Five U.S. banks failed during the month of March, a slight increase from the four closings reported in February, research firm Trepp said.

Trepp, which analyzes commercial-mortgage backed securities data, noted that commercial real estate exposure remained a key risk factor in March bank failures, continuing a trend that has ransacked troubled banks for several years.

Commercial real estate exposure made up $167.6 million of the $205.4 nonperforming loans held at the five failed banks. 

Still, the pace of bank failures is beginning to decline. 

In the first quarter of 2012, 16 banks failed, down from 18 in the fourth quarter of 2011 and 26 in the third quarter of last year, Trepp said.  

March bank failures occurred in three states, with two of those closings occurring in Georgia, a state that has lost 79 banks since the cycle of closings began in 2007. Two Illinois banks also closed, along with one in Michigan.

The two Georgia failures — Covenant Bank & Trust and Global Commerce Bank — had been on the watch list for several quarters. Trepp says construction and land loans made up the majority, or 68.6%, of Covenant's nonperforming loan portfolio. Global Commerce, on the hand, was weighed down by commercial mortgages that made up 98.6% of the bank's nonperforming loans. 

The two Illinois banks that failed — Premier Bank and New City Bank — ended up weighed down by commercial mortgages. Both banks were on the watch list for six quarters.  

Fidelity Bank in Michigan also closed with 67% of its nonperforming loans tied to commercial mortgages.