Southeastern banks continued to gradually improve in the third quarter, with earnings climbing to their highest level since 2007 and capital levels reaching a four- year high. However, banks will still face significant challenges in 2013, including uncertainty surrounding the so-called fiscal cliff, writes Atlanta Fed Senior Vice President Michael Johnson in Financial Update's "ViewPoint."
The fourth quarter "ViewPoint" includes an overview of Southeastern banking conditions and national banking trends. The quarterly column also shines a spotlight on two important issues for banks—net interest margins and the upcoming expiration of the Transaction Account Guarantee (TAG) program.
As the TAG program draws to a close on January 1, 2013, the Atlanta Fed's supervision and regulation division has been working closely with banks to explore the possible implications for net interest margin and liquidity. Meanwhile, interest rate risk has also been in the spotlight as banks struggle to preserve net interest margins. The current "ViewPoint" features one aspect of the interest rate risk discussion—net interest margins—with more to come in subsequent quarters.
For more in-depth discussion and analysis of regional and national banking issues, check out the fourth quarter issue of Financial Update's "ViewPoint."