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Steve Hach
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Steve Hach is the Senior Editor at ValuEngine.com, a Melbourne, Florida-based stock valuation and forecast service. ValuEngine utilizes Ivy League financial research as the basis for its coverage of more than 8000 US, Canadian, and other foreign stocks. Hach utilizes ValuEngine's complex... More
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  • ValuEngine Report Shows FDIC Banking Situation Greatly Improved 0 comments
    Nov 16, 2012 2:38 PM

    ValuEngine Chief Market Strategist Richard Suttmeier is an expert on the US Banking System and uses the health of the system as a leading economic indicator. He distills his thoughts on the banking system in our FDIC Report.

    For the purposes of this report, "problem banks" are publicly traded FDIC insured financial institutions overexposed to Construction & Development Loans and/or Nonfarm nonresidential real estate loans, with "1-Engine"--Strong Sell, or "2-Engine"-Sell. We also include all other engine-rated banks-- and those with "n/a" ratings but forecast figure data points according to our models-- in violation of FDIC guidelines vis-a-vis loan exposures. Those that are not covered by ValuEngine due to poor fundamentals or because there is no available EPS estimate but are still in violation of FDIC guidelines are also listed at the end of this section as a courtesy to our subscribers..

    This table tracks bank ratings and the number of problems bank back to Q2 2009. For November 2012, the FDIC Report shows a big improvement in VE Ratings for banks YOY. While many of our tracked banks remain overexposed to C&D or CRE loans and may have maxed out pipelines, less than 13% of them are now rated as "problem banks" and 38% of them are rated a BUY or STRONG BUY. Since last month's report, slightly more banks are rated HOLD rather than BUY or STRONG BUY, but there are also fewer banks rated STRONG SELL or SELL. The report shows an improved situation for banks from a ratings perspective.

     

    Q2 2009

    Q2 2010

    Q2 2011

    Q2 2012

    Oct 2012

    Nov 2011

    Nov 2012

    TOTAL BANKS

    212

    260

    216

    298

    298

    214

    288

    STRONG SELL %

    31.13

    25.00

    19.44

    12.75

    12.75

    15.77

    8.72

    SELL %

    30.66

    34.23

    36.57

    7.05

    7.05

    26.85

    4.03

    HOLD %

    37.26

    34.23

    42.13

    39.60

    39.60

    27.18

    45.30

    BUY %

    0.47

    5.00

    1.85

    31.54

    31.54

    1.68

    32.55

    STRONG BUY %

    0.47

    1.15

    0.00

    7.05

    7.05

    0.34

    6.04

    PROBLEM BANKS %

    61.79

    59.23

    56.02

    19.80

    19.80

    42.62

    12.75

    Themes: banking, fdic, suttmeier
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