38 MAY / JUNE 2020 Michael A. Renninger Principal Renninger & Associates LLC mrenninger@ renningerllc.com Renninger & Associates LLC is a Diamond Associate Member of the Indiana Bankers Association. Securities offered through Ausdal Financial Partners Inc. Member FINRA/SIPC. 5187 Utica Ridge Road, Davenport IA 52807 563-326-2064. Renninger & Associates and Ausdal Financial Partners Inc. are separately owned and operated. Indiana Statistics Click on the hand icon in HB Digital to access statistics through March 31, Feb. 28 and Jan. 31, 2020, or visit: indiana.bank/bankthrift-stock-update Stock Analysis Review as of March 31, 2020 INDIANA BANK & THRIFT STOCK UPDATE The Size, Pricing and Profitability Reports for Indiana Banks and Thrifts as of March 31, Feb. 29 and Jan. 31, 2020 are available by clicking on the icon on this page in HB Digital or by visiting the designated website location. These reports present the stock price changes for the 32 Indiana banks and thrifts that are traded on the NASDAQ and Over-The-Counter markets over the prior two years, one year and year-to-date, in addition to pricing and performance metrics. Selected banks headquartered outside Indiana, four broad market indices and five bank and thrift indices are also tracked. Sixty days ago, I listed in this space a number of the many headwinds that face the broad market and, by extension, impact the financial institution market. One of those headwinds was the potential for the coronavirus to become a pandemic. History books will chronicle how relative optimism in mid-February was replaced in the span of five weeks with such fear that much of the world’s economy was largely shut down with government mandated stay-at-home orders. Social distancing and essential services are concepts that are now emblazoned into our lexicon. Putting aside for the moment the very real life and death consequences of this once-a-century health crisis, no one knows at this writing the depth and length of the ensuing worldwide financial crisis. While the health industry continues the struggle to manage the disease, government intervention has been and will be necessary to provide financial liquidity and to combat spiraling unemployment. The Federal Reserve has lowered interest rates to near zero. Congress has authorized the disbursement of trillions of dollars through multiple rounds of stimulus and income replacement for individuals and businesses. With decreased economic activity, worldwide oil production has far outstripped demand causing oil prices to crash to the lowest levels in history, threatening the survivability of some oil producers. In addition to the lost and changed lives, the economic and social ripple effects may be felt for years to come. In the middle of the maelstrom, the financial services industry has seemingly performed well. Banks and brokerage firms continue to provide services, albeit with an emphasis on contactless technology. Of course, it is far too early to know the impact of constricting net interest margins and anticipated rising loan losses on bank profitability and stock prices. The numbers presented in the month end Size, Pricing and Profitability Reports referenced above understate the true magnitude of market volatility. The March 31 report shows that the S&P 500 Index was down 20% year-to-date at 2,585. This key broad market index was approaching 3,400 in mid-February, however, and fell to nearly 2,200 by late March, a 34% drop. In comparison, the S&P 500 Bank Index, a key banking industry index, was down 41% year-to-date at 223 at March 31, but has been down as much as 49% year-to-date. This continues the trend of bank and thrift indices significantly underperforming the broad market indices. The median for Indiana’s NASDAQ-traded bank stock prices has decreased 28.4% year-to-date, and Indiana’s OTC bank stocks decreased 16.3%. By comparison, the medians for selected banks with assets greater and less than $100 billion headquartered outside Indiana decreased 45.6% and comparable 37.5% yearto-date, respectively. No mergers or acquisitions were announced or completed over the last 60 days, as of this writing. HB
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