Nor can the model reflect a particular bank's underwriting standards or the terms and conditions of its loans. Also, the model is based on Call Report data, which is limited, and, for instance, cannot tell us whether construction loans are centered in residential or commercial real estate, which have very different risk characteristics. Because of these limitations, REST, like other offsite tools, provides clues for examiners to further explore. Onsite examination or other follow-up action would be necessary to determine the reasons behind REST results. Despite the above caveats, wWe do have concerns about the trends in real estate concentrations.find this a disconcerting trend.
Conditions are indeed favorable for damage in the event of an economic downturn.
The rising level of risk is accompanied by a geographic concentration of much of the risk. In Atlanta, almost 70 percent of the banks have high-risk profiles. The FDIC is not alone in its concern. The rising level of risk is accompanied by a geographic concentration of much of the risk. In Atlanta, almost 70 percent of the banks have high-risk profiles.