How to Trade 7 Regional Banks on Stock Charts and FDIC Data

NEW YORK (The Street) -- U.S. regional banks are well-positioned to benefit from increased real estate lending, given the healing process shown in the FDIC Quarterly Banking Profile for the first quarter of 2015. However, the technicals for stocks in this industry are deteriorating.

We will look at the key data from the Federal Deposit Insurance Corporation, profile the technicals and provide the key levels at which to buy these stocks, which include BB&T Corp (BBT), Fifth Third Bancorp (FITB), PNC Financial (PNC), Regions Financial (RF), SunTrust (STI), U.S. Bancorp (USB) and Zions Bancorp (ZION) stocks on weakness and to sell them on strength.

Here's a table of the FDIC data for real estate lending that shows mixed exposures to real-estate related loans. With first quarter GDP slumping by 0.7% in its second estimate, increased real estate lending is an important economic key to proclaiming that the "Great Credit Crunch" has ended.

Total Real Estate Loans include residential mortgages for 1 to 4 family homes, nonfarm / nonresidential loans, construction and development loans and home equity loans. The total of these loans increased by 2.5% year-over-year in the first quarter to $3.75 trillion. However, the healing process remains slow as these loans are down 15.8% since the end of 2007 when the Great Recession began.

Other Real Estate Owned declined a solid 30.6% year over year in the first quarter to $19.34 billion, but remains 59.3% above the level at the end of 2007. Banks had been slow to reduce these nonperforming assets making the bet that real estate prices would rise, so it's positive to see the pace of liquidation pick up. OREO peaked at $53.2 billion in the third quarter of 2010, which was a peak for foreclosure activities.

Notional Amount of Derivatives has been a financial stress among the largest seven banks, but 1,430 of the 6,419 FDIC-insured financial institutions reported some derivative exposure, which is up 2.2% year over year. The overall exposures declined 3.7% year over year to $205.9 trillion in the first quarter of 2015, but still up 23.9% from the end of 2007.

Deposit Insurance Fund are the dollars available to protect insured deposits. These monies are funded by all FDIC-insured institutions via annual assessments. The year-over-year gain of 20.3% to $65.3 billion has the FDIC well on its way to satisfy the regulatory guidelines, which is to have the fund at 1.35% of insured deposits by Sept. 20, 2020. At the current level of insured deposits, the DIF would have at $85.6 billion, so there is still work to do.

Insured Deposits are up 2.2% to $6.34 trillion and are up 47.8% since the end of 2007. The growth can be attributed to the increase in deposit insurance guarantees to $250,000 from $100,000 which occurred during the height of the credit crisis.

Reserves for Losses have been declining during the healing of the banking system. Reserves are at $121 billion are down 8.5% year over year, but still up 19% since the end of 2007, which is a sign that some loan stresses continue.

Noncurrent Loans declined by a significant 21.6% year over year in the first quarter to $153 billion, still 39.2% above the level at the end of 2007.

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