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.

Some regional banks looking to divest branches have attracted buyers by splitting up the branches and selling them to multiple community banks at once. In the episode, DD&F Consulting President Randy Dennis, who has worked with banks on some of those deals, discussed his outlook for future branch sales, bank liquidity levels and how institutions are evaluating their branch networks in a post-pandemic world where digital adoption has grown.

Bank M&A activity has picked up as institutions face revenue pressures and increasing customer demands to improve technology offerings, and more institutions could pursue to sales as they see some of their strong peers decide to partner with other institutions. In the episode, Collyn Gilbert, director of strategy at Valley National Bancorp, discussed M&A activity, balancing branches against digital channels, competition from neobanks and operating with dual markets in the Northeast and Florida. For more discussion on bank M&A, join us Sept. 8 to hear the changing drivers and considerations for successful deals in the industry post-pandemic, featuring leading advisors who have been active dealmakers in the last few years. Click here to register for the webinar.

In the episode, Banc of California President and CEO Jared Wolff discussed his outlook for community bank M&A, the health of small business borrowers and their appetite for expansion, and the state of the economic recovery and the potential impact from the emergence of the COVID Delta variant. Wolff also discussed Banc of California's multi-year turnaround that has transformed the company's balance sheet composition, capital structure and management team.

Citizens Financial Group Inc. sees stronger organic growth opportunities than peers, the company remains on the pursuit for acquisitions after announcing plans to acquire the East Coast branches and national online deposit business of HSBC Bank USA NA. In the latest Street Talk podcast, Citizens Financial Chairman and CEO Bruce Van Saun discussed the HSBC deal, the company's appetite for future acquisitions, balancing physical branches against digital offerings and the outlook for credit quality and loan growth.

As bank M&A continues to heat up, investors could increasingly receive nice pops on their stakes in institutions selling for notable market premiums. In the episode, Anton Schutz, president and CIO Mendon Capital, discussed what has driven bank stock valuations and recent bank deals as well as his outlook for future bank stock performance and M&A activity, including mergers of equals, or MOEs.

Revenue pressures from excess liquidity could create opportunities for community banks to take market share while competitors retreat. In the episode, Jeff Marsico, president at bank advisory firm Kafafian Group, and Jeff Weaver, president and CEO at Dallas-based American Bank suggested that banks should take a contrarian view to the challenging revenue environment and build core deposits, lend to industries most heavily impacted by the pandemic and invest in technology to remain relevant.

In the episode, Jeff Davis, managing director at Mercer Capital, said the real risk facing the U.S. banking sector is that interest rates do not increase materially from current levels and that excess liquidity remains on balance sheets longer than many expect. Banks' traditional revenue streams have also come under pressure at a time when digital adoption has accelerated considerably due to the pandemic. Davis believes banks have little maneuvering room and expect more institutions to look to M&A to cut costs associated with branches to offset revenue headwinds.

M&A and fundraising activity in the fintech sector has started a torrid pace in 2021 and shows no signs of slowing. In the episode, Greg Smith, managing director at fintech-focused investment bank FT Partners, discussed recent M&A and fundraising trends in the fintech sector and activity from special purpose acquisition companies in the space. He also offered his view of fintech valuations, which subsectors have garnered the most interest and his outlook for dealmaking activity, including between banks and fintechs.