Key Moment for US Regional Bank Investors?

Skyline of Uptown Charlotte, North Carolina under dramatic cloud cover.

In early 2023, we witnessed huge volatility in the US Regional Banks. A key issue, brought to the forefront of the market’s attention in March, is that Bank assets and liabilities are at an extreme duration mismatch. Balance sheets are filled with long-duration, low-yielding fixed income securities and loans, while liabilities can be shorter-term than previously anticipated. As interest rates rose, the value of their assets declined substantially.

As we cited in our 23rd August blog, unless interest rates drop dramatically, we were likely to see more regional banks under stress and further subsequent consolidation. Some banks will be negatively impacted by their asset liability mismatch and credit portfolios. Others will excel, benefitting from superior credit profiles and diversified business models that permit them to take advantage of market dislocation to gain market share.

As we did in our previous blogs on regional banks, below we have plotted the daily Bitvore Sentiment Scores for a sample of small US Banks whose loans books are estimated to be over 50% exposed to US commercial property.

231017 - high commercial property loan book bank sentiment scores

We have witnessed plenty of volatility in the share price movements of these banks over the last year.

231017 - high commercial property loan book bank 1 year share price

A number of these banks share price experienced healthy Q2 share price appreciation until early August, though, with the exception of Customers Bancorp, most of which has since been eroded over the subsequent last two months.

231017 - high commercial property loan book banks last 6mo share performance

We are now in Q3 Banks results season, with Bank of America, Bank of New York Mellon and Goldman Sachs announcing Q3 earnings today.

It is obviously important to note that there are vast differences in the quality of banks as well as diverse operating models which will result in broadly varied outcomes. These nuanced differences are will not be fully appreciated by many investors and are may not reflected in stock prices, thereby making the sector opportunity-rich. Given the recent share price movements the market would seem to be in make your mind up territory.

Miss Nothing With Bitvore's Automated Intelligence

Trusted by more than 70 of the world’s top financial institutions, Bitvore provides the precision intelligence capabilities top firms need to counter risks and drive efficiencies with power of data-driven decision making.

Uncover rich streams of risk and ESG insights from unstructured data that act as the perfect complement to the internal data and insights your firm is already generating. Our artificial intelligence and machine learning powered system provides the ability to see further, respond faster, and capitalize more effectively.

To learn how the Bitvore solutions can help your organization contact or visit

Request a Demo of the Bitvore Platform


Subscribe to Bitvore News Blog Weekly Email

Recent Posts


See all