Scott Hildenbrand, Head of Piper Sandler Financial Strategies, shared his insights on banking trends and strategies for 2024.
His industry analysis resulted from a Q&A interview with Travillian Head of Banking & Fintech Brian Love.
Strong Economy Fuels Optimistic Banking Outlook
Hildenbrand notes a “higher for longer” outlook due to a strong economy. “Credit costs have remained manageable thus far,” he says, adding that the stabilization in rising costs reduces the likelihood of further net-interest-margin compression.
Strategies to Combat Margin Pressure for Community Banks
Community banks face challenges with legacy assets squeezing margins. Banks are employing strategies like taking losses, raising capital, and hedging to manage these issues. Changing rate expectations have accelerated these adjustments.
Core Deposit Generation Is Key to Bank Value
“Generating core deposits is your value—this environment is putting that to the test,” Hildenbrand emphasizes. Banks are focusing on fintech partnerships and improving infrastructure to attract large deposits.
Talent Development Is Crucial as Bank Leadership Roles Evolve
Hildenbrand highlights increased demand for bank treasurers and CFOs, noting these roles are now more complex due to regulatory and market changes. He stresses the importance of in-house talent development and succession planning.
Economic Factors Will Shape Future M&A Landscape
M&A activity depends on stock prices and interest rates. “When stock prices go up, M&A goes up,” Hildenbrand says. While optimistic about future M&A, he noted potential volatility from the upcoming election.
The Hildenbrand banking industry Q&A can be found on the Travillian website. Watch now to get the full picture.
