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The Federal Reserve lowered interest rates on 17 September 2025, ushering in a new cycle of rate cuts.   Banks, which have prospered in a world of higher rates, will see a reversal of fortunes as margins compress. How will DBS and OCBC fare in this new environment? Let’s find out.  DBS: Resilient even as rates fallLet us start by examining DBS Group Holdings Ltd (SGX: D05), or DBS, the largest Singapore bank. DBS stands out with its strong diversification across net interest income (NII), fees, and wealth m ...

Core Viewpoint - Zions' recent earnings report indicates strong performance with adjusted earnings per share surpassing estimates, driven by higher net interest income and fee income, despite some challenges with rising non-interest expenses [2][4][5] Financial Performance - Adjusted earnings per share for Q2 2025 were $1.58, exceeding the Zacks Consensus Estimate of $1.31, and reflecting a 30.6% increase year-over-year [2] - Net income attributable to common shareholders was $243 million, up 27.9% year-over-year, after accounting for the positive impact from the IPO of SBIC Investment [3] - Net revenues were $851 million, an 8.1% increase year-over-year, and also beat the Zacks Consensus Estimate of $815.5 million [4] Income and Expenses - Net interest income (NII) rose to $648 million, an 8.5% increase, attributed to lower funding costs and an increase in average interest-earning assets [4] - Non-interest income increased by 6.1% to $190 million, driven by growth in most components except for card fees and wealth management fees [5] - Adjusted non-interest expenses rose 3% to $521 million, with an adjusted efficiency ratio improving to 62.2% from 64.5% in the prior year [5] Loan and Deposit Trends - As of June 30, 2025, net loans and leases held for investment were $60.1 billion, up 1.5% from the prior quarter, while total deposits decreased by 2.5% to $73.8 billion [6] Credit Quality - The ratio of non-performing assets to loans and leases increased by 6 basis points year-over-year to 0.51%, with net loan and lease charge-offs of $10 million, down 33.3% from the prior year [7] Profitability and Capital Ratios - The Tier 1 leverage ratio remained stable at 8.5%, while the common equity tier 1 capital ratio improved to 11% from 10.6% in the prior year [8] - Return on average assets was 1.09%, up from 0.91% in the prior year, and return on average tangible common equity increased to 18.7% from 17.5% [9] Future Outlook - Management anticipates a moderate year-over-year increase in NII, driven by earning asset remix and loan growth, with customer-related non-interest income expected to rise moderately due to increased activity [10][11] - Adjusted non-interest expenses are projected to increase moderately, influenced by technology costs and marketing expenses [12] Market Position - Zions has seen upward revisions in estimates, with a consensus shift of 7.83%, and holds a Zacks Rank 1 (Strong Buy), indicating expectations for above-average returns in the coming months [13][15]

Core Insights - SouthState Corporation (SSB) reported second-quarter 2025 adjusted earnings per share of $2.30, exceeding the Zacks Consensus Estimate of $2.00, and reflecting a 28.5% increase year over year [1][7] - Net income attributable to common shareholders was $215.2 million, up 62.6% year over year [1] Revenue and Expenses - Total revenues for the quarter reached $664.8 million, marking a 56.2% increase year over year and surpassing the Zacks Consensus Estimate by 3.9% [2] - Net interest income (NII) was $577.9 million, up 65% from the prior-year quarter, with the net interest margin rising to 4.02% from 3.44% [2] - Non-interest income was $86.8 million, reflecting a 15.4% increase year over year, driven by most components except for other income and net securities losses [2] - Non-interest expenses surged by 50.8% to $375.1 million, primarily due to merger, branch consolidation, severance-related, and other restructuring expenses [3] Loans and Deposits - As of June 30, 2025, net loans stood at $46.6 billion, up 1.1% from the prior quarter, while total deposits were $53.7 billion, showing a marginal increase [4] Asset Quality - Provision for credit losses was $7.5 million, a significant increase of 92.9% from the prior-year quarter [5] - Allowance for credit losses as a percentage of loans was 1.31%, down 11 basis points year over year [5] - The ratio of annualized net charge-offs to total average loans was 0.21%, up from 0.05% in the year-ago quarter [5] - Non-performing loans to total loans were 0.63%, an increase of 4 basis points from the prior-year quarter [5] Capital Ratios and Profitability Ratios - As of June 30, 2025, the Tier I leverage ratio was 9.2%, down from 9.7% in the year-ago quarter [6] - The Tier 1 common equity ratio decreased to 11.2% from 12.1% in the prior-year quarter [6] - The annualized return on average assets was 1.34%, up from 1.17% in the year-ago period [6] - Return on average common equity was 9.93%, compared to 9.58% in the prior-year quarter [6] Capital Distribution - The company increased its quarterly cash dividend on common stock by 11.1% to 60 cents per share, payable on August 15, 2025, to shareholders of record as of August 8, 2025 [8] Overall Assessment - SSB ended the second quarter positively, with both top and bottom lines rising year over year, supported by increasing NII and non-interest income [9] - Rising loan and deposit balances are encouraging, although high expenses from inorganic expansion efforts may pressure the bottom line [9]

Core Insights - Hilltop Holdings Inc. (HTH) reported second-quarter 2025 earnings of 57 cents per share, exceeding the Zacks Consensus Estimate of 41 cents, and reflecting an 83.9% increase from the prior-year quarter [1][9] - The earnings growth was driven by higher net interest income (NII) and a reversal of provisions, although higher non-interest expenses and lower non-interest income, along with a decline in deposits, posed challenges [1][10] Financial Performance - Net income attributable to common stockholders was $36.1 million, representing a 77.4% year-over-year increase, surpassing the estimate of $22.4 million [2] - Net revenues for the second quarter totaled $303.3 million, a 2.1% year-over-year increase, but fell short of the Zacks Consensus Estimate of $307.6 million [3] - NII rose by 6.8% year over year to $110.7 million, exceeding the estimate of $106.1 million, while the net interest margin (NIM) improved to 3.04%, up 12 basis points from the previous year [3] - Non-interest income decreased slightly to $192.6 million, missing the projected $196.3 million, primarily due to declines in most components except for securities commissions and fees [4] - Non-interest expenses increased by 1.8% year over year to $261.2 million, slightly below the estimate of $262.4 million [4] Loan and Deposit Trends - As of June 30, 2025, net loans held for investment were $8 billion, reflecting a 1.3% sequential increase, while total deposits decreased by 4.1% to $10.4 billion [5] Credit Quality and Capital Ratios - Hilltop Holdings experienced a reversal of credit losses amounting to $7.3 million, compared to a provision for credit losses of $10.9 million in the prior-year quarter [6] - Non-performing assets as a percentage of total assets improved to 0.53%, down 17 basis points from the previous year [6] - Return on average assets increased to 0.98% from 0.59% year over year, and return on average stockholders' equity rose to 6.62% from 3.84% [7] - The common equity tier 1 capital ratio improved to 20.74% from 19.45% year over year, while the total capital ratio increased to 23.38% from 22.57% [7] Strategic Outlook - The company's restructuring efforts, improving fee income, and favorable interest rates are expected to support revenue growth, although challenges remain in the Mortgage Origination segment and asset quality [10]

Core Insights - Annaly Capital Management, Inc. (NLY) reported second-quarter 2025 adjusted earnings available for distribution (EAD) per average share of 73 cents, exceeding the Zacks Consensus Estimate of 72 cents and up from 68 cents in the same quarter last year [1][9] - The average yield on interest-earning assets improved to 5.42% from 5.17% year-over-year, while the net interest spread increased to 1.47% from 1.24% [3][9] - The company's book value per share (BVPS) declined to $18.45 from $19.25 year-over-year, raising concerns about its financial health [4][9] Financial Performance - Net interest income (NII) for the quarter was $273.2 million, missing the Zacks Consensus Estimate by 33.5%, compared to $53.6 million in the prior-year quarter [2] - Total assets at the end of the second quarter reached $112.1 billion, reflecting a 6.7% increase from the previous quarter [2] - The economic capital ratio decreased slightly to 14.3% from 14.4% year-over-year [4] Key Ratios - The average economic costs of interest-bearing liabilities rose to 3.94% from 3.90% in the prior-year quarter [3] - The weighted average actual constant prepayment rate increased to 8.7% from 7.4% year-over-year [4] - Economic leverage remained stable at 5.8X as of June 30, 2025, unchanged from the previous year [4] Return Metrics - Annaly generated an annualized EAD return on average equity of 14.86% in the second quarter, up from 13.36% in the same quarter last year [5]

Core Insights - BOK Financial Corporation (BOKF) reported better-than-expected second-quarter 2025 results, with earnings per share of $2.19, surpassing the Zacks Consensus Estimate of $1.98, although this represents a 13.8% decline from the prior-year quarter [1][8] Financial Performance - The company's net income attributable to shareholders was $140 million, down 14.5% year over year [2] - Quarterly net revenues totaled $535.2 million, a decline of 3.6% year over year, but exceeded the Zacks Consensus Estimate of $517.9 million [3] - Net interest income increased by 10.8% year over year to $328.2 million, with the net interest margin expanding by 24 basis points to 2.80% [3] - Total fees and commissions decreased by 1.3% year over year to $197.3 million, primarily due to lower brokerage and trading revenues [3] Expense and Efficiency Metrics - Total operating expenses rose to $354.5 million, an increase of 5.3% year over year, mainly driven by higher personnel costs [4] - The efficiency ratio increased to 65.42% from 59.83% in the prior year, indicating a deterioration in profitability [4] Loan and Deposit Trends - As of June 30, 2025, total loans reached $24.3 billion, reflecting a 2.5% increase from the prior quarter, driven by growth in commercial real estate loans and loans to individuals [5] - Total deposits slightly declined to $38.2 billion, attributed to reduced demand and savings [5] Credit Quality and Capital Ratios - Non-performing assets decreased to $81 million, or 0.33% of outstanding loans, down from $93 million or 0.38% in the prior-year quarter [6] - The company recorded no provisions for credit losses, compared to $8 million in the prior-year quarter, with net charge-offs down 91.9% to $561 thousand [6] - As of June 30, 2025, the common equity Tier 1 capital ratio improved to 13.59%, up from 12.10% a year earlier [7] Profitability Ratios - Return on average equity was 9.70%, down from 12.79% in the year-ago quarter, while return on average assets decreased to 1.07% from 1.29% [9] Share Repurchase Activity - During the reported quarter, BOK Financial repurchased 663,298 shares at an average price of $93.99 per share [10] Overall Assessment - The solid loan balance is expected to support top-line growth, while improving asset quality is a positive factor amid a challenging operating environment; however, rising operating expenses present a near-term concern [11]

Core Insights - KeyCorp's second-quarter 2025 earnings per share from continuing operations was 35 cents, exceeding the Zacks Consensus Estimate by one cent and reflecting a 40% increase year-over-year [1][10] - The results were driven by a rise in net interest income (NII) and non-interest income, although higher expenses and increased provisions posed challenges [1][10] Financial Performance - Net income from continuing operations attributable to common shareholders reached $387 million, marking a 63.3% year-over-year increase [2] - Total revenues rose 20.9% year-over-year to $1.83 billion, surpassing the Zacks Consensus Estimate of $1.80 billion [3] - NII (on a tax-equivalent basis) increased 27.9% year-over-year to $1.15 billion, with the net interest margin expanding 62 basis points to 2.66% [4] - Non-interest income was $690 million, up 10% year-over-year, driven by increases in most fee income components [6] - Non-interest expenses increased 7% year-over-year to $1.15 billion, attributed to rising costs across nearly all components [7] Loan and Deposit Trends - Average total loans at the end of the second quarter were $105.72 billion, up 1.3% from the previous quarter [8] - Average total deposits were $147.45 billion, showing a slight decline due to reduced higher-cost commercial client balances and retail CDs [8] Credit Quality - The provision for credit losses was $138 million, up 38% year-over-year, with net loan charge-offs as a percentage of average total loans rising to 0.39% [9][10] - The allowance for loan and lease losses decreased by 6.5% year-over-year to $1.45 billion, while non-performing assets as a percentage of total loans fell to 0.66% [11] Capital Ratios - KeyCorp's tangible common equity to tangible assets ratio improved to 7.8% as of June 30, 2025, up from 5.2% in the same period of 2024 [12] - The Tier 1 risk-based capital ratio increased to 13.4%, up from 12.2%, and the Common Equity Tier 1 ratio rose to 11.7%, up from 10.5% [12] Strategic Outlook - The company is expected to benefit from decent loan balances, balance sheet repositioning efforts, strategic buyouts, and relatively higher interest rates in the near term [13]

Core Insights - Zions Bancorporation's shares increased by 4.4% following better-than-expected quarterly results, with Q2 2025 adjusted EPS of $1.58 surpassing the Zacks Consensus Estimate of $1.31 and reflecting a 30.6% year-over-year growth [1][9] Financial Performance - The quarterly results were driven by higher net interest income (NII) and non-interest income, along with a provision benefit, while increased loan amounts also contributed positively [2][9] - Net revenues (tax equivalent) reached $851 million, an 8.1% increase year-over-year, exceeding the Zacks Consensus Estimate of $815.5 million [4] - NII was reported at $648 million, up 8.5%, attributed to lower funding costs and an increase in average interest-earning assets, with net interest margin (NIM) expanding by 19 basis points to 3.17% [4][9] - Non-interest income rose 6.1% to $190 million, driven by increases in most components, while adjusted non-interest expenses increased by 3% to $521 million [5] - As of June 30, 2025, net loans and leases held for investment were $60.1 billion, a 1.5% increase from the prior quarter, while total deposits decreased by 2.5% to $73.8 billion [6] Credit Quality - The ratio of non-performing assets to loans and leases increased by 6 basis points year-over-year to 0.51%, with net loan and lease charge-offs of $10 million, down 33.3% from the previous year [7] - Provision for credit losses was negative $1 million in the reported quarter, compared to a provision of $5 million in the year-ago quarter [7] Profitability and Capital Ratios - The Tier 1 leverage ratio remained stable at 8.5%, while the common equity tier 1 capital ratio increased to 11% from 10.6% in the prior year [8] - The return on average assets improved to 1.09%, up from 0.91% in the prior year, and return on average tangible common equity rose to 18.7% from 17.5% [10] Market Outlook - The rising loan demand and improving fee income, along with relatively higher interest rates, are positive indicators for the future of Zions [11]

Core Insights - Huntington Bancshares Incorporated (HBAN) reported second-quarter 2025 adjusted earnings per share (EPS) of 38 cents, matching the Zacks Consensus Estimate and up from 30 cents in the prior-year quarter [1][7] - The company experienced a $58 million decrease in pre-tax earnings due to securities repositioning, impacting EPS by 4 cents [1] Financial Performance - Net income attributable to common shareholders (GAAP basis) was $536 million, an increase from $474 million in the prior-year quarter [2] - Total quarterly revenues increased 10.8% year over year to $2.01 billion, surpassing the Zacks Consensus Estimate of $1.98 billion [3] - Net interest income (NII) rose 12% year over year to $1.48 billion, driven by higher average earning assets and a net interest margin (NIM) increase of 12 basis points to 3.11% [3][7] - Non-interest income decreased 4% year over year to $471 million, while non-interest expenses rose 7% to $1.19 billion, primarily due to higher personnel and marketing costs [4][7] Loans and Deposits - Average loans and leases increased 2% sequentially to $133.2 billion as of June 30, 2025 [5] - Average total deposits rose 1% to $163.4 billion [5] Credit Quality - Net charge-offs were $66 million, down from $90 million in the prior-year quarter, with a net charge-off ratio of 0.20%, down from 0.29% [6] - The allowance for credit losses increased 3.8% to $2.52 billion, while total non-performing assets rose 9.2% to $852 million [6] Capital Ratios - The common equity tier 1 risk-based capital ratio was 10.5%, up from 10.4% in the prior-year period [9] - The regulatory Tier 1 risk-based capital ratio decreased to 11.8% from 12.1% in the comparable period in 2024 [9] - The tangible common equity to tangible assets ratio increased to 6.6% from 6% in the prior-year quarter [9] Strategic Outlook - The company's inorganic expansion efforts are expected to bolster revenue growth in the near term, with a focus on enhancing commercial banking capabilities in key growth markets [10]