Phila banks: 'Negative' value, 'stressed' borrowers; Update
The view from Wall Street: Philadelphia is still slow
"We have not been hearing much of any positive developments in terms of signs of improvement in credit quality from any of our banks under coverage in the Philadelphia" area, or neighboring states, for that matter, says Frank Schiraldi, bank analyst at financial-services investment bank Sandler O'Neill + Partners LP, New York, in a report to clients today.
"Most of what we have been hearing is rather negative," he adds.
"Appraisals continue to come in near the bottom of anticipated ranges amid continued signs of borrower stress." That's making it harder for lenders like First Republic Bank, which specializes in business loans backed by commercial real estate, to make a buck, according to the Sandler report.
Bright spot? In South Jersey, maybe: Republic says its new Haddonfield branch "has exceeded expectations," according to Schiraldi.
UPDATE: I asked Republic boss Harry Madonna. "We think it's bottoming," he told me.
"We're seeing some activity" in the commercial-property market. "Well-to-do" investors and funds are bargain-hunting buildings at "30 to 35 percent below peak prices" from the mid-2000s.
He's worried about residential units: "I see all these empty condos on Rittenhouse Square." But now that appraisers have "tightened up, we're seeing increased activity. There are buyers." Where there's offers, there's hope.