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Charts You Should See: Bull Run for Bank Stocks

Stocks in this article: C FITB CFR HBAN PBCT

NEW YORK (TheStreet) -- You were probably very pleased with your year-end 401(k) statement, with a 10% fourth-quarter return for the S&P 500. But looking further back, the stock market has bounced back beautifully from the doldrums of March 2009.

And bank stocks have done even better. Over the past five years, the S&P 500 has risen 175% through Wednesday's close at 1,877.03, while the KBW Bank Index has risen 280% through Wednesday's close at 70.68.

It's not much of a surprise to see the banks outpacing the market during this period because they had fallen so far in the wake of the credit crisis that crested during 2008, leading to the U.S. government's humongous bailout of the industry through the Troubled Assets Relief Program, or TARP.

Among the 24 components of the KBW Bank Index, the five-year winner is Fifth Third Bancorp (FITB) of Cincinnati, with a total return -- assuming the reinvestment of dividends -- of 1,774%. Second place goes to Huntington Bancshares (HBAN) of Columbus, Ohio, with a total return of 943%.

The remaining 22 component stocks of the KBW Bank Index have all seen triple-digit total returns over the past five years, with People's United Bancorp (PBCT) of Bridgeport, Conn., seeing a total return of only 9%.

Among the "big four" U.S banks -- Bank of America (BAC), JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo  (WFC) -- Wells Fargo is the winner, with a five-year total return of 503%.

All has not been rosy for the banks during this period, with 2011 being a particularly lousy year. This chart shows the performance of Fifth Third, Huntington, People's United and Wells Fargo over the past five years, with some slight differences in return calculations by YCharts:

FITB Total Return Price Chart data by YCharts

The major reason large-cap bank stocks have outperformed the broad market over the past five years is that the bank stocks had fallen so far before the bull run started. For 10 years through Wednesday's close, the KBW Bank Index was down 31%, while the S&P 500 has risen 62%. Many long-term bank stock investors who hung in there through thick and thin, have taken it on the chin, in great part from the dilution from common-share offerings.

The winner over the past 10 years among the 24 component stocks of the KBW Bank index is Cullen/Frost Bankers (CFR) of San Antonio, with a total return of 135%. Cullen/Frost continued to achieve double-digit returns on tangible common equity (ROTCE) through the worst of the credit crisis, according to data provided by Thomson Reuters Bank Insight.

Second place for 10-year returns among KBW Bank Index components goes to People's United Bancorp, with a total return of 124%.

The worst performer among the index components over the past 10 years, by far, has been Citigroup (C), with a negative return of 88%, reflecting not only its common-equity raises but the additional dilution caused by the U.S. Treasury's conversion of $37.7 billion in TARP preferred shares to common shares in 2009.

This chart shows the 10-year performance of Cullen/Frost, People's United and Citigroup:

CFR Total Return Price Chart> data by YCharts

California Banks Are Sitting Pretty, Says KBW

A 'Compelling' Case for JPMorgan's Stock

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 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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