Download Article
The chart on the left shows total year-over-year loan growth at community banks declining in 2020, but commercial real estate loans growing steadily and then picking up considerably in 2021, particularly in the construction and land development loan type, driving total loan growth up in recent periods. The chart on the right breaks down the quarterly dollar amount increases in each commercial real estate loan type over the same period.

Source: Reports of Condition and Income, adjusted for mergers, acquisitions and failures

*Other CRE = Non-owner-occupied nonfarm nonresidential (NOO NFNR), Owner-occupied nonfarmnonresidential (OO NFNR), and Multifamily

  • Loan growth has been sluggish since the onset of the COVID-19 pandemic across most U.S. banks and loan categories when excluding Paycheck Protection Program (PPP) loans. These trends were consistent across community banking organizations (CBOs) except for in CRE loans, which experienced steady growth rates through 2020 and rose above pre-pandemic levels in 2021, driven by growth in construction and land development (CLD) loans. As of September 30, 2021, CBO’s year-over-year CRE loan growth exceeded 10 percent for the first time since 2017.
  • CBOs added to their CRE loan portfolios each quarter since year-end 2019 in all CRE loan types, with more significant increases taking place in recent periods. In the second and third quarter of 2021, CBOs’ total CRE loans grew by $22.4 billion and $23.6 billion, respectively.
  • In the most recent quarter, the largest increase in CRE loans across CBOs has been in the CLD and non-owner-occupied nonfarm nonresidential (NOO NFNR) loan types, which increased by $6.3 billion and $8.9 billion, respectively.

Questions or comments? Please contact