Updated with Deutsche Bank analyst Dave Rochester's comments on Signature Bank and Prosperity Bancshares, after his firm initiated coverage for both stocks on Thursday morning, and also with SNL's inclusion of Prosperity in its "decade of dividend dominance" report.

NEW YORK ( TheStreet) -- TheStreet has identified the 10 most efficient actively traded U.S. bank and thrift holding companies.

The list includes the 10 bank and thrift holding companies with the lowest third-quarter overhead expense -- as a percentage of operating revenue -- among industry names with three-month average daily trading volume of at least 50,000 shares. Data was provided by SNL Financial.

Back in November of 2010, we identified a similar list of efficient and profitable banks and thrifts, with the lowest (best) efficiency ratios, and while only three had positive stock market returns during 2011, six of the names beat the performance of the KBW Bank Index ( I:BKX) dropped 25% for the year.

Looking at the remaining four of our original list of 10 actively traded, efficient and profitable bank and thrift holding companies, the worst performer was Wilshire Bancorp ( WIBC) of Los Angeles, with shares declining 52% during 2011, as the company continued trimming its balance sheet and raised $109 million in common equity during the second quarter.

Right behind Wilshire was Hudson City Bancorp ( HCBK), with shares dropping 49%, following a first-quarter balance sheet restructuring that was forced by regulators, after the company's long-term strategy of leveraging wholesale borrowings by investing in securities, backfired in the prolonged low-rate environment.

Meanwhile, Shares of New York Community Bancorp ( NYB) had a negative return of 30% during 2011, with the decline partly reflecting concerns of a high dividend payout ratio. The company has maintained its 25-cent dividend for 31 consecutive quarters, but it paid out 91% of what it earned, during the first three quarters of 2011.

Rounding out our previous list of 10 efficient banks and thrifts, Nara Bancorp of Los Angeles in December merged with its hometown competitor Center Financial to form BBCN Bancorp ( BBCN).

Our updated list of 10 efficient and profitable U.S. banks includes seven of the names featured on last year's list. While we have seen that this method of picking bank stocks was a mixed bag, 2011 was a terrible year for most bank stocks, and half of the names on the new list had positive returns last year.

The efficiency ratio is, effectively, the number of pennies of overhead expense for each dollar of a bank's revenue, with adjustments made for certain items. SNL defines the efficiency ratio as noninterest expense (before foreclosed property expense, amortization of intangibles, and goodwill impairments) divided by the sum of net interest income and noninterest revenues (excluding gains from securities transactions and nonrecurring items).

The 10 names on the new list reported decent or better operating earnings for the third-quarter, with seven of companies beating the industry's aggregate return on assets of 1.03%, as reported by the Federal Deposit Insurance Corp. Several of the stocks feature attractive dividend yields.

Here's the new list of 10 efficient and profitable banks, in descending order by efficiency ratio.

10. Investors Bancorp

Shares of Investors Bancorp ( ISBC) of Short Hills, N.J., closed at $13.48 Friday, returning 3% during 2011.

The company's third-quarter efficiency ratio was 42.00, according to SNL Financial.

The company has an agreement in place to expand its New York City presence and expand into Nassau County, N.Y., through the acquisition of Brooklyn Federal Bancorp ( BFSB) for $10.3 million. Brooklyn Federal's shareholders approved the merger on Dec. 22.

Investors Bancorp reported third-quarter net income of $20.0 million, or 19 cents a share, increasing from $16.6 million, or 15 cents a share, a year earlier, reflecting solid loan growth, along with a decline in interest expense. The third-quarter operating return on average assets (ROA) was 0.77%, according to SNL.

Investors Bancorp is part of a mutual thrift holding company structure, with Investors Bancorp MHC holding 58.3% the common shares. Sterne Agee analyst Matthew Kelley in November said that with Investors Bancorp's tangible common equity "expected to fall below 8% early next year following the Brooklyn Federal acquisition, we believe a fairly well telegraphed second step conversion is likely to be announced over the next 3-6 six months.

A second-step conversion would bring the company to full stock ownership. Kelley thinks the conversion could provide a catalyst for the shares, since "fully converted" peer thrifts "with similar capital levels and business models currently trade at 115%" tangible book value, while Investors Bancorp trades at just "90% - 95% of fully converted tangible book value."

Kelley has a $16 price target for the shares, and estimates that the company will earn 86 cents a share in 2012.

The shares trade for 15.5 times the consensus 2012 earnings estimate of 87 cents a share, among analysts polled by FactSet, and for 1.6 times their Sept. 30 tangible book value of $8.28, according to SNL Financial.

Out of seven analysts covering Investors Bancorp, five rate the shares a buy, while the remaining two analysts have neutral ratings.

Interested in more on Investors Bancorp? See TheStreet Ratings' report card for this stock.

9. BankUnited

Shares of BankUnited ( BKU) of Miami Lakes, Fla., closed at $21.99 Friday, for a negative return of 17% since the "new" BankUnited was taken public on January 27 of last year. Based on a quarterly payout of 14 cents, the shares have a dividend yield of 2.55%.

The "new" BankUnited was formed in May 2009 by an investor group led by former NorthFork Bancorp CEO John Kanas, to acquire the failed "old" BankUnited from the FDIC.

The company's third-quarter efficiency ratio was 41.64, according to SNL Financial.

BankUnited in June announced a deal to acquire Herald National Bank ( HNB) of New York, in a deal valued at $71.4 million by SNL. Herald National's shareholders approved the deal on Dec. 22, and the transaction is expected to be completed during the first quarter.

Herald National Bank has three branches and reported $487 million in total assets as of Sept. 30. While this is a small deal for BankUnited, it provides an entry back into the New York market for Kanas, and BankUnited has loads of excess capital to fund a significant expansion in the New York area.

BankUnited earned $45.6 million during the third quarter, or 45 cents a share, compared to $45.0 million, or 48 cents a share, a year earlier.

The third-quarter ROA was 1.68%, according to SNL.

Bank of America Merrill Lynch analyst L. Erika Penala rates BankUnited a buy, with a $30 price objective, saying in October that the company remained "a long-term growth story, with anticipated outsized growth in metro New York representing the crux of our bullish stance." Penala estimates that BankUnited will earn $1.74 a share in 2012.

The shares trade for 14 times the consensus 2012 EPS estimate of $1.59, among analysts polled by FactSet, and for 1.5 times their Sept. 30 tangible book value of 14.72, according to SNL Financial.

The six analysts covering BankUnited are split between buy ratings and neutral ratings.

Interested in more on BankUnited? See TheStreet Ratings' report card for this stock.

8. Dime Community Bancshares

Dime Community Bancshares ( DCOM) of Brooklyn, N.Y., closed at $12.60 Friday, declining 10% during 2011. Based on a quarterly payout of 14 cents, the shares have a dividend yield 4.44%.

The company's third-quarter efficiency ratio was 41.16, according to SNL Financial.

Dime was included among TheStreet's 10 New York Bank Stocks With Most Upside for 2012, based on analysts' price targets.

Another feather in the company's cap is that its generous dividend payout is very well supported by earnings, as the payout ratio has been below 50% over the past year.

Third-quarter earnings were $11.2 million, or 33 cents a share, declining from $11.4 million, or 34 cents, a year earlier.

The third-quarter ROA was 1.10%, according to SNL.

Sterne Agee analyst Matthew Kelley has a neutral rating on the shares and estimates that Dime will earn $1.32 a share in 2012, with a slight earnings decline, as "the net interest margin will remain under pressure due to asset yield compression continuing at a rate higher than funding cost reductions."

Dime Community's third-quarter net interest margin -- essentially the difference between a bank's average yield on loans and investments and its average cost for deposits and borrowings -- declined to 3.58% from 3.66% in the second quarter and 3.60% in the third quarter of 2010.

The shares trade for 9.5 times the consensus 2012 EPS estimate of $1.33, among analysts polled by FactSet, and for 1.5 times their Sept. 30 tangible book value of $8.54, according to SNL Financial.

Out of nine analysts covering Dime Community Bancshares, four rate the stock a buy, while the remaining analysts all have neutral ratings.

Interested in more on Dime Community Bancshares? See TheStreet Ratings' report card for this stock.

7. Westamerica Bancorporation

Shares of Westamerica Bancorporation ( WABC) of San Rafael, Calif., closed at $43.90 Friday, down 18% during 2011. Based on a quarterly payout of 37 cents, the shares have a dividend yield of 3.37%.

The company's third-quarter efficiency ratio was 41.16, according to SNL Financial.

In late November, Westamerica was included among TheStreet's 10 Bank Stocks Bringing Home the Bacon because it was one of the strongest earnings performers among actively traded U.S. banks during the first three quarters of 2011 and the preceding four years. Please see that article for a discussion on the company's third-quarter results.

KBW analyst Julianna Balicka rates the shares "Outperform," with a $55 price target, saying in October that "Westamerica is widely recognized as a high-quality, low risk banking franchise that provides a compelling value proposition for investors looking for low volatility earnings, consistently increasing dividends, and active capital management in the form of share buybacks or well priced acquisitions."

The company repurchased 956,000 shares for $45.1 million during the first three quarters of 2011.

The shares trade for 14 times the consensus 2012 EPS estimate of $3.21, among analysts polled by FactSet, and for three times their Sept. 30 tangible book value of $14.21, according to SNL Financial.

Out of eight analysts covering Westamerica Bancorporation, one rates the shares a buy, six have neutral ratings, and one analyst recommends selling the shares.

Interested in more on Westamerica Bancorporation? See TheStreet Ratings' report card for this stock.

6. Prosperity Bancshares

Prosperity Bancshares ( PB) of Houston closed at $40.35 Friday, returning 5% during 2011. Based on a quarterly payout of 20 cents, the shares have a dividend yield of 1.93%.

The company's third-quarter efficiency ratio was 39.82, according to SNL Financial.

SNL on Thursday included Prosperity on its list of 35 publicly traded banks that had "paid an increasing dividend of at least 1.5% every year for the last 10 years." Through Dec. 30, Prosperity's five-year total return was 27.45%, and the company paid out 24.5% of its earnings during 2011, leaving plenty of room to cover a dividend increase.

Prosperity on Tuesday announced it had completed its purchase of Texas Bankers of Austin, acquiring three branches and roughly $71 million in assets.

On Dec. 9, the company announced a deal to acquire East Texas Financial Services ( FFBT) of Tyler, to pick up three branches in Smith County for about $20 million.

Prosperity reported third-quarter net income of $36.4 million, or 77 cents a share, increasing from $32.2 million, or 69 cents a share, in the third quarter of 2010.

The third-quarter ROA was 1.52%, according to SNL.

Sterne Agee analyst Brett Rabatin said after the East Texas deal was announced that the transaction was "M&A next year, as the transaction is too small to have much impact on growth or EPS," even though the analyst called the deal "a solid one."

Rabatin has a neutral rating on the shares and estimates that Prosperity will earn $3.04 in 2012.

Deutsche Bank analyst Dave Rochester on Thursday initiated his firm's coverage of Prosperity Bancshares with a "Hold" rating and a $44 price target, calling the stock a "relatively safe haven," with earnings "upside from M&A," estimating EPS of $3.10 for 2012.

Rochester likes "the focus on accelerating organic growth," and also views Prosperity "as one of the strongest acquirers in the state," but awaits "a better entry point, as we expect a better chance for multiple compression in FY12 given declining expected return on tangible equity in 2013 with continued mid single digit EPS growth."

The shares trade for 13 times the consensus 2012 EPS estimate of $3.04, among analysts polled by FactSet, and for three times their Sept. 30 tangible book value of $12.67, according to SNL Financial.

Out of 17 analysts covering Prosperity Bancshares, two rate the stock a buy, 14 have neutral ratings, and one analyst recommends selling the shares.

Interested in more on Prosperity Bancshares? See TheStreet Ratings' report card for this stock.

5. State Bank Financial Corp.

Shares of State Bank Financial ( STBZ) of Atlanta closed at $15.11 Friday, returning 4% in 2011.

The company's third-quarter efficiency ratio was 37.84, according to SNL Financial.

State Bank Financial on Oct. 21 purchased the failed Community Capital Bank of Jonesboro, Ga., from the FDIC, picking up two branches and roughly $181 million in assets, with the FDIC covering 80% of losses on $141.3 million of the acquired assets. That deal followed the purchase of the failed Piedmont Community Bank of Gray, Ga., which had $201.7 million in assets and two branches, with the FDIC agreeing to cover 80% of losses on $163.2 million of the acquired assets.

State Bank Financial earned $17.1 million, or 53 cents a share, in the third quarter, increasing from $10.8 million, or 34 cents, a year earlier, with the increase mainly reflecting growth through previous government-assisted acquisitions.

The third-quarter ROA was 2.52%, according to SNL.

FIG Partners analyst Christopher Marinac rates State Bank Financial "Outperform," with an $18.50 price target, saying after the two October acquisitions that the company's "build-up of both Cash and Retained Capital remains tremendous, which enables tangible book value to grow significantly during the next several quarters into 2013." Marinac also said "the company has the capacity to pay cash dividends as well as execute on share repurchases when prudent, both of which serve to justify a stronger stock price."

The analyst estimates that the company will earn $1.17 a share in 2012.

The shares trade for 10 times the consensus 2012 EPS estimate of $1.49, among analysts polled by FactSet, and for 1.3 times their Sept. 30 tangible book value of $12.04, according to SNL Financial.

All three analysts covering State Bank Financial Corp. rate the shares a buy.

Interested in more on State Bank Financial? See TheStreet Ratings' report card for this stock.

4. Signature Bank

Shares of Signature Bank ( SBNY) of New York closed at $59.99 Friday, returning 20% during 2011.

The bank's third-quarter efficiency ratio was 36.45, according to SNL Financial.

Signature Bank has been a unique growth story in its home market, and was included last month among TheStreet's 10 Bank Stocks Beating Analysts' Price Targets.

The bank had $13.9 billion in total assets as of Sept. 30, with 25 branches in New York City and in Nassau, Suffolk, and Westchester counties, in New York, focusing on private banking services as well as commercial lending.

Signature Bank's balance sheet grew 19% year over year through the third quarter, with total loans growing 23%, to $6.4 billion as of Sept. 30. Third-quarter net income was $38.4 million, or 83 cents a share, increasing from $27.4 million, or 66 cents a share, a year earlier.

The third-quarter ROA was 1.13%, according to SNL.

Guggenheim Securities analyst David Darst has a neutral rating on the shares, saying in early December that they were fairly valued based on forward earnings estimates, but adding that the "disarray" among local competitors would "continue to drive opportunities for SBNY to add new teams and locations, allowing SBNY to drive above-peer growth over the next year." Darst estimates the bank will earn $3.71 a share in 2012.

Deutsche Bank analyst Dave Rochester on Thursday initiated his firm's coverage of Signature Bank with a "Buy" rating and a $69 price target, touting the bank's "unique model to drive coverage-leading EPS growth." The analyst expects Signature to earn $3.70 a share in 2012.

Rochester added that "with some of the strongest capital levels in the industry, SBNY has all the pieces in place to support above-peer revenue/EPS growth for the next few years, equating to premium trading multiples and share outperformance."

The shares trade for 16 times the consensus 2012 EPS estimate of $3.67, among analysts polled by FactSet, and for twice their Sept. 30 tangible book value of $29.57, according to SNL Financial.

Out of 16 analysts covering Signature Bank, seven rate the shares a buy, while the remaining analysts all have neutral ratings.

Interested in more on Signature Bank? See TheStreet Ratings' report card for this stock.

3. Oritani Financial Corp.

Shares of Oritani Financial Corp. ( ORIT) of the Township of Washington, N.J., closed at $12.77 Friday, returning 8% during 2011. Based on a quarterly payout of 12.5 cents, the shares have a dividend yield of 3.92%.

The company's third-quarter efficiency ratio was 34.77, according to SNL Financial.

Oritani announced on Nov. 14 that its board of directors had completed its second share repurchase program, and authorized a new program to repurchase up to 2,278,776, or another 5% of its common shares.

Third-quarter net income was $7.3 million, or 15 cents a share, increasing from $7.2 million, or 14 cents a share, a year earlier. The third-quarter ROA was 1.14%, according to SNL.

Sterne Agee analyst Mike Shafir in October downgraded Oritani's shares to a neutral rating, "based exclusively on valuation," relative to peers. While the analyst said the premium was "warranted due to Oritani's superior profitability," he didn't "see near-term multiple expansion in the current operating environment." Shafir estimates the company will earn 61 cents a share in 2012.

The shares trade for 22 times the consensus 2012 EPS estimate of 59 cents, among analysts polled by FactSet, and for 1.1 times their Sept. 30 tangible book value of $11.12, according to SNL Financial.

The four analysts covering Oritani Financial Corp. are evenly split between buy ratings and neutral ratings.

Interested in more on Oritani Financial Corp.? See TheStreet Ratings' report card for this stock.

2. Hudson City Bancorp

Shares of Hudson City Bancorp ( HCBK) of Paramus, N.J., closed at $6.25 Friday, sliding 49% during 2011, mainly because of a first-quarter balance sheet restructuring that was forced by regulators, after a long-term leverage strategy of borrowing from the Federal Home Loan Bank and investing the proceeds mainly in mortgage backed securities issued by Fannie Mae and Freddie Mac backfired, and resulted in sharp decline in the company's net interest margin. The first-quarter restructuring included the prepayment of $12.5 billion in wholesale borrowings and resulted in a $649.3 million charge and a $555.7 million net loss.

The company later reduced its quarterly dividend payout to 8 cents a share, from 15 cents. Based on the lowered payout, the shares have a dividend yield of 5.12%.

The company's third-quarter efficiency ratio was 32.78, according to SNL Financial.

On Dec. 16, the company announced another balance sheet restructuring, this time prepaying $4.3 billion in borrowings, with a weighted average coupon of 4.21%, which CEO Ronald Hermance said would boost the company's "net interest margin by as much as 20 basis points in the first quarter of 2012 as compared to the third quarter of 2011," while giving the company "greater balance sheet flexibility when growth becomes more profitable."

Hudson City said the fourth-quarter restructuring would result in a charge of $440.7 million, but did "not expect the loss for the fourth quarter to affect its dividend strategy in light of the improved earnings position."

Guggenheim Securities analyst David Darst said that Hudson City's second round of prepayments helped to "secure the dividend yield for now," providing "more comfort that the dividend is not at risk."

Darst added that Hudson City "might need to look at tweaking their business model to include other types of loans, rather than just jumbo mortgages."

The analyst estimates that the company will post a fourth-quarter loss of 75 cents, followed by earnings of 70 cents during 2012.

The shares trade for 9.5 times the consensus 2012 EPS estimate of 66 cents, among analysts polled by FactSet, and for 0.7 times their Sept. 30 tangible book value of $9.14, according to SNL Financial.

Most analysts covering Hudson City are taking a "wait and see" attitude on further restructurings. Out of 16 analysts covering the company, only one rates the shares a buy, while 13 analysts are neutral and two recommend selling the shares.

Interested in more on Hudson City Bancorp? See TheStreet Ratings' report card for this stock.

1. Washington Federal

Shares of Washington Federal ( WFSL) of Seattle closed at closed at $13.99 Friday, for a year-to-date decline of 16%. The company on Dec. 19 raised its quarterly payout to eight cent from six cents, for a dividend yield of 2.29%.

The company's third-quarter efficiency ratio was 31.18, according to SNL Financial. This was for the third calendar quarter, which was the company's fiscal fourth quarter.

Net income for fiscal 2012 ended Sept. 30 was $111.1 million, or a dollar a share, declining from $118.7 million, or $1.05 a share a year earlier, as a sharp decline in credit expenses wasn't enough to offset two non-recurring items in 2010, including an $85.6 million gain on the sale of assets of Horizon Bank -- acquired from the FDIC in January 2010 -- and "a $39 million recovery resulting from the settlement of a contingent federal tax liability."

The fiscal 2011 ROA was 0.83%.

On Dec. 16, Washington Federal acquired the failed Western National Bank of Phoenix, Ariz., from the Federal Deposit Insurance Corp.

Following the dividend increase, Sterne Agee analyst Brett Rabatin on Dec. 21 reiterated his "Buy" rating for Washington Federal, saying the company would "stand out in the banking space next year with profitability improvement due to credit leverage," and basing his $17 price target for the shares on 11 times his fiscal 2013 earnings estimate of $1.54 a share.

The analyst noted that the company had achieved "a 20-year average 1.8% ROA."

Rabatin expects "management of excess capital with a sizable buyback accretive to EPS" in 2012, and Washington Federal said that as of Sept. 30, it was authorized to buy back 9,083.51 additional shares under its share repurchase program. He expects the company to earn $1.22 a share in 2012.

The shares trade for 12 times the consensus 2012 EPS estimate of $1.21, among analysts polled by FactSet, and for 0.9 times their Sept. 30 tangible book value of $15.15, according to SNL Financial.

The 12 analysts covering Washington Federal are evenly split between buy ratings and neutral ratings.

Interested in more on Washington Federal? See TheStreet Ratings' report card for this stock.

>>To see these stocks in action, visit the 10 Well-Run, Profitable Banks portfolio on Stockpickr.

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

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

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To submit a news tip, send an email to: tips@thestreet.com.
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.

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