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5 Bank Stocks Facing the Biggest Legal Risks (Update 1)

The $2.34 billion figure, however applies only to "those matters where an estimate is possible," according to the bank's annual 10-K filing with the Securities and Exchange Commission.

Bank of America has also struck a separate side deal as part of the National Mortgage Settlement, according to a report in The Wall Street Journal Friday. As part of the agreement, mortgages modified by Bank of America will be reduced by more than $100,000 on average, according to the report. The report also states that the deal will allow Bank of America to avoid as much as $850 million in penalties.

2. Regions Financial (RF)

Regions Financial estimates it faces up to $221 million in additional litigation costs after taxes, or 12.9% of estimated $1.707 billion in 2012-2013 earnings.

Regions is also on the hook for any litigation related to its Morgan Keegan brokerage unit, which it agreed to sell to Raymond James Financial (RJF) Jan. 11.

1. Synovus Financial (SNV)

Synovus faces just $39 million in potential litigation costs after taxes, above what it has written down or reserved against. However, that equates to 14.5% of the bank's estimated $270 million in 2012-2013 earnings.

As is the case with Bank of America, however, Synovus's estimates relate only to "those legal matters where [the company] is able to estimate a range of reasonably possible losses," according to its 10-K.

>>To see these stocks in action, visit the 5 Bank Stocks Facing the Biggest Legal Risks portfolio on Stockpickr.

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-- Written by Dan Freed in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
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