News today from Wilmington Trust (WL, Baa3/BB+) highlights risks associated with construction, land development and commercial real estate loans.
Numerous relatively large banks have substantial exposure to construction, land development and commercial real estate loans. For example, according to SNL Financial data, these combined loan categories exceed 3x tangible common equity at the following banks: Zions Bancorp (5.8x), Synovus Financial (5.3x), M&T Bank (5.0x), BB&T Corp (3.6x), Regions Financial (3.2x), Marshall & Ilsley (3.1x) and Huntington Bancshares (3.1x).
This is my effort to help fit the pieces together to get a better picture of the capital markets.
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
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