This Day On The Street
Continue to site
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

Bank of the Ozarks, Union Bankshares Are Community Banks to Avoid

NEW YORK (TheStreet) -- The number of FDIC-insured institutions declined to 6,730 in the first quarter from 6,812 at the end of 2013. This decline is among the smaller community banks that attempt to compete with larger regional banks moving into neighborhoods around the country.

The good news is 54% of all banks had year-over-year growth in quarterly earnings according to the FDIC's Quarterly Banking Profile for the first quarter of 2014. Just 7.3% were unprofitable down from 8.5% year over year.

But there are still some community banks to avoid including Bank of the Ozarks (OZRK - Get Report) and New York Community Bancorp (NYCB - Get Report). The other three on my list are Cardinal Financial (CNL), Dime Community Bancshares (DCOM) and Union Bankshares (UBSH).

On June 11 I wrote 9 Community Bank Stocks on the Rise, Plus Must-See Charts for Traders. These are the community banks to bank on given a resumed economic recovery.

On June 16, I wrote Why the Big Banks Aren't Doing More to Boost the Economy where I profiled the reasons why the four "too big to fail" banks are not positioned to take leadership actions to help re-boot and economic recovery.

While there are promising statistics, noninterest income from the securitization and servicing or mortgages, the life's blood for banking, was just $4 billion in the first quarter, down 53.6% year over year. Loans for residential mortgages originated and intended for sale declined 70.6% year over year to $323.6 billion.

Realized income from securities "held-for-trading" were down 60.1% year over year to just $827 million as higher U.S. Treasury yields reduced market values for these investment portfolios.

Reductions in loan-loss provisions continued in the first quarter of 2014, but a drop of $7.6 billion was down 30.3% year over year. While this was the 18th consecutive decline, it's the second-smallest decline.

Compared to the end of 2007, the recovery in the banking system has further to go.

Residential Mortgages (1 to 4 family structures) -- down 19% since the end of 2007 to $1.822 trillion. These are loans on the books of the FDIC-insured financial institutions.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
OZRK $41.30 0.00%
NYCB $15.03 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs