May 13, 2009
An article in the LA Times today sheds light on the mounting troubles at regional banks. Over the past several years a lot of smaller regional banks got themselves heavily entrenched into financing commercial property and construction.
A number of banks have already gone under, but many more are just beginning to feel the pain. Take East West Bank for instance:
Land development and construction loans, the main problem so far for East West, total about 20% of the bank’s loan portfolio. Now Ng says he is nervously watching delinquencies on commercial mortgages — about 40% of East West’s loans.
“Some of the borrowers say: ‘Go ahead, come after me. I have absolutely nothing left,’ ” Ng said. “The net worth completely disappeared in 12 months.”
- United Commercial Bank Goes Down
- Next Wave of Stress Tests To Focus on CRE
- Nearly 20% of Construction Debt is Delinquent
- Commercial/Multi-Family Delinquency Rates Continue Hike Up
- Banks Quick to Adopt New FDIC Guidelines