EBC - Not Even This Strong Bank Is Immune to Deposit Pressure Right Now
As I've discussed in the past, the Boston-based regional lender Eastern Bankshares (NASDAQ: EBC) is one of my favorite mid-cap bank stocks, primarily because of its incredibly strong deposit base.
But after the Federal Reserve went on its most intense interest rate hiking campaign ever in 2022, banks really started to feel the pinch as customers sought higher yields. Additionally, the Fed has been pulling liquidity out of the economy by shrinking its balance sheet in a process known as quantitative tightening, which has also led to deposits leaving the banking system.
In the fourth quarter, these trends seemed to catch Eastern by surprise, with the bank seeing a significant rise in deposit costs and deposit outflows, showing that no bank is immune to the environment right now. Let's take a look.
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Not Even This Strong Bank Is Immune to Deposit Pressure Right Now