The FDIC has closed 49 banks in 2012, bringing the total since the end of 2007 to 463. With the FDIC's nonpublished List of Problem Banks still above 700 insured institutions, look for additional Bank Failure Fridays over the foreseeable future. At ValuEngine we have an excellent track record of tracking the publicly traded community banks that have the overexposures to loans that could cause the FDIC to knock on the door some Friday afternoon.

Back on Sept. 6, 2012 I described the continued problems within the banking system in Community Banks Still Under Stress, and today the technicals are showing deterioration.

ValuEngine shows that the finance sector is 11.4% overvalued. Each banking region is local with different industry valuations. The Northeast is 20.9% overvalued, the Midwest is 4.1% undervalued, the Southeast is 21.7% overvalued, the West is 2.6% overvalued and the Southwest is 1.6% overvalued.

Evidence of "QE Fatigue" includes a negative weekly chart for the ABA Community Bank Index (169.05). ABAQ may be up 39.2% since its bottom in October 2011 and up 14.2% year to date, but Friday's close was below its five-week modified moving average at 170.01 with declining momentum.

This is a negative technical profile, where the risk is to the 200-week simple moving average at 153.36. My annual value level lags at 135.62 with an annual pivot at 166.87, and weekly, quarterly and monthly risky levels at 171.16, 172.74 and 175.59, respectively.

Reading the Table

OV/UN Valued: The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage, according to ValuEngine.

VE Rating: A "1-Engine" rating is a strong sell, a "2-Engine" rating is a sell, a "3-Engine" rating is a hold, a "4-Engine" rating is a buy and a "5-Engine" rating is a strong buy.

Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.

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