As we close out 2023, we're looking at how investors in some publicly-held local companies did this year. When it comes to the banking sector, it was a challenging and busy year.
It's tough to be an investor in banks when the Federal Reserve is raising interest rates.
That's because rising rates push down the price of bonds — and bonds usually make up a key part of a bank's value in its capital reserves.
Nationally, that's been a banking challenge for much of the past year.
The S&P Bank Index lost more than a quarter of its value from its February peak to its November low.
It's bounced off those lows, as Fed officials have spoken about plans to cut rates next year.
Another challenge in 2023 was the March failure of Silicon Valley Bank.
That pressured regional banks and led the executive director of the Hawaiʻi Bankers Association to issue a statement in May saying “the fundamentals of the Hawaiʻi banking industry remain strong.”
By year's end, local banks had bounced off their lows — but are still down for the year.
Going into Friday's trading, First Hawaiian's stock was down about 11% this year, while Bank of Hawaiʻi was down about 5% and Central Pacific was down about 2% for the year.
The smaller Territorial Savings Bank is also off its lows, but down more sharply — losing more than half its value this year.
The state's third-largest bank, American Savings, trades as part of its parent company — Hawaiian Electric Industries.
And that's another story — for next week.
