Earnings

CRE stress hits one loan, others stay mixed

The Tip Desk · November 12, 2026 · 2 min read

Citizens & Northern booked a $10.1 million charge-off on a 2022 non-owner-occupied CRE loan while other community lenders posted uneven credit and concentration signals.

Citizens & Northern (CZNC) recorded a $10,056,000 charge-off in the first quarter of 2026 on a $24 million non-owner-occupied commercial real estate loan originated in 2022 after an April 2026 appraisal came in significantly lower than the original appraisal.

The same CRE loan was downgraded to substandard and placed on nonaccrual after the borrower lost a large tenant and faced cash flow needs on other properties, and the company entered a forbearance agreement in the second quarter of 2026. Citizens & Northern recorded an additional $352,000 charge-off in the third quarter of 2026 on that CRE loan from advances to protect collateral, leaving an amortized cost basis of $5,836,000 at September 30, 2026.

CF Bankshares (CFBK) said the increase in criticized and classified loans in the nine months ended September 30, 2026, was primarily the result of three relationships that were downgraded, with special mention loans rising to $42.0 million and substandard loans to $15.7 million. CF Bankshares said total past-due loans rose to $30.8 million at September 30, 2026, primarily due to a $6.7 million C&I loan and a $5.9 million commercial real estate loan in one relationship, and that both loans were brought current after quarter-end.

California BanCorp CA (BCAL) reported that commercial real estate loans were approximately 61.3% of its total loan portfolio at June 30, 2026, and that CRE concentration represented 469% of total risk-based capital at December 31, 2025. Princeton Bancorp (BPRN) said commercial loan balances decreased due to increased selectivity in new loan originations and a continued focus on credit quality, with the CRE portfolio at $1.34 billion, or 73.9% of total loans, at December 31, 2025.

CF Bankshares attributed the increase in loans and leases balances to a $101.9 million increase in commercial real estate loan balances and a $17.5 million increase in construction loan balances, driven primarily by expansion of commercial banking teams. Credit stress is therefore uneven: one CZNC loan drove a large charge-off and forbearance in 2026, while CFBK’s criticized book and past-due mix as of September 30, 2026, pointed to a handful of relationships.