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10 Bank Stocks With Great Expectations

NEW YORK (TheStreet) - TheStreet has identified 10 bank holding companies with relatively good earnings in 2010, that are expected to see a significant increase in profits during 2011.

To come up with our list, we isolated the 10 bank and thrift holding companies with average daily trading volume of at least 50 thousand shares and were profitable in 2010 with an operating return on average assets of at least 0.50%. These banks were also expected to have the largest percentage increase in earnings for 2011, according to analysts polled by Thomson Reuters .

All data was supplied by SNL Financial.

Not surprisingly, the expected earnings improvement for these already-profitable holding companies has been baked into share prices to a certain extent. For all 10 bank and thrift holding companies listed here, forward price-to-earnings ratios based on the consensus earnings estimates for 2011 and 2012 among analysts polled by Thomson Reuters are well-above those of the "big four" U.S. bank holding companies.

  • For Bank of America (BAC), the forward P/E was 10.6 based on Friday's closing price of $14.04 and the 2011 consensus EPS estimate of $1.33. The forward P/E was 7.5 based on the 2012 consensus EPS estimate of $1.87.
  • For JPMorgan Chase (JPM), the forward P/E was 9.5 based on Friday's closing price of $45.74 and the 2011 consensus EPS estimate of $4.79. The forward P/E was 8.2 based on the 2012 consensus EPS estimate of $5.59.
  • For Citigroup (C), the forward P/E was 10.5 based on Friday's closing price of $4.50 and the 2011 consensus EPS estimate of 43 cents. The forward P/E was 8.5 based on the 2012 consensus EPS estimate of 53 cents.
  • For Wells Fargo (WFC), the forward P/E was 11.2 based on Friday's closing price of $31.83 and the 2011 consensus EPS estimate of $2.84. The forward P/E was 8.9 based on the 2012 consensus EPS estimate of $3.58.

You get what you pay for, and our "higher earnings growth" group of 10 featured here faces less headline risk from the continuing foreclosure crisis and from the endless stream of rule proposals from regulators, as the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama in July of last year.

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