Bank Valuations: What You Can and Can’t Control

The Federal Reserve’s decision to pause interest rate increases in June 2023 gave markets hope that the period of rapidly rising rates had ended. “The fact that they paused likely indicates we are near the top,” says Patrick Vernon, senior manager, advisory services at the consulting firm Crowe LLP. But he notes that no one knows for sure whether more rate increases could come. For financial institutions, this moment has provided a breath of fresh air. Rising rates have cut into bank valuations as bond portfolios went underwater, and investors grew more concerned about an uncertain economy. High-profile regional bank...