NEW YORK (TheStreet) -- This is my fourth installment of articles covering the housing market and banking system based upon the FDIC Quarterly Banking Profile for the second quarter of 2013, ValuEngine data, technical analysis and my proprietary analytics.

On Monday I wrote,

JP Morgan Upgraded As Banking System Heals

where I summarized the evolution of the housing bubble and how the bursting of the bubble created toxic assets throughout the banking system resulting in the Great Credit Crunch. In this post I profiled the four 'too big to fail' money center banks.

Also on Monday I wrote,

Housing Bubble Is Re-inflating

where I explained how the homebuilders led the 2013 stock market rally into May 20 and have since lagged as home prices and mortgage rates moved higher. I profiled the 11 homebuilder stocks and today

DR Horton

(DHI) - Get D.R. Horton, Inc. Report


M/I Homes

(MHO) - Get M/I Homes, Inc. Report



(PHM) - Get PulteGroup, Inc. Report


Toll Brothers

(TOL) - Get Toll Brothers, Inc. Report

have been downgraded to sell from hold according to


On Tuesday I wrote,

Bank Earnings Rise, but Not Real Estate Lending

where I sliced and diced the real estate related assets shown in the FDIC Quarterly Banking Profile. The banking system may appear healthier on the surface, but crunch issues remain such as; a decline of $1.8 billion in interest income, and a negative mark-to-market of $51.1 billion on fixed income securities in holdings classified as 'available for sale' securities.

Since the end of 2007, other real estate owned is up 168.6% at $32.6 billion. Reserves for losses are elevated by 46.5% at $149 billion. And, noncurrent loans are up 117.7% at $239.3 billion.

Read: Google Laughs at the New iPhones

I also noted new issues that began in the second quarter and will continue for the remainder of 2013.

Bank of America

(BAC) - Get Bank of America Corp Report



(JPM) - Get JPMorgan Chase & Co. (JPM) Report


Wells Fargo

(WFC) - Get Wells Fargo & Company Report

are experiencing reduced demand for mortgages as mortgage rates rise.

Read: Thanksgiving Travel 2013 Top 5: Book Early, Be Flexible

Among the 6,940 FDIC-insured financial institutions 338 still have an overexposure to C&D loans and 1,641 are overexposed to CRE loans. There are 1,755 banks that have their CRE loan commitment pipeline at least 80% funded with 696 of these at 100% funded.

Read: Old iPhone? 7 Ways to Make It Pay for Itself

In today's article I drilled down through the FDIC data for the 1,174 publicly-traded FDIC- insured financial institutions to find those that are overexposed to CRE loans and are tradable. Many publicly-traded banks have become penny stocks, or do not have enough trading volume to be considered tradable.

There are 461 publicly-traded banks that are overexposed to commercial real estate CRE loans and another 10 overexposed to the construction and development C&D portion of CRE. Overexposures occur when the size of a bank's CRE loans reaches 300% of risk-based capital or higher, or when the size of C&D loans reaches 100% of risk-based capital or higher.

Do to tradability I have narrowed my study to 90 publicly-traded banks and I have prepared two spreadsheets for these bank stocks. The first presents the key data from the FDIC and the second covers ValuEngine data and my value levels, pivots and risky levels.

The number of banks on the FDIC non-list of problem banks declined to a still elevated 553 from 612 in the second quarter. The number of problem banks is down nearly 40% from the high of 888 at the end of first quarter 2011. In the second quarter the FDIC closed 12 banks.

The 90 publicly-traded banks on the two lists I present today are not likely to fail, but they should take action to raise capital, trim noncurrent loans or consider merger opportunities.

Chart Courtesy of the FDIC

CRE vs. Risk-Based Capital

88 of the 90 publicly-traded banks have overexposures to commercial real estate loans with exposures of 302.8% to 842.4% of risk-based capital, above the 300% guideline. The other two

Texas Capital BancShares

(TCBI) - Get Texas Capital Bancshares, Inc. Report




) are overexposed to C&D loans only, above the 100% of risk-based capital guidelines.

Banks with overexposures to both C&D and CRE loans

Cardinal Financial



Eagle Bancorp

(EGBN) - Get Eagle Bancorp, Inc. Report


Monarch Financial Holdings



Bank of the Ozarks



Shore Bancshares

(SHBI) - Get Shore Bancshares, Inc. Report


Union First Market Bankshares

(UBSH) - Get Atlantic Union Bankshares Corporation Report

are overexposed to both C&D loans and CRE loans.

A positive for these banks is that only 15 of 90 have their CRE loan commitments 80% or more funded. A healthy pipeline has about 60% of the CRE loan commitments funded.

Increased Assets

a 'yes' in this column are the banks that increased assets in the second quarter, which is a positive. A 'no' indicates that the bank is having a tough time increasing assets. Those 'new' to this list reached an overexposure to CRE loans in the second quarter;



, Texas Capital and Teche.

Read: What's Next After Nokia Hangs Up the Phone?

Reading the Table

OV/UN Valued:

TheStreet Recommends

Only six of 90 are undervalued,


(BRKL) - Get Brookline Bancorp, Inc. Report





Preferred Bank

(PFBC) - Get Preferred Bank Report



(RVSB) - Get Riverview Bancorp, Inc. Report


Sun Bancorp




(STSA) - Get Satsuma Pharmaceuticals, Inc. Report

. All others are overvalued according to ValuEngine.

VE Rating:

There are four banks with a "4-Engine" buy rating;





(RVSB) - Get Riverview Bancorp, Inc. Report


Old Second Bancorp

(OSBC) - Get Old Second Bancorp, Inc. Report



(STSA) - Get Satsuma Pharmaceuticals, Inc. Report

. The only bank with a "2-Engine" sell rating is

United Community

(UCBI) - Get United Community Banks, Inc. Report

. . All others have "3-Engine" hold ratings.

Last 12-Month Return (%):

Only four banks stocks declined over the last 12 months;

First Financial

(FFBC) - Get First Financial Bancorp. Report


Great Southen

(GSBC) - Get Great Southern Bancorp, Inc. Report

, Texas Capital and


( VLI). Three had triple-digit gains over the last 12 months;



, Old Second Bancorp and Riverview.

Forecast 1-Year Return:

The performance percentages are not exciting over the next 12 months between; from a loss of 6.0% for United Community Banks to a gain of 9.9% Old Second Bancorp.

12 Month Trailing P/E Ratios:

Four banks have single-digit P/E ratios;

Access National

(ANCX) - Get Access National Corporation Report






(EFSC) - Get Enterprise Financial Services Corp Report

and Monarch. And 20 have P/E ratios over 20.0.

There are 89 of 90 are trading above their 200-day simple moving averages reflecting the risk of reversion to the mean.

Value Level:

Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.


A level between a value level and risky level that should be a magnet during the time frame noted.

Risky Level:

Price at which to enter a GTC limit order to sell on strength.

Read: How Lexus Is Selling Lexus Without Having to Sell Cars

At the time of publication the author held no positions in any of the stocks mentioned.

Follow @Suttmeier

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined

in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs

a "buy and trade" investment strategy

and can be reached at