Softening in Commercial Real Estate Sector Indicated by RMA/AFS Risk Analysis Service

Quarterly benchmarking metrics released this week by The Risk
Management Association (RMA) and Automated Financial Systems, Inc.
(AFS), showed some decline in credit quality in the construction
industry. The fourth quarter results from the Risk Analysis Service
reflect actual data for middle market loans totaling approximately
$600 billion in commitments and $325 billion in outstandings provided
by 17 top tier participating banks. The database is estimated to
include nearly one-half of all middle market commercial loans in the
U.S.

While macro-level indicators of overall middle market credit
quality were relatively flat quarter-over-quarter, signs of credit
distress began to emerge in certain sectors. Nonaccrual loans in the
construction industry jumped 51.6%, the largest jump since the
origination of the Service in September 2003, and loans past due 30 to
89 days increased sharply, rising 15.7% from third quarter levels.
Given that growth in construction lending has comprised a substantial
share of total loan growth at many organizations for the past several
years, these are trends warranting close attention.

The Risk Analysis Service offers the ability to benchmark credit
quality in all industry sectors against peer banks and against the
industry. Due to the specialized nature of commercial real estate
assets, the Service now offers a dedicated reporting module focused
exclusively on the needs of the commercial real estate market.

For additional information on the Risk Analysis Service, please
contact Suzanne Wharton at RMA at +1-215-446-4089 or Doug Skinner at
AFS at +1-484-875-1562.

About RMA

Founded in 1914, The Risk Management Association(RMA) is a
not-for-profit, member-driven professional association whose sole
purpose is to advance the use of sound risk principles in the
financial services industry. RMA promotes an enterprise-wide approach
to risk management that focuses on credit risk, market risk, and
operational risk. Headquartered in Philadelphia, Pennsylvania, RMA has
3,000 institutional members that include banks of all sizes as well as
nonbank financial institutions. They are represented in the
Association by 17,000 risk management professionals who are chapter
members in financial centers throughout North America, Europe, and
Asia/Pacific. Visit RMA on the Web at www.rmahq.org.

About AFS

Automated Financial Systems, Inc. (AFS) is an information
technology and software development company providing products and
professional services exclusively to the financial services industry.
Its mission is to work with forward-looking financial institutions to
build the industry-leading global franchise for lending processes
based on a straight-through processing model and on-demand technology
and services. AFS assists clients by combining the lending
applications, execution expertise, and management information to
mitigate risk, reduce costs, and increase revenue. The firm is
headquartered in Exton, PA; its European subsidiary, Automated
Financial Systems GmbH is located in Vienna, Austria. For further
information, visit AFS' website at www.afsvision.com.