The flight of deposits at Fifth Third Bancorp (FITB.O), Comerica (CMA.N), Truist Financial Corp (TFC.N) and KeyCorp (KEY.N) dampened gains that the lenders made in their interest income benefiting from the U.S. Federal Reserve's aggressive monetary policy tightening through the past year.
Only, Huntington Bancshares Inc (HBAN.O), among banks reporting on Thursday, managed to grow average total deposits by $472 million from the prior quarter.
In the aftermath, the KBW Regional Banking Index (.KRX) has tumbled 19.4% this year, through previous close.
Clients are expected to continue the shift toward other assets that bring in higher returns unless the banks increase returns, analysts have said.
Citizens Financial (CFG.N) on Wednesday cut its forecast for net interest income, expecting an increase in the rate it pays out for deposits to clients.