Community Banks Drive Bank CRE Lending in Q1

FDIC headquarters

WASHINGTON, DC—Commercial and community banks continue to increase their commercial real estate lending during the first quarter of 2016, according to recent figures from the Federal Deposit Insurance Corp. But while commercial banks posted a slight 1.6% increase, community bank lending for commercial real estate rose by 11.9%, the figures show.

Indeed, community banks were the darlings among insured institutional bank lending for the quarter: Net income grew considerably from a year earlier, as FDIC Chairman Martin J. Gruenberg noted in a prepared statement with the release of the data.  Revenue growth, loan growth and net interest margins as well were appreciably higher than the overall industry. One reason was likely their lower exposure to the oil and gas producers, both in trading operations and direct loans. Such transactions tend to be the domain of larger institutions and as the Q1 figures show, larger banks did take a hit from this sector.