Loans: Showed a positive turn for both small and large banks, indicating improved demand.
• Earning Assets:
  • Small Banks: Grew at 0.9% QTD, which is healthier than large banks.
  • Large Banks: Grew at 0.3% QTD, which is weaker compared to the previous quarter.
• NIM (Net Interest Margin): Supported by the earning asset/funding mix, with small banks showing better performance in this regard.

Valuation and Risks

• Valuation: Mid-cap banks are trading at 15.3x FY18E EPS and 2.19x TBV, which are below historical medians of 13.5x and 2.4x.
• EPS Growth Estimates: First Call consensus estimates are now 10% for FY17 and 15% for FY18, which are above the historical range of 10%–12%.
• P/E Ratio: Mid-cap bank P/E on FY18E is 86% of the S&P P/E, which is within the historical range of 82%–101%.
• Upside Catalysts:
  • Stronger economic conditions (job growth, GDP).
  • Meaningful M&A activity.
  • Rising real estate prices.
• Downside Risks:
  • Increased macro concerns.
  • Declining longer-term interest rates.
  • Declining real estate prices.

Key Analysts

• Dave Rochester: Research Analyst, US Mid Cap Banks.
• Meng Jiao: Associate Analyst.

Upcoming Events

• Mar. 1: DB Mid Cap Bank 1-on-1 Conference.
• May 8-9: ASB Mgmt. in Boston.

Recent Research

• 11/8/17: Mid Cap Banks - 4Q17 Outlook: Neutral on Group, See Downside to Cons. EPS ex. Tax Cuts.
• 11/6/17: Mid Cap Banks - Bank B/S: EOP Loan Gr. Remains Elusive in 4Q17.
• 10/30/17: Mid Cap Banks - Bank B/S: Large/Small Bank Loans/Deposits Lower in Week 3 of 4Q17.
• 10/23/17: Mid Cap Banks - Bank B/S: Deposit Gr. Continues, Liquidity Builds.
• 10/16/17: Mid Cap Banks - Bank B/S: 4Q17 Kicks Off With Solid Deposit Growth.
• 10/9/17: Bank B/S: Loan Gr. Accelerates Into Quarter-End for Small Banks.

Summary Table

Notes

• The report is a weekly analysis of the Fed H8 data.
• The data is non-seasonally adjusted and includes all bank conversions from October 18, 1989.
• The report highlights the importance of tracking trends in loan and deposit growth, liquidity, and borrowings to assess bank fundamentals and market valuation.