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10 Bank Stocks Trading Under $5

NEW YORK ( TheStreet) -- The concept of a cheap bank stock with good earnings potential may sound like an oxymoron, but there are a few out there these days.

Using data provided by SNL Financial, TheStreet has narrowed down the 10 bank stocks trading under $5 with the highest earnings expectations for 2010, and it's a hit-and-miss proposition. The list includes both quality names as well as those that investors may want to avoid because of capital shortfalls or crippling levels of problem loans.

Out of the roughly 1,000 publicly traded domestic bank and thrift holding companies (excluding those traded on the Pink Sheets), around 300 closed last week below $5 a share. We narrowed our list down to exclude stocks with an average daily trading volume of less than 25,000, and those with total risk-based capital ratios of less than 10%. This ratio needs to exceed 10% for most banks and thrifts to be considered well capitalized by regulators, although many institutions have been ordered to hold higher levels of capital.

Holding companies for which this ratio wasn't available were only included if their ratios of tangible common equity to tangible assets were at least 5%, as provided or calculated by SNL Financial.

That left us with 26 companies, including some pretty risky names, and some that have turned the corner. The following are the top ten listed in ascending order of projected earnings per share for 2011 as compiled by Thomson Reuters.
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