Longtime investor and trader Jim Lebenthal said he favors big banks over small lenders as it heads into earnings season. “The big banks should have benefited from what happened last month with Silicon Valley Bank and Signature Bank, meaning they got the flow of deposits from small banks,” Lebenthal said. than”. “I think we should favor larger banks over smaller banks just because of their overall strength.” Watch the video above for Lebenthal’s overview of the field and his favorite picks. First-quarter earnings season kicks off on Friday with JPMorgan, Citigroup, Wells Fargo and PNC Financial reporting quarterly numbers. From these reports, Lebenthal said he will assess the health of the banking system as well as the macroeconomic health of consumers. He is a partner at Cerity Partners, which manages US equity portfolios for clients and advises them on asset allocation. “I want to hear from both the big banks and the PNC… how they feel about the health of the banking system,” Lebenthal said. “Is there more pressure on the balance sheet? Is there more deposit flow not just from small banks to big banks but from all banks to money market funds?” The collapses of Silicon Valley Bank and Signature Bank last month – the second and third largest bank failures in US history, respectively – have investors concerned about the overall health of the bank. banking system and if more institutions are at risk. There is an overlooked blessing for the banking sector, says Lebenthal, that bond yields are falling. Lebenthal said lower interest rates would increase the value of Treasury securities on a bank’s balance sheet. The investor called JPMorgan a “creme de la creme” in the banking system and said he owns Citigroup as a value and spin game. He said he doesn’t have any individual shares in the regional banks but he does own a small position in the SPDR S&P Regional Banking ETF.