In the episode, Anton Schutz, senior portfolio manager at Mendon Capital, offers his outlook for bank stocks in 2020 as well as bank M&A activity. The longtime bank investor said banks enjoyed a relief rally late in 2019 after being "oversold, underowned and hated" and the prospect of further increases in long-term rates and improvements in efficiencies will drive the group in 2020. Schutz also believes there is investor support for bank M&A, at least in the case of smartly-priced transactions. He said smaller acquirers remain in the catbird seat because they can evaluate a larger pool of potential sellers and have the optionality of selling to another institution.

Traditional banks face increasing competition from digital-only players, leading to further pressure on net interest margins. In the episode, Sandler O'Neill's co-head of investment banking and executives from First Horizon and South State Bank discuss the growth of digital-only deposit platforms, how have they kept banks from decreasing deposit costs despite Fed rate cuts and the investments that community and regional banks are making to combat the threat and improve their product offerings.

The importance of scale has been a driver of larger bank deals announced in 2019 but longtime analyst Nancy Bush is skeptical of the argument. In the episode, the veteran bank analyst, who will retire at year-end, discussed recent large bank M&A, the future of equity research, including the prospect of other analysts opening independent firms like her own, and whether she believes bankers truly have learned lessons from past downturns and are better prepared for an eventual turn in the credit cycle.

The current interest rate environment creates challenges for virtually all U.S. banks but some institutions, like Signature Bank in Rosemont, Ill., are still producing outsized returns. In the episode, Signature President and CEO Mick O'Rourke discusses how his bank has outperformed most banks, built prized noninterest-bearing deposits through superior service and technology and what changes he sees in the operating environment. ________ For more discussion on banks' efforts to modernize and use technology to compete effectively, join us in Charlotte, NC on Dec. 3 for an event focused on digital banking and innovation. https://www.spglobal.com/marketintelligence/en/events/in-person/sp-global-digital-banking-innovation-symposium?utm_source=banner

Financial institutions will move away from Libor, a reference rate that tracks nearly $400 trillion in financial contracts, in just a few years and Goldman Sachs still sees the group adopting the Secured Overnight Financing Rate, or SOFR, despite the recent volatility in the relatively new benchmark. In the episode, Goldman's head of Libor transition, Jason Granet, discusses how prepared the banking industry is for the transition away from Libor, what Goldman is doing today ahead of the move and how the recent volatility in SOFR doesn't change its status as the true replacement for Libor in the U.S., even over alternative benchmark rates that gained some prominence.