Accessible Version
Monitoring High Credit Growth: The Link Between Local Deposits and CRE Lending, Accessible Data
Figure 1. CRE Origination Index
This is a line chart showing annual data from 2015 to 2024, with the y-axis measuring an index value (average 2015-16 = 1) ranging from 0 to 9. The chart displays four variables: "Large banks" (red solid line), "Regional & small banks" (blue solid line), "High-growth banks" (green dotted line), and "Other banks" (blue dashed line). All four bank categories start with index values around 1 in 2015. From 2015 to 2021, Large banks maintain relatively stable index values between 1-1.5, while the other three categories show increasing trends. High-growth banks experience the most dramatic growth, climbing steadily to approximately 9.5 by 2022, before declining slightly to about 7.5 by 2024. Regional & small banks and Other banks follow similar upward trajectories, peaking at about 6-7 in 2022 before declining to approximately 5 and 4 respectively by 2024. Large banks show a slight decrease to near 0.5 by 2024.
Note: This figure plots a CRE origination index, defined as the annual sum of originations normalized to the 2015–2016 average. Large banks are defined as those with total assets exceeding $100 billion. Regional and small banks (assets less than $100 billion) are classified as "high-growth" if their index value exceeds the 70th percentile for at least three years during the sample period; these banks retain the high-growth designation for the entire sample period.
Source: CRE Public Records and FR Y-14Q.
Figure 2. Relative Importance of High-Growth Banks
This is a line chart showing annual data from 2016 to 2024, with the y-axis measuring percent ranging from 25 to 40 percent. The chart displays two variables: "CRE origination share" (blue line) and "Total assets share" (red line). The CRE origination share starts at approximately 30 percent in 2016, decreases to about 27.5 percent in 2017, then rises significantly to around 37.5 percent by 2020. It then experiences a sharp drop to about 32.5 percent in 2021, recovers to about 35 percent in 2022, plateaus briefly, and then increases sharply to approximately 39 percent by 2024. In contrast, the Total assets share shows a more gradual trend, starting at about 32 percent in 2016 and rising steadily to about 35 percent by 2020, then fluctuating slightly between 35-36 percent through 2024.
Note: This figure illustrates the annual share of total CRE originations and total assets attributable to "high-growth" banks. The origination share is the annual sum of originations by high-growth banks divided by total sample originations. The asset share is calculated similarly using the annual average of quarterly total assets. Regional and small banks are classified as "high-growth" if their origination index exceeds the 70th percentile for at least three years of the sample period; such banks retain this designation for the entire period.
Source: CRE Public Records, FR Y-9C, and Call Reports.
Figure 3. Portfolio Composition of CRE Loan Types
This figure presents two stacked area charts showing annual data from 2016 to 2024, comparing the portfolio composition of CRE loan types between "Other banks" (left chart) and "High-growth banks" (right chart). Both charts have y-axes measuring "Percent of total originations" from 0 to 100 percent. Each chart displays six CRE loan categories: Construction (red), Multifamily (orange), NFNR (green), Office (purple), Retail (blue), and Other (gray).
For Other banks (left chart), NFNR loans constitute the largest segment throughout the period (approximately 30-40%), followed by Office and Retail loans (each about 10-15%). Construction and Multifamily each represent roughly 10-15% of originations. From 2016 to 2024, there is a notable increase in Construction loans (from about 10% to 20%) and a slight decrease in NFNR loans (from about 40% to 35%). For High-growth banks (right chart), NFNR loans similarly form the largest segment (approximately 30-40%), though their share decreases from about 40% to 30% by 2024. Construction loans show a more dramatic increase over time, growing from roughly 10% to 40% of total originations by 2024. Both bank types show relatively stable proportions for Office, Retail, and Other loans throughout the period.
Note: Regional and small banks are classified as "high-growth" if their origination index exceeds the 70th percentile for at least three years of the sample period; such banks retain this designation for the entire period. NFNR stands for nonfarm nonresidential loans for industrial, hospitality, and mixed-use properties. Construction includes construction and land development.
Source: CRE Public Records.
Figure 4. CRE Loan Growth and Deposit Funding Share in the Same CBSA
This is a bar chart comparing CRE loan growth rates between "Other Banks" (left panel) and "High-Growth Banks" (right panel). The y-axis shows "CRE Bank-CBSA Loan Growth, percent" ranging from 0 to 40 percent, while the x-axis displays three categories of "Local Deposit Share": "High," "Low," and "Zero" for each bank group. For Other Banks, the loan growth rates are 12% for high local deposit share, 17% for low local deposit share, and 14% for zero local deposit share. High-Growth Banks show substantially higher growth rates for the high and low local deposit share categories (33% and 25% respectively), while their zero local deposit share category shows 11% growth, like the Other Banks' rate for high local deposit share. Each bar is labeled with its specific percentage value.
Note: This figure plots average CRE origination growth for high-growth versus other regional and small banks. The sample is restricted to institutions with total assets below $100 billion. Within this group, "high-growth" banks are defined as those whose CRE growth index exceeded the 70th percentile for at least three years of the sample period; these banks retain the designation for the entire sample period. The analysis covers the ten largest CBSAs. "High" and "Low" denote locations where a bank's local deposit share is above or below the median for its respective bank-year group, while "Zero" identifies areas where a bank has active CRE originations but no local deposit presence. Local deposit share is the ratio of a bank's deposits in a specific CBSA to its total deposits for that year. CRE loan growth is calculated as the midpoint growth rate.
Source: Summary of Deposits and CRE Public Records.