INDUSTRY UPDATE

Industry Update: Number of Banks exceeding 300% capital threshold for CRE loans grows to 38.7%.

Recent Articles

OTS Goes it Alone on CRE Guidance

Residential Mortgages -- Are regulators asleep on mortgage servicing rights?  Our analysis suggests that US banks may be overstating regulatory capital. One-Third of US Banks Fail New CRE Guidance.   36% of banks would fail the recent hurdles suggested by the recent regulatory guidance on CRE.   Accountants view new regulation with trepidation.   Managing CRE concentration risk: Regulators likely to enforce heightened risk management practices, according to RSM McGladrey. Economist sanguine about CRE concentration risk  An economist at the FRB of San Francisco concludes with respect to CRE concentrations that "most CRE-concentrated banks have managed these exposures prudently over the sample period. However, the relatively favorable economic conditions prevalent during much of the period could overstate the success of their risk-management practices." Attorneys: New regulation likely to have market and capital consequences -- According to attorneys Bricker and Eckler, LLC:   "Institutions that choose to maintain large CRE concentrations or continue to grow rapidly in the area of CRE lending must be ready to withstand the inevitable additional supervisory and market scrutiny that is sure to follow. " Trade Group wary of new CRE regulation  -- The Independent Community Bankers Association or ICBA has taken a wait and see approach to the new guidance, however, it is ever vigilant to an adverse impact on community banks.