Fed's extended rate hike campaign is expanding banks' net interest margins: Argus Research's Biggar

Financial Performance - Banks are expected to report good results, with upward rerating in stocks justified by improved macro environment [2] - Loan growth is decent at about 3% for both commercial industrial and consumer [3] - Higher for longer interest rates have resulted in some upward repricing on securities [3] - 3% loan growth can translate into 5% to 6% net interest income growth [3] Macroeconomic Factors - Deregulatory environment is constructive for banks [2] - Employment is healthy, which is a significant determinant for delinquencies and loan loss provisions [4] - The shock factor of tariffs has abated, with companies finding ways to navigate the tariff environment [6] Potential Risks and Opportunities - Uncertainty from tariffs could result in more moderate loan growth and pause on expansion plans [7] - Trade finance might be negatively impacted by tariffs [7] - IPO and M&A activity could be much stronger in the absence of tariff conversations [7] - Potential for rebound in capital markets generally [7]