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Bank of America Securities started coverage of M&T Bank (NYSE:MTB) with an Overweight rating on Monday as the lender is managing through risks tied to the beaten-down commercial real estate market.
MTB has relatively high exposure to the commercial property space, analyst Tom Curcuruto noted, but it has shrunk its portfolio by 22% on a pro forma basis.
“This run-off in CRE has likely enabled MTB to reduce its risk profile and, in part, explains its relatively below average loan loss reserves in total CRE and office CRE,” he wrote in a note.
In all, M&T’s (MTB) “strong capital position, high earnings power, and long term track record in CRE are underappreciated,” the analyst added. Year-to-date, shares of the Buffalo, New York-based bank advanced 6.9%, trailing the S&P 500’s 16.7% climb.
Curcuruto’s Overweight rate aligns with the SA Quant system rating and the average Wall Street analyst rating, both at Buy.
MTB edged up 0.4% in Monday afternoon trading.