Brianna Wilson,
Editor,
Monitor

Monitor’s 2023 Bank 50 companies reported $292,971.5 million in 2022 net assets, a $23,178.0 million (8.6%) increase from $269,793.5 reported in 2021. The group also saw growth in originations, reporting a $9,468.8 million (10.2%) increase from $92,923.6 million in 2021 to $102,392.3 million in 2022.

In the asset ranking, Bank of America Global Leasing and Wells Fargo Equipment Finance remained in first and second place with more than $56.3 billion and $35.1 billion in net assets, respectively. The remainder of the top five experienced slight ranking shifts. BMO Financial Group ascended to occupy third place, exceeding $20.8 billion in net assets and growing its book by 57% since last year, primarily due to its acquisition of Bank of the West. Despite a 5.6% increase in portfolio size, PNC Equipment Finance fell to fourth place, with approximately $20.8 billion in 2023 net assets. First Citizens Bank Equipment Finance fell to fifth place from fourth in 2022, reporting a portfolio of $18.9 billion, up 18.1% year over year. Huntington Asset Finance fell to sixth place from fifth in 2022.

As for the volume ranking, Bank of America Global Leasing ($16.1 billion in originations, up 5.4% year-over-year), Wells Fargo Equipment Finance ($12.2 billion in volume, up 6.7% from 2021), Huntington Asset Finance (nearly $6.7 billion in originations, up 12.8% year-over-year) and PNC Equipment Finance (nearly $6.5 billion in volume, up 15% from 2021) retained their positions in the top four. First Citizens Bank Equipment Finance took fifth place, reporting a 42.1% increase with nearly $5.3 billion in new business volume recorded in 2022.

U.S. Bank Overview

According to the FDIC Quarterly Banking Profile, which provides a comprehensive summary of financial results for all FDICinsured institutions, net income faced an 11.3% decline from Q1/23, a total decrease of $9 billion at $70.8 billion in Q2/23. Year-overyear net income increased by 9.9%, a dollar amount of $6.4 billion, as net interest income growth exceeded that of provision and noninterest expense. The average return on assets reported was 1.21%, down from 1.36% in Q1/23 but up from 1.08% in Q2/23.

The report found that net interest margin (NIM) in Q2/23 declined three basis points to 3.28%, following a decline of seven basis points in Q1/23, though it remains 48 basis points than Q1/22 and above the pre-pandemic, 3.25% average. The FDIC attributes the NIM decline to the cost of funds rising at a faster rate than yields on earning assets. From Q1/23 to Q2/23, the yield on earning assets increased to 5.32% — 40 basis points, while the cost of funds increased to 2.05% — 43 basis points.

The FDIC found that net operative revenue declined $9.2 billion (3.5%) to $252.5 billion; noninterest income declined $7.8 billion (9.1%) while net interest income declined 0.8% ($1.4 billion) and interest income increased 8.4% ($21.8 billion), offset by interest expense increase of 27.2% ($23.2 billion). Additionally, net operating revenue grew 10.7% ($24.5 billion), net interest income grew $23.2 billion (15.4%) and noninterest income grew $1.3 billion (1.7%) from the year-ago quarter.

Banking industry assets declined overall by $254.4 billion from Q1/23 to Q2/23; the year-over-year decline was $252.8 billion, according to the FDIC. Securities, followed by cash and balances due from depository institutions, were the largest areas of decline at $175.1 billion (3.1%) and $138.1 billion (4.9%), respectively.

Top Bank 50 — Rankings

Monitor’s Bank 50 reported nearly $293 billion in net assets for 2022, up 8.6% — a nearly $23.2 billion increase — year-over-year from approximately $270 billion in 2021. Of the 50 banks, 41 reported portfolio increases, collectively totaling nearly $24.5 billion, and nine reported declines of approximately $1.3 billion. BMO Financial Group reported the largest year-over-year dollar gain of this year’s Bank 50, increasing its net assets by nearly $7.6 billion in 2022. Oakmont Capital Services, ranked No. 43, achieved the highest percentage gain (241.1%), growing its portfolio from $165.4 million in 2021 to $564.1 million in 2022.

The 50 banks reported combined 2022 originations of approximately $102.4 billion, up 10.2% (nearly $9.5 billion), from approximately $93 billion in 2021. Forty banks reported increases in new business volume, totaling $12.7 billion, while 10 banks reported decreases equal to roughly $3.2 billion. First Citizens Bank Equipment Finance, ranked No. 5, achieved the highest dollar amount increase in new business volume for the year, reaching nearly $5.3 billion, up more than $1.5 billion from $3.7 billion in 2021. Western Alliance Bank, ranked No. 43, logged the highest percentage gain in new business volume at 138.7%, adding $191.4 million to its 2021 originations of $138 million, to achieve $329.4 million this year.

New Arrivals

Four banks joined the ranking this year – Ascentium Capital at No. 22, Oakmont Capital Services at No. 43, Prime Alliance Bank at No. 46 and Western Alliance Bank at No. 40.

Ascentium Capital joined the ranking with nearly $2.9 billion in net assets and $1.4 billion in originations. Oakmont Capital Services entered the rankings with $564.1 million in net assets and $419.1 million in originations. Prime Alliance Bank joined with $520.2 million in net assets and $237.7 million in volume. Finally, Western Alliance Bank entered with a $511 million portfolio and $329.4 million in originations.

Forecasts

Of the 49 banks that forecasted their 2023 net assets, 67% anticipated an increase in portfolio size, 12% anticipated a decrease and 20% expected no change. Calculated on an average weighted basis, the group forecasted 3.5% portfolio growth in 2023. The 2022 Bank 50 group predicted a 3.6% portfolio growth, just under half of the 8.6% it achieved.

Forty-eight of the 50 banks reported volume forecasts; 65% reporting banks planned to expand originations in 2023, while 15% predicted a decrease, and 21% did not predict a change. Calculated on a weighted average, the reporting banks predicted a collective 9.6% increase in new business volume in 2023. The 2022 Bank 50 group predicted a 4.6% increase, less than half of the 10.2% increased it achieved this year.

Thirty-one (76%) of the 41 banks reporting a staffing forecast plan to hire new employees in 2023, for a collective total of 271 new bankers. No banks expected employee numbers to drop, and 10 expected no change in staffing throughout the year. Overall, the group planned to increase staffing numbers by 4.1% by 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.

ABOUT THE AUTHOR: Brianna Wilson is editor of Monitor.