The divide highlights a lingering question about how much commercial and retail depositors value cutting-edge technology over price — and whether midsize banks can keep pace with bigger rivals when it comes to tech investments.
Profits soared at the Dallas bank as recent interest rate hikes and ongoing expense cuts outweighed weakness in the company’s loan book and in its fee income.
Look for banks to boost dividend payouts, expand into new markets, increase their tech spending and, eventually, ramp up their C&I lending. But don't expect much in the way of M&A.
Though business owners are more optimistic about the direction of the economy since the tax law was passed, it's doubtful their borrowing will increase meaningfully until they see more signs of more robust growth, bankers say.
Apart from a one-time adjustment for deferred taxes, the Dallas company reported strong gains in net interest income and meaningful improvement in all of its key performance ratios.
The Dallas company reported strong profits in the third quarter as higher yields on loans and improved cost control more than offset slight declines in loan balances and earning assets.
The Dallas company has extinguished talk of a potential sale after aggressively cutting costs over the past year. But concerns about its future — including its ability to find new sources of revenue — remain.
Flush with cash, many commercial firms are also opting to pay down debt rather than take on new loans, and those seeking financing aren’t always turning to banks to meet their needs.
