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

Nonfarm / Nonresidential Real Estate Loans -- higher by 15% since the end of 2007 to $1.118 trillion as community banks continue to lend for office buildings, strip malls, apartment buildings and condos.

Construction & Development Loans -- down 65.9% to $214.3 billion as loans to finance planned communities and homebuilders proved to be the Achilles Heel for community banks. This loan category has stabilized and has increased during the last two quarters.

Home Equity Loans -- down 17.1% since the end of 2007 to $503.5 billion and this category will continue to be hurt by loans at banks that do not service the first-lien mortgage. In addition some interest-only loans are now becoming normal loans where principal reductions are now required increasing monthly payments for borrowers.

Total Real Estate Loans -- down 17.8% since the end of 2007 to $3.658 trillion which is a key sign that banks are not ready to rebuild their core business, supporting the housing market on Main Street, USA.

Other Real Estate Owned -- may be down in recent quarters but at $29.4 billion is still up 141.9% since the end of 2007. Banks have slowed the reduction of these nonperforming assets making the bet that real estate prices will continue to rise. OREO peaked at $53.2 billion in the third quarter of 2010.

Noncurrent Loans -- while down significantly but at $195 billion is still up 77.5% since the end of 2007 after peaking at $405.4 billion in Q1 2010.

Here are the tables for the five banks community banks to avoid. contributor Jessica Sandoval disagrees with my assessment of New York Community Bank (NYCB - Get Report) saying the bank is a solid dividend stock. That's what makes a market.

Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics

This table provides the technical status for the stocks profiled in today's report.

There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.

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