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Regional Outlook


Camera-ready art of "Regional Outlook" (758Kb PDF file - PDF help or hard copy)


In Focus This Quarter

Bank Earnings: Competitive Pressures and Cyclical Risks - Intense competition to preserve or attract business can lead to relaxed underwriting standards and other changes to risk management practices that can reduce banks' ability to weather a downturn. As this economic expansion reaches an advanced age, prudent bankers will evaluate their lending standards and reserve adequacy with an eye to possible adverse changes in economic conditions. By Ronald Spieker, Steve Linehan, George French

Strong Demand and Financial Innovation Fuel Rebounding Commercial Real Estate Markets - Commercial real estate markets in many parts of the United States have rebounded, and commercial banks are once again actively pursuing lending opportunities. Banks are not alone, however, as a broader and more competitive financing market has emerged. Securitization vehicles such as commercial mortgage-backed securities and real estate investment trusts are changing how real estate is owned and paid for. By Steven Burton, Gary Ternullo

Regular Features

Regional Economy - A review of the San Francisco Region's largest metropolitan areas reveals several that are growing extremely rapidly, while a few others are performing relatively poorly. Banks' high and rising exposure to highly cyclical construction lending in several metropolitan areas is becoming an area of concern. By Gary C. Zimmerman

Financial Markets - Bank holding companies of all sizes have issued trust preferred stock following the Federal Reserve's decision in October 1996 to count these tax-advantaged, capital securities toward Tier 1 capital...rating agencies and investment analysts have argued that trust preferred stock is a weaker form of Tier 1 capital. By Kathy R. Kalser

Regional Banking - Favorable performance continues for most banks and thrifts in the Region...banks and thrifts show that renewed interest in commercial real estate lending in several areas has occurred as strong economic growth has reduced vacancy rates and spurred construction of commercial properties...exposure to higher-risk construction and commercial real estate loans is near record levels in some areas. By Catherine I. Phillips-Olsen, Roger Stephens, Millen L. Simpson


A Publication of the Division of Insurance

Regional Outlook Information


Last Updated 7/26/1999 insurance-research@fdic.gov