US banks' capital offerings plummet sequentially in Q4'22

The total value of capital issuance by U.S. banks saw a massive sequential drop in the fourth quarter of 2022.

Capital raised by the U.S. banks decreased during the fourth quarter to nearly $12.63 billion, a 50.0% drop from the third quarter of 2022, according to S&P Global Market Intelligence data.

Senior debt fares better

The significant quarter-over-quarter decline was driven by preferred equity, common equity and subordinated debt, which witnessed a drop of 99.1%, 81.6% and 82.0%, respectively. Senior debt also posted a sequential decline, but of only 27.8% during the fourth quarter of 2022.

Senior debt was the biggest capital offering type at $11.27 billion, compared to $15.59 billion in the third quarter of 2022.

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Subordinated debt was only $1.17 billion in the fourth quarter, a drop from $6.49 billion in the third quarter. Common equity amounted to $171.4 million in the most recent quarter, which marked a decline from the $931.1 million raised in the third quarter.

The least preferred capital offering type was preferred equity, which was down to $19.5 million in the fourth quarter from $2.23 billion during the third quarter.

Largest issuers among US public banks

PNC Financial Services Group Inc. raised $3.5 billion through three senior debt offerings, making it the largest issuer during the fourth quarter.

JPMorgan Chase & Co. had the second-largest issuance, a $3.0 billion senior debt offering. Citigroup Inc. completed the third-largest capital raise through a $2.75 billion senior debt offering.

Fifth Third Bancorp, Northern Trust Corp. and State Street Corp. were the only other banks with at least $1.0 billion in capital offerings in the last quarter of 2022.

Bancorp 34 Inc. and PSB Holdings Inc. were the only two banks to raise capital through preferred equity, raising $7.3 million and $7.2 million, respectively.