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TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.

Huntington Bancshares

(HBAN) - Get Huntington Bancshares Incorporated Report

is the best-performing


this quarter on the KBW Banks Index, tripling its value since March 31.

People's United Financial

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

is one of the index's biggest losers, but it's a far better buy.

Government-run stress tests conducted in recent weeks revealed that 10 of the nation's 19 biggest


need more capital. Companies laid out plans to raise money from private sources in response, stoking investor confidence about the industry. That optimism has trickled down to smaller



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The fortunes of regional


are tied to the economies of the areas they serve. New England, where People's United runs about 300 branches, has experienced lower rates of job loss and home foreclosure than other parts of the country. That helped People's United shares lose only 1.7% in the past year while its competitors lost 51%, on average.

People's United shares have been looking less attractive in recent weeks, losing 8.2% this quarter as the KBW index rose 39%. But the company has a stronger capital position than most regional banks, reflected by a tangible common equity ratio of 19.5%.

Huntington, in contrast, was one of the many banks that fell through the floor as the credit crisis unfolded. Even with its recent gains, the company's shares are down 41% from a year ago. The bank runs more than 600 branches in states such as Michigan, Ohio and Indiana. Those states are struggling with some of the highest unemployment and foreclosure rates in the country.

The damage inflicted by the crumbling credit markets is evident in Huntington's tangible common equity ratio of 4%. If the company decides to issue stock to raise money to bolster its shaky capital position, it could hurt the share price.

Huntington is a fraction of the size of

Bank of America

(BAC) - Get Bank of America Corp Report



(C) - Get Citigroup Inc. Report

, but its shares have experienced similar wild swings. With an adjusted beta value of 1.96, Huntington's shares are slightly less volatile than those of Bank of America and Citigroup, which have beta values of 2.19 and 2.6, respectively.

Although big price gains make these bank stocks more appetizing, it also makes them more likely to lose. With an adjusted beta value of 0.8, People's United is unlikely to see any massive one-day increases. However, it's in a better position to succeed long term, making it the best bank bet for risk-averse investors.

Huntington has earned a D grade from Ratings, a recommendation to "sell." We consider People's United a "buy" with a grade of B-minus.

Prior to joining Ratings, David MacDougall was an analyst at Cambridge Associates, an investment consulting firm, where he worked with private equity and venture capital funds. He graduated cum laude from Northeastern University with a bachelor's degree in finance and is a Level II CFA candidate.