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Community Banks Remain Overexposured to CRE Lending

The FDIC Quarterly Banking Profile for the second quarter continues to show increasing loan exposures to commercial real estate lending including construction and development loans.

Today’s focus is on 12 publicly-traded community banks that are overexposed to commercial real estate loans including construction and development loans.

At the end of 2006, bank regulators including the U.S. Treasury, the Federal Reserve and the FDIC established regulatory guidelines to exposures of these types of real estate lows versus risk-based capital. Overly simplified, exposures for C&D loans should not exceed 100% of risk-based capital, and exposures to CRE loans should not exceed 300% of risk-based capital.

Commerce Bancshares CBSH – Buy weakness to my annual value level of $48.09. My monthly and semiannual pivots are $56.59 and $57.25, respectively. Reduce holdings on strength to my quarterly risky level of $61.39.

ConnectOne Bancorp CNOB – Buy weakness to my quarterly value level of $23.09. I show an annual pivot of $24.44. Reduce holdings on strength to my semiannual risky level of $26.80. This bank is overexposed to both C&D loans and CRE loans.

Green Bancorp GNBC – Buy weakness to my quarterly value level of $19.07. Reduce holdings on strength to my semiannual risky level of $27.42.

Hancock Holding HBHC – Buy weakness to my semiannual value level of $40.50. Reduce holdings by 25% with the stock above my quarterly pivot of $48.78.

Home BancShares HOMB – Buy weakness to my annual value level of $21.06. My annual pivot is $24.16. Reduce holdings on strength to my semiannual risky level of $26.57.

Investors Bancorp ISBC – Buy weakness to my annual value level of $11.01. My annual pivot is $13.22. Reduce holdings on strength to my semiannual risky level of $15.95.

Northwest Bancshares NWBI – Buy weakness to my annual value level of $13.62. My annual pivot is $17.81. Reduce holdings on strength to my quarterly risky level of $18.66.

Old National Bancorp ONB – Buy weakness to my semiannual value level of $16.07. Reduce holdings by 25% with the stock above my quarterly pivot of $17.56.

Bank of the Ozarks OZRK – Buy weakness to my annual value level of $43.53. My quarterly pivot is $48.44. Reduce holdings on strength to my annual risky level of $52.71. This bank is overexposed to both C&D loans and CRE loans.

Courtesy of MetaStock Xenith

PacWest Bancshares PACW – Buy weakness to my annual value level of $45.30. My quarterly pivot is $50.16. Reduce holdings on strength to my semiannual risky level of $56.44.

Courtesy of MetaStock Xenith

Texas Capital Bancshares TCBI – Buy weakness to my semiannual and quarterly value levels of $81.23 and $80.99, respectively. Reduce holdings by 25% with the stock above my annual pivot of $82.97.

Umpqua Holdings UMPQ – Buy weakness to my annual value level of $16.50. Reduce holdings by 25% with the stock above my semiannual pivot of $18.50.

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