NEW YORK ( TheStreet) - Bank stocks have remained unloved through most of 2011, but some regional bank stocks have managed to earn investors' respect.
Stocks of large, regional banks such as U.S. Bancorp (USB - Get Report) and PNC Financial Services (PNC - Get Report) have been the relative winners in the year so far, declining to a lesser extent than their larger, more troubled, rivals- Bank of America (BAC - Get Report), JPMorgan Chase (JPM), Citigroup (C - Get Report) and Wells Fargo (WFC).
Most of these banks are still "plain vanilla,"; predominantly focused on lending rather than capital markets activity that is more volatile. The universal banks have been hit hard in recent quarters by the European debt crisis, which has frozen capital markets and has investors jittery about banks' counterparty risk.
Regional banks have also been able to use acquisitions to build market share, growing revenues at a time when loan demand is low. As European banks exit the U.S. market, these banks are poised to benefit.Smaller banks, such as East West Bancorp (EWBC - Get Report) have been able to benefit from a niche focus. While performances do diverge, most of these banks are reporting solid trends in loan growth, driven by commercial loans and progress on expense reductions. The caveat is that these banks are more exposed to the U.S. economy and also tend to be more sensitive to interest rate pressures on margins. And while valuations of these stocks are cheap relative to their historic levels, several trade at premiums to their large-cap peers, which means there is little room for earnings disappointments. TheStreet compiled a list of banks most loved by analysts with the help of analyst rating data from Bloomberg. We screened for banks with a market capitalization of more than $1 billion and that have at least 10 analysts covering the stock. While Citigroup, Wells Fargo and JPMorgan Chase still top the list of analyst favorites, the following five rank high as well.