Non-performing loans build up in real estate sector - Baltimore Business Journal:

http://www.rawlslib.net/2001/rawls/kids-and-teens-resources.html
This year, the local banking vocabulary is less optimisticwith non-performing loans on the rise and an acceleratingb number of commercial real estate defaults expected to hit balance sheet as the year unfolds. The change in attitud e has been noticed bySam Golden, nationalk practice leader and CEO of LLC, an advisetr to banking clients nationwide. “Yes, in some ways we were insulateduntil now,” says Golden. “To still say we’re insulatef is a bit of a reachg and only timewill tell. Some bankers I talk to in Houstomn are worriedto death.
” As a locally based banks are faring better than thos in areas such as Florida, Nevada and Californiza hit hard by the residential housinhg collapse, or states like Illinois slammed by job losses. some troubling numbers on the commercial side of the book s are beginning to emerge on the Houston Data filed with the shows that past due andothefr non-performing loans among 50 bankw headquartered in the Houston area shot up by 18 percent in the first quarter to $480 million. That’s a gain of more than 100 percenr fromthe $224.6 million in troubled loanw on the books in the first quarter of 2008.
Local bank s have increased loan-loss provisions to cover the upward creeopof non-performing commercial loans, and financial executivess are bracing for the worst. “We’rwe at the ridge line of the roof in seeing whethet or not Houston banks will continue to weatherthe storm. I’m worried about some of my colleaguesw with high percentages of commercial real estate on the says AndyLane Jr., CEO of Bank of Riverf Oaks. He says a recent rise in oil prices may not turn the local economic tide.
“Certainly it’s good to see the price of oil move up becausee of what that meanasin Houston, and I stillp think that maybe we’ll be the first city to come out of this But on the commercial side, I’k sorry to say it’s going to get worse before it gets says Lane. Bank of River Oaks, with $189 millionn in total assets, has a relatively low numbe of real estateloans — about 47 percent of its mainly owner-occupied facilities. “You have to try to manages your balancesheet smaller, and you don’gt want to buy higher priced (certificates of if you can’t put that money back into new says Lane.
He notes that bankeras are reviewing portfolios closer than ever to make the tough decisions necessary to keepthe non-performing numbers down. Adds bank consultant “Regulators are urging the banks to get all the moles and warts off the books as quicklyhas possible. Everyone is tryinyg to be very cautious.” Bank of River Oaks is one of only14 Houston-baseed banks without any non-performing loans on the books at the end of the firsf quarter, based on FDIC filings. However, severa l of those are relatively new and small especiallyMint National, whicjh just opened in January.
Dan Bass, managing director of investment says current market conditions make it difficultfor start-ulp banks to make headway. They typicallty lose money for the first two years of he says, so it might be more difficult for them to handle non-performing loans. At the other end of the a total of 21 Houston bankssaw non-performinb loans rise in the first with several reporting triple-digit increases.