The number of bank failures receded to five in May following a sharp jump to 13 in April, according to New York-based Trepp LLC. Three of the bank failures occurred in the Southeast, including two in Georgia and one in Florida. Two of the failures occurred in the state of Washington.

Georgia continues to lead the country in bank failures, with 12 during the first five months of 2011, and 64 since the cycle started in 2007.

The five failed institutions include First Heritage Bank and Summit Bank in the State of Washington, First Georgia Banking Co. and Atlantic Southern Bank in Georgia, and Coastal Bank in Florida.

Commercial real estate loans accounted for $152 million (or 76%) of the total $201 million in nonperforming loans of the five failed banks in May. Construction and land loans made up $109 million, or 54% of the total, while commercial mortgages accounted for $44 million (22%) of the total nonperforming pool.

The residential real estate loan category was second, with $31.4 million in nonperforming loans, or 16% of the total nonperforming balance. The remainder was comprised of commercial and industrial loans ($5.8 million, 3% of the total) and consumer and other loans ($11.1 million, 6% of the total).

All the failures in May involved loss-sharing agreements with the Federal Deposit Insurance Corp., with 73% of the assets acquired being covered via loss-sharing agreements. The proportion of loss-share assets is up from 67% in April.

Trepp analysts say that the prevalence of loss-sharing agreements indicates that buyers continue to exercise caution in failed bank acquisitions.