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July's 5 Worst-Performing Big Bank Stocks

Stocks in this article: C BAC BBT TCB FULT BXS WTFC

NEW YORK ( TheStreet) -- While most big bank stocks recovered after a rough June, shares of nine out of the 50 largest public U.S. bank holding companies (by total assets) fell for the month. Here are the five worst performers among the group for July.

Shares of TCF Financial (TCB) of Wayzata, Minn. closed at $15.84 Friday, down 4% for July but up 17% for 2010, according to SNL Financial.

Earnings: TCF Financial reported second-quarter net income of $45 million, or 32 cents a share, improving from a profit of $33.9 million, or 26 cents a share, in the first quarter. Net income in the second quarter of 2009 was $10.3 million, or 8 cents a share.

>>>TCF Financial Beats View, Shares Drop

Capital: While TCF was a participant in the Troubled Assets Relief Program, or TARP, the company fully repaid the government in May 2009. The company raised $164.6 million in capital through a common share offering in February. TCF's Tier 1 capital ratio of 10.30% and its total risk-based capital ratio was 12.71% as of June 30. These ratios need to be at least 6% and 10% for most banks to be considered well capitalized by regulators.

Asset Quality: TCF Financial had $18 billion in total assets as of June 30. Nonperforming assets -- including nonaccrual loans and repossessed real estate -- comprised 3.04% of total assets as of June 30, increasing from 2.75% the previous quarter and 2.40% a year earlier. The company's ratio of net charge-offs to average loans for the second quarter was 1.30% and loan loss reserves covered 1.72% of total loans. Although the increase in problem assets ran counter to the trend for many large banks, TCF's pace of loan losses was low when compared to the national aggregate net charge-off ratio of 2.84% for the first quarter, reported by the Federal Deposit Insurance Corp.

Prospects: Following the earnings announcement, Keefe, Bruyette and Woods analyst Eileen Rooney reiterated her "market perform" or neutral rating on the shares, but increased her 2010 earnings estimate to $1.12 a share from 83 cents a share. Rooney's 2011 earnings per share estimate is $1.13, and her 12-month target for the shares is $15.

>>>July's 5 Best-Performng Big Bank Stocks

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