U.S. regional banking stocks fell Friday to extend a brutal, two-day sell-off sparked by New York Community Bancorp’s earnings that renewed investor focus on the lenders’ exposure to the troubled commercial real estate sector.

NYCB on Wednesday boosted its provisions for credit losses by 345%, part of which was allocated to its commercial real estate (CRE) portfolio, re-igniting worries over defaults as high interest rates and remote work dampen office demand.

The bank’s shares have nearly halved in value over the last two sessions. They edged up 0.8% in volatile trading on Friday.

The KBW Regional Banking Index, a key gauge of the banking industry, declined 1.9% and was on course for its fourth straight session of declines.

The stock reaction has hit investor confidence to re-engage in bank stocks, BofA analysts said.

“It could potentially cause investors to take a wait-and-watch approach until additional visibility emerges on macro, Fed policy and earnings per share outlooks.”

Shares of Valley National Bancorp, Comerica, Citizens Financial Group and other mid-size banks fell between 1.5% and 3%.

Meanwhile, shares of Japan’s Aozora Bank slumped to a three-year low in Tokyo after it took a huge loan-loss provision against U.S. office loans.

The disclosure from Aozora Bank on Thursday “lit a match” to underlying CRE fears but the reaction in U.S. bank stocks was overdone, Citi analyst Keith Horowitz said.

“We remain constructive long term on the regional banks. Our general view is that the large cap banks in our universe have been very focused on relationship lending and we don’t view foreign bank CRE as the best data point,” Horowitz said.

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