Oliver R. Sims
Published: 2013
Total Pages: 0
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This book presents the results of a study of FDIC-supervised institutions with significant acquisition, development, and construction (ADC) loan concentrations that did not fail during the recent economic downturn. ADC loans are considered the riskiest type of commercial real estate (CRE) lending. During the recent financial crisis, FDIC analysis shows that failed institutions had concentrations of ADC loans to total assets that were roughly three times the average of concentrations of non-failed institutions. This book studies the characteristics and supervisory approaches for FDIC-supervised institutions that had significant ADC loan concentrations and were not considered to be problem banks as of April 2011, with a focus on the identifying factors that may have helped banks mitigate the risks historically associated with ADC concentrations during periods of economic stress.