1Q Deposit Pricing Competitive, Pace Of Downward Pricing Actions Slowed In 1Q

Research evidence excerpt

1Q Deposit Pricing Competitive, Pace Of Downward Pricing Actions Slowed In 1Q

TD SECURITIES (USA) LLC INDUSTRY UPDATE

May 11, 2026

■Diversified Financials: Consumer Finance 1Q Deposit Pricing Competitive, Pace Of

Downward Pricing Actions Slowed In 1Q

Moshe Orenbuch THE TD COWEN INSIGHT

646 562 1495

We believe deposit costs at online banks will continue to decline from here through the end of

moshe.orenbuch@tdsecurities.com

2026, as we are now in a rate cut cycle, even though market is no longer assuming any more

Hoang Nguyen, CFA rate cuts this year. Most card issuers remain slightly asset sensitive, so fewer-than-expected

646 562 1337 rate cuts could be a positive for NIM for most card names.

hoang.nguyen2@tdsecurities.com

Burç Okumuş Generally, we believe that other factors such as credit quality and growth are likely more

212 468 8443 important now, though ALLY and SLM are generally bigger beneficiaries of lower rates and

burc.okumus@tdsecurities.com lower deposit costs given the more fixed nature of their asset bases.

Online banks have continued to be competitive in deposit pricing relative to the Fed funds

rate. The pace of downward pricing actions slowed in 1Q vs 4Q, and online banks generally

have continued to cut rates in 2Q, though we are seeing some banks increasing 1-year CD

rates. The next validation for easing deposit pricing competition would come from a bigger

decline in savings rates, which usually move after CDs in each up/down cycle. In general,

companies in our coverage have noted that betas had been higher than expected on the way

up, and their assessments have been that betas on the way down should also be more rapid,

should the Fed resume cutting rates.

Based on the latest filings (where applicable), COF and SYF are likely to see some headwind