Commercial Real Estate Outlook Sours for Banks

Fifth Third Bank of Grand Rapids

Fifth Third Bank of Grand Rapids, Mich. had a ratio of nonperforming CRE and CCL to total assets of 2.01%, which is an improvement from 2.15% in September. This institution, with $54 billion in total assets as of Dec. 30, and Fifth Third of Cincinnati, Ohio, with total assets of $69 billion, are the two main subsidiaries of Fifth Third Bancorp (FITB).

While the quarter-end ratio of nonperforming CRE and CCL to total assets improved, this was because Fifth Third of Grand Rapids charged-off $797 million of these loans during the quarter, taking loans off the books at a faster pace than loans entering nonperforming status.

Colonial Bank

Colonial Bank of Montgomery, Ala. (held by Colonial BancGroup (CNB)) made the list again, with a ratio of nonperforming CRE and CCL to total assets of 2.30%, up from the previous quarter.

Colonial Bancorp on Jan. 27 reported a fourth-quarter loss of $825 million, which included a non-cash goodwill charge of $575 million. The company has received preliminary approval from the government for a $553 million TARP investment, but that is contingent on first raising private capital.

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