Smaller banks face pressures on CRE loans

08/25/2009 | Portfolio.com

Regional and community banks -- already hard hit by the collapse of the residential real estate market -- are being threatened by bad commercial real estate loans. "Across the board, if you look at the fraction of loans that have stopped paying, you'll see there's a huge spike," said Amiyatosh Purnanandam, finance professor at the University of Michigan's Ross School of Business. The smaller banks are being especially hurt by construction loans.

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