Deposits

Executives say Bank of New York Mellon can maintain its upbeat forecasts on net interest income and perhaps beat its expense-control goals. However, they warn deposits could shrink in the second half.

The Pittsburgh superregional reported lower second-quarter earnings as net interest income tapered and deposits fell from the previous quarter. CEO William Demchak predicted further weakening of loan demand and NII through the current quarter.

The brokerage firm reported that during the second quarter bank deposits fell 31% from a year earlier. But executives suggested that the worst is now over.

The average credit union member had saved $286 less in March compared to a year earlier. That was the largest per-member drop in credit union history, fueled by rising costs of living and more aggressive competition.

For now, worries about more bank failures have faded. But in the wake of the recent industry turmoil, higher funding costs are expected to weigh on banks' second-quarter results.

Smaller regional banks kept funding costs in check and relied on robust noninterest income to earn their spot as a 10 top-performing bank on American Banker's annual ranking.

In June's roundup of American Banker's favorite stories: Attempts to steal consumer data target a growing number of banks, credit unions secure deposits outflowing from other financial institutions, Citizens recruits 50 former private banking employees of First Republic and more.

Banks are simultaneously looking to shed their obligations under laws like the Community Reinvestment Act and begging the government for more support in the form of higher deposit insurance limits.

The Fed's aggressive tightening has been a boon for money markets, which have drawn investors seeking a haven from volatility and tiring of the skimpy rates on bank accounts.