MOST READ: Best Banks Not Best Buys

A complete impairment writedown of the $3.2 billion would have reduced State Street's core capital by 27%, however State Street's Sept. 30 capital ratios were relatively high, with a leverage ratio of 8.36% and a risk-based capital ratio of 17.19%. While regulatory guidelines for these ratios apply only to the banks themselves and not the holding companies, they need to be 5% and 10% for a bank to be considered well capitalized. One more thing to consider is that these ratios don't reflect the $2 billion in capital the Treasury injected during the fourth quarter. Of course, by the price action, it's clear that despite State Street's good earnings performance, the overall feeling in the market is that the company will be forced to realize much more losses on asset-backed securities.

Like State Street, Northern Trust's common shares held relatively well through the first three quarters, even peaking at an intraday high of $88.92 on Sept. 15. Shares tanked in early October, when analysts' earnings estimates were lowered. The company then reported a third quarter loss of $129 million, mainly from $562 million in charges to prop up money market funds managed by the company, "support securities lending clients," and to "purchase certain illiquid auction rate securities that were purchased by a limited number of Northern Trust clients." Northern Trust still managed a not-too-shabby return on equity of 12.66% for the first three quarters of 2008, but its shares had a year-to-date total return of negative 42%.

Where are the bargains?

Four of the institutions posted positive total returns on common stock through Monday' market close -- FirstMerit (FMER Quote), Cullen/Frost Bankers (CFR Quote), Commerce Bancshares (CBSH Quote) and International Bancshares (IBOC Quote).