Can those double-digit ROEs last?

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Anemic loan demand and contracting net interest margins hurt overall profitability for banks with more than $50 billion of assets last year.

Revenue growth for this group of banks — ranked here by their returns on average equity across three years — was a median of 2.84% last year, half as much as it was for 2018.

Their median return on average equity for last year was still in the double digits at 10.19%, but tumbled 111 basis points from the year before.

With the pandemic still going strong, an even more dramatic decline in revenue and profitability is likely this year, said Claude Hanley, a partner with Capital Performance Group, which compiles our annual rankings.

Core deposit growth — at a median of 6.54% — was huge compared with the 0.59% posted in 2018. This surge far exceeded loan growth, which was essentially flat. The median loan growth of 4.10% was just 13 basis points higher than the prior year. As a result of the imbalance, the median loan-to-deposit ratio declined by 230 basis points, to 84.93%.

"This dynamic will become more pronounced in 2020, given the significant influx of deposits that larger banks have experienced since the onset of the pandemic this spring," said Hanley. "And the resulting excess liquidity will put additional pressure on net interest margins."

View Table
2019 Rank Institution/Ticker Location Total Assets ($000) 3-Year Avg.
ROAE
(%)
ROAE (%) ROAA (%) Net Income ($000) Pre-Tax Net Income Growth (%) Efficiency Ratio FTE (%) Net Interest Margin FTE (%) Demand Deposits/ Total Dep. (%) Net Loan Growth (%) One-Year Gap/ Assets (%)
1 SVB Financial Group (SIVB) Santa Clara, CA 71,004,903 17.92 20.34 1.87 1,184,717 15.37 50.09 3.51 5.11 17.12 39.28
2 Comerica Inc. (CMA) Dallas, TX 73,402,000 13.85 16.39 1.68 1,198,000 (0.17) 52.17 3.54 47.47 0.49 64.12
3 Northern Trust Corp. (NTRS) Chicago, IL 136,828,400 13.75 14.01 1.27 1,492,200 (0.71) 67.23 1.60 12.94 (3.31) 37.28
4 U.S. Bancorp (USB) Minneapolis, MN 495,426,000 13.31 13.04 1.46 6,946,000 (0.98) 54.73 3.06 20.80 4.48 28.75
5 Fifth Third Bancorp (FITB) Cincinnati, OH 169,369,000 13.18 12.57 1.53 2,512,000 13.64 55.24 3.31 7.33 15.81 37.97
6 JPMorgan Chase & Co. (JPM) New York, NY 2,687,379,000 12.08 13.99 1.33 36,431,000 8.42 56.51 2.46 25.32 (2.52) 21.54
7 Huntington Bancshares (HBAN) Columbus, OH 109,002,000 11.99 12.21 1.31 1,411,000 1.86 56.47 3.25 24.72 0.76 24.92
8 Signature Bank (SBNY) New York, NY 50,616,434 11.66 12.70 1.20 588,926 14.49 39.39 2.72 11.46 6.74 11.96
9 PNC Financial Services (PNC) Pittsburgh, PA 410,295,000 11.40 11.14 1.35 5,418,000 0.81 58.74 2.89 10.88 6.04 29.12
10 M&T Bank Corp. (MTB) Buffalo, NY 119,872,757 11.06 12.27 1.61 1,929,149 1.53 55.99 3.84 34.18 2.77 45.59
11 Wells Fargo & Co. (WFC) San Francisco, CA 1,927,555,000 10.77 10.14 1.05 20,041,000 (17.93) 67.40 2.73 4.55 1.72 23.15
12 KeyCorp (KEY) Cleveland, OH 144,988,000 10.39 10.32 1.19 1,717,000 (8.95) 60.69 3.04 2.58 5.77 34.54
13 First Republic Bank (FRC) San Francisco, CA 116,263,634 10.21 10.06 0.88 930,329 7.19 61.88 2.85 11.65 19.59 7.33
14 Zions Bancorp. (ZION) Salt Lake City, UT 69,172,000 10.03 10.84 1.17 816,000 (8.64) 60.59 3.54 11.64 4.39 31.70
15 Regions Financial Corp. (RF) Birmingham, AL 126,240,000 9.62 9.84 1.26 1,582,000 1.55 57.58 3.45 35.26 0.14 31.38
16 Truist Financial Corp. (TFC) Charlotte, NC 473,078,000 9.50 9.49 1.31 3,237,000 (1.02) 56.54 3.42 27.61 106.59 27.89
17 Bank of America Corp. (BAC) Charlotte, NC 2,434,079,000 9.20 10.24 1.14 27,430,000 (5.59) 57.54 2.43 28.11 3.75 29.62
18 Citizens Financial Group (CFG) Providence, RI 165,733,000 8.40 8.33 1.10 1,791,000 2.97 57.27 3.16 3.18 3.79 31.16
19 Popular Inc. (BPOP) Hato Rey, PR 52,115,324 8.37 11.75 1.33 671,135 9.78 55.92 4.43 18.65 3.84 29.23
20 People's United Financial (PBCT) Bridgeport, CT 58,589,800 7.05 7.36 1.01 520,400 11.67 57.15 3.14 22.47 25.24 16.86
21 TD Group U.S. Holdings () Wilmington, DE 408,604,662 6.60 7.42 1.00 3,863,665 11.64 54.37 2.53 5.46 4.54 31.08
22 New York Community Bancorp (NYCB) Westbury, NY 53,640,821 6.41 5.93 0.76 395,043 (6.57) 49.29 2.01 7.68 4.35 (18.44)
23 Citigroup Inc. (C) New York, NY 1,951,158,000 5.34 9.92 0.98 19,467,000 1.91 57.94 2.69 3.25 2.32 29.58
24 BMO Financial Corp. () Chicago, IL 172,874,960 4.67 5.98 0.68 1,098,548 19.84 67.60 2.37 22.13 8.45 11.58
25 BBVA USA Bancshares () Houston, TX 93,603,347 3.46 1.10 0.16 153,407 (239.27) 63.64 3.17 27.15 (1.91) 36.67
26 BNP Paribas USA () New York, NY 125,300,535 3.12 2.34 0.34 429,993 (148.74) 83.34 2.11 3.96 4.62 5.86
27 MUFG Americas Holdings () New York, NY 170,810,000 2.32 (4.44) (0.44) (751,000) 264.85 78.44 1.95 7.08 2.13 10.36
28 HSBC North America Holdings () New York, NY 249,096,021 (1.27) 0.11 0.01 25,299 170.81 87.30 0.84 20.67 (1.23) 13.56
Median for all 28 institutions 140,908,200 9.82 10.19 1.18 1,451,600 1.71 57.40 2.97 12.30 4.10 29.18
Average for all 28 institutions 468,432,057 9.09 9.48 1.06 5,090,315 4.28 60.04 2.86 16.55 8.80 25.84

Source: Capital Performance Group analysis of data provided by S&P Global Market Intelligence. Ranking is of top consolidated bank holding companies, banks, and thrifts with total assets of more than $50 billion as of 12/31/19 and is based on three-year average ROAE from 2017 to 2019. Additional data is for the 12 months ended 12/31/19; year-over-year changes compare 2019 to 2018. Financials are from SEC filings. If unavailable, regulatory financials were used. Ties broken using the 2019 ROAE and subsequently the 2018 ROAE.

Excludes industrial banks, nondepository trusts, foreign banks, and bankers' banks, as well as institutions with credit cards to total loans of more than 25%, loans to total assets of less than 20%, or loans to total deposits of less than 20% at 12/31/19. Excludes institutions with a leverage ratio of less than 5%, Tier 1 riskbased capital ratio of less than 6%, or total risk-based capital ratio of less than 10% during any quarter in the ranking period. Excludes institutions that received a tax benefit of greater than 10% of net income or that did not report data for any year in the ranking period. Also excludes institutions that have fewer than five depository branches and are owned by a company not primarily focused on commercial or retail banking. Based on the preceding criteria, 20 institutions in this asset size range were excluded from the ranking.
Regional banks National banks