(Bloomberg) -- KeyCorp Chief Executive Officer Chris Gorman touted his company’s contained exposure to commercial real estate lending, an area of concern for investors in regional US banks amid heightened interest rates and property vacancies.

“At Key, we are underweight commercial real estate relative to our peers,” Gorman said Tuesday during a Bank of America Corp. financial-services conference. About 13% of KeyCorp’s total loans are to non-owner-occupied commercial properties, he said, compared with 17% for its regional-banking peers, and the company has no loans in one area of particular concern. “Key has no exposure to rent-controlled properties in New York City.”

Last month, KeyCorp reported fourth-quarter profit that fell short of analysts’ estimate and predicted that net interest income would decline by as much as 5% this year, compared with analysts’ expectations of a small increase in NII. Net charge-offs were projected to keep rising in the first quarter after climbing for seven consecutive quarters compared with year-earlier periods.

Read More: KeyCorp Profit, NII Forecast Miss Analysts’ Estimates

Cleveland-based KeyCorp said in a presentation at Tuesday’s conference that average loans in its portfolio are likely to decline 5% to 7% this year, while average deposits will be flat to down 2%. Net interest income will fall as well, slipping 2% to 5%. Non-interest expenses, meanwhile, will be “relatively stable” and non-interest income will be up 5% or more.

“We are well-positioned relative to our capital priorities,” Gorman said.


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