While peak funding costs are in the rearview mirror, investors and bank acquirers continue to assign higher values to institutions with lower-cost deposit franchises.

In the episode, S&P Global Market Intelligence analysts Nathan Stovall and Zain Tariq discuss which banks have the strongest deposit franchises, what attributes they have and how deposits continue to drive valuation in the banking sector. They also share takeaways from the inaugural Deposit Conference, co-hosted with South State, where experts shared their views on niche strategies and the state of the competitive and regulatory landscape.

Bank M&A activity is showing signs of life, and a much awaited rebound in bank deal activity could be in store.
In this episode, Christopher Olsen, managing partner at Olsen Palmer, shared his view of the bank M&A market and why community banks are selling at this point in the cycle. The veteran deal adviser said shareholder liquidity, and board and management succession remain significant drivers of sales activity. He also said that buyers have greater regulatory support to announce multiple transactions in a relatively short period of time and are seeking scale to compete with both traditional banks and nonbank competitors vying for market share. He also noted that some recently announced large transactions demonstrate increased deal discussions and the promise of greater activity in the future.

InterBank President and CEO C.K. Lee runs one of the highest-performing banks in the country. The $4.7 billion, Oklahoma City-based bank has produced a pretax return on average assets of 3.30% or higher in each of the last five quarters and an S-Corp. adjusted ROAA of 2.60% or higher during each of those periods. The latter is more than 2x the ROAA generated by the community bank aggregate during that time frame. In the latest edition of Tales from Top Performers, a series featuring conversations with executives at high-performing banks, Lee discusses the bank's philosophy and how it positioned the institution to thrive through the changing interest rate environment, generate strong performance and recruit top talent. The executive also discussed his prior experience as a regulator and investment banker, and shared his outlook for credit quality and the M&A landscape.