Deposits

The Federal Reserve’s aggressive tightening is putting some pricing pressure on digital banks that rely on high-yield savings accounts. But the increases are not keeping pace with the central bank’s rate hikes, and the caution may continue in the face of economic uncertainty.

The company says it’s making progress on other parts of its business-model revamp — including a shift to lower-cost deposit sources — while regulators weigh its application to buy Flagstar Bancorp in Troy, Michigan.

Indiana-based Old National Bancorp says it has invested $1 billion in floors, collars and other credit hedges in case of a sudden shift in interest rate policy.

The Cincinnati bank plans to lean into its retail expansion in the southeastern U.S. after its deposits fell by $6 billion from the first quarter.

Executives said Wednesday that more than half of the deposits that left the Chicago trust bank were “nonoperational” in nature, or excess funds that institutional investors are moving elsewhere for higher returns. The outflow wasn’t unexpected as interest rates rise.

The New York bank reported a double-digit increase in profits in the second quarter. But larger than expected deposit withdrawals — some by cryptocurrency-business customers — raised questions about its ability to fund growth and hurt its stock Tuesday.

If the agency’s treatment of Bank of America is extended to the rest of the industry, it will cause widespread confusion and excessive regulatory burden.

The Federal Reserve’s aggressive rate hikes are leading corporate clients to demand higher deposit rates, according to industry consultants. Some banks are better positioned than others to weather the changing landscape.

The two regional banks announced plans to abandon nonsufficient fund fees and make other moves that will reduce the revenue they collect from cash-strapped consumers.

Data as of Mar. 31, 2022. Dollars in thousands.

Goldman Sachs’ Marcus, Synchrony Financial, American Express and Capital One Financial are among the banks that have recently raised their five-year CD yields. The price competition arrives as the Federal Reserve acts quickly to rein in inflation, spurring expectations that rates will continue to rise.

Banks need to come together to create interoperable tokenized deposits, as part of an effort to bridge the gap between traditional finance and blockchain.

Sustainable finance activists argue in a new report that big companies are underreporting their emissions because they aren’t accounting for what banks do with their deposits. The findings add to a debate over how to measure firms’ contributions to climate change.

Online-only banks that place a premium on personalized customer service receive higher satisfaction ratings, according to a new survey by J.D. Power.

Year to date Dec. 31, 2021. Dollars in thousands.

The Federal Reserve’s forceful moves to fight inflation are resetting expectations about how quickly banks will need to start raising their deposit rates.

The technology giant is partnering with a fintech firm to deploy $25 million of deposits at minority-owned banks, community development financial institutions and other mission-focused lenders. It’s part of a broader effort by the iPhone maker to combat systemic racism.

In a recent survey, just over half of community bankers expressed concern that the central bank will harm the U.S. economy by raising rates too fast in its quest to contain inflation.

Executives at the Alabama bank anticipated that some corporate deposits would start to leave during the first quarter as interest rates rose. Instead, deposits grew to a record $138.7 billion.

On Dec. 31, 2021. Dollars in thousands.