Commercial real estate (CRE) exposure was the main driver behind problem loans for the banks that failed in October, according to new data released by Trepp LLC.
CRE loans comprised $401 million (65.1%) of the total $617 million in nonperforming loans at the failed banks. Construction and land loans made up $254 million (41.2%) of the total, while commercial mortgages comprised $147 million (23.9%) of the total nonperforming pool.
Trepp adds that the residential real estate loan category was a secondary source of distress, with $136 million in nonperforming loans, or 22% of the total nonperforming balance. The remainder was comprised of commercial and industrial loans ($69 million, 11.2% of the total) and consumer and other loans ($11 million, 1.7% of the total).