This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Assessing 29 Community Banks That Report Quarterly Results

Stocks in this article: EWBCCFNLHAFCHOMBMCBI

NEW YORK ( TheStreet) -- Many investors are considering buying community banks in anticipation of an economic recovery on Main Street.

This bet is based on the assumption that the housing market has started to recover and that the community banks are about to increase lending to homebuilders and developers.

Even so, many community banks remain overexposed to commercial real estate loans, including construction and development loans.

Today I profile 29 of the publicly traded community banks that are reporting second-quarter earnings results this week. A goal of investors is to focus on banks near home. Seven are in the Northeast, 10 are in the Southeast, three are in the Midwest, and nine are in the West.

Last week I profiled four healthy community banks in my article "Four Healthy Community Banks Worth Watching", and Bank of the Ozarks (OZRK) did not disappoint, trading to a new all-time high at $33.15 on Friday. Commerce Bankshares (CBSH) also moved significantly higher after reporting earnings.

My benchmark for community banks is the America's Community Bankers Index (ABAQ), which tracks more than 400 small publicly traded FDIC-insured financial institutions.

Source: Thomson Reuters

ABAQ (168.53) is up 38.8% since October 2011, and is up 13.9% year to date. The weekly chart above shows a rising momentum reading (12x3x3 weekly slow Stochastic) with ABAQ above its five-week modified moving average at 163.37 and above its 200-week simple moving average at 155.60. This is a positive weekly chart profile. My quarterly value level is 161.51 with an annual pivot at 166.87 and monthly risky level at 172.92.

Reading the Table

The table above shows the FDIC assets in billions, the construction and development loans in millions, the percent of C&D loans vs. risk-based capital, the percent of CRE loans vs. risk-based capital, and the pipeline, which is the total real estate loans outstanding vs. total real estate loan commitments.

Back in the fall of 2005, the Federal Reserve, Treasury and FDIC realized that community banks were loaning funds to the housing and real estate markets at a pace above what these regulators thought was prudent. Guidelines were set and monitored via quarterly filings to the FDIC. These guidelines were formalized at the end of 2006.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,719.00 +33.27 0.19%
S&P 500 2,051.72 +3.00 0.15%
NASDAQ 4,698.0510 +22.3390 0.48%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs