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Previewing the FDIC Quarterly Banking Profile

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The profile for the second quarter will likely show continued stress relative to commercial real estate loans.

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Editor's Note: This article was written by Richard Suttmeier, chief market strategist at ValuEngine.com, which is a fundamentally-based quant research firm in Princeton, New Jersey, that covers more than 5,000 stocks every day.


10-Year Note --
(2.545) My annual pivots are 2.813 and 2.999 with a weekly pivot at 2.648, and daily, quarterly, and semiannual risky levels at 2.488, 2.495, and 2.249 versus last week's low yield at 2.419. Note that the decline in yield is no longer overdone on the daily chart.


Source: Thomson / Reuters

Comex Gold -- ($1238.7) Semiannual, weekly, quarterly, monthly, and annual value levels are $1218.7, $1211.5, $1140.9, $1133.2, and $1115.2 with a daily pivot at $1240.1, and semiannual risky level at $1260.8. Note that gold is still overbought on its daily chart.


Source: Thomson / Reuters

Nymex Crude Oil -- ($74.21) My daily value level is $71.96 with annual, monthly, weekly, and semiannual risky levels at $77.05, $80.02, $81.35, and $83.94. Note that crude oil is no longer oversold on the daily chart profile.


Source: Thomson / Reuters

The Euro -- (1.2661) Daily, quarterly, and monthly value levels are 1.2542, 1.2167, 1.1486, and 1.1424 with weekly and semiannual risky levels at 1.3170 and 1.4733. Note that the euro is still oversold on its daily chart.


Source: Thomson / Reuters

Daily Dow: (10,010) Daily and quarterly value levels are 9,788 and 7,812 with my annual pivot at 10,379, and monthly, semiannual, weekly, and annual risky levels at 10,439, 10,558, 10,904, and 11,235. My annual risky level at 11,235 was tested at the April 26 high of 11,258.01. Note that the daily chart remains oversold with the 21-day, 50-day, and 200-day simple moving averages at 10,366, 10,269 and 10,452.


Source: Thomson / Reuters

Here are some statistics from the FDIC for the second quarter 2010:

There were 45 bank failures in the second quarter, and we likely ended the quarter with less than 7,900 FDIC-insured financial institutions.

  • 2,504, or 31.7%, are thus overexposed to commercial real estate loans.

  • 3,939, or 49.9% of all banks, have a pipeline that's 80% or more funded.


Half the community banks in America remain overleveraged to commercial real estate and the possible losses remain about $1.5 trillion.

Assets among banks with a CRE pipeline of 80% or more funded increased to $3.84 trillion, including $121.3 billion in construction-and-development loans.

The average pipeline for 3,939 banks is 92.0%. Among this list are four big banks that will likely see waves of write-offs in upcoming quarters.

  • JPMorgan Chase (JPM) with $1.72 trillion in assets has a pipeline of 80%.

  • SunTrust Banks (STI) has $160.5 billion in assets with an 83% pipeline.

  • BB&T Corp (BBT) has $149.2 billion in assets with an 84% pipeline.

  • Fifth Third Bank (FITB) has 100.0 billion in assets with an 84% pipeline.
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No positions in stocks mentioned.
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