Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries As the NYCB stock collapses, OZK, GBCI, VLY, HOMB are at risk By: Invezz February 09, 2024 at 06:41 AM EST The New York Community Bancorp (NYSE: NYCB) stock price has collapsed this week and revived the memories of last year’s banking crisis that led to the collapse of Silicon Valley Bank (SVB) and First Republic Bank (FRC). The shares have plunged to a low of $4, down from this month’s high of over $12. Its market cap has crashed to $3 billion.Regional banks exposure to CRENYCB is not the only bank at risk, which explains why the SPDR Regional Banking ETF (KRE) has crashed by more than 10% this year. In contrast, the Invesco KBW Bank ETF (KBWB), which includes the other safe banking companies like JP Morgan and Goldman Sachs has retreated by just 2.38% this year.The other regional banks at risk are Bank OZK (OZK), Glacier Bancorp (GBCI), Valley National Bank (VLY), and Home Bancshares (HOMB) are at the biggest risk. This explains why most of them have plunged by more than 10% this year.OZK vs GBCI vs VLY vs HOMB stocksThe main reason why these banks are at an elevated level is that the real estate industry is imploding. And as shown below, these banks have extended billions of dollars in loans to commercial loans. Commercial real estate loans as a percentage of total loans stand at 71.1% for Bank Ozak. They stand at over 60% for the other four companies, including New York Community Bank. As I have written before, the commercial real estate (CRE) industry is facing a triple whammy that will be difficult to overcome. Office occupancy rate has fallen in most American cities, including New York and San Francisco. This trend will likely continue as many companies like Citigroup, Roblox, and Snap lay off thousands of white-collar employees.The second whammy is that the industry is facing a wall of maturities at a time when interest rates are expected to remain higher for longer. This situation is happening because many real estate companies borrowed heavily during the zero-interest rate environment. They are now required to refinance at a higher interest rate, a highly difficult situation.More than two-thirds of all commercial real estate loans are held by small- and medium-size banks, prompting concern that regional banks might be unable to withstand a wave of defaults if landlords cannot pay off loans.— twelvetwentyseven (@twelve_twenty7) February 8, 2024Real estate property values are sinkingThe third reason is that these factors have pushed the value of properties substantially lower in the past few months. In a recent statement, Barry Sternlich, the founder of Starwood Capital warned that property values have plunged by over $1 trillion in the past 12 months and the situation could get worse.The logic behind this is simple. As occupancy rate in key markets wanes, demand for office blocks is falling, pushing prices lower. For example, a San Francisco building was sold at a 75% discount last year. Just recently, a Blackstone-defaulted tower in New York sold for a 50% discount. This trend will likely continue as the industry goes through major woes.The challenge for these regional banks is that they hold most of the property debt after big players like JPMorgan and Bank of America exited the industry after the Global Financial Crisis (GFC). A report by Citigroup found that regional banks hold about 70% of all CRE in the US, putting them at risk as the default risks rise.The post As the NYCB stock collapses, OZK, GBCI, VLY, HOMB are at risk appeared first on Invezz Related Stocks: New York Community Bancorp Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
As the NYCB stock collapses, OZK, GBCI, VLY, HOMB are at risk By: Invezz February 09, 2024 at 06:41 AM EST The New York Community Bancorp (NYSE: NYCB) stock price has collapsed this week and revived the memories of last year’s banking crisis that led to the collapse of Silicon Valley Bank (SVB) and First Republic Bank (FRC). The shares have plunged to a low of $4, down from this month’s high of over $12. Its market cap has crashed to $3 billion.Regional banks exposure to CRENYCB is not the only bank at risk, which explains why the SPDR Regional Banking ETF (KRE) has crashed by more than 10% this year. In contrast, the Invesco KBW Bank ETF (KBWB), which includes the other safe banking companies like JP Morgan and Goldman Sachs has retreated by just 2.38% this year.The other regional banks at risk are Bank OZK (OZK), Glacier Bancorp (GBCI), Valley National Bank (VLY), and Home Bancshares (HOMB) are at the biggest risk. This explains why most of them have plunged by more than 10% this year.OZK vs GBCI vs VLY vs HOMB stocksThe main reason why these banks are at an elevated level is that the real estate industry is imploding. And as shown below, these banks have extended billions of dollars in loans to commercial loans. Commercial real estate loans as a percentage of total loans stand at 71.1% for Bank Ozak. They stand at over 60% for the other four companies, including New York Community Bank. As I have written before, the commercial real estate (CRE) industry is facing a triple whammy that will be difficult to overcome. Office occupancy rate has fallen in most American cities, including New York and San Francisco. This trend will likely continue as many companies like Citigroup, Roblox, and Snap lay off thousands of white-collar employees.The second whammy is that the industry is facing a wall of maturities at a time when interest rates are expected to remain higher for longer. This situation is happening because many real estate companies borrowed heavily during the zero-interest rate environment. They are now required to refinance at a higher interest rate, a highly difficult situation.More than two-thirds of all commercial real estate loans are held by small- and medium-size banks, prompting concern that regional banks might be unable to withstand a wave of defaults if landlords cannot pay off loans.— twelvetwentyseven (@twelve_twenty7) February 8, 2024Real estate property values are sinkingThe third reason is that these factors have pushed the value of properties substantially lower in the past few months. In a recent statement, Barry Sternlich, the founder of Starwood Capital warned that property values have plunged by over $1 trillion in the past 12 months and the situation could get worse.The logic behind this is simple. As occupancy rate in key markets wanes, demand for office blocks is falling, pushing prices lower. For example, a San Francisco building was sold at a 75% discount last year. Just recently, a Blackstone-defaulted tower in New York sold for a 50% discount. This trend will likely continue as the industry goes through major woes.The challenge for these regional banks is that they hold most of the property debt after big players like JPMorgan and Bank of America exited the industry after the Global Financial Crisis (GFC). A report by Citigroup found that regional banks hold about 70% of all CRE in the US, putting them at risk as the default risks rise.The post As the NYCB stock collapses, OZK, GBCI, VLY, HOMB are at risk appeared first on Invezz Related Stocks: New York Community Bancorp
