Jacquelynne Chimera, Vice President of Keefe, Bruyette & Woods, Inc., Interviews with The Wall Street Transcript: Job Generation and Spending Growth Lead to Positive Outlook for Northwest and Hawaii Banks

Wall Street Transcript

67 WALL STREET, New York - March 7, 2013 - The Wall Street Transcript has just published its Pacific and Southwest Banks Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Heightened M&A Activity - Regulatory Obstacles and Fee Income Replacement - Interest Rates and Loan-Growth Strategies - Pockets of Growth in Western Banking - Regulatory Outlook Gains Clarity

Companies include: Pacific Continental Corp. (PCBK), Sterling Financial Corp. (STSA), Heritage Financial Corp. (HFWA) and many more.

In the following excerpt from the Pacific and Southwest Banks Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Where are the banks experiencing growth? Is it in deposits?

Ms. Chimera: Deposit growth has been pretty steady for those that are strong, healthy banks throughout the cycle. You could argue that part of it is a flight to safety that took place, but I think what's happening is we are still seeing a lot of depositors that are on the sidelines that are a bit more cautious with how they deploy their income, and so they are keeping a lot of that fairly liquid and in banks, so that's definitely helping deposits.

The level of non-interest bearing deposits has increased dramatically for a lot of banks, in part because of new account generation, because they have been able to take some accounts from their competitors, but also in part because the rates that you get on higher-interest bearing deposit accounts are just not attractive right now. The Hawaii market in particular has had very strong deposit growth.

TWST: What are the banks doing to increase revenues, especially in a continued low interest rate environment?

Ms. Chimera: It's a struggle to be certain. We are seeing a lot of focus on fee generation, more diversification, which I think is very positive going forward, especially to the extent that they are able to maintain this higher level of fees relative to overall revenue. Mortgage banking, for those that participate in sales to the secondary market, has been a very strong source of growth.

And in other generation, we are seeing companies look to develop their wealth management divisions; we are seeing different fee sources that they are evaluating - not anything where they are looking to charge customers fees that may hurt their customer base - but things that perhaps were once provided that should have had a fee attached to them that are now being...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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