This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

10 New York Bank Stocks With Most Upside for 2012

Updated with information about the Federal Reserve's rules proposal for enhancing oversight of the nation's largest financial institutions.

NEW YORK ( TheStreet) -- TheStreet has identified the 10 actively traded New York bank stocks with the most upside potential for 2012.

Using data provided by SNL Financial, we isolated the bank and thrift holding companies headquartered in the Empire State, with three-month average daily trading volume of at least 50,000 shares, then pared down the list to the 10 names with the most upside potential in 2012, based on mean price targets among analysts polled by FactSet.

There are many familiar names on the list, with the largest banks seeing the greatest discounts to tangible book value and forward earnings estimate because of regulatory threats to revenue, including the reduced interchange fee income brought about by the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Federal Reserve's final regulations based on the Volker Rule's requirement to curtail banks' proprietary trading.

Other threats to the large banks include European exposure, and even though the banks have detailed relatively modest exposure on their balance sheets, what investors have no way of knowing -- and what Dodd-Frank didn't address -- is how much off-balance-sheet risk the banks might have from the tangled web of credit default swaps and other derivative investments.

The Fed's release on Tuesday of a new 173-page proposal, with new rules to strengthen oversight of large banks didn't settle the largest banks' ultimate capital requirements, although the regulator did say it would incorporate the Basel III requirements for enhanced capital buffers for systemically important banks.

The regulatory capital issue may continue to drag on the shares of banks with over $50 billion in total assets, until the Fed begins phasing in its new capital rules in 2014.

Still, for the largest New York banks, analysts generally give a thumbs-up, because of the great amount of additional capital the group has built-up over the past few years and the expectation that following the third round of Federal Reserve stress tests in January, many of the large industry players will be allowed to significantly increase their return of capital to investors through dividends and share buybacks.

Of course, investors may be wondering if 2012 is the year when the analysts finally get the big banks right. After all, the valuations have been heavily discounted for years now, and many of the analysts have been saying "buy" all along.

The smaller names on the list trade at higher multiples than the biggest banks, which isn't surprising, with lower (or no) European exposure, less impact on capital requirements from Basel III, less of an impact from Durbin, and a smaller political target-on-the-back.

Here's the list of 10 liquid New York bank stocks with the most upside for 2012, ordered by ascending upside potential:
1 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BK $39.27 -1.40%
C $44.66 -2.00%
FNFG $10.23 -1.90%
GS $160.13 -1.80%
JPM $61.56 -1.60%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs