KBRA Financial Intelligence

Banks with High Concentrations of Uninsured Deposits and Commercial Real Estate

Fed Chair Jerome Powell testified in front of Congress in early March that the central bank has been reviewing lenders that have high concentrations in uninsured deposits and commercial real estate.

Banks with high concentrations of uninsured deposits are more susceptible to bank runs, which threaten financial stability. The collapse of Silicon Valley Bank and Signature Banks, the third- and fourth-largest failures in U.S. history, were triggered in part by depositors pulling their cash, according to regulators.

What is KFI?

The commercial office market is still struggling years after the pandemic. Stress is climbing fastest at the biggest banks with delinquencies at a 10-year high. Large loans tied investor properties, often made to office towers, are reporting the biggest jump in delayed payments. Office is the largest component of KBRA Credit Profile's K-LOC index, which tracks stress in the conduit CMBS market.

The table below displays the top 12 banks with both high CRE Loans to Tier 1 Capital and uninsured deposits to total deposits.