Comerica, SVB Financial expected to see fast core NII growth: Jefferies

Mar. 17, 2022 3:58 PM ETComerica Incorporated (CMA), SIVBBAC, JPM, FITB, MTB, CBSH, RF, TCBI, FHN, CFRBy: Liz Kiesche, SA News Editor

Comerica Bank branch building

Sundry Photography/iStock Editorial via Getty Images

  • Comerica (NYSE:CMA -1.6%) is the large-cap bank and SVB Financial (NASDAQ:SIVB +1.2%) is the mid-cap bank expected to have fastest core net interest income growth (vs. Q4 2021 annualized levels) as the Federal Reserve starts raising rates, according to a group of Jefferies analysts led by Ken Usdin.
  • The analysts also updated their "stoplight" rankings, which show asset/liability-side traits. "On the way up, it favors banks with 1) more variable-rate loans; 2) shorter average life securities books; 3) low loan/deposit ratios; 4) high excess liquidity position relative to history; 5) high percentage of noninterest-bearing deposits; 6) low historical deposit betas," the analysts wrote in a note to clients.
  • The simple rank add-up: Comerica (CMA), JPMorgan Chase (JPM +0.9%), Fifth Third Bancorp (FITB -1.8%), M&T Bank (MTB -1.5%), and Regions Financial (RF -1.4%) for large-caps; Cullen Frost (CFR -1.6%), SVB Financial (SIVB), First Horizon (FHN +0.3%), Texas Capital Bancshares (TCBI -3.2%), and Commerce Bancshares (CBSH -0.9%) for the midcaps.
  • Bank of America (BAC) is still Mike Mayo's No. 1 pick among large banks
  • On Wednesday, the Fed increased its policy rate by 25 bps, its first hike since 2018, and most Fed officials now predict at least seven hikes this year

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