NEW YORK ( TheStreet) -- This year saw a tremendous recovery for many bank stocks, but a majority are still trading below book value and are cheap relative to projected earnings performance. This creates a tremendous opportunity for investors.

Using data supplied by SNL Financial for publicly traded U.S. banks and thrifts - excluding those traded on the Pink Sheets - TheStreet has compiled year-end awards highlighting aspects of bank performance that may illuminate investment opportunities.

TheStreet has already published articles detailing which actively-traded bank and thrift stocks had the best and worst year-to-date total returns, as well as the names operating with the highest efficiency. All three of those lists include attractive opportunities for investors.

The award categories are for best and worst return in the following categories:

Return on average assets (ROA) for the first three quarters of 2010.

Growth of non-interest bearing deposits.

Improvement of net interest margin for the first three quarters of 2010.

Projected earnings growth for 2011 among analysts polled by Thomson Reuters.

Price upside based on price targets among analysts polled by Thomson Reuters.

Since two award categories are based on analyst coverage, we have narrowed down the list to banks and thrifts with average daily trading volume of at least 50,000 shares over the past three months.

Here are the five winners among banks and thrifts with stocks trading below tangible book value:

Terms

For each of the five banks discussed on the following pages, we'll be looking at capital strength, earnings quality and asset quality. For an explanation of those terms you can click on the box below.

Best ROA

Company Profile

Among publicly traded banks and thrifts with average daily trading volume of at least 50,000 shares, the company with the best return on average assets for the first three quarters of 2010 was Bank of the Ozarks ( OZRK) of Little Rock, Ark. Shares closed at $44.16 Wednesday, up 60% over the previous year.

The bank's ROA for the first three quarters of 2010 was 2.14%, improving from 1.32% the previous year.

For a basis of comparison, the aggregate ROA for all U.S. banks and thrifts for the first three quarters of 2010 was 0.56% according to the Federal Deposit Insurance Corp., as elevated provisions for loan losses continued to drag on earnings for hundreds of institutions.

With four acquisitions failed institutions this year, Bank of the Ozarks has expanded on the cheap while taking little additional credit risk because of FDIC loss-sharing agreements. The icing on the cake is $26.2 million in gains on purchases of failed banks during the first three quarters of 2010.

The failed banks acquired during 2010 included Unity National Bank of Cartersville, Ga. in March; Woodlands Bank of Bluffton, S.C. in July; Horizon Bank of Bradenton, Fla. in September; and Chestatee State Bank of Dawsonville, Ga. on December 17.

Income Statement

Net income for the first three quarters of 2010 was $47.1 million, or $2.77 a share, compared to net income to common shareholders of $27.2 million, or $1.61 a share, during the first three quarters of 2009, when the company paid $3.2 million in dividends on preferred shares held by the government for $75 million in bailout funds received through the Troubled Assets Relief Program, or TARP. Bank of the Ozarks fully repaid TARP in November 2009.

An even bigger factor in the bank's earnings improvement was a reduction in the provision for loan losses to $11.9 million during the first three quarters, from $39.2 million a year earlier.

The bank's net interest margin also improved, to a strong 5.14% for the first three quarters of 2010, from 4.77% a year earlier.

Balance Sheet

Total assets were $3.2 billion as of September 30, increasing 10% over the previous year. The nonperforming assets ratio was 2.39%, improving from 2.87% a year earlier. The third- net charge-off ratio for the first three quarters was 0.79% and reserves covered 1.76% of total loans as of September 30.

As of September 30, the company's Tier 1 leverage ratio was 11.73% and its total risk-based capital ratio was 16.71%, well above the 5% and 10% required for most banks to be considered well-capitalized by regulators. The tangible common equity ratio was 9.74% according to SNL Financial.

Stock Ratios

The shares trade for 2.4 times tangible book value according to SNL and 15 times the consensus earnings estimate of $2.88 a share. The forward P/E declines to 14 based on the 2012 consensus estimate of $3.06 a share.

Analyst Ratings

Although the shares appearing fully valued based on the stock ratios in the current environment, five out of ten analysts covering Bank of the Ozarks rate the shares a buy, while four recommend investors hold the shares and one analyst has a sell rating. The consensus price target among analysts polled by Thomson Reuters is $41.71, which is lower than Wednesday's closing price.

Best Growth in Non-interest Bearing Deposits

Company Profile

Among publicly traded banks and thrifts with average daily trading volume of at least 50,000 shares, the bank with the largest percentage increase in non-interest bearing deposits -- which represent free funding and a lovely source of fee revenue - was Oriental Financial Group ( OFG) of San Juan, Puerto Rico, which saw a 131% increase in these favored funding sources to $168.6 million as of September 30. The company purchased its failed competitor Eurobank of San Juan from the FDIC on April 30.

Oriental's shares closed at $18.10 Wednesday, up 20% over the previous year.

Income Statement

Oriental reported a net loss to common shareholders of $11.6 million, or 33 cents a share, for the first three quarters of 2010, including $22.7 million in deemed benefits for preferred shareholders upon conversion to common shares during the second quarter. For the first three quarters of 2009, net income to common shareholders was $93.4 million, or $3.84 a share.

Provisions for loan losses totaled $12.2 million during the first three quarters of 2010, compared to $11.3 million a year earlier.

The net interest margin for the first three quarters was a tax-adjusted 3.75%, compared to 3.91% a year earlier.

Balance Sheet

Total assets were $7.4 billion as of September 30 and the nonperforming assets ratio was 2.56%. The net charge-off ratio for the first three quarters was 0.67% and reserves covered 1.57% of total loans as of September 30.

The company was strongly capitalized with a Tier 1 leverage ratio of 9.00% and a total risk-based capital ratio of 12.01% as of September 30. The tangible common equity ratio was 8.73% according to SNL Financial.

Stock Ratios

The shares trade for 0.9 times tangible book value according to SNL and at relatively low forward P/E of 9 based on the consensus earnings estimate of $1.40 for 2011 and 7, based on the $1.71 earnings estimate for 2012.

Analyst Ratings

Three out of five analysts covering Oriental Financial Group rate the shares a buy, while the other two recommend investors hold the shares. Based on the mean price target of $18.10, the shares have 50% upside.

Most-Improved Net Interest Margin

Company Profile

Among publicly traded banks and thrifts with average daily trading volume of at least 50,000 shares, the bank with the most dramatic improvement in its net interest margin was East West Bancorp ( EWBC - Get Report) of Pasadena, Calif., with a margin of 4.93% for the first three quarters of 2010, increasing from 2.97% a year earlier.

Shares closed at $19.32 Wednesday, up 15% over the previous year.

Following the trend for our first two bank awards, the company benefitted from FDIC-assisted deals, including Washington First International Bank, which failed in June and United Commercial Bank of San Francisco, which failed in November 2009.

Income Statement

The company reported net income available to common shareholders of $89.2 million, or 61 cents a share, for the first three quarters of 2010, compared to a net loss of $226.1 million, or $3.19 a share, during the first three quarters of 2009.

The improvement in the company's net interest margin came about because even though its total assets increased 64% from the prior year to $20.4 billion as of September 30, its total interest expense actually declined, to $155.5 million during the first three quarters of 2010, from $175.4 million a year earlier.

This improvement took place because the failed-bank acquisitions increased non-interest bearing demand deposits to $2.4 billion as of September 30 from $1.3 billion a year earlier. Meanwhile, interest income nearly doubled to $803.6 million for the first three quarters of 2010 from $439.2 million a year earlier.

Balance Sheet

East West Bancorp's nonperforming assets ratio was 1.69% as of September 30. The net charge-off ratio for the first three quarters was 2.57% and reserves covered 1.80% of total loans as of September 30.

The company owes $306.5 million in TARP money. Its Tier 1 leverage ratio was 10.75% and its total risk-based capital ratio was 19.70% as of September 30. The tangible common equity ratio was 7.97% according to SNL Financial.

Stock Ratios

The shares trade for 1.8 times tangible book value according to SNL and 14 times the consensus earnings estimate of $1.36 a share for 2011. The forward P/E declines to 11, based on the consensus estimate of $1.69 for 2012.

Analyst Ratings

Analyst sentiment is quite positive, as 10 of the 15 analysts covering East West Bancorp rate the shares a buy. The other five analysts all recommend investors hold the shares.

Best Projected Earnings Growth

A large number of banks and thrifts were projected by analysts to make a penny or two a share during 2010, so in order to make this award meaningful, we only considered companies achieving an ROA of at least 0.50% for the first three quarters of 2010.

Company Profile

Among publicly traded banks and thrifts with average daily trading volume of at least 50,000 shares that achieved an ROA of at least 0.50% during the first three quarters of 2010, Fifth Third Bancorp ( FITB - Get Report) of Cincinnati is projected by analysts to have the largest percentage increase in earnings for 2011. The consensus among analysts polled by Thomson Reuters is for the company to earn 53 cents for the full year 2010, and $1.11 a share during 2011.

Shares closed at $14.30 Wednesday, up 41% over the previous year.

Income Statement

Net income available to common shareholders for the first three quarters was $233 million, or 29 cents a share, compared to $670 million, or 91 cents a share during the first three quarters of 2009, when the company booked a gain of $1.8 billion from the sale of its card processing unit.

The provision for loan losses declined to $1.4 billion during the first three quarters, from $2.8 billion a year earlier. Fifth Third also saw its net interest margin increase in the low-rate environment, to 3.63%, from 3.25% a year earlier.

Balance Sheet

Total assets were $112 billion as of September 30, with a nonperforming assets ratio of 2.74%, improving from 4.03% a year earlier. During the third quarter, Fifth Third sold or transferred to held-for-sale (with associated write-downs) $1.2 billion in loans, including $899 million that were not performing.

The net charge-off ratio for the first three quarters was 3.32% and reserves covered 4.06% of total loans as of September 30.

The company owes $3.4 billion in TARP money, and reported a Tier 1 leverage ratio of 12.54% and a total risk-based capital ratio of 18.28% as of September 30. The tangible common equity ratio was 7.06% according to SNL Financial.

With the company returning to profitability, taking aggressive actions on credit and being in a strong capital position "relative to peers, U.S. regulatory standards, and proposed Basel III standards," CEO Kevin Kabat said in an investor presentation on December 7 that the "TARP capital is not needed," but that repayment of the TARP money would be subject to Federal Reserve approval.

Stock Ratios

The shares trade for 1.5 times tangible book value according to SNL, and 13 times the consensus earnings estimate of $1.11 a share for 2011. The forward P/E declines to 10, based on the consensus estimate of $1.43 for 2012.

Analyst Ratings

Out of 24 analysts covering Fifth Third Bancorp, six rate the shares a buy, 15 have hold ratings and three recommend investors sell the shares.

Greatest Upside

Company Profile

Among publicly traded banks and thrifts with average daily trading volume of at least 50,000 shares, the company -- rated a buy by at least two analysts -- having highest projected upside based on the consensus price target among analysts polled by Thomson Reuters was Popular, Inc. of Hato Rey, Puerto Rico.

The shares closed at $2.94 Wednesday, up 34% over the previous year, with 57% upside based on the mean price target of $4.61 among analysts covering the company.

The major event for Popular during 2010 was the company's purchase of the failed Westernbank Puerto Rico from the FDIC on April 30. This put the company in a leading position among banks operating in the territory, with a 38% deposit market share as of June 30.

Income Statement

For the first three quarters of 2010, Popular reported net income applicable to common stock of $161.9 million, or 19 cents a share, compared to $310.6 million, or 94 cents a share, during the first three quarters of 2009.

The 2010 results included an after-tax gain of $531 million on the completed sale of 51% of Popular's Evertec subsidiary. Interest income was also boosted during the third quarter by a $78.5 million discount accretion on FDIC-covered loans acquired from Westernbank.

The 2009 results included a $485.3 million gain the company recorded after converting the $935 million in preferred shares held by the U.S. Treasury for TARP assistance to trust-preferred shares. Although the company is still paying the government 5% on the TARP money, the conversion lowered the Popular's accumulated deficit by $485 million because Popular assumed a discount rate of 16%, taking into account the much greater dividend rate it would pay if it had offered trust-preferred shares in the open market.

The company's provision for loan losses during the first three quarters was $657.5 million, declining from $1.1 billion a year earlier. The net interest margin for the first three quarters was 3.75%, improving from 3.45% during the first three quarters of 2009.

Balance Sheet

Total assets were $40.8 billion as of September 30, with a nonperforming assets ratio of 6.94%, compared to 6.47% a year earlier.

The net charge-off ratio for the first three quarters was 3.97% and loan loss reserves covered 4.74% of total loans as of September 30.

The Tier 1 leverage ratio was 9.99% and the total risk-based capital ratio was 16.16% as of September 30. The tangible common equity ratio was 8.31% according to SNL Financial.

Stock Ratios

The shares trade for 0.9 times tangible book value according to SNL and 15 times the consensus earnings estimate of 19 cents a share for 2011. The forward P/E drops to an attractive 8 times the consensus earnings estimate of 39 cents a share for 2012.

Analyst Ratings

Six of the seven analysts covering Popular rate the shares a buy, while the remaining analyst recommends investors hold the shares. Following a meeting with the company's management, Adam Barkstrom of Sterne Agee reiterated his firm's buy rating and $5 price target, saying that Popular's "current valuation is providing an attractive opportunity to initiate or increase positions as the market continues to discount recent transactions that have enhanced franchise value (Westernbank) and provided clarity regarding capital (EVERTEC and common offerings)."

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

To contact the writer, click here: Philip van Doorn.

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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 TheStreet.com 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.