Executive Summary

This report highlights 28 publicly traded New York banks with assets between $800 million and $20 billion using financial data as of or for the quarter ending June 30, 2021. We believe banks in this size range are large enough to be efficient and small enough to deliver personalized services. These “under the radar” publicly held banks are not widely followed by brokerages or institutional investors for several reasons, including fairly low market caps and little trading volume.

The Empire State consists of two distinct regions: the New York City metropolitan area and Upstate New York (“Upstate”). We define Upstate as the areas north and west of New York City and Long Island. Upstate is more rural, but includes Albany, Buffalo, Rochester, and Syracuse. New York City and its nearby areas are much different (culturally, demographically, economically, and politically) from Upstate. Most of New York’s banks, therefore, cater to either Upstate or New York City.

Accustomed to slower-growing markets, many Upstate banks have satisfied shareholders via adequate returns on equity and steady dividends. Banks in densely populated NYC/Long Island markets continue to compete well against global financial firms. At press time, rising Covid-19 Delta variant cases probably will not lead to widespread business shutdowns and quarantines, but will likely dampen overall economic activity.

The pandemic has clearly demonstrated that banks across all asset sizes face major and permanent changes, which includes a greater need for scale. As part of this “survival of the fittest” challenge, New York’s community banks may consider expanding niche businesses and fintech applications; and/or pursuing merger partners. As discussed herein, more Empire State banks probably should consider merger-of equals (MOE) transactions to gain the requisite scale to better compete. A 2021 deal announcement was the large MOE pact between Webster Financial Corporation (NYSE: WBS) and Sterling Bancorp (NYSE: STL).

June 2021 quarter results for our highlighted banks were good. Credit remains excellent and many banks reported lower, or even negative, loan loss provisions. Several New York banks took advantage of near-perfect interest rates and other favorable market conditions to raise subordinated (“sub”) debt over the past 18 months or so. PNC FIG Advisory also recommends ESG bonds as good options for both bank issuers and investors.


  • There are 231 depository institutions, including 56 which are publicly traded banks and thrifts, headquartered in New York State. The top five banks have a combined deposit market share of approximately 62%. JPMorgan Chase & Co. (NYSE: JPM) is the market leader with a 39.3% deposit share. Of the banks headquartered Upstate, only M&T Bank Corp. (NYSE: MTB) ranks among the top ten banks regarding deposit market share (3.3%).
  • Interest rates and spreads are about that same as those a month-ago. Although one size does not fit all, some strategies that should work well in the current rate environment include deleveraging through the prepayment of FHLB advances, selling lower-yielding securities, purchasing whole loans, and by investing in higher-yielding sub-debt issuances of other financial institutions.
  • Opportunistic banks continue to take advantage of favorable debt markets to raise sub debt. Because it is unlikely pricing can improve much, we believe there is limited value for prospective issuers to wait for better conditions. Community bank sub debt coupon rates for rated deals have trended down as certain new issue sub debt deals were recently priced with coupons below 3.00%. Selective investments in bank sub debt are also good options to consider for enhanced yield.

For more information, please visit pnc.com/fig or contact PNC FIG Advisory by calling 1-610-351-1633.

Flying Under the Radar: New York Small and Micro-Cap Banks