) --

Bank of America

(BAC) - Get Report

was the worst of the worst during a year of pathetic bank stock performance, with shares plunging 58% for the year and closing Friday at $5.56.


KBW Bank Index


closed Friday at 39.42 for a 2011 decline of 25%, with all 24 index components showing declines for the year, except for

U.S. Bancorp

(USB) - Get Report

, which was up 2% for the year to close at $27.05.

Capital One

(COF) - Get Report

, was down only slightly for the year, closing at $42.9.

Among the KBW Bank Index components, Capital One achieved the highest operating return on assets of 1.90% during the first three quarters of 2011, followed by U.S. Bancorp, with an ROA of 1.47%, according to SNL Financial.

Most of the epic drop in Bank of America's shares can be attributed to continued uncertainty over just how much risk the company faces from former CEO Ken Lewis's disastrous decision to by Countrywide Financial in 2008.


reported last week that Bank of America was considering asset sales to boost regulatory Tier 1 capital, after boosting its regulatory capital by $3.9 billion through the issuance of new common shares and retirement of preferred shares and long-term debt.

Bank of America's Tier 1 common equity ratio was 8.65% as of Sept. 30, according to SNL Financial, which was the lowest among the "big four" U.S. banks.

The shares trade at roughly 0.4 times tangible book value, with the heavy market discount reflecting the continued uncertainty over capital and ongoing mortgage putback litigation, including

Federal Housing Finance Agency's lawsuits

and the expected settlement between the largest mortgages servicers, federal regulators and the states' attorneys general, which Credit Suisse analyst Moshe Orenbuch has estimated could cost Bank of America between $5.6 billion to $9.4 billion.

Rochdale Securities analyst Richard Bove put out a terse note last week, saying it was time for Bank of America's management to come clean with investors by reviewing "all of the issues related to this business and to explain why it believes it is so critical for the bank to continue to hold onto this division."

Bove said that the company had refused to discuss why it wasn't "suing the sellers of Countrywide for misrepresenting of the value of the assets at the time of sale," why Bank of America was "paying legal fees and fines of a former Countrywide executive," and why it hadn't considered putting the Countrywide business into bankruptcy.

He added that "the company's tangible book value would be an estimated $3 per share higher without Countrywide."

With Bank of America's shares trading at such a heavy discount to book value, and for just over five times the consensus 2012 earnings estimate of 97 cents a share, among analysts polled by FactSet, it isn't surprising that there are still 10 analysts rating the shares a buy. Meanwhile 13 analysts have neutral ratings and one lonely analyst still thinks investors should move on.

Interested in more on Bank of America? See TheStreet Ratings' report card for

this stock


The second-worst performer among the largest U.S. banks was

Goldman Sachs

(GS) - Get Report

wish shares closing Friday at $90.43, for a year-to-date decline of 46%.

The company faces major uncertainty in 2012, with the Federal Reserve still not settled on its ultimate enhanced capital requirements for banks, and the Volcker Rule still in play.

The comment period following the Fed's

confusing 300-page proposal

to implement the Volcker Rule's ban on "proprietary trading" by banks -- as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama last July -- has been extended to February 13.

Atlantic Equities analyst Richard Staite on Dec. 15 cut his fourth-quarter earnings estimate for Goldman by 60% to 90 cents, "driven by lower revenue across all business against a relatively fixed cost base." The analyst has a neutral rating on the shares, and estimates the company will achieve a decent return on tangible equity of 9.4% in 2012, "on the assumption that revenues improve in both Investment banking and in the Investing and Lending division."

Staite also said that Goldman "has the potential to increase market share as competitors, particularly European banks, drop out," although "near term trading revenue

is likely to be subdued," and could decline "due to new regulations." The analyst estimates that Goldman will earn $11.15 a share in 2012.

Goldman's shares trade for just 0.7 times their Sept. 30 tangible book value of $124.90, according to SNL and seven times the consensus 2012 EPS estimate of $12.74, among analysts polled by FactSet.

Interested in more on Goldman Sachs? See TheStreet Ratings' report card for

this stock


Shares of


(C) - Get Report

closed at $26.31 Friday, for a year-to-date decline of 44%, adjusting for the 1-for-10 reverse split on May 6.

Despite the lousy performance of the shares, there's quite a bit of analyst support for Citigroup, with 15 rating the stock a buy, while five analysts are on the fence and two recommend selling the shares.

The company ranked highest among


10 New York Bank Stocks With Most Upside for 2012

, based on analysts' consensus price targets.

CEO Vikram Pandit has continued to patiently trim the company's balance sheet by

winding-down non-core assets


In his 2012 U.S. banking industry outlook report last week, Sterne Agee analyst Todd Hagerman said that Citi was his firm's "speculative Buy recommendation in the sector with the bad news effectively discounted in the stock at current levels," and that although "the company's outsized international exposure will continue to weigh on the shares, at least near term," and that following the next round of

Federal Reserve

stress tests

in January, a "meaningful positive inflection point on the stock will likely occur in March," with an announcement of a capital return to investors through increased dividends and/or share buybacks.

Interested in more on Citigroup? See TheStreet Ratings' report card for

this stock


Morgan Stanley

(MS) - Get Report

was another major loser during 2011, with shares also declining 44% to close Friday at $15.13.

Following on his theme for a "weak and messy" fourth quarter for investment banks, Richard Staite estimates that Morgan will post a 51-cent fourth-quarter loss, springing from the company's $1.8 billion settlement with


(MBI) - Get Report

over claims related to credit default swaps on commercial mortgage-backed securities.

Staite is neutral on the shares, predicting a mediocre 2012 return on equity of 6.6% for Morgan Stanley, and estimating 2012 earnings from continuing operations of $1.81 a share.

Credit Suisse analyst Howard Chen on Dec. 13 called the MBIA exposure Morgan Stanley's "single largest legacy issue," and said the settlement "improves Morgan Stanley's capital flexibility, accelerating the firm's Basel III readiness at a critical moment heading into the 2012 Fed CCAR submission," referring to the capital plan the company must submit for the Federal Reserve's annual stress tests, by Jan. 7, 2012.

Morgan Stanley's shares trade for 0.6times the company's Sept. 30 tangible book value of $25.55 according to SNL, and for 7.5 times the consensus 2012 EPS estimate of $2.02.

Interested in more on Morgan Stanley? See TheStreet Ratings' report card for

this stock



2011 Bank Failure Winners >

Bank of America Employees Had Blowout 2011 Payday: Report >

Could Bank of America Survive a 'Run on the Bank' in 2012? >

A 2012 Housing Rebound Can't Save Bank of America >

Bank of America to Top $10 a Share in 2012: Poll >

First Niagara Among 'Cheapest Yield Plays': Jefferies >


Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here:

Philip van Doorn


To follow the writer on Twitter, go to


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.