As financial regulators shift their sights to the mounting problems with commercial real estate loans, many Philadelphia-area banks remain bogged down in bad loans for residential construction.

Led by construction loans, the overall percentage of problem loans - those seriously behind in payment - at the 15 largest publicly traded banks here soared to nearly 3 percent Sept. 30 from 0.89 percent a year earlier.

That increase added $1.1 billion to the loans banks will have to collect through restructuring, foreclosure, or other measures - unless the improving economy allows the borrowers to recover enough to pay their debts.

The Federal Reserve did its part today to help banks, keeping its target federal funds rate at the record-low level of zero percent to 0.25 percent. That keeps banks' borrowing costs low, helping them to earn more on the limited number of new loans they are making.

Bankers, meanwhile, even those with the strongest loan portfolios in the region, see continued problems.

"I think every bank is going to be thinking very carefully about bolstering their reserves because you just don't know what is out there," said Kent Lufkin, president of TF Financial Corp., of Newtown, the parent of Third Federal Savings Bank, which had the lowest rate of nonperforming assets among the area banks.

Lufkin said Third Federal stayed out of trouble during the real estate boom because it did not change its conservative lending practices. "That's helped us today to have a lower percentage of nonperforming assets," he said.

By contrast, Abington Bancorp Inc., of Jenkintown, followed a suburban builder with which it had previous experience into the Philadelphia condo market during the real estate boom. The move came after the company raised $71 million in a 2004 stock offering and contributed to Abington's possession of the highest rate of nonperforming assets in the region, 5.03 percent, according to data from Bloomberg News.

"It's our construction-loan portfolio that's in bad shape," said Robert White, the lender's chief executive officer. Indeed, the delinquency rate on its residential construction loans, including loans at least 30 days past due, was 35.2 percent on Sept. 30, according to a report by Stern, Agee & Leach Inc., a research firm in Portland, Maine.

For example, the bank lent $15.1 million to the builder of the 11-story American Loft in Northern Liberties, which it acquired at a sheriff's sale in June for $8.6 million. White said today that the bank was considering a purchase offer on the building.

Depite its high level of troubled loans, Abington is in a much stronger position than certain competitors. Harleysville National Corp., with a similar level of problem construction loans, was told by regulators to raise capital. The difference is that a key measure of a bank's financial strength is 18 percent at Abington. At Harleysville, it was only about 4 percent when regulators cracked down. That was the lowest of the 15 local banks.

Matthew Kelley, banking analyst at Stern Agee, said Philadelphia-area banks were having problems with residential-construction loans because "it appears to have been more overbuilt than other parts of the Northeast."

The average past-due rate on construction loans at 15 Pennsylvania and New Jersey banks Kelley tracks climbed to 15.5 percent in September from 12.1 percent in June. The figure for commercial real estate climbed to 2.9 percent from 2.6 percent.

With loan defaults still rising two years after the subprime-mortgage crisis began, all business loans - not just for commercial real estate - are getting careful attention.

Before agreeing to buy First Keystone Financial Inc. this week, Bryn Mawr Bank Corp., reviewed 69 percent of First Keystone's business loans, Bryn Mawr chief executive Ted Peters said.

The purchase agreement allows Bryn Mawr to walk away if the level of delinquencies at First Keystone climbs from $5.8 million to more than $16.5 million, Peters said.

Such a stipulation "would not have been normal two or three years ago. It's becoming the norm now," Peters said.