Higher-for-longer interest rates are dampening commercial loan demand at regional banks, but Texas expansions are helping two midsize lenders,
The Ohio-based banks are seeing more stability from business clients in the Lone Star State than in some other parts of their footprints,
While the Southeast, including the Carolinas and Florida, has been core to both banks’ growth plans, lending in the land where everything’s bigger has been helping them offset the negative impacts of economic uncertainty at a time when the near-term interest rate outlook remains unknown.
Texas, Florida and North Carolina have all consistently seen a rise in gross domestic product, population and company relocations in the last five years, priming them for financial institutions’ expansion plans.
“Texas has been a really nice story for us,”
The $214.5-billion
“I really like our new colleagues,” who are led by market president Clint Bryant, Steinour said Friday in an interview. He added that the Texas economy is “booming.”
Texas is the most recent initiative, but
To date, the new markets and verticals have produced a loan pipeline “approaching $2 billion,” as well as a sizable deposit portfolio, Chief Financial Officer Zach Wasserman said on the conference call. “The early traction has been really positive,” he said.
Huntington reports loan growth, higher funding costs
The bank reiterated previously stated guidance calling for full-year 2024 deposit growth in the 2% to 4% range, with Wasserman suggesting the end result would be nearer the top end.
In a similar vein, Steinour labeled
Approximately 40% of the first-quarter loan and deposit growth that
Investors appeared to view
Fifth Third beats estimates
While
Overall, the bank brought in $480 million of net income in the first quarter, down 2% sequentially. The bank beat analysts’ estimates on net interest income, expenses and fees. Its stock price was up 6% Friday, to $36.25.
Piper Sandler analysts wrote in a note that most investors expected
Spence added that any loan growth will likely be driven by taking market share.
“The places where we are expecting to see growth in the second half of the year are the places where we made investments to be able to do it,” Spence said.
In 2023,