The threat from a looming wave of maturing commercial real estate loans has been well telegraphed to investors, but it's possible the metrics they are using to protect themselves from risk are flawed.
Many investors have been avoiding bank stocks with high concentrations of commercial real estate (CRE) exposure.
Investors have been punishing regional bank stocks, especially when the bank's commercial real estate exposure tops more than 300% of its total equity .
While the latter two have some exposure to New York City real estate, both banks benefit from strong management teams, he said.
(New York real estate markets are navigating both falling office values as well as the dynamics of rent-regulated multifamily properties.)
Persons:
Erika Najarian, Stephens, Matt Breese, Breese, Webster, Najarian, Piper Sandler, Scott Siefers, Siefers, generalists
Organizations:
Owners, KBW, Regional Banking, UBS, Federal Deposit Insurance Corp, Federal Reserve, Kansas City Fed, NBT Bancorp, Webster, National Bancorp, Micron Technology, Financial Group, Citizens
Locations:
New York City, York, . Connecticut, New, New York, Providence, R.I