Member News

Bank Shares Rise on Second Round of Bank Earnings; Double-digit Growth in CRE Lending

Bank share prices rose for the week as a second round of bank earnings reports lifted investors’ spirits. Bank of America is among the banks that boosted attitudes, with non-interest income bolstering total revenues. Shares of regional banks led the way, rising 4.1% for the week. Share prices of the largest banks also increased, gaining 2.1% for the week.

The gains came as the broader market rose by a more modest 0.4% and surprisingly, bond yields fell slightly as the yield on the 10-year Treasury decreased 5 basis points to 1.74%. The strength of the rally in banks’ share prices indicates an improved outlook for bank earnings within a still-low interest rate environment.

Weekly Trend

Commercial real estate lending growth overall increased with double-digit growth in all three of the main CRE segments. Construction and land development lending growth increased to an 18.2% annualized rate, after double digit growth in the previous weeks. Multifamily mortgage lending grew at a 20.8% annual rate, after a similar figure in the prior week. Commercial mortgages grew at a 14.7% annualized rate. The weekly figures for all three major CRE segments were above the year-to-date trend.

Year-to-Date

Total commercial real estate lending for the year-to-date edged higher to 11.4%. The annualized growth rate for construction and land development rose slightly to 14.0%. Multifamily properties’ annualized growth rate for the year-to-date increased to 14.4%. The annualized year-to-date growth rate for commercial mortgages rose to 10.1%. Commercial mortgage growth has been relatively steady this year, while multifamily mortgage and construction and land loan growth rates have been more volatile.

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Compliments of Trepp – a member of the EACCNY