The analysis screened the 157 biggest banks with over $10 billion in assets. It used public government data to calculate each bank’s total CRE exposure as a percentage of equity.
Flagstar Bank and Zions Bancorporation faced the highest risks, according to the screener. Flagstar’s $51 billion CRE portfolio comprised 553% of its $9.3 billion equity. For Zions, the $26 billion CRE book was 440% of its $5.8 billion equity.
“These are the two largest banks with excessive CRE exposure,” Cole said. “Both rely heavily on uninsured deposits, making them vulnerable to bank runs like those that felled three big lenders last spring and raised systemic stability concerns.”
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The industry average CRE exposure was just 139% of equity in Q1 2024. But among all US banks, 1,871 exceeded the 300% threshold, with 243 over 600%.
