Bank Tellers Tell All
Actionable Market Insights from Tuttle Ventures
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This week we took the time to review the latest Bank Executive Business Outlook Survey provided by IntraFi.
IntraFi offers access to FDIC insurance into the millions, using a patented process to help financial institutions give depositors the safety, transparency, control, and return potential they need.
The IntraFi Network is used by more than half of all US Banks with nearly 3,000 banks in network.
The survey was delivered via email to bank CEOs, presidents, CFOs, and COOs. Leaders from 454 unique banks throughout the US completed the survey. Of these respondents, 151 were CEOs (33%), 42 were presidents (9%), 235 were CFOs (52%), and 26 were COOs (6%).
We believe a survey of this scope can give insights on what we can expect drawing up our investing playbook for 2023.
What stood out the most was the consensus expectation of an imminent recession.
Banks remain pessimistic with regard to the narrative of the Fed guiding the economy to a soft landing.
A majority of survey respondents (52%) said the U.S. economy is already in a recession, or will be by the end of 2022.
Another 47% believe a recession will take place in 2023, with most of those saying it will occur in the first half.
Only about 1% said a recession is not imminent.
I’d be curious to meet the 1% willing to stand out from the crowd on this one.
Ok, but if bankers expect a recession to happen, is this a self fulfilling prophecy?
After all, are banks not the primary source of capital and lines of credit to stimulate and grow the economy?
Well, depending on the size of the bank respondent, perspectives changed.
For bankers who worked at institutions with more than $10 billion of assets, 64% predicted a recession in the first half of 2023.
This is interesting for two reasons.
First, it suggests that those who work closest to the action (with the largest in bank deposits) believe the strongest that a downturn is coming.
A trickle down recession typically starts from the top down.
Second, it indicates that the banking industry is still struggling to get behind the current Fed policy. The fact that so many bankers are predicting a recession is a clear sign that the industry is not as healthy as the Fed expects it to be.
You can access the report for yourself here.
Final Word
Thank you for reading and I am grateful and humbled to be able to learn, grow and invest alongside you at Tuttle Ventures. Vision, Courage and Patience leads to successful investing.
Don’t forget to follow Tuttle Ventures on Twitter, LinkedIn or Instagram.
Check out the website or some other work here.
Best,
Darin Tuttle, CFA
NOTE - This is not investment advice. Do your own due diligence. I make no representation, warranty or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information contained in this report. Any assumptions, opinions and estimates expressed in this report constitute my judgment as of the date thereof and is subject to change without notice. Any projections contained in the report are based on a number of assumptions as to market conditions. There is no guarantee that projected outcomes will be achieved. Unless there is a signed Investment Management or Financial Planning Agreement by both parties, Tuttle Ventures is not acting as your financial advisor or in any fiduciary capacity.