FDIC Sees Potential Warning Signs for Bank CRE Lenders

The Summer 2022 issue of the FDIC’s Supervisory Insights ran an article called “Commercial Real Estate: An Update on Bank Lending Amid the Evolving Pandemic Backdrop.” While an examination of financial performance of banks lending to CRE, it also mentions “observations about CRE lending risk management practices” and “the FDIC’s forward-looking supervisory focus for banks with significant exposure in this sector.”

“The majority of banks with CRE loan concentrations are satisfactorily rated,” the article said. “Nevertheless, CRE loan concentrations add dimensions of risk that necessitate continued attention from banks and their regulators, especially as the pandemic lingers and uncertainties remain.”