While most banks are positioned for higher rates, institutions might be wise to consider the possibility that rates could turn the other way in the future, according to Darling Consulting Group President and CEO Matt Pieniazek. In the episode, Pieniazek discussed balance sheet positioning ahead of the rate hike cycle, the potential for securities portfolios to move further underwater as rates move higher, and how banks should evaluate how sensitive their deposit bases will be to the Fed's tightening cycle.

While a number of investors are looking for higher interest rates to drive bank earnings and stocks higher, not all investors are sold on the prospect. Even with the recent selloff, Brad Rinschler, managing partner at Down Range Capital Management, said in the latest Street Talk podcast that he believes valuations of many regional banks remain too high. In the episode, Rinschler and Connor Labozzetta, a partner at Down Range, discussed year-to-date performance of bank stocks, why they think many bank stocks could face pressure in the future and their favorite banks to own.

Many banks have been hesitant to invest excess cash before the Federal Reserve raises short-term interest rates, but they are likely leaving money on the table given the strong move in immediate rates that has already occurred, according to Piper Sandler's Scott Hildenbrand. In the episode, Hildenbrand, chief balance sheet strategist and head of the financial strategies group at Piper Sandler, discussed how banks should view their excess liquidity, investment opportunities in the current market and whether the outlook for interest rates and loan growth should change investment strategy.

A number of banks during fourth-quarter earnings season, including large players like Wells Fargo and Bank of America, unveiled plans to reduce overdraft and nonsufficient fees in 2022 as competitive pressure mounts from neobanks and regulators seek to increase their oversight of the issue. The group of banks that have cut or reduced their overdraft fees own close to 45% of U.S. deposits and likely will pressure many community banks and credit unions to follow suit, according to Lauren Seay, a banking reporter who has covered the topic for S&P Global Market Intelligence. In the episode, Seay explains why banks are making these changes now and discusses how the moves will impact earnings, the competitive landscape and even prompt more M&A activity.

The Federal Reserve's plans to raise interest rates and the return of loan growth will boost bank profitability but the gains might not come as quickly as the Street hopes and that should encourage more bank M&A activity, according to Greg Hertrich, head of U.S. depository strategies at Nomura. In the episode, Hertrich discussed how Fed actions will impact bank profitability and liquidity, whether those results will meet current expectations from the Street and how the performance will alter the bank M&A landscape.

The Federal Reserve might have to raise short-term rates sooner than expected and that could prompt the central bank to end the tapering of its bond purchases early in 2022, according to S&P Global Ratings Chief U.S. Economist Beth Ann Bovino. In the episode, Bovino discussed the outlook for economic growth, inflation and the labor markets, and how those factors will impact future Fed policy. 

TD Bank never turned its focus away from growth during the pandemic and the company continues see to see organic and acquisition opportunities, both in and outside of its traditional U.S. retail footprint, according to CEO Greg Braca. In the episode, Braca discussed the company's outlook for growth, including through potential acquisitions, balancing physical distribution with digital channels and the potential threat from fintechs.

Bank stocks and bank M&A activity have rebounded strongly from the depths of the pandemic and the factors driving the resurgence remain in place, according to KBW CEO Tom Michaud. In the episode, the CEO of the Stifel Financial unit discussed current bank stock valuations, the Street's view of the group, the competitive threat of fintechs, recent bank M&A activity, the outlook for transactions in 2022 and how the banking and advisory business has changed during his 10-year tenure as the firm's CEO.

The pandemic has put technology front and center for financial institutions as customers shifted transactions toward digital channels. Meanwhile, fintechs continue to attract even greater amounts of capital and have expanded their offerings to include more banking and insurance products, putting them in direct competition with traditional players. In the episode, three members of the S&P Global Market Intelligence financial institutions research team — Tim Zawacki, Tom Mason and Nimayi Dixit — discuss the intersection between fintech and the banking and insurance sectors. The group also discussed the key themes those companies will face in 2022, including the growth of underwriting based on algorithms in the life insurance business; usage-based insurance in the private auto business; venture funds continued support of fintechs and the pronounced shift of customers away from bank branches and into mobile banking apps.