) --


(C) - Get Report

was the winner among the largest U.S. financial names on Monday, with shares rising over 3% to close at $29.98.

FBR analyst Edward Mills on Monday said that contrary to the U.S. Treasury's assertion that its new requirement for

Fannie Mae



Freddie Mac


to fork over

all profits

to the government, in order to "support the continued flow of mortgage credit during a responsible transition to a reformed housing finance market," The Treasury has ensured the two mortgage giants'


of mortgage finance.

Mills said that although the Fannie and Freddie are forced to reduce the amount of loans they hold in their portfolios, the government's action "does not limit the amount of loans that Fannie or Freddie can guarantee," and that "nothing in this agreement reduces the dominance of Fannie and Freddie in the securitization of conforming loans."

The analyst added that the Federal Housing Finance Agency -- which took Fannie Mae and Freddie Mae under conservatorship in 2008, costing U.S. taxpayers over $189 billion as of June 30 -- "has begun contract harmonization and a unified securitization platform," and that "the more standardized the product, the more likely the vast majority of loans are securitized through the GSEs," which benefits "originators with economies of scale, such as the large national lenders," including

Wells Fargo

(WFC) - Get Report


JPMorgan Chase

(JPM) - Get Report


U.S. Bancorp

(USB) - Get Report

, and

PNC Financial Services Group

(PNC) - Get Report



KBW Bank Index


rose slightly to close at 47.38, with only nine of the 24 index components showing gains, including Bank of America, which rose 2% to close at $8.15, and JPMorgan, which was up 1% to close at $37.37.

Citigroup's shares have now returned 14% year-to-date, following a 44% decline during 2011.

The shares are trading for a low 0.6 times their reported June 30 tangible book value of $51.81, and for 6,6 times the consensus 2013 earnings estimate of $4.54, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $4.09.

JPMorgan Chase analyst Vivek Juneja has a neutral rating on Citi, "as increased capital return in 2012 had been a key catalyst for the stock and the Fed's refusal to approve Citi's capital return plan and Citi's decision to not ask for return in the resubmission pushes this out to 2013."

For long-term investors, the analyst listed several positive factors for Citigroup's shares, including the low price multiples; "strong and growing capital levels;" international revenue growth opportunities, as the company's business outside the U.S. accounted for 40% of revenues during 2011; a "sizeable amount of loan loss reserves," and the "long run potential for return of excess capital to shareholders."

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Interested in more on Citigroup? 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 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.