NYC’s multifamily lenders see shares tumble in 2020

Hits keep coming for community banks

TRD New York /
Sep.September 24, 2020 11:40 AM
Signature Bank CEO Joseph DePaolo and New York Community Bank CEO Joseph Ficalora (Photos via Getty; Facebook; iStock)

Signature Bank CEO Joseph DePaolo and New York Community Bank CEO Joseph Ficalora (Photos via Getty; Facebook; iStock)

Despite assurances that rent collections have remained strong, share prices for community banks in New York have plummeted.

Since the beginning of the year, New York Community Bank, Signature Bank and M&T Bank have seen their shares fall 30, 39 and 46 percent respectively, Bloomberg reported.

The declines come as few of New York City’s workers return to the office, uncertainty over the reopening schools persists and restaurants struggle to stay open.

The community banks are some of New York’s most active multifamily lenders, and their portfolios are heavily focused on the five boroughs. Early on in the pandemic, the banks offered financial relief to their borrowers in the form of an initial three-month forbearance period on commercial real estate loans.

Some banks said they planned to extend the forbearance agreements, and that rent collections have remained strong. For most borrowers, those forbearance agreements come to an end in October and November.

The loss in share price is in stark contrast to last year’s gains. New York Community Bank’s shares rose 28 percent, Signature’s climbed 33 percent and M&T’s stock increased 19 percent — all outperforming the KBW Regional Banking Index, which tracks comparable community banks.

Still, even before the coronavirus, there were questions about the impact of New York’s new rent law on community banks. While banks said publicly that they were not concerned about over-leveraged assets in their rent-stabilized portfolios, analysts and observers privately cast doubt on that confidence. [Bloomberg] — Georgia Kromrei


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