. -- which will start with ms. thompson. >> good morning. i appreciate the opportunity to testify on behalf of the fdic regarding the condition of the commercial real estate market and its relationship to the overall stability of the financial system. the events surrounding the recent and enterprises have taken a heavy toll on economic activity throughout our nation. the past three years have been difficult for many institutions focusing on cre lending. in 2009, there were 140 bank failures. last year, 157 banks failed. many of those failures were caused by losses on construction loans that were made during the boom years before the crisis. some banks continue to experience as elevated losses. distressed loan exposures take time to work out, and in some cases, require restructuring to establish a more realistic and sustainable repayment program. some loans may not be able to be modified and must be written off. this process of prompt loss recognition and restructuring, painful as it may be, is needed to lay the foundation of recovery in the