trending Market Intelligence /marketintelligence/en/news-insights/trending/qNmyR5qBFtH-opHwbvdeyQ2 content
BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
PRIVACY & COOKIE NOTICE
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *

* Required

In this list

Top 50 largest US banks and thrifts in Q3'18

A New Era For Blockbuster Bank M&A

2018 US Property Casualty Insurance Market Report

Street Talk Podcast

Street Talk Episode 23 - As More Banks Reach for Yield, Advisers Urge Caution

Fintech

Fintech Funding Flows To Insurtech In February


Top 50 largest US banks and thrifts in Q3'18

Thirty-five of the 50 largest U.S. banks posted a quarterly increase in assets during the third quarter. The top three, JPMorgan Chase & Co., Bank of America Corporation and Citigroup Inc., added over $85 billion in assets combined in the third quarter.

RBC US Group Holdings LLC, which was not included in the second-quarter ranking due to the filing date of its Y9C report, entered the top 50 at No. 31 with $120.11 billion in assets.

SNL Image

Methodology

To conduct this analysis, S&P Global Market Intelligence examined the largest U.S. banks and thrifts by assets with a deposits-to-assets ratio of at least 25% for the quarter ended Sept. 30. Banks and thrifts are exempted from the deposits-to-assets ratio criteria if they hold more than $20 billion in deposits as of the most recent quarter.

To compile a pro forma ranking, S&P Global Market Intelligence calculates pro forma assets after taking into account pending M&A transactions or deals that have closed after quarter-end. To be included in the pro forma adjustments, the deal value must be at least $500 million or involve assets or deposits in excess of $2 billion. Loan portfolio deals are not included because of a general lack of data on both deal consideration and the impact on total assets.

Newly announced mergers, acquisitions and divestitures

People's United Financial Inc.'s assets and deposits were raised by $2.97 billion and $1.95 billion, respectively, to account for the pending acquisition of Belmont, Mass.-based BSB Bancorp Inc., which was announced Nov. 27.

SNL Image

Did you enjoy this analysis? Click here to set up real-time alerts for data-driven articles on the U.S. financial sector.

Click here to access the top-50 table in Excel.



A New Era For Blockbuster Bank M&A

Feb. 08 2019 — The days of large bank acquirers pursuing deals to plant a flag in a new market might be receding as more buyers see transactions as a way to support much needed investments in technology.

In the latest Street Talk podcast, we discuss how BB&T Corp. touted that prospect when announcing its merger with SunTrust Banks Inc. and talk about the implications for future big-ticket transactions.

BB&T said the deal, one of the largest in U.S. banking history, will create a premier financial institution fueled by increased capacity to invest in innovation and talent. That stands in stark contrast to other blockbuster deals announced before the financial crisis, when buyers sought to create financial supermarkets or extend their footprints to new markets.

The size of BB&T's landmark transaction might have caught some members of the investment community off guard since Chairman and CEO Kelly King suggested the company was focused on organic growth and internal initiatives to drive costs lower. Still, while the merger of equals, the largest in BB&T's history, might have come as a surprise, it is part of a small group of large deals that received applause from the Street. The projected tangible book value accretion certainly played a role, but King also emphasized that the expansion would allow BB&T to achieve its previously stated goal of investing in technology to meet growing client demands.

Street Talk is a podcast hosted by S&P Global

Market Intelligence.

Listen on SoundCloud and iTunes.

"We'll transform platforms to drive out cost, that's important, supporting a more technologically enabled business. And we will gain incremental efficiencies through automation by enabling faster, smarter and more secure way of doing business," King said on a call to discuss the deal.

Investment bankers have suggested others could follow BB&T's move and use cost savings from transactions to upgrade technological offerings. Some advisers even predicted an increase in larger deals before the BB&T/SunTrust transaction surfaced, arguing that regional banks needed to play catch up with the nation's largest institutions and upgrade technology and digital channels to keep their clients happy.

For his part, King emphasized that the world has changed considerably, even in just the last 12 months. King echoed comments made during BB&T's investor day in November 2018, when the company rolled out a new initiative, dubbed "Disrupt or Die," focused on improving efficiency while investing in delivery platforms.

"We talked about disrupt to thrive. And this is it, this is kind of the ultimate disrupt to thrive," King said on the SunTrust call.

That theme has recently become more common in larger bank deals. Chemical Financial Corp. and TCF Financial Corp., for instance, highlighted the opportunity to invest in technology as a combined franchise when discussing their $3.55 billion MOE announced a few weeks ago. The companies said the deal would allow them to invest and innovate more efficiently, enhance customer-facing digital service offerings and streamline internal systems and processes.

WSFS Financial Corp. offered a similar assessment when announcing plans to buy Beneficial Bancorp Inc. for $1.5 billion in August 2018. While WSFS took heat for the price paid on the deal, the buyer outlined plans to use some expected cost savings to invest in digital channels and shrink its branch network considerably.

"This combination allows us to economically address the question in every bank's boardroom," WSFS Chairman Mark Turner said on the call. "That is, how and when are we going to adjust to the new realities of banking delivery to meet the changing customer behavior and their needs."

The Street seems to think it makes sense to spend on technology to play offense. Jeff Davis, managing director at Mercer Capital and a S&P Global Market Intelligence contributor, said in a recent blog post that scale might be required to protect existing returns in the face of improving technology. He said the Amazon effect could apply to deposit pricing as "informed depositors with mobile technology" could force increased competition. Davis said the same thing occurred in the asset management business, where cost-conscious investors utilized widely available information and easy-to-use technology to upend the industry's pricing model.

BB&T seems to recognize the threat of fintech and other technology providers creeping into its space. As King noted on the conference call to discuss the SunTrust merger, he wants to get ahead of that sea change and lead rather than follow.

Learn more about Market Intelligence
Request Demo

Insurance
2018 US Property Casualty Insurance Market Report

Highlights

S&P Global Market Intelligence’s 2018 US Property & Casualty Insurance Market Report offers a five-year outlook for the P&C sector, which should return to underwriting profitability for the first time since 2015.

Oct. 26 2018 — The federal tax reform President Donald Trump signed into law in December 2017 should help provide for an extended period of P&C industry profitability in 2018 and beyond as companies benefit from the lower corporate tax rate, but the impact is not limited to after-tax profitability. Actions by several prominent European-headquartered insurers to change the way certain of their U.S. business is reinsured materially impacted premium growth rates in the first quarter of 2018 and are likely to affect full-year results.

1 quarter does not a trend make

Historically strong results for the State Farm group in the first quarter
helped drive favorable comparisons in several key measures of underwriting profitability. To the extent the improvement continues for State Farm — the industry’s largest group based on direct premiums written — it could provide an additional tailwind for 2018 and beyond.

While there is a risk of recency bias in reading too much into a single quarter’s worth of data, the industry was already positioned for improved underwriting results in 2018. The second half of 2017 saw elevated catastrophe losses as the United States was hit by three landfall-making hurricanes and an unusual spate of fourth-quarter wildfires in California. Projected results for 2018 and subsequent years, all of which show combined ratios of less than 2017’s total of 103.5%, assume a normal catastrophe load.

Auto repairs in progress

Competition will remain intense in certain non-auto business lines given ample reinsurance capacity, high levels of industry capitalization and a macroeconomic environment that remains characterized by relatively slow growth in gross domestic product. Though modestly higher business volume driven by that economic expansion will help offset downward pressure on premiums, the industry will be challenged to achieve profitable top-line growth.

Trends in litigation will increasingly weigh on underwriting results in several business lines, including professional lines and the Florida homeowners business. They also could lead to greater demand for coverage, particularly for new and emerging risks.

The macro view

A rising federal funds rate and 10-year Treasury yields that have reached seven-year highs bode well for an industry that has long been suffering from low interest rates. And the relief cannot come quickly enough after the industry’s net yield on invested assets slipped to a new low of only 3.03% in 2017. Though projected results provide for increasing yields from that floor, the improvement will still take place gradually and is unlikely in and of itself to materially impact how companies are underwriting business

S&P Global Market Intelligence client? Click here to login and read the full 2018 US Property & Casualty Insurance Market Report.

The projections reflect various assumptions regarding premiums, losses and expenses. They are a product of a sum-of-the-parts analysis of individual business lines that is informed by third-party macroeconomic forecasts, historical trends and recent market observations that include first-quarter 2017 statutory results and anecdotal commentary about market conditions. Projected results are displayed on a total-filed basis and are not intended for application to individual states, regions or companies. S&P Global Market Intelligence reserves the right to update the projections at any time for any reason.

Learn more about Market Intelligence
Request Demo

U.S. Insurance Market Report – Property & Casualty (June 2017)

Learn More

Listen: Street Talk Episode 23 - As More Banks Reach for Yield, Advisers Urge Caution

More banks are reaching further out the yield curve in their loan portfolios to meet customer demands but, increasingly, advisers believe institutions need to proceed with caution. In the episode, experts from PIMCO, Sandler O’Neill, Chatham Financial and PrecisionLender discuss rate risk and how banks focused on funding will ultimately prove the winners.

Street Talk is a podcast hosted by S&P Global Market Intelligence.

Follow on SoundCloud and iTunes.

No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).


Fintech
Fintech Funding Flows To Insurtech In February

Mar. 21 2018 — Insurance technology companies took center stage in the month of February, attracting the most investor dollars of the various financial technology subsectors that S&P Global Market Intelligence tracks. Overall funding in the financial technology sector declined about 10% from the prior month, however, based on the disclosed value of deals involving private U.S.-based companies that closed in each period.

Two health-insurance-focused startups were key drivers of the $216 million that flowed into insurtech. These were CollectiveHealth and Bind Benefits, which closed on $110 million and $60 million funding rounds, respectively. Both provide tech solutions to companies that self-insure (i.e. provide health coverage for their employees with their own money rather than using an outside insurance company.)

This was a departure from last month, when investment and capital markets technology was the most well-funded, bolstered by capital raises from several robo-advisors, including Wealthfront and Acorns. Meanwhile, insurance technology companies only closed on $71.3 million worth of transactions during the month.

Already a client? Access more data and insights from the full report here.

Learn More About Sector Intelligence
Request a Demo