Commercial lending

The Dallas-based bank swung to a loss in the third quarter after reclassifying a large bundle of multifamily loans that it plans to offload under a recently announced strategy pivot.

The average size of a Small Business Administration 7(a) loan has fallen to just over $400,000, a level last reached in 2017, according to agency statistics.

The bank, which is rebranding to Flagstar Financial, still expects to meet 2027 earnings goals, despite reduced profit projections for the next couple of years.

The bank cut its dividend, raised capital, hired multiple top executives and vowed to reduce its commercial real estate concentration after a bruising first half of 2024.

The Raleigh, North Carolina-based bank lowered full-year guidance for 2024. Costly deposits are outpacing its yield on loans amid tepid borrowing demand.

As new hires generate low-cost deposits and higher-yielding business loans, the New York company's net interest margin is widening. Dime executives signaled the hiring will resume in 2025.

The Arkansas bank said CRE is no longer its principal growth driver, yet it is still the bank's most prominent business and a big part of its robust lending activity.

The Buffalo, New York-based bank said its commercial real estate portfolio continued to shrink, but this was more than offset by business and consumer lending.

There is a tendency to assume that banks carrying a large commercial real estate loan portfolio need to diversify. But that ignores the fact that many of those institutions have much deeper knowledge of the market than their critics.

The regional bank's earnings were impacted by challenges in its office loan portfolio, though its overall results were a mixed bag, with its nascent private bank showing momentum.