Growth

Deal advisors said the Trump administration's tariff threats and the specter of inflation have given some bankers reason to pause on acquisition plans. Momentum could still mount, but uncertainty in Washington is a detriment early in the new year.

Small lenders produced net interest margin expansion in the fourth quarter, thanks in large part to interest rate cuts in the second half of 2024. Festering inflation, however, threatens to lead to rate increases that could stall their momentum.

Joseph Otting, who is leading Flagstar's turnaround, said potential buyers may be interested in acquiring the regional bank once it gets past certain challenges.

The superregional in Pittsburgh said banks large enough to attract its attention have yet to put themselves on the sale block. PNC's finance chief said, "We just have to be ready if and when those windows open."

The Canadian bank plans to exit its 10.1% interest in the brokerage firm, allowing it to shore up capital and strategically shrink to adhere to penalties related to its historic compliance failures.

Oil and gas companies are borrowing to invest in more drilling and new processing facilities to meet rising global needs for U.S. fossil fuels. Several banks said energy loan demand is expected to strengthen further this year.

Small lenders beset by the fallout from high interest rates took losses in the fourth quarter when they unloaded underperforming securities and loans. But they are reinvesting the proceeds into higher-yielding assets.

Small lenders across the country filled leadership positions, including The Peoples Savings Bank in Ohio, which promoted from within to name its first woman CEO.

The Dallas bank made some headway on its goal to slim down its multifamily loan portfolio, but $17 million in bad loans led to a bottom-line loss in the fourth quarter.