The company faces credit risk from loan defaults and inadequate collateral, especially in commercial real estate and leveraged lending. Interest rate risk is present due to fluctuating rates impacting income and liabilities. Liquidity risk is a concern, stemming from potential deposit withdrawals and funding needs. Legal and regulatory risks exist from ongoing litigation, including antitrust lawsuits and CFPB settlements, potentially leading to significant fines or judgments. Economic downturns, changes in interest rates, and actions of rating agencies also pose risks.
Financial Upside
The company anticipates modest increases in net interest margin from fixed-rate asset repricing and moderating deposit costs. Increased yields on average interest-earning assets and average balances of other short-term investments could also contribute positively. Growth in wealth and asset management revenue and service charges on deposits are also potential positive factors. The company's strong core deposit funding and available liquidity provide a buffer against market disruptions.
