NEW YORK ( TheStreet) -- President Obama's expanded mortgage refinance program is feeding "another record quarter for mortgage origination revenues" according to JPMorgan Chase analyst Vivek Juneja.

The analyst on Monday raised his 2012 earnings estimates for nine of the nation's largest banks, not only because of the refinancing boom, but because investment banking revenue is holding up "better than feared," and because "10 year Treasury yields have recovered sharply recently from their lows in late July," which should lead to an eventual rise in mortgage loan rates, reducing pressure on net interest margins.

A key weakness for the big banks continues to be trading volume, which Juneja said is "tracking down sharply in 3Q from weak 2Q amid more pronounced summer slowdown in activity levels, particularly in equities and derivatives."

JPMorgan Chase still views the banking sector as "attractive and expect rising rates and better than feared fundamentals to help, especially when combined with the fact that the sector is underowned," although "there is still some uncertainty around Europe and global growth, as well as the looming presidential election and 'fiscal cliff', which provide some headwinds."

The "fiscal cliff" is the combination of the expiration of the "Bush tax cuts" that were extended in 2010, and also the federal spending cuts mandated by the Budget Control Act of 2011 -- a Faustian bargain signed into law by President Obama in August of last year, in order to have the U.S. debt ceiling raised.

Among large regional banks, Juneja said that " SunTrust ( STI), Fifth Third ( FITB - Get Report) and Regions ( RF) have all seen strong gains post earnings on improving credit," and that "in addition, for Fifth Third, a near-term catalyst is the pending likely approval of a share buyback and dividend increase from stress test resubmission."

The Federal Reserve in March only partially approved Fifth Third's annual capital plan, which included an increase in the dividend on common shares and repurchases of common shares. The Fed only approved the company's plan to repurchase $1.4 billion in trust preferred securities and repurchases of common shares in amounts equal to after-tax gains from the sale of shares in Vantiv ( VNTV) Fifth Third's former payment processing subsidiary, which went public during the first quarter.

Juneja has a neutral rating on Fifth Third, with a price target of $17.50, saying that "FITB's stock valuation is in line with the peer average, trading at 1.2 times tangible book value and nine times JPMorgan's 2013 earnings estimate of $1.57 a share, at Friday's closing price of $14.40. The analyst's price target for Fifth Third is based on "a price to tangible book value multiple of 1.4x," and Juneja expects the company "to trade at a slight discount to the expected peer group multiple of 1.5x owing to a relatively weaker footprint and recent track record."

Citigroup ( C - Get Report) is the cheapest large-cap bank stock covered by JPMorgan Chase, trading for just 6.4 times JPM's 2013 EPS estimate of $4.52, at Friday's closing price of $29.03.

Despite the low forward P/E and price-to-tangible-book ratio of just 0.6, Juneja has a neutral rating on Citi, "as increased capital return in 2012 had been a key catalyst for the stock and the Fed's refusal to approve Citi's capital return plan and Citi's decision to not ask for return in the resubmission pushes this out to 2013."

Over the long term, JPMorgan sees many constructive factors for Citigroup's shares, including the low price multiples; "strong and growing capital levels;" international revenue growth opportunities, as the company's business outside the U.S. accounted for 40% of revenues during 2011; a "sizeable amount of loan loss reserves," and the "long run potential for return of excess capital to shareholders."

Here are the four large-cap banks that JPMorgan rates "Overweight," sorted by declining forward P/E:

4. U.S. Bancorp
Shares of U.S. Bancorp ( USB - Get Report) of Minneapolis closed at $33.11 Friday, returning 24% year-to-date, following a 2% return during 2011.

The shares trade for 2.8 times tangible book value, and for 10.9 times the consensus 2013 earnings estimate of $3.03, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $2.83.

Based on a quarterly payout of 19.5 cents, USB's shares have a dividend yield of 2.36%.

While U.S. Bancorp trades at much higher multiple to tangible book value than most large-cap bank stocks, its forward P/E ratio is not very high, considering that the company has achieved operating returns on average assets (ROA) ranging between 1.54% and 1.71% over the past five quarters, according to Thomson Reuters Bank Insight.

Juneja on Friday raised his price target for U.S. Bancorp's shares by a dollar to $38.50, while raising his 2012 EPS estimate by a nickel to $2.86 and his 2013 EPS estimate by two cents to $3.12, and said that "our new price target assumes a price to tangible book value multiple of 3.2x versus the expected peer group multiple of 1.5x."

The analyst said that "USB has greater capital return than peers given high profitability and strong capital ratios," and that JPMorgan expects a continued "favorable business mix" for the company, along with "faster growth in revenues than peers from multiple sources, above-average earnings and tangible book value growth, and lower impact from regulatory/political issues."

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3. Wells Fargo
Shares of Wells Fargo ( WFC - Get Report) closed at $34.03 Friday, returning 36% year-to-date, following a 10% decline during 2011.

The shares trade for 1.8 times tangible book value, and for 9.3 times the consensus 2012 EPS estimate of $3.67. The consensus 2012 EPS estimate is $3.32.

Based on a quarterly payout of 22 cents, the shares have a dividend yield of 2.59%.

Wells Fargo has also been a solid, consistent earner when compared to other large-cap banks, with ROA ranging between 1.26% and 1.40%, over the past five quarters.

Juneja's price target for the shares is $42, "reflecting 2.0x price to YE 2012 tangible book value versus the expected peer group multiple of 1.5x tangible book value." The analyst estimates that Wells Fargo will earn $3.31 a share for all of 2012, followed by 2013 EPS of $3.70.

Wells Fargo's "Overweight" rating for Wells Fargo is supported by "better fee income growth opportunities with recent acquisitions of loan portfolios, expansion of capital markets and wealth management businesses as well as leading mortgage banking position," as well as expense reduction initiatives, and "lower international risk and capital markets exposure relative to peers," according to Juneja.

JPMorgan expects "WFC to trade at a premium to the group because of its strong long-term track record, lower risk profile and solid growth prospects."

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3. PNC Financial Services Group
Shares of PNC Financial Services Group ( PNC - Get Report) of Pittsburgh closed at $62.05 Friday, returning 10% year-to-date, following a 3% decline during 2011.

The shares trade for 1.4 times tangible book value, and for 9.1 times the consensus 2013 EPS estimate of $6.82. The consensus 2012 EPS estimate is $5.68.

Based on a quarterly payout of 40 cents, the shares have a dividend yield of 2.58%.

PNC suffered a hiccup during the second quarter, with mortgage putback charges of $284 million, or 54 cents, and $119 million in other charges for trust preferred redemptions and merger integration expenses related to the acquisition of RBC Bank (USA) in March.

A bright spot for PNC's second quarter was an increase of its net interest margin to 4.08% from 3.90% the previous quarter, and 3.93% a year earlier

Juneja's price target for PNC's shares is $78, "based on 1.7x our 2012E tangible book value, a modest premium to expected peer median tangible book value multiple of 1.5x."

The analyst said that his "Overweight" rating for PNC reflects "its attractive valuation and multiple drivers of revenue growth." The company has an "actively growing fee based businesses including capital markets and treasury management as well as consumer businesses such as credit cards," he said.

Juneja added that PNC's price-to-tangible-book ratio is "slightly above overall regional banks but should be trading closer to high quality banks given its track record of good revenue growth and conservative risk profile."

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1. Bank of America
Shares of Bank of America ( BAC - Get Report) closed at $8.00 Friday, returning 44% year-to-date, following last year's 58% decline.

The shares trade for 0.6 times tangible book value, and for 8.7 times the consensus 2013 EPS estimate of 92 cents. The consensus 2012 EPS estimate is 56 cents.

Despite the strong year-to-date return, Bank of America's shares have been quite volatile, reflecting investors' uncertainty over the company's ultimate risk from mortgage repurchase demands, mainly springing from the company's purchase of Countrywide Financial during 2008. During the second quarter, total mortgage repurchase claims increased by 41% to $22.7 billion, from $16.1 billion in March, with private mortgage investors' putback claims climbing to $8.6 billion from $4.9 billion.

Bank of America still refuses to repurchase loans from Fannie Mae ( FNMA), as the companies argue over "what constitutes a valid repurchase request," -- according to Bank of America CFO Bruce Thompson.

In addition to the low market valuation for the shares, Juneja justified his "Overweight" rating for Bank of America by citing "potential for significant appreciation when earnings normalize, ongoing improvement of capital levels, and position as a leading retail and commercial banking franchise," in the united states.

The analyst's price target for the shares is $11.50, "reflecting improved capital position and reduction in mortgage related issues," and "based on 0.9x price to our December 2012 tangible book value multiple, a 40% discount to expected peer median tangible book value multiple of 1.5x."

Juneja estimates that Bank of America will earn 58 cents a share for all of 2012, followed by EPS of $1.02 in 2013.

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

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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.