NEW YORK ( TheStreet) -- With the economy's recovery uncertain and many large banks still unable to gauge their ultimate risk from mortgage putback lawsuits, TheStreet has identified the U.S. bank holding companies with the strongest capital ratios.

The list was compiled using second-quarter data from Securities and Exchange Commission filings provided by SNL Financial. In order to keep the data uniform, thrift holding companies were excluded.

The group includes the 10 bank holding companies with total assets exceeding $25 billion, with the highest Tier 1 common risk-based capital ratios as of June 30.

Tier 1 capital is one of the most conservative measures of a bank's capital strength, and excludes some intangible assets, including certain deferred tax assets, goodwill, and mortgage servicing rights. Tier 1 capital also excludes some preferred equity, including the recent $5 billion investment in Bank of America ( BAC - Get Report) by Warren Buffett's Berkshire Hathaway ( BRK.B - Get Report), since the 6% dividend on Buffett's preferred shares is cumulative.

Tier 1 Common is even more conservative, since it excludes all preferred equity. This shows just how desperate Bank of America was for Buffett's money, since the Berkshire preferred shares won't help the nation's largest bank achieve the higher capital ratios required under the enhanced Basel III standards.

JPM Securities analyst on Friday reiterated his neutral rating for Bank of America, but said that "if the cumulative destruction of the current pro-forma equity buffer were significant enough (i.e., $37 billion per our analysis), the company would be at minimum capital levels and thereafter need to execute a dilutive common raise."

For the group of banking holding companies we selected, we have also included the total risk-based capital ratios, which include preferred (and cumulative preferred) equity, most loan loss reserves, some unrealized losses on securities gains, and some subordinated debt.

With the entire banking sector being hammered this year, some of the 10 strongly-capitalized large banks identified here are priced very cheaply to consensus forward earnings estimates, reflecting investors' suspicions about the entire sector, and the prospects for a double-dip recession. Then again, banks have been consistently beating analysts' quarterly earnings estimates over the past year.

Four of large, strongly capitalized bank holding companies are priced below tangible book value, according to SNL Financial.

Here they are, in ascending order by Tier 1 capital

10. KeyCorp

Shares of KeyCorp ( KEY - Get Report) of Cleveland closed at $6.42 Thursday, declining 27% year-to-date.

KeyCorp's Tier 1 common equity ratio was 11.14% as of June 30, according to SNL Financial. The company's total risk-based capital ratio was 17.88%.

The company raised $625 million in common equity in March, before fully repaying $2.5 billion in government bailout funds received through the Troubled Assets Relief Program, or TARP, on March 30.

KeyCorp reported second-quarter net income attributable to common shareholders of $234 million, or 25 cents a share, increasing from $29 million, or three cents a share, in the second quarter of 2010. During the second quarter, the company transferred $8 million from loan loss reserves. A year earlier, KeyCorp recorded a provision for loan losses of $228 million.

A $142 million decline in loan loss reserves during the second quarter directly boosted KeyCorp's earnings performance.

The company's annualized ratio of net charge-offs to average loans during the second quarter was 1.11% and reserves covered 2.57% of total loans as of June 30, suggesting that the reserve releases will continue.

The second-quarter net interest margin -- the difference between a bank's average yield on loans and investments and its average cost for loans and deposits -- was a tax-adjusted 3.19%, compared to 3.17% a year earlier.

KeyCorp's second-quarter operating return on average assets was 1.15% according to SNL, and was the third-highest ROA among the 10 strongly capitalized banks listed here.

The shares trade for 8.6 times the consensus 2012 earnings estimate of 77 cents a share, among analysts polled by FactSet. The stock trades for just 0.7 times the company's tangible book value of $8.90 a share, as of June 30, according to SNL.

Sterne Agee analyst Todd Hagerman on September 1 reiterated his neutral rating on KeyCorp's shares, after meeting with the company's executive team, saying that although the bank's "credit quality will likely continue to exceed expectations at least over the near term and expenses will remain well controlled," it will take several more quarters for the company to complete its expense initiatives and "and right sizing the franchise as a means to generate profitability measures closer to peers."

Hagerman said that achieving an ROA in the 1% range "remains contingent upon ongoing reserve release/negative provisions."

Out of 22 analysts covering KeyCorp, five rate the shares a buy, 15 have neutral ratings, and two analysts recommend selling the shares.

9. First Niagara

Shares of First Niagara Financial Group ( FNFG) of Buffalo, N.Y., closed at $10.44 Thursday, down 23% year-to-date. Based on a quarterly payout of 16 cents, the shares have a dividend yield of 6.13%.

First Niagara's Tier 1 common equity ratio was 11.41% as of June 30, according to SNL Financial. The company's total risk-based capital ratio was 12.69%.

The company agreed on July 30 to purchase 195 branches from HSBC ( HBC), and announced plans to divest 100 of the acquired branches.

First Niagara was included in TheStreet's 10 Banks Growing Business Loans, since the company grew its commercial loans at an annualized pace of 17% during the second quarter, irrespective of its acquisitions of NewAlliance.

Please click here for a discussion of First Niagara's second quarter results.

The shares trade for 8.7 times the consensus 2012 EPS estimate of $1.22, among analysts polled by FactSet, and 1.4 times the company's June 30 tangible book value of $7.33 a share, according to SNL.

Out of 10 analysts covering First Niagara, seven rate the shares a buy, while the remaining analysts all have neutral ratings.

8. Popular, Inc.

Shares of Popular, Inc. ( BPOP - Get Report) of Hato Rey, Puerto Rico, closed at $1.81 Thursday, declining 43% year-to-date.

Popular's Tier 1 common equity ratio was 11.53% as of June 30, according to SNL Financial. The company's total risk-based capital ratio was 16.50%.

The company reported second-quarter net income applicable to common stock of $109.8 million, or 11 cents a share, compared to $9.2 million, or a penny a share, in the first quarter, and a net loss of $236.2 million, or 28 cents a share, for the second quarter of 2010. The Second-quarter ROA was 1.14%, according to SNL.

The results in the second quarter of 2010 reflected a capital raise that was initially a preferred issue, but was later converted to common shares after shareholder approval to increase the common share count. Upon conversion, the company recorded one-time $192 million dividend on preferred shares during the second quarter.

Second-quarter 2011 results were boosted by "a tax benefit of $59.6 million related to the timing of loan charge-offs for tax purposes." Popular had agreed with Puerto Rico's Department of the Treasury to defer tax deductions related to loan charge-offs that occurred in 2009 and 2010 to 2013 through 2016. The company said that "as a result of the agreement, the Corporation made a payment of $89.4 million to the P.R. Treasury and recorded a tax benefit on its financial statements of $143 million, or $53.6 net of the payment made" to the Puerto Rico Treasury."

Popular's second-quarter net interest income totaled $374.5 million, increasing by $31.2 million from the previous quarter, reflecting improved yields on loans acquired when the company purchased the failed Westernbank Puerto Rico from the FDIC in April 2010 increased, and the company's second-quarter purchase of $282 million "performing mortgage loans in Puerto Rico."

Popular's quarterly financial reports tend to be a bit complicated, as the company continues to digest its April 2010 acquisition of the failed Westernbank, and handles Federal Deposit Insurance Corp. loss-share accounting and tax issues.

The shares trade for 5.5 times the consensus 2012 earnings estimate of 35 cents a share, among analysts polled by FactSet. The stock trades for just 0.6 times the company's June 30 tangible book value of $3.14, according to SNL.

Following "another messy quarter due to a tax benefit and loss share accounting noise," Derek Hewitt of KBW in July reiterated his "Outperform" rating for Popular, with a $4.50 price target, saying that the company's "higher accretable yield, lower funding costs and some opportunistic portfolio purchases drove higher spread revenue," and that its capital continued to grow.

Four out of five analysts covering Popular rate the shares a buy. The remaining analyst has a neutral rating.

7. Citigroup

Shares of Citigroup ( C - Get Report) closed at $27.98 Thursday, for a year-to-date decline of 41%.

Citi's Tier 1 common equity ratio was 11.62% as of June 30, according to SNL Financial. The company's total risk-based capital ratio was 17.18%.

Citigroup reported second-quarter net income of $3.3 billion, or $1.09 a share, increasing from $3 billion, or 99 cents a share, in the first quarter, and $2.7 billion, or 90 cents a share, during the second quarter of 2010. The second-quarter ROA was 0.67%, according to SNL.

Credit losses declined to $5.1 billion in the second quarter from $6.4 million the previous quarter and $8 billion a year earlier. The company released $2 billion in reserves during the second quarter, directly boosting earnings, although this was the smallest reserve release since the second quarter of 2010.

Atlantic Equities analyst Richard Staite has an "Overweight" or "Buy" rating on Citigroup, with a $52 price target, on the basis "a growth angle through its emerging market businesses which account for almost 50% of core operations."

The shares trade for 5.8 times the consensus 2012 EPS estimate of $4.96 among analysts polled by FactSet, and just 0.6 times the company's June 30 tangible book value of $49.64 a share, according to SNL.

While Citi faces far less mortgage putback exposure than Bank of America and JPMorgan Chase ( JPM - Get Report), it was among the 17 lenders sued by the Federal Housing Finance Agency on Sep. 2, with the regulator of Fannie Mae and Freddie Mac demanding that Citigroup repurchase private-label mortgage-backed securities that were sold to the government-sponsored mortgage giants, with an original unpaid balance of $3.5 billion.

Out of 21 analysts covering Citigroup, 16 rate the shares a buy, three have neutral ratings, and two analysts recommend investors sell the shares.

6. First Horizon

Shares of First Horizon National Corp. ( FHFN) of Memphis, Tenn., closed at $6.39, down 46% year-to-date.

First Horizon's Tier 1 common equity ratio was 11.86% as of June 30, according to SNL Financial. The company's total risk-based capital ratio was 18.21%.

Second-quarter net income was $43 million, or 16 cents a share, improving from $2.7 million, or a penny a share, in the second quarter of 2010. The second-quarter provision for loan losses was just $1 million, declining from $70 million a year earlier. During the second quarter, the company made a $24.6 million provision for mortgage repurchases and foreclosures, declining from $56.2 million a year earlier, but still holding placing a major drag on earnings.

A $ 65 million release of loan loss reserves directly boosted second-quarter earnings.

The second-quarter net interest margin was 3.20%, expanding slightly from 3.19% a year earlier. The second-quarter ROA was 0.31%, according to SNL.

First Horizon was included among the the 17 lenders sued by the FHFA, with the regulator demanding the lender repurchase mortgage-backed securities originally sold to Fannie Mae and Freddie Mac, with an original unpaid balance of $883 million.

FIG Partners analyst said after First Horizon announced its second-quarter results, that the company's mortgage repurchase losses were "manageable," and reiterated his "Outperform," or "Buy" rating on the shares, with a $12.25 price target.

The shares trade for 8.9 times the consensus 2012 earnings estimate of 76 cents a share, among analysts polled by FactSet. The stock trades for 0.8 times the company's June 30 tangible book value of $8.43 a share, according to SNL.

Out of 22 analysts covering First Horizon, eight have buy recommendations and the remaining analysts all have neutral ratings.

5. New York Community Bancorp

Shares of New York Community Bancorp ( NYB) of Westbury closed at $11.96 Thursday, down 33% year-to-date. Based on a quarterly payout of 25 cents, the shares have a dividend yield of 8.36%. That's the highest dividend yield among publicly traded U.S. bank and thrift holding companies -- excluding those traded on the Pink Sheets -- according to SNL Financial.

New York Community's Tier 1 common equity ratio was 12.29% as of June 30, according to SNL Financial. The company's total risk-based capital ratio was 14.55%.

The company reported second-quarter net income of $119.5 million, or 27 cents a share, declining from $123.2 million, or 28 cents a share in the first quarter and $131.4 million, or 30 cents a share, in the second quarter of 2010. The second-quarter ROA was 1.17% according to SNL, which was the second-highest among this group of 10 strongly-capitalized banks.

While the decline in New York Community's shares this year has been in-line with the entire sector there has been some concern that the dividend could be threatened, since the company has paid-out nearly all of its earnings during recent quarters. Then again, similar pullbacks have occurred before, as the company maintained the dividend through good times and bad.

KBW analyst Matthew Clark said last month that the company's dividend "should be safe," as New York Community Bancorp is regulated by the Federal Reserve, FDIC and NY State and "is not having to deal with the transition to a new regulator," like federally chartered thrifts, which are transitioning to the Office of the Comptroller of the Currency.

Clark also said that "NYB continues to cover the dividend on a cash basis, including a 1-year look-back, and we believe the latest earnings power can hold up even with the latest move in rates," adding that the company "has plenty of capital and liquidity not to mention a solid credit performance cycle to date."

The shares trade for 10.3 times the consensus 2012 EPS estimate $1.19, among analysts polled by FactSet, and 1.7 times the June 30 tangible book value of $7.00, according to SNL.

Out of 17 analysts covering New York Community Bancorp, eight rate the shares a buy, eight have hold ratings, and one analyst recommends investors sell the shares.

4. Northern Trust

Shares of Northern Trust ( NTRS - Get Report) of Chicago closed at $36.43, declining 33% year-to-date. Based on a quarterly payout of 28 cents, the shares have a dividend yield of 3.07%.

Northern Trust's Tier 1 common equity ratio was 12.30% as of June 30, according to SNL Financial. The company's total risk-based capital ratio was 14.54%.

Second-quarter net income was $152 million, or 62 cents a share, declining from $199.6 million, or 82 cents a share, in the second quarter of 2010. The earnings decline reflected $16.6 million in securities losses during the second quarter, a 30% year-over-year decline in foreign exchange trading income, and a 15% increase in noninterest expenses, partially offset by a 3% increase in trust, investment and servicing fees -- the company's main revenue source -- which totaled $557.8 million.

The second-quarter ROA was 0.66%, according to SNL.

The second-quarter net interest margin was a tax-adjusted 1.23%, narrowing from 1. 1.47% a year earlier, reflecting balance sheet growth "concentrated primarily in lower yielding Federal Reserve deposits and investment securities due to continued weakness in loan demand."

Guggenheim Securities analyst Marty Mosby has a neutral rating for Northern Trust, saying after the company announced its second-quarter results that "NTRS has been the most-impacted trust bank from this low interest rate environment," but adding that the second quarter appeared to be "the inflection point where the operating environment begins to stabilize and incremental business growth begins to turn into positive total revenue and earnings growth."

The shares trade for 12.1 times the consensus 2012 EPS estimate of $3.09, among analysts polled by FactSet, and 1.4 times the June 30 tangible book value of $26.96, according to SNL.

Out of 18 analysts covering Northern Trust, four rate the shares a buy, 13 have neutral ratings, and one analysts recommends selling the shares.

3. Bank of New York Mellon

Shares of Bank of New York Mellon ( BK - Get Report) closed at $20.11 Thursday, down 33% year-to-date. Based on a quarterly payout of 13 cents, the shares have a dividend yield of 2.59%.

The company's Tier 1 common equity ratio was 12.56% as of June 30, according to SNL Financial. The company's total risk-based capital ratio was 16.67%.

On August 31, Bank of New York Mellon announced that CEO Robert Kelly would be replaced by the company's president, Gerald Hassell.

Second-quarter net income applicable to common shareholders was $735 million, or 59 cents a share, increasing from $658 million, or 54 cents a share, a year earlier. The second-quarter ROA was 1.09%, according to SNL.

Total fee revenue increased 18% year-over-year, to $3 billion during the second quarter. Noninterest expense climbed 21% year-over-year to $2.7 billion, which the company said mainly reflected expenses from its acquisitions of Global Investment Servicing in July 2010 and BHF Asset Servicing GmbH in August of last year.

Following Kelly's firing, Marty Mosby of Guggenheim Securities reiterated his "Buy" rating for Bank of New York Mellon, with a $35 price target, saying that the appointment of Hassell as CEO and chairman of the board displayed "the confidence that the Board has in the new CEO and that whatever issue became irreconcilable between Mr. Kelly and the Board is not a pressure point for Mr. Hassell."

The shares trade for 8.3 times the consensus 2012 EPS estimate of $2.51, among analysts polled by FactSet, and 2.4 times the company's June 30 tangible book value of $8.23, according to SNL.

Out of 19 analysts covering Bank of New York Mellon, 10 rate the shares a buy, eight have neutral ratings, and one analyst recommends selling the shares.

2. State Street

Shares of State Street ( STT - Get Report) of Boston closed at $33.30 Thursday, declining 28% year-to-date. Based on a quarterly payout of 18 cents, the shares have a dividend yield of 2.16%.

State Street's Tier 1 common equity ratio was 16.88% as of June 30, according to SNL Financial. The company's total risk-based capital ratio was 20.75%.

The company was featured among TheStreet's 10 Big Banks with Solid Revenue, with second-quarter pre-provision net revenue -- which excludes the effect of the release of loan loss reserves -- increasing 47% year-over-year, to $740 million, according to SNL.

State Street's servicing fees increased 15.5% year-over-year to $1.1 billion in the second quarter, while investment management fees were up 24% to $250 million, and securities finance revenue increased 26% to $137 million. These revenue improvements were partially offset by a 20% increase in total operating expenses to $1.6 billion, which the company said mainly reflected "the impact of the reduction in incentive compensation in the second quarter of 2010."

Second-quarter net income available to common shareholders was $502 million, or a dollar a share, increasing from $427 million, or 87 cents a share, in the second quarter of 2010. The net interest margin was 1.76% in the second quarter, contracting from 2.21% a year earlier. The operating ROA for the second quarter was 1.25%, according to SNL.

KBW analyst Robert Lee has an "Outperform" or "Buy" rating on State Street, with a price target of $53, although he was less than thrilled with the second-quarter results, saying that "while revenues were solid and above forecast, expenses were elevated and contributed to the lower than forecast earnings."

The shares trade for 8.4 times the consensus 2012 EPS estimate of $4.09, among analysts polled by FactSet, and 1.5 times the June 30 tangible book value of $21.99, according to SNL.

Analyst sentiment for State Street is quite strong, with 14 out of 17 analysts rating the shares a buy. The remaining analysts all have neutral ratings.

1. People's United

Shares of People's United Financial ( PBCT - Get Report) of Bridgeport, Conn., closed at $11.75 Thursday, declining "only" 13% year-to-date. Based on a 16-cent quarterly payout, the shares have a dividend yield of 5.36%.

The company's Tier 1 common equity ratio was a very strong 17.00% as of June 30, according to SNL Financial. The company's total risk-based capital ratio was 19.10%.

People's United was the main company featured in TheStreet's 10 Big Banks with Solid Revenue, with second-quarter pre-provision net revenue more than doubling year-over-year, to $98.4 million, according to SNL, which in part reflected the November acquisitions of LSB Corporation of North Andover, Mass., and Smithtown Bancorp of Smithtown, N.Y.

Second-quarter net income was $51.2 million, or 15 cents a share, increasing from $16 million, or four cents a share, in the second quarter of 2010. The provision for loan losses was $14 million in the second quarter, declining from $17.8 million a year earlier.

The second-quarter net interest margin was a strong 4.13%, increasing from 3.69% a year earlier. The second-quarter ROA was 0.82%, according to SNL.

The shares trade for 13.4 times the consensus 2012 earnings estimate of 88 cents a share, among analysts polled by FactSet. The stock trades for just 1.3 times the company's June 30 tangible book value of $9.15 a share, according to SNL.

Out of 15 analysts covering People's United, seven rate the shares a buy, while remaining analysts all have neutral ratings.

As you can see from the year-to-date performance of the stock, People's United has been a relatively low-risk play this year. The company's rock-solid capital ratios, lack of mortgage putback exposure and strong net interest margin are all feathers in its cap.

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>>To see these stocks in action, visit the 10 Banks on Solid Financial Footing portfolio on Stockpickr.

-- 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.