The Institutional Risk Analyst

The prospect of Zohran Mamdani becoming Mayor of NYC and the rise of other socialist elements in the Democratic Party means that owners of New York real estate are facing effective expropriation of their property.  And the real losers are New York consumers.

In simple terms, FLG is not making money and does not seem to have any immediate prospects to pull itself out of a slow downward spiral of balance sheet shrinkage and operating losses.  Whereas before 2024, FLG was a peer performer in most respects, today the bank’s financial performance is significantly below-peer, bottom quartile in many cases.

We expect to see continued consolidation in the world of residential mortgage finance in coming months. The sad fact is that many less competitive businesses in mortgage finance have been waiting for the FOMC to ride to the rescue with lower interest rates. If rate cuts do not materialize in 2025, however, then many of these businesses may not survive.

Some of the largest banks by assets have dropped from the top quartile into the bottom half of the distribution for the top 100 banks

A look at the bottom quarter of WGA Bank Top 100 Index. We view TCBI as a work in progress. But kudos to KEY...