Banks Containing Balance Sheet Size with Lending and Deposit Activity Slowing.

Bank loan portfolio growth continues to show weakness with the largest banks up only 1.7% from year ago and weaker in recent weeks. Community banks and all other banks not in the top 25 show 6.5% year over year growth but growth is also moderating recently. Data is from the Federal Reserve's H.8 Assets and Liabilities of Commercial Banks and sourced via the FRB St. Louis' FRED economic database.

Deposit growth has also stalled across banks of all sizes. Overall balance sheets (total assets) are leveling off with investment securities portfolios showing reductions. Has the rise in interest rates and flattening of yield curve lessened profitability of these investment securities? How will the expected 3 Fed hikes throughout 2018 impact overall balance sheet size and management?

For other information and analysis, go to Banking Strategist.