June bank failures driven by CRE exposure

Commercial real estate exposure contributed heavily to the nation’s four bank failures last month, data analytics firm Trepp said Thursday. June’s failed-bank tally was the second-lowest monthly count in the past year, according to Trepp, which has more than 1,000 banks on its watch list, with 250 at a high risk of failure. Among the four institutions that failed in June, CRE loans represented 77%, or $91 million, of the $119 million of nonperforming loans held. Of that distressed pool, construction and land loans made up 48%, or $57 million, and commercial mortgages represented 29%, or $34 million. Commercial loans have weighed heavily on distressed banks all year. In May, commercial real estate mortgages made up the largest portion of nonperforming loans at failed banks, according to Trepp. The five banks that failed held a collective $201 million in nonperforming assets. Of those assets $152 million, or 76%, were attributable to nonperforming CRE loans. Write to Kerri Panchuk.