Nonaccrual

A loan goes on nonaccrual when the bank stops accruing interest income on it — generally required once the loan is 90 days past due or full collection of principal and interest is otherwise in doubt. From that point the bank recognizes income only as cash actually arrives. Nonaccrual is an accounting status, not a foreclosure, but it is the clearest public signal that a bank itself has classified a loan as troubled.

For borrowers scouting lenders, a bank’s nonaccrual CRE trend is a leading indicator of its future behavior. Rising nonaccruals consume management attention, force loss provisions, and typically precede tightened credit standards, reduced appetite, and tougher renewal negotiations — including for performing borrowers, who can find their maturing loan "invited to leave" a stressed bank. Falling nonaccruals suggest a book under control and room to lend.

Because Call Reports disclose past-due and nonaccrual balances by loan category, we show each tracked bank’s nonaccrual CRE line in its quarterly trend table — one of the fastest reads on the health of a lender’s book.