Brianna Wilson,
Managing Editor,
Monitor

Monitor’s 2024 Bank 50 companies collectively reported $304.3 billion in 2023 net assets — a $6.7 billion (2.3%) increase from the nearly $297.6 billion the group reported in 2022 — and $97.5 billion in originations — a $3.5 billion (3.5%) decrease from the $101 billion the group reported in 2022.

The top five Bank 50 companies retained their positions in the asset ranking. No. 1-ranked Bank of America Global Leasing dominated the ranking again this year, with a portfolio of $59 billion. This is nearly $20 billion more than No. 2-ranked Wells Fargo Equipment Finance, with a reported portfolio of nearly $39.9 billion in 2023. BMO Financial Group, at No. 3, reported net assets of $22.1 billion, and PNC Equipment Finance, at No. 4, reported $18.3 billion in net assets. Rounding out the top five, First Citizens Bank Equipment Finance reported a $16.5 billion portfolio.

Four of the top five banks grew their portfolio — Bank of America, by 4.7% ($2.7 billion); Wells Fargo by 6.3% ($2.4 billion); BMO Financial Group by 5.9% ($1.2 billion); and First Citizens by 8.2% ($1.2 billion). PNC’s portfolio decreased by 3.2% ($611.5 million), but it still maintained its position in the rankings.

The volume ranking also welcomed back the same top five from the previous year. Bank of America Global Leasing secured the top spot with $16.6 billion, a 3.1% ($492.2 million) increase from its $16.1 billion in originations in 2022. Bank of America surpassed Wells Fargo Equipment Finance by just under $2 billion. Wells reported $14.7 billion in 2023 originations, representing a significant 20.2% ($2.5 billion) increase from its $12.2 billion new business volume in 2022. Ranks No. 3 through No. 5 come in at less than half of Well’s Fargo’s 2023 originations. At No. 3 in new business volume, Huntington Asset Finance reported $6.4 billion, representing a 4.0% ($268.3 million) decrease from its originations of $6.7 billion in 2022. PNC Equipment Finance reported $5.5 billion, a significant 15.2% ($980.4 million) decrease from $6.5 billion in 2022. Finally, First Citizens rounds out the top five with $4.8 billion in originations, posting the only other top five increase of 18.6% ($759.2 million) from $4.1 billion in 2022.

U.S. Bank Overview

According to the FDIC Quarterly Banking Profile (published June 30, 2024), which provides a comprehensive summary of financial results for all FDIC-insured institutions, net income increased 11.4% from Q1/24, representing a $7.3 billion increase to $71.5 billion in Q2/24. The return-on-assets ratio was 1.2% in Q2/24, represented a rise of 12 basis points from Q1/24 but a decline of one basis point year over year.

The FDIC also reported that net interest margin (NIM) increased quarter over quarter for all groups, except for large banks with more than $250 million in assets. In aggregate, the large banks posted a four-basis point decrease from Q1/24. Overall, the industry saw an increase to 3.16%, representing a decline of one basis point in Q2/24. This is nine basis points below its average prior to the pandemic. The FDIC attributes this decline to the comparative growth in funding costs and in earning asset yields — funding costs slightly exceeded earning asset yields.

Net operative revenue, according to the FDIC, increased 0.5% (a dollar amount of $1.3 billion) from Q1/24 to $250.7 billion in Q2/24. Net interest income also increased, though only by 0.1% (a dollar amount of $124 million); so did noninterest income, at a slightly elevated rate of 1.5% (or $1.2 billion). The FDIC credits must of the noninterest income’s increase to larger firms’ gains on equity security transactions.

The FDIC report shows a total asset decrease of $70.5 billion (or 0.3%) from Q1/24 for a total of $23.9 trillion in Q2/24. Securities (down 0.3%, a dollar amount of $16.8 billion) and cash and balances due from depository institutions (down 6.7%, a dollar amount of $194.9 billion) were primarily responsible for the decline, the FDIC reported. However, total loans and leases, which were up 1%, or $125.8 billion, contributed to slightly offsetting the reduction in cash and securities.

Top Bank 50 — Rankings

Collective net assets for Monitor’s Bank 50 increase by 2.3% ($6.7 billion) from $297.6 billion in 2022, for a total portfolio size of $304.3 billion in 2023. This is primarily thanks to the 35 companies that reported increases, totaling $15.6 billion, year over year. The remaining 15 banks posted decreases of $8.9 billion. Bank of America posted the largest dollar amount increase of $2.7 billion in net assets year over year. By percentage, Pinnacle Financial Partners posted the largest increase, an impressive 164.1% year-over-year portfolio increase. As a note, although Pinnacle did not rank in the Monitor’s Bank 50 last year, the bank did report its 2022 assets.

On the originations side, the 50 banks reported a collective $97.5 billion in 2023, representing a 3.5% ($3.5 billion) decrease from $101 billion in 2022. Only 21 banks reported volume increases, representing a $5.9 billion gain from 2022. The remaining 29 banks reported decreases in originations, totaling a $9.4 billion drop year over year. Wells Fargo reported the greatest dollar amount increase ($2.5 billion) in originations year over year, while No. 49-ranked Raymond James Equipment finance posted the greatest increase by percentage, a 135.7% year-over-year increase.

New Arrivals

Three banks joined the Bank 50 this year: No. 34-ranked Pinnacle Financial Partners, No. 46-ranked TriState Capital Bank Equipment Finance and No. 49-ranked Associated Bank Equipment Finance.

Pinnacle Financial Partners ranked with nearly $1.1 billion in net assets and $741.9 million in new business volume. TriState Capital Bank Equipment Finance reported $ 551.2 million in net assets and $ 221.1 million in originations. Associated Bank joined the rankings with $ 402.6 in net assets and $ 236.7 in new business volume.

Forecasts

Of the 49 banks that provided a net asset forecast for 2024, 63% (31 banks) predicted an increase in portfolio size, 10% (five banks) expected a decrease and 27% (13 banks) anticipated no change. Calculated on an average weighted basis, the group forecasted 1.1% portfolio growth in 2024. The 2023 Bank 50 group predicted a 3.5% portfolio growth for 2023, which is 1.2% more than the 2.3% year-over-year growth it achieved.

Again, 49 banks reported their volume forecast for 2024; 59% (29 banks) expected an increase in originations, 18% (nine banks) anticipated a decrease and 22% (11 banks) did not predict a change. Calculated on a weighted average, the reporting banks expected a collective 0.4% in originations growth. This is a dramatic drop compared to the 2023 Bank 50 group’s prediction of 9.6%. It’s clear why: the group experienced a collective year-over-year decrease of 3.5% in originations from 2022 to 2023.

Forty-three banks reported staffing predictions for 2024; 53% (23 banks) planned to hire new employees, 14% (six banks) expected to let employees go and 33% (14 companies) anticipated no change to their employee base. Despite half of the banks’ plan to hire more employees, the group forecasts an overall decrease of six personnel by year-end 2024, representing a 0.1% drop from year-end 2023.

Monitor thanks all the participants and their staff members who provide us with the survey data we rely upon to produce this report. As always, we welcome your feedback and commentary.

Brianna Wilson is managing editor of Monitor.