US Banks: Weighing the Cross-Currents: Fixed-Rate Asset Repricing vs Deposit Creep

研报英文原文证据摘录

US Banks: Weighing the Cross-Currents: Fixed-Rate Asset Repricing vs Deposit Creep

Executive Summary

The impetus of our analysis is to understand which banks are likely best positioned against a higher-for-longer backdrop with a

steeper yield curve, but with offsetting deposit pricing pressure concerns. As market expectations have shifted from 2-3 Fed cuts at the

start of 2026 to a forward curve now pricing in no cuts (with a potential hike), banks face a critical inflection point on balance sheet

repricing dynamics… Our analysis identifies which franchises are likely best positioned in today's higher-for-longer rate environment

coupled with a modestly steeper yield curve, while managing offsetting deposit pricing pressures. Our work suggests fixed-rate repricing is

entering its later stages, with only ~6bps of median NIM benefit remaining across our coverage over the next year.

Our estimates show CFG, KEY, FCNCA, PNC, STT and USB having the largest fixed-rate asset repricing tailwinds over the next year.

Through our analysis, we find these names benefit the most from fixed-asset repricing, though it is driven by different factors. We believe

CFG and KEY could realize the most benefit from CF swaps, with CFG largely a function of amortizing down losses from previously

terminated swaps, and KEY a function of swap maturities driving up receive rate and eliminating NIM drag. FNCNA, PNC, and STT should

see the majority of NIM benefit from securities repricing, while USB’s uplift is most concentrated in loan repricing.

Narrowing fixed-asset repricing opportunity. CFG emerges as one of our top picks with the largest total NIM uplift and superior deposit

franchise positioning.