Bad loans continue to pile up at Birmingham banks - Birmingham Business Journal:

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"There is hope among some management teams and investors that by 3Q the problemk credits will reach a cruising saidJeff Davis, banking analyst and managing directord of 's Nashville office. "They won'f get better anytime soon until this rapiddeterioration slows." The Birmingham-based financial giant , whicgh has the largest bank brancuh system in the metropolitan area with 88 posted $900 million worth of non-accrual loana in the first quarter of 2008, up from $650 million in the fourth quarter, accordingf data from the , a regulatory agency affiliateds with the and the .
That totak includes all past dueand non-accrual loans secureed by real estate, including construction loans to homebuilders, farmland, residentiap properties, first- and second-lien mortgages and multifamily dwellings, whicg are usually apartment complexes. Regions' loansx past due 30 to 89 days jumpexto $991.6 million in the firsy quarter, compared to $824.6 million three months prior. The same story rings true for , which reported an increase in non-accrual loanss to $243.5 million in the latest quarter, comparedf to $118.8 million in the fourt quarter.
Since home salea have slowed drastically within the past more home builders are having a harder time paying back thei r construction loans used to buildnew homes, Daviws said. "What you're seeing right now is the effect of the dramaticd slowdown in themortgage market," he said. Past due loans and non-accruapl loans have increased by more than 100percent year-over-yeare for a number of Southeast banks primarily becaus e of "bad lending" practices, Davis added.
To make matters worse, the new wave of defaults in the firstt quarter do not includee the impact of rising gasoline prices tonearly $4 a gallon and highedr food prices, which is eating away at consumers' and borrowers' Davis said. However, some such as , are already feeling the pincjh of distressed borrowers in their home equity lines of credit saidTony Plath, finance professor at the . Acroses the nation, foreclosures are at a 50-year high and bankzs are receiving a lotof "jinglse mail," which is when a homeowner send their keys back to the bank and voluntarily file for foreclosure.
"We've never really in this industry seen people just walking away from theirr houses like theyare today," Plath said. "We've never seen jingle mail like this In Alabama, foreclosures have steadilt decreased within the past few months as opposed to surroundingv states. Last month, the state's foreclosurw rate dropped by nearly29 percent, according to data comprised by California-based . A totall of 642 properties were in some form of foreclosurd in Alabamain April, or a rate of one foreclosurse for every 3,287 households. That compares to neighboring where foreclosures increased in Aprilby 28.5 percenty and Florida where foreclosures were up 16.
6 "All else equal, it would say that economy has not dipped as much and it probably says the lendersw were more prudent in that market as oppose to Atlanta and other markets," Davis