Capital markets activity from US banks plummets in June

The overall total value of capital markets issuance from U.S. banks plummeted in June despite month-over-month increases from subordinated debt offerings along with preferred and common equity.

Amid a continuing uncertain economic environment, capital raised by U.S. banks in June fell to $6.08 billion, a 53.2% decline month over month and 27.9% decline year over year, according to S&P Global Market Intelligence data. The drop was driven by a reduction in the value of senior debt issuance, which fell 79.1% month over month and 53.8% year over year to $2.62 billion, and was the lowest total in a calendar month since November 2021.

Debt continues to lead the way

Still, June marked the seventh straight month in which senior debt generated the highest total value, and it was followed by subordinated debt offerings at $1.38 billion, marking the first month since August 2021 that the total cleared the $1 billion threshold. Subordinated debt climbed year over year from $1.19 billion in June 2021.

Preferred equity and common equity capital raises saw drastic month-over-month increases in June. Preferred equity jumped to $1.26 billion in June from $212.1 million in May, while common equity increased month over month to $818.9 million from $115.66 million.

However, preferred equity declined on a year-over-year basis, falling from $1.49 billion in June 2021. Common equity did increase on a year-over-year basis, from $75.77 million in June 2021.

The preferred activity received a lift from the U.S. Treasury Department's Emergency Capital Investment Program. Under the program, the agency makes preferred stock investments in community development financial institutions and minority depository institutions.

Ponce Financial Group Inc. and Broadway Financial Corp. are both taking part in the program and raised $225 million and $150 million, respectively, in June.

Largest issuers among U.S. public banks

JPMorgan Chase & Co. raised the most in June thanks to two senior debt offerings on June 7 totaling $2.5 billion.

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PNC Financial Services Group Inc. raised the second most among public banks with its $850 million subordinated debt offering. Six other banks completed subordinated debt offerings in June, ranging from First Guaranty Bancshares Inc.'s $15 million to Berkshire Hills Bancorp Inc.'s $100 million.

PacWest Bancorp was the only other bank with at least $500 million in capital raises in June as the firm completed a $513.3 million preferred equity offering.

Wintrust Financial Corp. raised the fourth-most capital in June and was the only public bank to complete a common equity offering in June. The bank completed a $296.7 million offering in early June.