Recent Rise in Long-Term Rates Bodes Well for Bank Profitability

NEW YORK, Jan. 29, 2013 /PRNewswire/ -- RateWatch, a premier banking data and analytics service owned by TheStreet, Inc. TST reported today that interest rates for savings products are holding steady.  The average interest rate on a 5-year CD decreased by one basis point based on data collected from over 90,000 financial institution locations.

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Market yields for 10-year U.S. Treasury bonds reached the 2.00% line on Monday, for the first time since April 25 of last year, according to the Treasury's data.  The recent rise in long-term rates will eventually bode well for profitability for many banks, as yields on other long-term assets rise, although in the near term, a concurrent rise in mortgage backed securities yields means lower profits for banks on the sale of newly originated loans. 

It is too early in this rate cycle for the rising long-term rates to translate to higher deposit rates.  The Federal Reserve Open Market Committee in December said that it expected to keep its target short-term federal funds rate in a target range of zero to 0.25% for "at least as long as the unemployment rate remains above 6-1/2 percent," and as long as inflation projections remain within 0.5% of the central bank's long-term goal of 2%.

NATIONAL AVERAGE RESULTS - $10K

TOP RATE ISSUERS - $10K
This is a list of issuers with top interest rates.  The issuer's Financial Strength Rating is an independent, unbiased evaluation of quarterly regulatory statements. Institutions are assigned a letter grade of A-E with "A" representing the highest rating based on a review of many aspects of financial safety including capitalization, asset quality, profitability and liquidity. For more information, visit www.weissratings.com/help/what-our-ratings-mean.aspx.  Information is believed to be accurate, but not guaranteed.

Data is surveyed weekly with averages calculated each Monday afternoon from RateWatch's unbiased national interest rate survey of over 90,000 financial institution locations across the United States.

About RateWatch  
For over 20 years, RateWatch has been the premier provider of competitive interest rate and product information to financial institutions across the United States.  Consistently providing top quality, highly relevant data RateWatch maintains the largest database in the industry with deposit, loan, and fee information monitoring over 90,000 locations. Rate surveys, product comparisons, financial strength reporting, local/regional/national averages, fee reporting, specialty reports and more are available.  To learn more about RateWatch, visit www.rate-watch.com.  RateWatch is a division of TheStreet, Inc.

About TheStreet
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Contact: 

Erin Corcoran  
TheStreet, Inc.  
212-321-5566  
erin.corcoran@thestreet.com  

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SOURCE TheStreet