4 Community Banks Builds Lending to Support the Housing Market

NEW YORK (TheStreet) -- Old National Bancorp (ONB), Bank of the Ozarks (OZRK), PacWest Bancorp (PACW) and Umpqua Holdings (UMPQ) are four of the many community banks that have increased lending to the real estate market including home construction.

Today's focus is on the four major categories of real estate lending as presented in the FDIC Quarterly Banking Profile for the first quarter of 2015. The four banks profiled have increased total assets significantly year over year, but have mixed performances year to date. Two have strong technical profiles, two do not. Let's take a look.

Here's a table of the FDIC data for real estate lending that shows the status of mortgage lending, nonfarm/nonresidential lending, construction and development loans and home equity loans.


Residential Mortgages (1- to 4-family structures) represent the mortgage loans on the books of our nation's banks. Banks increased mortgage issuance by 1.7% year over year in the first quarter to $1.86 trillion. As a sign of reluctance to increase lending significantly, mortgage loans are down 17.4% since the end of 2007.

Nonfarm/Nonresidential Real Estate Loans represent lending to construction companies and homebuilders to build office buildings, strip malls, apartment buildings and condos which has been a major focus for community banks. This category of real estate lending held up well during the Great Recession. These loans were up 4.1% in the first quarter to $1.16 trillion and are up 20.1% since the end of 2007.

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