In large part, this increase reflected deterioration in residential mortgages and loans to builders and has contributed to an increase in the portion of state member banks with lessthan-satisfactory supervisory ratings from 4.5 percent at year-end 2006 to 6.3 percent at the end of 2007.
Indeed, half of the state member banks that were downgraded to less-thansatisfactory CAMELS ratings since mid-2007 have evidenced significant financial or risk management weaknesses related to commercial real estate lending activities. State member banks entered 2007 relatively well-positioned to confront and withstand more adverse conditions.