Assessing the impact of tariffs on US banks

The emergence of tariffs led to a broad sell-off of US banks amid fears of slower economic growth or even a possible recession. Banks' first-quarter earnings season showed strong performance before the onset of tariffs, but ultimately might have left investors with more questions than answers.

In the episode, senior reporter Harry Terris shared the key takeaways from large banks' first-quarter results and highlighted commentary from JPMorgan Chase & Co., Bank of America Corp., Capital One Financial Corp., First Citizens BancShares Inc. and others. The results show a noticeable divide between "hard" data, such as consumer spending strength, and "soft" data, like stock market volatility and economic forecasts. Despite the uncertainties, major banks have largely maintained their financial guidance. However, they have adjusted loan growth expectations downward due to a more cautious approach from clients, reflecting a "wait and see" attitude amid the current economic climate.

Bank news lead Lauren Seay further discussed how tariffs are expected to negatively impact M&A activity, but also notes that the trade policies have not completely stymied bank deals, with large transactions like Columbia Banking System Inc.'s plans to purchase Pacific Premier Bancorp Inc. surfacing since tariffs were announced.

READ MORE about the impact of tariffs on US banks.

Tariffs stand to spoil favorable outlook for US banks

US banks' net interest margins are poised to expand as funding costs move lower, while earning assets mature and are replaced with higher-yielding loans and securities. But the Trump administration's broad suite of tariffs will serve as an overhang on the economy, drive credit costs higher and prevent earnings from growing in 2025.

Analysts cutting loan growth estimates at US banks

The analyst community has adopted a more cautious stance on US bank loan growth this year amid a slew of macroeconomic wildcards.

Tariffs spur volatility, challenge bond restructuring activity among US banks

Many banks have sought to restructure their underwater bond portfolios in recent quarters by selling lower-yielding securities at a loss and using the proceeds to pay down borrowings and invest at higher rates available. But investor sentiment toward the bank group has soured considerably since the April 2 tariff announcement limiting further restructuring that was anticipated.

Uncertainty chips at some US banks' loan growth, NII expectations in Q1 2025

Most US banks kept their 2025 guidance intact during first-quarter updates, but some amended their expectations over fears of an economic downturn.

Big bank Q1 earnings reports leave economic outlook murky

The biggest US banks attempted to give preliminary reads on an economic outlook that has been shaken by the Trump administration's tariff salvos, but bank executives themselves are waiting for the picture to clear.

US banks' Q1 credit loss provisions mostly below estimates despite uncertainty

Many US banks recorded lower-than-estimated provisions for credit losses in the first quarter even as macroeconomic uncertainty heightens.

JPMorgan Chase builds credit loss reserves in 'unusually uncertain' environment

Analyst questions focused on the outlook amid an upheaval in global trade policies. CFO Jeremy Barnum said the future "is obviously unusually uncertain" while Chairman and CEO Jamie Dimon predicted further declines in consensus earnings forecasts for many companies across industries as they report earnings, and that many more will withdraw their guidance.

Banks' already modest loan growth outlook in peril from tariff shock

Loans across domestically chartered US banks edged up just 0.2%, or 1.3% after seasonal adjustment, from Jan. 1 through March 26. Already conservative expectations for US bank loan growth are under further risk from the potential for a tariff-induced recession with executives saying that hat borrowers remained in wait-and-see mode during the period, reflecting uncertainties about policies under the Trump administration.

M&A, markets-related coverage

Analysts shrink US i-bank revenue expectations

Total investment banking revenue increased year over year for the largest US players in the first quarter, but the outlook for the remainder of 2025 has become murkier.

Two large public-bank deals show a pathway to M&A, advisers say

The two largest US bank M&A transactions of the year were announced just weeks after a marketwide sell-off that investment bankers said would chill deals.

Bank M&A advisers tell clients not to panic after deal values drop

Although stocks have regained some value, investment bankers say dramatic market movements still inhibit pending bank deals from moving forward. Bank deal advisers are reassuring clients that exchange ratios remain the same despite the price fluctuation, but most deals have still been put on ice until market conditions are more certain.

US bank M&A jolts back to life with 2 biggest deals of the year

The US bank M&A landscape surged back to life last week with a wave of announcements, including the two biggest deals of the year.

Tariff pause slows bank stock sell-off, but uncertainty still remains

In light of the tariff-driven uncertainty, analysts expect bank management teams to err on the lower end of their forward-looking earnings guidance as they report first-quarter earnings. They also expect banks to build their loan loss reserves due to the uncertain impact on credit trends.

Analysts cut M&A revenue expectations for advisers big and small

Expectations for M&A advisory fees are lower as a result of a deferral of the M&A boom predicted for 2025, while equity underwriting fees are expected to be lower than previously forecast.

Tariff-related selloff has chilling effect on bank M&A, advisers say

The state of bank stocks as a result of the tariffs will have a chilling effect on dealmaking similar to that of the onset of COVID-19 in 2020 and the failure of Silicon Valley Bank in 2023 and some deals talks will pause or break off entirely, while bank IPOs will be shelved.

Bank shares take worst hit of 2025; analysts suggest some stocks to target

Larger cap bank stocks with strong credit histories, durable balance sheets and loan portfolios with limited tariff or Department of Government Efficiency exposure and those with strong dividend yields could be attractive investments.

US bank M&A 'impossible' thanks to ongoing volatility – PNC CEO

Recent volatility is making bank M&A "impossible," PNC Financial Services Group Inc. Chairman and CEO William Demchak said although he expects "big consolidation" in the long term.

"Street Talk" is a podcast hosted by S&P Global Market Intelligence that takes a deep dive into issues facing financial institutions and the investment community.

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