Several banks have raised capital to tackle their commercial real estate concentrations, despite the hit to shareholders - and many more are expected to follow their lead.
New York Community Bancorp in Hicksville, New York, FirstSun Capital Bancorp in Denver and First Foundation Inc. in Dallas, have all turned to investors as part of broader plans to purge commercial real estate-related loans.
More banks are having difficult discussions with investment bankers and potential investors about absorbing any hits tied to selling concerning assets, investment bankers say.
"We're hearing, seeing and partaking in conversations with banks that are feeling pressure about CRE concentrations," says Matt Shields, a managing director and head of FIG capital markets at Performance Trust Capital Partners.
"Raising defensive capital unlocks the ability for them to be proactive, solve the problems in their balance sheets and get earnings to a better place over the long run," Shields adds.
