NEW YORK (

TheStreet

) --

Citigroup

(C) - Get Report

won't gain much from paying back the government now, while

Wells Fargo

(WFC) - Get Report

and regional banks including

Comerica

(CMA) - Get Report

are in a good position to do so.

>>POLL:

Should Citigroup Rush to Repay TARP?

The following table comprises the 10 largest banks that haven't yet arranged for repayment of the Troubled Asset Relief Program, or TARP, excluding

Bank of America

(BAC) - Get Report

, which raised more than $19 billion in common equity last week.

Bank of America

owes the government $45 billion.

Regulators are most concerned about TARP banks' tangible common equity ratio because that measure of capital strength excludes preferred shares, including those held by the government. (Banks have a set of regulatory capital ratios that have to be met to be considered well-capitalized under normal circumstances.)

Citigroup will stay on the dole

Citigroup has converted $25 billion in government-held preferred shares, along with $33 billion in publicly held convertible shares, into common stock, diluting shareholders and leaving the government with a 34% stake of the common stock.

Citigroup still owes another $20 billion in TARP money, represented by trust-preferred shares issued to the government with a hefty 8% coupon. Another $7 billion is owed to the Federal Deposit Insurance Corp. and the Treasury for the government's loss-sharing guarantees, also represented by trust-preferreds paying 8%.

Citigroup would be hard-pressed to raise as much as $20 billion to pay off Uncle Sam. It would be tough for investors to swallow another major dilution but, more importantly, paying off TARP wouldn't allow the company to escape the stigma of government intervention, as loss-sharing guarantees from the FDIC, Federal Reserve and the Treasury covered $250 billion of Citigroup's assets as of Sept. 30.

Rochdale Securities analyst Richard Bove told

TheStreet.com

that "to assume Citi can get out of this relationship makes no sense whatsoever."

Wells Fargo deal in the works

Wells Fargo owes $25 billion in TARP money, having issued preferred shares to the government after arm-twisting from former Treasury Secretary Henry Paulson. The former

Goldman Sachs

(GS) - Get Report

chief executive officer enlisted eight other companies, including

JPMorgan Chase

(JPM) - Get Report

, which, like Wells Fargo, said it never needed the money.

According to a report in the

Wall Street Journal

, Wells Fargo and Citigroup are arguing with government regulators over TARP repayment terms, since Federal Reserve and Treasury officials are requiring the banks to "raise more capital relative to what they are seeking to repay than Bank of America did."

That's understandable for Wells Fargo, since its tangible common equity ratio was 4.51% as of Sept. 30, the second-lowest of the 10 biggest banks yet to repay TARP, save

PNC Financial

(PNC) - Get Report

.

Wells Fargo also has the highest nonperforming-assets ratio, at 4.43%, only exceeded by

Zions Bancorp

(ZION) - Get Report

and

Marshall & Ilsley

(MI)

.

Bank of America's stock price is higher than it was before the company said it was raising money. That said, this would be a good time for Wells Fargo to increase its capital and quickly make a deal to repay TARP, especially since shareholders haven't been massively diluted by previous conversions, as Citigroup's shareholders have.

Comerica and Key

Looking further down the list,

Comerica

and

KeyCorp

(KEY) - Get Report

have the highest tangible common equity ratios among the 10 banks -- both above 7.5%.

Comerica has performed reasonably well through the credit crisis, and CEO Ralph Babb has clearly stated his intention for the company to repay TARP soon. While

KeyCorp

has been steadily losing money for five quarters, earlier capital increases should enable to the company to repay TARP without much further dilution to shareholders.

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

Philip W. van Doorn joined TheStreet.com Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, 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.