Webinar: How to Manage CRE Concentrations

May 2016

Webinar: How to Manage CRE Concentrations

Don’t miss Bank Insights’ free webinar on how to manage CRE concentrations.  Regulators announced in December that they would be paying extra attention to banks that planned to grow CRE loan portfolios, or whose concentrations were near or had exceeded concentrations limits. They warned that some banks might have to raise additional capital if they couldn’t prove they were managing their concentrations well.

Bank Insights is sponsoring a complimentary webinar, “Powerful and Practical Techniques to Manage CRE Concentrations amid Regulatory Scrutiny,” to help banks with this issue. The hour-long webinar begins at 1 p.m. EST on June 16, and features Invictus senior partner Adam Mustafa, who has been advising banks across the country on the best way to manage their CRE loan portfolios. Some of his clients have received regulatory approval to increase their CRE concentrations way beyond the thresholds. Mr. Mustafa will share techniques that will not only satisfy regulators, but will also be helpful in strategic planning.

Regulators have advised banks to use stress testing to determine if their CRE portfolios can withstand an economic downturn. At April’s FDIC community bank conference, Maryann Hunter, deputy director of the Federal Reserve Board’s Division of Banking Supervision and Regulation, said even small banks should start using scenario analyses if they have concentrations.

The CRE warning is broad: Banks that will come under regulatory scrutiny do not need to have exceeded concentration limits. Banks must merely be contemplating an increase in CRE loans, have already increased CRE lending or “operate in markets or loan segments with increasing growth or risk fundamentals,” regulators said.

Banks are taking the warning seriously. One New York community bank, for instance, said in a recent earnings call that it was concerned about CRE underwriting standards in the industry, noting that it had seen “highly irrational term sheets” from competitors. The bank announced it was curtailing applications for multifamily loans and pulling back from CRE lending markets.The bank also said it expected the OCC to demand higher capital requirements, which could cause it to sell investment securities and multifamily loans.

Register here and feel free to invite any of your peers who many want to attend.