Regional Bank CRE Nonaccruals Split in Q3: Huntington Up, KeyCorp Down
Huntington's CRE nonaccrual loans rose to $265 million and Fifth Third's to $205 million in Q3, while KeyCorp's fell 40% to $154 million, filings show.
Why it matters
- Huntington Bancshares' nonaccrual commercial real estate loans rose to $265 million on Sept. 30 from $243 million on June 30 and $131 million a year earlier, its supplement filed Thursday, Oct. 22, shows. Its CRE book roughly doubled after two acquisitions.
- Fifth Third's nonaccrual commercial mortgage and construction loans rose to $205 million from $156 million. KeyCorp's nonperforming CRE loans fell to $154 million from $256 million.
- CRE charge-offs stayed small at all four banks. Fifth Third and Zions booked small net recoveries, and Huntington's CRE net charge-offs were $10 million.
Commercial real estate credit moved in different directions at four large regional banks that reported third-quarter results this week. Nonaccrual CRE loans rose at Huntington Bancshares and Fifth Third Bancorp, while KeyCorp's nonperforming CRE loans fell 40% to $154 million and Zions Bancorporation's stayed low at $40 million, according to their filings with the Securities and Exchange Commission from Monday, Oct. 19, to Thursday, Oct. 22.
How did CRE problem loans change at regional banks in Q3?
| Bank (report date) | CRE nonaccrual loans, Sept. 30, 2026 | June 30, 2026 | Sept. 30, 2025 | CRE loans, Sept. 30, 2026 |
|---|---|---|---|---|
| Huntington (Oct. 22) | $265 million | $243 million | $131 million | $22.7 billion |
| Fifth Third (Oct. 19) | $205 million | $156 million | $42 million | $36.4 billion |
| KeyCorp (Oct. 20) | $154 million | $256 million | $214 million | $16.7 billion |
| Zions (Oct. 19) | $40 million | $34 million | $70 million | $14.2 billion |
Sources: company earnings releases and supplements. Fifth Third figures combine commercial mortgage and commercial construction loans. KeyCorp reports nonperforming loans.
By our math, nonaccruals equal about 1.2% of CRE loans at Huntington, 0.9% at KeyCorp, 0.6% at Fifth Third and 0.3% at Zions. That is far below the 4.55% nonaccrual ratio across all loans that Flagstar Bank reported Friday, where multifamily is the largest book.
Why did Huntington's and Fifth Third's numbers rise?
Both banks grew through acquisitions. Huntington's CRE loans were $22.7 billion on Sept. 30, up from $10.7 billion a year earlier, and its release attributed loan growth largely to the Cadence and Veritex acquisitions. Fifth Third completed the systems conversion of Comerica, which it acquired, and its commercial mortgage loans rose to $27.5 billion from $11.9 billion a year earlier.
From the second quarter, though, the change was not from acquisitions. Huntington's CRE loans fell $709 million while CRE nonaccruals rose $22 million. Fifth Third's nonaccrual commercial mortgages rose to $141 million from $94 million. Fifth Third said overall credit quality "remained stable," with delinquencies and nonperforming loans "broadly unchanged sequentially."
Charge-offs stayed low. Huntington's CRE net charge-offs were $10 million, or 0.16% annualized, up from $3 million. KeyCorp's were $5 million, down from $19 million. Fifth Third and Zions recorded small net recoveries on CRE.
What does this mean for lender funding?
Zions' release offered a reminder of the risk banks take when they finance lenders. Its prior-year third quarter included $50 million of charge-offs on revolving credit facilities to two related commercial borrowers "that financed commercial mortgage originations and purchases," the bank said. Its net charge-offs this quarter were $3 million in total. Lines of this kind include warehouse facilities; our warehouse line of credit guide explains how they are sized and monitored.
For more third-quarter bank results, see our reports on Wells Fargo and PNC. A handful of banks does not show a trend for the whole real estate loan market.
Sources
- Huntington Bancshares, Third-quarter 2026 earnings release, Exhibit 99.1 to Form 8-K (Oct. 22, 2026)
- Huntington Bancshares, Third-quarter 2026 financial supplement, Exhibit 99.2 to Form 8-K (Oct. 22, 2026)
- Fifth Third Bancorp, Third-quarter 2026 earnings release (Oct. 19, 2026)
- KeyCorp, Third-quarter 2026 earnings release, Exhibit 99.1 to Form 8-K (Oct. 20, 2026)
- Zions Bancorporation, Third-quarter 2026 earnings release, Exhibit 99.1 to Form 8-K (Oct. 19, 2026)
