Keefe, Bruyette & Woods Equity Analyst Sees Stiff Headwinds for New York State Banks

January 23, 2020

Collyn Gilbert is Managing Director of Keefe, Bruyette & Woods, Inc. Ms. Gilbert is currently a Managing Director with KBW/Stifel covering small- and mid-cap banks in the Northeast. Prior to joining KBW in 2013 when it was acquired by Stifel, Ms. Gilbert was Managing Director at Ryan Beck & Co., covering regional banks throughout the Northeast.

In this 2,912 word interview, exclusively in the Wall Street Transcript, Ms. Gilbert makes a case for her top picks in 2020.

Her picks are very interest rate sensitive:  “The movements in the yield curve and in interest rates are really a heavy, heavy factor in how banks and, in particular, my universe of smid banks perform.”

New York State has an additional set of challenges:

“This was a particular setback for the NYC real estate market, given the large concentration of rent-stabilized properties in NYC and the interconnectedness these properties have with the overall strength of the real estate market in NYC.

These new laws have eroded the return profile for the property owner, which then has eroded the desirability for this asset class, which then lowers demand and overall activity in the sector, and that has negatively impacted the overall loan activity for many of the banks in the NYC metro market.

The other law that has impacted the real estate market in NY state was the SALT deduction that was implemented in 2018. This tax limits the property tax deductibility, which has, again, negatively impacted the real estate profile for the higher-property-tax regions of NY state.”

An additional challenge is on the technology side:

“At the large-bank level it is, but there still seems to be a large gap there to what the community banks are doing. Many banks are still in the initial stages of rolling out mobile products, online account opening capabilities and just moving to more sophisticated data management platforms.

So while we are happy to see these banks implementing these technologies, sometimes you want to say, “You should have had done that five years ago.”

Get the complete picture on all the Keefe, Bruyette & Woods picks from this experienced analyst by reading the entire 2,912 word interview, exclusively in the Wall Street Transcript.