Kal Lateral on the 300% Line

EVERYWHERE (Sept. 29, 2026) — 393 of 4,239 banks were over the regulators' 300% commercial real estate line at June 30. EveryBank was at 105%. The median bank was at 132%.

The line comes from the 2006 interagency guidance on CRE concentrations. A bank draws closer supervisory attention in two cases:

• non-owner-occupied CRE reaches 300% of total risk-based capital, and the book grew 50% or more over 36 months, or
• construction and land loans alone reach 100% of capital.

It is not a limit. It is where the examiner stops nodding and asks for the rent rolls.

Threshold, June 30, 2026	Banks over	Share of banks
CRE ≥ 300% of capital	393	9.3%
CRE ≥ 300% and ≥ 50% growth in 36 months	108	2.5%
Construction & land ≥ 100% of capital	278	6.6%

"The Mean is nowhere near the line, and that's the problem. The biggest banks hold their real estate against enormous capital, and averaging them in drags the Mean down. The banks getting the rent-roll requests are closer to the Median."

— Kal Lateral, Head of Lending

"Past-due office and shopping-center loans fell eight to nine percent this quarter. The loans are still there. Somewhere between most and all of them."

— Perry Sentyle (%), Chief Risk Officer

The whole loan book, every quarter since 2016, is on The Loan Book.

Commercial real estate here means construction and land loans, apartment buildings, commercial property the borrower does not occupy, and real estate loans not secured by property. Capital is total risk-based capital, or tier 1 capital plus loan-loss reserves at banks that use the simpler community bank leverage ratio.