Despite accumulating headwinds, U.S. banks turned in a solid first quarter, says credit rating agency DBRS Ltd., which expects the banks to remain resilient in the year ahead.

In the first quarter, concerns ranging from slowing global growth and trade disruptions, to Brexit and the yield curve, continued to pile up. Yet, DBRS said financial markets and market sentiment improved in the quarter, thanks to a shift by the U.S. Federal Reserve Board to a more neutral position on interest rates.

As a result, the U.S. banks managed to turn in decent Q1 results, DBRS said in a new report.

Looking ahead, DBRS indicated that it “generally expects similar financial results and balance sheet trends from U.S. banks over the near term, given that economic and financial market indicators do not suggest a significant deviation from the current operating environment.”

Among other things, the rating agency reported that commercial loan growth was very strong in the quarter, and consumer business growth was also solid.

“Notably, the residential mortgage market was significantly improved from the very weak prior quarter, benefiting from the drop in mortgage rates,” it said.

Additionally, net interest income and the net interest margins (NIMs) remained relatively stable in the quarter, DBRS said.

One weak spot was the banks’ results from their capital markets-related businesses, which DBRS said were “lacklustre,” noting that sales and trading net revenues were down an average of 14% from the same quarter a year ago.

Also, investment banking revenues were essentially flat, and “wealth and investment management revenue trends were again mixed,” it said.

Asset quality remained stable, DBRS reported. While riskier lending has gravitated to non-bank financial firms, the rating agency also said that banks have exposure to these firms through credit facilities and equity investments.

These exposures “are generally well managed,” it said, but added that the underlying risks and interconnectedness “remains concerning, particularly given that the current credit cycle is potentially in its later stages.”

Nevertheless, the report indicated that, while underlying growth is slowing, it’s still holding up better than many other countries, and “the Federal Reserve has policy space to manage an unexpected downturn,” it noted.

“Regardless of what lies ahead, DBRS considers U.S. banks to be well positioned to cope with an adverse operating environment, considering their strong capital and liquidity ratios that are substantially better than pre-crisis levels and their consistently strong stress test results under particularly onerous conditions,” it concluded.