These 7 tables show just how bad this 'crisis quarter' could be for earnings of the 20 largest banks

The first quarter marked a sea change for U.S. banks. Two high-profile failures of institutions with specific problems pointed to further challenges: The long period of super-easy money is coming to an end, as customers shop around for higher interest rates. And signs of an economic slowdown, including a decline in commercial property values, could lead to rising credit losses.

The decline in bonds’ market values during the period of rapid increases in interest rates that the Federal Reserve started in March 2022 has pushed bank’s regulatory capital ratios lower. Buying back shares also weighs on capital ratios. Investors might be well-served by paying more attention than usual to comments from bank executives in the earnings press releases and during earnings conference calls.to the defensive as liquidity measures are implemented,” wrote Wedbush analyst David Chiaverini in his industry earnings preview March 29.

Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page. Net interest margins aren’t calculated in a uniform manner in banks’ earnings filings with the Securities and Exchange Commission. So what follows is the largest banks’ estimated net interest income divided by estimated average earning assets for the first quarter and actual numbers for the previous four quarters, as calculated by FactSet:

How credit quality affects earnings As the Federal Reserve keeps raising interest rates in an attempt to cool the U.S. economy and lower inflation, banks are becoming more concerned about potential loan losses. This is exacerbated by maturing loans secured by commercial real estate — many of these loans have 10-year terms, which means a good number mature every year and renewing the loans will be difficult if collateral values have plunged.

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Wall Street bank earnings under pressure after crisisMost Wall Street banks are likely to report lower quarterly earnings and face a dour outlook for the rest of the year, with last month's regional banking crisis and a slowing economy expected to hurt profitability. 完璧 And the bigger they are, the harder they fall, Bring it. Manufactured crisis.
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