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 68 Community Banks that Report Quarterly Results

Stocks in this article: ABAQ

NEW YORK ( TheStreet) -- Several strategists and bank stock analysts are advising investors to consider buying the smaller community banks instead of buying the bigger regional names.

My role is to separate those that look healthy versus those who are risky.

This week investors have 68 community banks to choose from; 14 Savings & Loans, 17 from the northeast, 15 from the southeast, 10 from the midwest, 11 from the west, and one small major regional.

As I said last week in Assessing 29 Community Banks That Report Quarterly Results , this bet assumes that the housing market is in recovery, and that community banks will increase lending to home builders and developers and will ease tight lending standards for homeowners and home buyers who seek to refinance or buy a home.

This list of community banks include only five that are overexposed to construction and development loans, but there are 38 that are overexposed to the broader category of commercial real estate loans. Only 11 have pipeline risk of more than 80% of loans outstanding versus loan commitments.

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.



Chart Courtesy of Thomson / Reuters

ABAQ (164.50) declined by 2.4% last week, but remains up 35.5% since October 2011, and is up 11.2% year to date. The daily chart above is negative with declining momentum (12x3x3 daily slow Stochastic), with a close on Friday below its 21-day simple moving average at 163.37.

The 50-day and 200-day simple moving averages are key supports at 161.30 and 155.29. My quarterly value level is 161.51 with weekly and annual pivots at 164.66 and 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 percentage of C&D loans versus risk-based capital, the percentage of CRE loans versus risk-based capital, and pipeline, which is the total real estate loans outstanding versus total real estate loan commitments.

1 of 2

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 16,677.90 +216.58 1.32%
S&P 500 1,950.82 +23.71 1.23%
NASDAQ 4,452.7920 +69.9450 1.60%

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