NEW YORK ( TheStreet) -- Analysts from Sterne Agee on Monday identified three defensive bank stock plays that are strongly capitalized and have repurchased shares. Saying that there were "opportunities in high quality, small-cap financials that may have been missed," Sterne Agee analyst Peyton Greene listed three buy-rated names with tangible common equity ratios exceeding 10% and nonperforming asset ratios below 3%, that "have been actively repurchasing shares over the past twelve months." These defensive names trade much higher to forward earnings than shares of the largest U.S. banks, including JPMorgan Chase ( JPM), Bank of America ( BAC), Citigroup ( C), and Wells Fargo ( WFC), but their ability to repurchase shares is unfettered by the regulatory stress tests being faced by the largest industry players. These smaller picks, of course, are also free of the daily headline risk faced by the largest banks, including mortgage putback demands, ever-increasing threats to revenue as new rules clamp down on fees and the ongoing agony of exposure to troubled economies in Europe.
to full stock ownership is likely over the next 12 months," and in the meantime, Meridian Interstate Bancorp "can grow minority tangible book value by ~7% a year through increased retained earnings and continued share repurchases." Kelly's price target for the shares is $15.00.