Sterling Bancorp Isn't Valued For What It Really Is

Investors are nervous about banks with significant exposure to New York’s commercial real estate market, and multifamily in particular. While Sterling Bancorp (STL) certainly does make loans in both of those categories, the shares trade more like a risky multifamily monoline lender than the more diversified lender it really is, to say nothing of giving the bank credit for an above-average deposit base and expense efficiency.

I do have some concerns that management’s guidance for loan growth and operating leverage in 2020 could be too bullish, but I do think the shares are undervalued on the basis of the company’s long-term growth opportunities. With fair value in the low-to-mid-$20’s, I think this is a name worth considering at today’s price.

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Sterling Bancorp Isn't Valued For What It Really Is