In the past for quarters the amount of commercial real estate loans on U.S. bank books has swelled by more than $100 billion, according to the latest FDIC numbers released this past week. Construction/development and multifamily lending remain fastest growing categories, increasing 14.5% and 11.9% which are now totaling $289 billion and $230 billion. When bank profit rising, the improving CRE lending performance at U.S. banks has helped drive higher earnings. While the economy continues to recover, the reductions in loan-loss provisions appear to be coming to an end.
Excerpts from the Article:The amount of commercial real estate loans on U.S. bank books has swelled by more than $100 billion in the past four quarters, a 6.6% increase and now totals more than $1.65 trillion (excluding farming), according to the latest FDIC numbers released this past week. The total basically matches outstanding the CRE loan balance at the last peak of CRE markets seven years ago. Multifamily lending continues to be the fastest growing category, increasing 14.5% over the past four quarters and now totaling $289 billion.
Citation and link:
Heschmeyer, Mark. “CRE Lending, Asset Quality Soaring at U.S. Bank.” CoStar News., 10 Dec. 2014 Web. 12 Dec. 2014.