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FDIC Report Tells Concerning Story for CRE

By Erik Sherman
May 31, 2025

The latest quarterly report from the Federal Deposit Insurance Corporation underscores mounting pressure in the commercial real estate sector, signaling potential headwinds for the industry. While the overall past-due and nonaccrual (PDNA) rate across all FDIC-insured institutions stood at 1.59% of total loans — still below the pre-pandemic average of 1.94% — the numbers within CRE portfolios tell a more concerning story.

CRE loan portfolios saw their PDNA rate climb to 1.49% in the first quarter of 2025, marking the highest level since late 2014. Multifamily loans, in particular, experienced the sharpest increase, with PDNAs rising by 88 basis points over the past year to reach 1.47%. Despite this deterioration in loan performance, overall loan growth remains sluggish, with total loan and lease balances increasing just 0.5% from the previous quarter. Notably, multifamily CRE loans were a key driver of what little growth there was.

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