Three under-the-radar takeaways from big-bank earnings

• Key Insight: Banks are weighing what to do with excess capital that they'll accumulate as a result of regulatory changes currently taking shape.
• Supporting data: The nation's largest bank, JPMorganChase, currently has $40 billion of excess capital.
• Expert Quote: "It's a nice problem to have. We're going to drop a point of capital into our pocket, and we'll figure it out when it shows up," said PNC CEO Bill Demchak.

During last week's kickoff to bank earnings season, a few topics grabbed most of the attention: the AI revolution, the economic fallout from the Iran war and the question of how much risk the rise of private credit poses.

But the earnings calls covered a lot of ground, and it's worth digging into a few themes that didn't attract as much notice. Here's a look at three under-the-radar takeaways from a busy start to earnings season.

Crypto fades from view, for now

In last week's calls, one word was mentioned conspicuously less than in previous quarters: crypto.

Just last year, digital currencies were still the tech revolution du jour. As the crypto-friendly second Trump administration took power and Congress passed the GENIUS Act, bank CEOs fielded numerous questions from investors about how they planned to use the new technology.

"I think there's a lot of reason to be excited and interested in these things," David Solomon said during Goldman Sachs' fourth-quarter earnings call, regarding tokenization and stablecoins.

"We'll be fine. We'll have the product," Brian Moynihan said of stablecoins during Bank of America's call that week.

One quarter later, neither CEO mentioned crypto, stablecoins or tokenization even once during their earnings calls.

And on Monday, Wells Fargo CEO Charlie Scharf told an interviewer that he sees use cases for stablecoins in inflation-prone countries and in cross-border payments, before adding: "Beyond that, it's not clear to me that there's a winning edge here."

Of course, not all banks went silent, or sounded cautious, on the topic of cryptocurrencies and stablecoins. During Bank of New York Mellon's earnings call last week, CEO Robin Vince spoke at length about the bank's involvement in digital assets, including its selection to provide custody of them for PayPal. Among banks, BNY has long been sought to be at the leading edge of crypto adoption.

But at several other big banks, executives had less to say during first-quarter earnings season. Whether that means the technology is less important to banking than first thought, temporarily ceding the spotlight to AI, or simply taking time for the industry to absorb remains to be seen.

Are declining deposit costs a thing of the past?

Last fall, banks' deposit costs began a long-awaited decline when the Federal Reserve resumed interest rate cuts for the first time since 2020.

The Fed's actions had an impact. Among 48 publicly traded banks that reported first-quarter earnings through April 17, funding costs were lower compared with the fourth quarter of 2025, analysts at Brean Capital wrote Monday in a research note. Deposit costs fell by about 15 basis points quarter over quarter for those banks.

Still, it's unclear how much banks will be able to keep reducing those costs, now that the outlook for further rate cuts has dimmed. 

At Truist Financial in Charlotte, North Carolina, average total deposit costs have been shrinking since the middle of 2025, coming in at 1.55% for the first quarter. Earlier this year, the $544 billion-asset bank was expecting a federal funds rate cut this month and another one in July. 

But the Federal Open Market Committee held the benchmark rate steady in January and March, as policymakers sought clarity on the economic outlook, which has been clouded by the Iran war and inflationary pressure. Truist, in response, revised its outlook to exclude upcoming rate cuts, with Chief Financial Officer Mike Maguire saying last week that the bank expects "the federal funds rate will remain unchanged throughout 2026."

As a result, Truist's full-year net interest income guidance now calls for 2%-3% growth, down from 3%-4% growth it had predicted in January. The bank did not provide an outlook for deposit costs, but Maguire said rate competition was a factor in the bank's decision to lower its net interest income guide.

"We're seeing a little bit more yield-seeking and rate awareness in the market across the businesses," he said. "That's where the pressure is really coming from, that drove our outlook a little lower."

The Brean analysts wrote that bank clients are demanding "more for their funds due to higher U.S. Treasury rates and the clear Fed comments about no near-term rate cuts."

What to do with excess capital?

Bloomberg

The recent suite of regulatory proposals to modify capital requirements at the big banks will likely mean increased share repurchases, expanded lending and accelerated investments in certain lines of business, large bank leaders said last week.

The banks won't divulge the full details of plans for possible excess capital until the rules are finalized, executives said. Most of the largest banks, though, are targeting decreases in their Common Equity Tier 1, or CET1, ratios, which is a key measure of a bank's capital against its risk-weighted assets.

Bank of America Chief Financial Office Alastair Borthwick told analysts that the company is "in a good place," but the proposed rules should give the bank more flexibility.

"That's allowed us to do a little bit more buyback, it's allowed us to put out a little bit more balance sheet," Borthwick said during BofA's earnings call. "We're gaining a little more confidence."

The Charlotte, North Carolina-based company paid $2 billion in common dividends and bought back $7.2 billion of common shares in the first quarter, which helped drive down its CET1 ratio to 11.2% from 11.4% the prior quarter.

Citi CFO Gonzalo Luchetti said part of his bank's earned capital is being used to grow business, but the company also bought back $6.3 billion of stock in the first quarter. The repurchases were up from $4.5 billion the prior quarter. Luchetti said Citi is near the end of the $20 billion buyback plan it authorized last year.

JPMorganChase has steadily been decreasing its CET1 ratio, which peaked at 15.7% at the end of 2024 and now sits at 14.3%. CEO Jamie Dimon has repeatedly emphasized that he prefers not to accelerate stock buybacks or dividends, and instead to use capital on business investments and "serving clients."

"The way you see us serving clients: we have more bankers, innovation economy, more global banking, doing commercial banking overseas, opening countries, opening payment systems, opening branches — that is ultimately what deploys capital over time," Dimon said during JPMorgan's first-quarter earnings call. "Building the client base. It doesn't happen overnight."

Dimon estimated last week that JPMorgan, the nation's largest bank by assets, currently has about $40 billion of excess capital.

Meanwhile, PNC Financial Services Group CEO Bill Demchak said his bank has increased its buybacks and deployed capital into growing its franchise, but he didn't specify how the company may use excess capital going forward.

"It's down the road," Demchak said, referring to the finalization of the rules. "Then it'll be a whole new environment, and we'll figure out what we do at that point in time. But it's a nice problem to have. We're going to drop a point of capital into our pocket, and we'll figure it out when it shows up."