U.S. Banks鈥� Exposure to Risk from Commercial Real Estate Screener
Many financial experts in the banking industry have warned about future losses on commercial real estate (CRE) mortgages as $1 trillion dollars in mortgages mature and must be refinanced at much higher rates during the coming year.
As most CRE mortgages are five- or ten-year balloon mortgages, most of these loans that originated in a lower rate environment are currently rolling over and need to be refinanced this year when rates are higher. There also are many 5-1 adjustable rate mortgages that are repricing during the coming year to much higher rates.
The imminent refinancing of loans, combined with more commercial properties selling at a discount relative to pre-pandemic values, has exposed vulnerabilities in the banking system not only to commercial real estate mortgages, but also to commercial real estate construction loans and unused commitments to fund commercial real estate mortgages and loans.
The U.S. Banks鈥� Exposure to Risk from Commercial Real Estate screener evaluates 152 of the largest banks in America (with more than $10 billion in assets) out of about 4,500 existing banks to track their exposure to commercial real estate. Using publicly available quarterly data from the Federal Financial Institutions Examination Council Central Data Repository, we calculate each bank鈥檚 total CRE exposure (the sum of CRE nonfarm-nonresidential mortgages, multifamily mortgages, CRE commercial & industrial loans, CRE construction loans and unused CRE commitments) as a percentage of the bank鈥檚 total equity.
We use this ratio as a broad measure of bank exposure to commercial real estate. A variation of this ratio is used by banking regulators to assess excessive CRE exposures. Any ratio over 300% is viewed as excessive, which puts the bank at greater risk of failure.
This ongoing, quarterly project is produced by The Banking Initiative at 麻豆精品视频 sponsored by Executive Education.听 These statistics are based upon Dr. Cole鈥檚 analysis of Bank Call Report data for Q3 2025 obtained from the U.S. Federal Financial Institutions Examination Council.