Comerica and Huntington Bancshares have cut their 2023 interest income growth predictions due to falling loan demand and rising deposit costs.

The Federal Reserve’s fastest monetary tightening cycle since the 1980s increased lenders’ net interest income in the second quarter, but high rates are making some clients reconsider loans and purchases.

Analysts believe the high interest rate environment is prompting lenders to raise deposit rates to keep clients’ money from flowing to high-yielding money market funds, which will hurt NII.

Regions Financial also announced higher deposit costs in the second quarter.

The industry is waiting to fund potential capital requirement hikes and postponing buyback plans.