We've been talking for a while now about the plight of small and regional banks, who are saddled with lots of commercial real estate loans. To put some numbers to the conventional wisdom: Lending for offices, malls, hotels and similar properties averages more than a third of loans at 35 of the biggest regional players with federal funds, according to an analysis by Bloomberg/Business Week.

Such debt averages less than 10 percent of loans at Citigroup (C) and Wells Fargo (WFC). So the worst may be far from over for these banks, even if the economy manages to rebound a bit. One expert told the magazine that lots of regional banks effectively became real estate lenders, with little in the way of other businesses to diversify their exposure. Profits have been tanking for a year now. It will be a long time before they are able to replay their TARP obligations. Then again, we were saying that about Bank of America (BAC), Citigroup and Wells Fargo. 

For more:
- here's the article

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