2 Factors Help You Spot High-Risk Banks Like KeyCorp

If you want to find troubled banks, start here… [Turn Your Images On] Editor’s Note: We’ve been hitting on banks for a while now in Stock Power Daily, and it’s for good reason. Adam has found 282 bank stocks at high risk, and he has an “off Wall Street” trade to capitalize on this troubling trend. He’ll tell you more about it in a special presentation next week. [Click here to put your name on the guest list]( before reading about Matt’s bank stock to avoid below. [2 Factors Help You Spot High-Risk Banks Like KeyCorp]( [Turn Your Images On] [Matt Clark, Chief Research Analyst]( As a journalist, I learned that when tackling a complex issue, it’s always best to find someone smarter than you on the subject. Over the last several weeks, I’ve been jumping into the banking sector … particularly looking at banks in danger of failing — in addition to ones that already have. After three banks' massive failures, I want to know if there are any other institutions in the danger zone. So I enlisted the help of Bill Moreland over at [BankRegData.com]( who pointed me to two critical data sets that are a fantastic starting point when analyzing a bank’s health. Of course, we have our own proprietary tool that gives us a quick snapshot of a stock’s projected health as well: the Green Zone Power Ratings system. So today, I want to focus on those two data sets and then use our proprietary Green Zone Power Ratings system to show you one bank to stay away from. Deposits and Delinquencies The first set of data that gives a good read on a bank’s financial status is core deposits. For banks, core deposits are one of the most stable and cheap forms of funds because they attract low interest-rate risk. Two examples of core deposits are money kept in your checking or savings account. Contrast that with certificates of deposit or money market accounts, which are more vulnerable to short-term interest rate changes. The more core deposits a bank gets, the more money it can lend out. Essentially, deposits create loans. The other important dataset is delinquencies. Banks earn money from interest rates. The higher the interest rates, the more money a bank can make. But that profit is offset when they have loan delinquencies — when payments are past due. Bottom line: A bank that is in solid financial standing likely has high core deposits collecting more interest payments and low delinquencies so they get to keep those profits. --------------------------------------------------------------- [Turn Your Images On]( [Profit From the Banking Chaos by Going “Off Wall Street”]( Adam O’Dell recently closed out a third of his position on a trade for 76% profits in just two weeks. All he did was capitalize on a major flaw in the banking sector using an “off Wall Street” trade. He believes many more opportunities will be up for grabs in the coming months. On Wednesday, May 31 at 1 p.m. Eastern, he’s going live to show you how to take advantage of this banking chaos. [Go here to reserve your spot now.]( --------------------------------------------------------------- KeyCorp: A Snapshot of Deposits and Delinquencies The bank I’m focusing on today is KeyCorp (NYSE: KEY). It operates KeyBank — a Cleveland, Ohio-based institution providing retail and commercial banking services, student loan refinancing and mortgage services. First, I want to examine the bank’s core deposits. Remember, in order to loan out more money, those core deposits need to grow. But that isn’t the case for KeyCorp: [Turn Your Images On] [(Click here to view larger image.)]( As you can see from the chart above, core deposits at KeyCorp have declined by more than 10% since the third quarter of 2021. Next, let’s look at loan delinquencies … specifically residential loans — the second-largest concentration of loans for KeyCorp: [Turn Your Images On] [(Click here to view larger image.)]( Again, banks ideally want their loan delinquencies to go down because the more delinquencies, the lower the profits. KeyCorp’s delinquencies are trending in the wrong direction. Loan delinquencies are up — therefore profits are lower. And that’s helped create a stock that’s not worth buying right now. Green Zone Power Ratings: KeyCorp KeyCorp stock rates a “High-Risk” 11 overall on our proprietary Green Zone Power Ratings system. This means we expect KEY to significantly underperform the broader market over the next 12 months. [Turn Your Images On] [(Click here to view larger image.)]( The stock scores in the red on all three of our price-based factors (momentum, size and volatility). It does rate a “Bullish” 75 on our value factor, but it’s neutral on our other two fundamental factors (quality and growth). The stock’s momentum tells you all you need to know: [Turn Your Images On] [(Click here to view larger image.)]( Over the last 12 months, KEY has fallen 43.4%. Its U.S. bank peers have lost an average of 14.2% during the same time. KEY scores a “High-Risk” 11 on our proprietary Green Zone Power Ratings system. We expect it to significantly underperform the broader market over the next 12 months. --------------------------------------------------------------- [Turn Your Images On]( From our Partners at Paradigm Press. [“Financial Nostradamus” makes bone-chilling prediction…]( In 2019, [this man]( wrote a book called Aftermath that shocked the world by predicting that “Something on the scale of a global pandemic will be the cause of the next financial crisis” And that “it will happen with 100% certainty” in the next few years. Just four months later we had the first reported case of the coronavirus. Now he’s back with another [bone-chilling prediction](. A prediction that’s already starting to come true. A prediction I’m urging you to watch right away. Because if what he says is true, within days this single event will have a profound effect on your retirement assets, your banks account and your entire way of life. [Click Here to See This Exclusive Interview]( Warning: What you’re about to see is a REAL exclusive interview with a former CIA and Pentagon insider. The content herein is NOT for the faint of heart. --------------------------------------------------------------- Bottom line: This mini banking crisis may turn into something much worse as 2023 rolls along. More banks struggling with a decline in deposits and an increase in loan delinquencies could collapse like we’ve seen with Silicon Valley Bank, Signature Bank and First Republic. Troubling data for KEY in both areas show potential danger for this bank. And our Green Zone Power Ratings system shows us it’s a stock you want to keep out of your portfolio. Adam O’Dell has also been tracking this banking situation closely. And he believes we’re in the early innings of a broader crisis. [He’s found 282 banks]( that are at a high risk of failure now. And he’s got an “off Wall Street” trade that he believes will help investors make gains as this situation develops. Elite investors have already banked profits with this trade. And Adam’s going to show you how you can do the same next Wednesday. [Click here to sign up for his free upcoming presentation.]( Stay tuned: Tomorrow, Chad is going to walk you through how he used Green Zone Power Ratings to create his own shortlist of banks to avoid. Until then… Safe trading, [Matt Clark signature] Matt Clark, CMSA® Chief Research Analyst, Money & Markets --------------------------------------------------------------- Check Out More From Stock Power Daily: - [HIDDEN LANDMINES FOR THE BANKING SECTOR]( - [REGIONAL BANKS ARE IN TROUBLE. ARE YOU?]( - [OUR DATA STORAGE PICK IS UP 150% SINCE OCTOBER!]( Privacy Policy The Money & Markets, P.O. Box 8378, Delray Beach, FL 33482. To ensure that you receive future issues of Money & Markets, please add info@mb.moneyandmarkets.com to your address book or [whitelist]( within your spam settings. For customer service questions or issues, please contact us for assistance. The mailbox associated with this email address is not monitored, so please do not reply. Your feedback is very important to us so if you would like to contact us with a question or comment, please click here: [( Legal Notice: This work is based on what we've learned as financial journalists. 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