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FBP - Another Possible Source of Bank Short Ideas

07/05/2010 05:27 PM by Dave Pinsen

Checking FDIC's website over the weekend to see if the shutdown FBP, something caught my eye: the FDIC's list of banks examined for CRA complaince: ( http://fdic.gov/news/n... ). To the extent that the CRA (Community Reinvestment Act) compels banks to lend to poor credit risks, a bank rated "outstanding" in its compliance with the CRA would seem to be an interesting prospect for shorting.

I am going to do some homework on these lists to see if I find any publicly-traded banks that I might want to short. As this will be a time-consuming project, I may share any ideas I come up with exclusively with Short Screen premium members rather than posting them here.

Rating:
5

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  • 07/06/2010 01:10 AM by Hesperian

    That's a great idea. I had no clue such a list was made public.

    Rating:
    5
  • 07/06/2010 02:26 AM by Dave Pinsen

    Thanks. Me neither.

    Rating:
    0
  • 07/08/2010 03:49 PM by Dave Pinsen

    Wild day for FBP today. After the close yesterday, it announced a preferred swap with the Treasury Department ( http://finance.yahoo.c... ). The stock was up as much as high as 92 cents on the day, but has since settled down to the mid 60s.

    Rating:
    4
  • 07/09/2010 12:19 PM by Dave Pinsen

    Sold these puts for $2.10 today, for a gain of 23.5%. The balance of risk versus reward started to look unfavorable here.

    Rating:
    5
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