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Bank stocks hit the bottom on March 6. We just didn't know it at the time.

That was the day


six bank stocks

that appeared to be undervalued based on last year's earnings and loan quality, and low price-to-book ratios. Five of the stocks lagged their benchmark indexes from March 6 to April 29.

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This chart compares the stocks' total returns with relevant indexes:

After analyzing the 20 largest U.S. bank and thrift holding companies by market capitalization, we picked six that hadn't received government aid from the Troubled Assets Relief Program, or TARP. Their ratios of bad loans to core capital and reserves were less than 10%. The banks also generated earnings last year, suggesting their dividends are safe.

Wild Ride for Indexes

None of the stocks we picked performed as well as the

S&P 500

Financial Index, which rose almost 80% between March 6 and April 29. That index includes the epically battered


(C) - Get Citigroup Inc. Report

, whose shares tripled during the period. Members

Bank of America

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(BAC) - Get Bank of America Corp Report


Wells Fargo

(WFC) - Get Wells Fargo & Company Report

more than doubled in value.

In the last article, we mentioned the headline risk companies take by accepting TARP money. Here, we see how an investor with excellent timing could make a lot of money flipping the shares of distressed holding companies.

My colleague Kevin Baker recently offered his take on best-performing bank ETFs:

He also compiled a

more extensive list

of mutual funds that invest in banks.

How Our Six Fared

From March 6 to April 29, the six bank stocks performed well, except for

Peoples United Financial

(PBCT) - Get People's United Financial, Inc. Report

, which lost 3.8%. Its shares fell 4% on April 17, when the company reported per-share earnings of 8 cents for the first quarter, falling short of the 10 cents analysts had projected.

The company's annualized return on average assets was 0.53% and its return on average equity was 2.1%. The second figure reflects the company's high level of capital. Its tangible equity ratio was 19% and its risk-based capital ratio was 13%.

Peoples United said low interest rates and the weak economy cut into the company's fees. On a conference call, Chief Executive Officer Philip Sherringham said the bank would be able to leverage its excess capital to improve earnings through expansion or an acquisition. He said low interest rates would keep the company from loading up on securities to boost its net interest margin.

Peoples United raised its dividend by a penny to 15 cents a share, a yield of 3.79% as of Wednesday.

New York Community Bancorp

( NYB)had the strongest performance from March 6 to April 29, jumping 49%. The company stayed ahead of the S&P 400 MidCap Financials Index, which gained 48%.

The remaining four banks generated double-digit returns, but trailed their benchmarks. However, the high quality of their assets and their rejection of TARP funds suggest they're excellent names for long-term investors.

Senior Analyst Kevin Baker contributed to this article.

Philip W. van Doorn joined 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.