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McEvoy on Monday also downgraded Fifth Third Bancorp to a "Perform" rating, from "Outperform," citing "outperformance in price," and the Federal Reserve's approval of the company's revised capital plan.

Fifth Third's shares closed at $15.31 Friday, returning 22% year-to-date, following an 11% decline during 2011.

The shares trade for 1.4 times tangible book value, and for 10 times the consensus 2013 EPS estimate of $1.58, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $1.60.

After the Federal Reserve in March only partially approved Fifth Third's annual capital plan, allowing the company to repurchase $1.4 billion in trust preferred securities and buy back common shares in amounts equal to after-tax gains from the sale of shares in Vantiv (VNTV), Fifth Third on Aug. 21 announced that the regulator had approved its revised capital plan, which "included the potential increase of the quarterly common stock dividend to $0.10 in the third quarter of 2012 and the potential repurchase of common shares."

Fifth Third's board of directors authorized the repurchase of up to 100 million common shares, including "potential common share repurchases of up to $600 million through the first quarter of 2013, in addition to any incremental repurchases related to any after-tax gains from the sale of Vantiv, Inc. stock."

McEvoy said that "solid loan growth across the company's Midwest footprint and an active mortgage banking environment have contributed to Fifth Third's above-peer profitability and stock price performance," but lowered his rating and rescinded his $17 price target for Fifth Third's shares, because "at this point we struggle to find the next company-specific catalyst to improve FITB's valuations."

As one of many large regional bank holding companies expected to see reduced earnings in 2013, McEvoy said "we feel Fifth Third could look to fill this earnings hole with a deal in the Midwest given their acquisitive history, which could limit multiple expansion," and that "potential targets may be TCF Financial (TCB) or Citizens Republic (CRBC)."

The analyst estimates that Fifth Third will earn $1.62 a share for all of 2012, followed by 2013 EPS of $1.55.

Interested in more on Fifth Third Bancorp? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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