Video Transcript
David Brenia
Research Analyst, U.S. Value Equity Team
We are currently overweight the banks. Coming into 2026, we were very positive on the banks. We had the prospect of Fed rate cuts, which could drive the economy and accelerate loan growth. 2025, we saw some muted loan growth; now that was expected to pick up. So with fourth-quarter earnings in the month of January, we had a lot of positive guidance. So the banks outperformed. We had AI-related articles; private credit concerns; the buildup and including the war in Iran that's currently going on. So all of that has taken the tailwinds away. And so there's a lot of uncertainty around the prospect of recession, the Fed having to possibly hike rates instead of cut, and then how long the war in Iran will last and energy prices remain high. Still like the backdrop for the banks. There's still M&A that's expected to happen given the conducive regulatory environment that while that might be on pause in the near term, I think that will pick back up. Very positive still on the Southeast region and in Texas, and continue to just think that we can find idiosyncratic growth stories in the bank space.
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