not large banks. just regional. mostly doing commercial crap. disqus!
Have to have some job to pay the bills of living above one’s means.
Exactly. Banking is larceny. 9-fucking-% to borrow 6k for two years to buy a car.
Credit is 785. And I’m getting absolute horse fkked. So, these banks deserve everything coming to them in this next recession… but we’ll probably bail these mofo’s out again.
i levered my car recently. i am at 830, but i think my rate was the lowest advertised. 2.5% for 4 years, i did it just 3 mos ago.
actaully the net income margin for most banks is not much like 2.5% once you accoutn for defaults etc with avg duration between 5 to 10. many feel that as rates will rise, so will NIM!
I like the sector in general, but it is a Wall Street darling right now. All my bank stocks have more than doubled since Trump. While there are probably some bargains left, I doubt there are as many like there were pre-Trump. Sentiment is too positive on them right now, especially with a flattening yield curve and potential beginning of the declining money supply.
But I would make sure you can dig deeply into the banks. There is a lot of management judgment on asset values and if you aren’t paying close attention, it can quickly have your equity completely disappear.
Higher rates do not mean NIM rises. Most smaller banks are poorly positioned for rising rates and may have NIM declines. But you have to define what you mean by regional. Regional banks by the standard definition are mostly OK - but I find the most alpha in the community banks that have little or no coverage.
How are you paying 9% when the average since 2016 has been around 4.3%?
Personal loan*
ceo - enjoy! https://www.lightstream.com/
raw- nim been falling for awhile as overall rates have been falling since 1980s. so presumably, their earnings would rise in the future as nim rises along with the 10 year (has not happened yet despite numerous hikes). their current portfolio will take a hit from the duration, but that is a one time hit. a higher nim rate moving forward will allow them to make more money. the assets they own are just commercial loans. some they originated, but the majority purchased from someone else etc. what is worrisome is the charge offs, those have a higher prob of spiking up if commercial real estate tanks. from essentially 30 bps to 250 bps. consider nim 250 bps. their earnings can go negative. combine that with duration rise and their portfolio sinking, its a recipe for a disastaaaaa
https://www.statista.com/statistics/210869/net-interest-margin-for-all-us-banks/
Gotcha. Any particular reason why you wouldn’t get an auto loan instead of a personal one if it is to buy a car?
You can’t look at aggregate NIM. You have to look at asset yields and liability costs. Both of these are priced on different parts of the curve in general and then for each bank. Then there is the duration component. Some banks benefit, some don’t.