19 Sep, 2025
Even with rate cuts, deposits still carry the day
Peak funding costs might be in the rearview mirror, but investors and bank acquirers continue to assign higher values to institutions with lower-cost deposit franchises. Many banks seem to have taken notice, recognizing that deposits represent the true value of a franchise.
In the episode, S&P Global Market Intelligence analysts Nathan Stovall and Zain Tariq discuss which banks have the strongest deposit franchises, what attributes they have and how deposits continue to drive valuation in the banking sector. They also share takeaways from the inaugural Deposit Conference, co-hosted with SouthState Bank Corp., where experts shared their views on niche strategies, including banking-as-a-service (BaaS), as well as the state of the competitive and regulatory landscape.
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M& key driver for many of the best large deposit franchises
EB Acquisition Co. LLC , the parent company of Mechanics Bank, topped S&P Global Market Intelligence's ranking of best deposit franchises among banks with more than $10 billion in total assets as of June 30, 2025.
Stride Bank remains the best deposit franchise among large community banks
Oklahoma-based Stride Bank NA outshone its peers again in S&P Global Market Intelligence's latest ranking of the best deposit franchises among banks with total assets between $3 billion and $10 billion.
Titan Bank retains top spot as the best small deposit franchise
Dallas-based Titan Bank N.A. outperformed again when evaluated against eight metrics used in S&P Global Market Intelligence's latest ranking of the best deposit franchises among banks with less than $3 billion in assets.
Despite looming rate cuts, strong deposit franchises still take the cake
Funding pressures have eased significantly from the fervor witnessed in the aftermath of the liquidity crunch in 2023. The Federal Reserve's rate cuts late in 2024 also offered banks some relief from higher deposit costs, which have fallen from the recent high point recorded in the third quarter of 2024. Still, the premium awarded to stronger deposit franchises remains on full display even as the Fed is expected to cut rates further by year-end 2025.
PNC strikes most expensive bank deal this year with FirstBank buy
PNC Financial Services Group Inc. paid up for FirstBank Holding Co., recording the most expensive deal of 2025.
The combination's deal value to tangible common equity ratio of 234.2% surpassed the 230.5% ratio on Bank First Corp.'s pricey July acquisition of Centre 1 Bancorp Inc. and far outstripped the median of the 20 most expensive bank deals of the year at 169.0%. The growth that should result from the addition of FirstBank's quality loans and deposits and Colorado expansion justified the higher price tag, industry experts said.
Regulators issued just 1 banking-as-a-service bank enforcement action in Q2
Analysts cited a friendlier regulatory environment and fewer banks entering the banking-as-a-service space as reasons for a slowdown in enforcement actions.
Certificate of deposit rates stuck in neutral as banks await Fed decision
After an initial wave of rate trims following the Federal Reserve's first cut in September 2024, deposit pricing for higher-cost certificates of deposit has largely stabilized.
Back-to-back bank buys ramp up as sellers come to market
Buyers are testing regulators' capacity for deal approvals by announcing deals before previously announced deals have closed.