Commercial Real Estate took a hit to its fundamenta-s due to the pandemic which sped up home based work. that is a better idea in our IT based environment but got wartime convergence.
The credit downgrades are now here and higher rates for refinancing.
So write down the book. sorry. It is going to take a deecade to undo the issue.
Large Banks' Total Exposure to Commercial Real Estate
https://www.linkedin.com/posts/rebel-c-b253391_large-banks-total-exposure-to-commercial-share-7521421532925968385-FqFD/
(Updated with 2026-Q1 Data)
Many astute commentators about the banking industry have been warning about future losses on commercial mortgages. The MBA estimates that $875 billion of commercial and multifamily mortgages mature in 2026, and many of these loans must be refinanced at much higher rates than when they were made.
I have calculated the total CRE exposure (CRE nonfarm-nonresidential and multifamily mortgages, CRE construction loans, CRE loans not secured by real estate, and unused CRE commitments) as a percentage of total equity as a broad measure of bank exposure to commercial real estate. A variation of this ratio is used by banking regulators to assess CRE exposures; any ratio over 300% is viewed as excessive exposure to CRE.
Data are as of March 31, 2026 (Q1).
Below is a list of the total CRE exposure of the 50 banks with more than $10B in assets where their exposure exceeds 300% of total equity capital (50 out of 154 large banks, 4,336 banks of any size). Two have exposures greater than 500% of equity, and 14 have exposures greater than 400%. In Q4, the comparable numbers were 52, five and 17.
Most prominent (by size) are #7 Flagstar Bank, #22 Valley National Bank, #29 Columbia Bank (formerly Umpqua Bank), #30 Zions Bancorporation, #43 SouthState Bank, #44 East West Bank, and #48 Old National Bank, each of which has more than $50B in total assets.
Some of the drop in the large-bank list comes from mergers rather than lower exposures. Synovus (369% in Q4) merged into Pinnacle Bank on Jan. 2, and Comerica (302% in Q4) merged into Fifth Third in early February. EagleBank (520% in Q4) fell off the list because its assets slipped below $10B; its exposure is still 473%. FirstBank of Colorado (392% in Q4) dropped to 158% after PNC acquired it in January, because purchase accounting pushed down to the bank more than doubled its equity.
Among banks of any size,
- 1,572 have total CRE exposures greater than 300%, down from 1,585 in Q4, 1,607 in Q3, 1,697 in Q2 and 1,713 in Q1 2025.
- 824 have exposures greater than 400%, down from 842 in Q4, 866 in Q3, 958 in Q2 and 988 in Q1 2025.
- 346 have exposures greater than 500%, down from 349 in Q4, 368 in Q3, 426 in Q2 and 449 in Q1 2025.
- 125 have exposures greater than 600%, up from 110 in Q4, but down from 120 in Q3, 178 in Q2 and 281 in Q1 2025.
For comparison, the aggregate industry total CRE exposure is 135% of total equity ($3.56 trillion vs. $2.63 trillion).
These statistics are based upon my calculations using publicly available Call report data downloaded from the FFIEC's Central Data Repository as of Feb. 15, 2026.
Q2 2026 information coming next week. (I'm behind!)
Q3 2026 data will be released Nov. 15.
Most of these lists will be available for download at FAU's Banking Initiative Website: https://lnkd.in/eA8hsQuu
Watch for my new Substack with deeper dives into these topics. Coming soon!
