NEW YORK (

TheStreet

) --

Wells Fargo

(WFC) - Get Report

and

TCF Financial

(TCB)

offer the most compelling value among large cap bank stocks, according to a report published Tuesday by Deutsche Bank.

"We prefer to have exposure to banks that have balance sheet flexibility, are gaining market share and have cost take-out plans," wrote Deutsche Bank analyst Matt O'Connor in his report.

Reiterating a theme he sounded in a July 6 report, O'Connor sees Wells Fargo chopping expenses by $6 billion to $8 billion over the next year, with $4.5 billion in annual expenses "more or less naturally going away," due to reduced mortgage resolution costs and the integration of Wachovia, among other factors. He also argues Wells is picking up market share in its card, commercial lending and mortgage businesses. He also argues Wells trades at seven times "normal" earnings estimates compared to nine times for the large cap banking universe as a whole.

As for TCF, O'Connor argues net interest margins will improve as TCF re-prices its debt obligations, and the stock is cheap as investors have been concerned about declining fee revenues. TCF is widely seen as one of the banks most heavily impacted by the Durbin Amendment, which cuts down on fees banks earn from merchants on debit card transactions.

O'Connor also upped estimates on

M&T Bank Corp.

(MTB) - Get Report

,

Fifth Third

(FITB) - Get Report

and

Huntington Bancshares

(HBAN) - Get Report

. He noted

Bank of America

(BAC) - Get Report

has undertaken "a firm wide expense," though he wrote "results aren't expected to be meaningful until 2012."

--

Written by Dan Freed in New York

.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.