More troubling perspective from David Goldman. A non-accrual loan is a non-performing loan, typically that has not paid interest due for at least 90 days.
Over at Forbes Online, James Kaplan of the research firm Audit Integrity observes:
The 20 banks on our list …exhibit the following alarming levels of risk:
–Commercial real estate loans comprising a median 26% of total loans
–Commercial real estate loans equal to a median of 170% of Tier 1 capital (defined as equity capital and undisclosed reserves)
–A median increase of 100% in commercial real estate non-accrual loans in the nine months through September 2009
–Commercial real estate non-accrual loans comprising a median 53% of total non-accrual loans
Kaplan adds:
In addition to the standard commercial real estate loans on the balance sheet consisting of construction and mortgage loans, additional risk exists from the following sources:
–Additional real estate obtained primarily through foreclosures
–Agreements to extend customer financing and other commitments and contingent liabilities
–Off-balance sheet assets securitized in special purpose entities
–Operating expenses that include collection efforts and carrying costs for nonperforming assets
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