On 12/23/19, the FDIC released their Fall 2019 edition of the publication Supervisory Insights. This edition contains two articles that might be of interest for bank management.
The first article discusses commercial real estate (CRE) exposure in the banking industry and summarizes findings from recent FDIC exams of banks with CRE lending concentrations. "This article provides insights into current industry risk management practices. In a competitive lending environment, sound risk management of the CRE portfolio is critical for IDIs that specialize in CRE lending," said Doreen R. Eberley, Director, FDIC Division of Risk Management Supervision.
The second article gives an overview of the leveraged lending market, discusses the risks associated with leveraged lending, and includes observations regarding current underwriting practices from recent FDIC exams.
As is the case with most Supervisory Insights, this edition also includes a “Regulatory and Supervisory Roundup” section which includes thirteen pages of activity by the FDIC, which would be beneficial for FDIC-regulated institutions to review.
The Fall 2019 edition of Supervisory Insights can be found here.