Mid-Cap and Regional Banks at an Inflection Point, Says Equity Research Director

Big Bank Earnings and Outlook

• 🏦 Big bank earnings for the quarter were solid, with fewer negatives than anticipated, although caution is expected for the second and third quarters.
• 📉 Reserve building was minimal compared to the COVID-19 crisis in 2020, with current levels flat on a basis point side and generally up about 1% late quarter.
• 📈 The next four to six weeks will be crucial for revealing the impact of trade wars, inflation, and other data points.
• 🗣️ CEOs of major banks expressed a surprisingly upbeat tone, indicating that current daily operations are not significantly reflecting broader market concerns.
• 💰 Net interest income outlooks were maintained or slightly raised by major banks, despite headwinds and uncertainty surrounding the yield curve.

Valuation and Investment Banking

• 📊 Bank valuations have