Here are the top five large-cap banks by growth in tangible book value, backing out reserve releases, according to KBW.
  • U.S. Bancorp saw 47.4% growth in adjusted tangible book value over the three-year period to $13.99 a share as of Sept 30, backing out 31 cents a share in reserve releases. The adjusted CAGR was 15.8% -- still a very impressive figure.
  • Wells Fargo achieved 44.1% growth in adjusted tangible book value to $22.23, backing out a dollar a share for reserve releases. WFC's adjusted CAGR was 14.7%.
  • PNC Financial Services Group (PNC) of Pittsburgh saw a 23.3% increase in adjusted tangible book value to $46.69 a share as of Sept. 30, backing out $1.98 a share for reserve releases, for a CAGR of 7.8%. PNC ranked sixth on the unadjusted list, with 28.5% growth in TBV to $48.67, for a CAGR of 9.5%.
  • Huntington ranked fourth with adjusted TBV growing 22.9% over the three-year period to $5.59, backing out 51 cents a share for reserve releases, for a CAGR of 7.6%.
  • Fifth Third ranked... fifth on the adjusted list, with TBV growing 22.6% over three years to $11.94 as of Sept. 30, backing out $1.15 a share for reserve releases, for a CAGR of 6.1%.

Among large-cap banks, U.S. Bancorp and Wells Fargo continue to stand out as steady, strong earners. Over the past 12 quarters, if we take the mean of U.S. Bancorp's returns on tangible common equity (ROTCE), we come up with a very impressive 24.2%, according to data supplied by Thomson Reuters Bank Insight. For Wells Fargo, the mean ROTCE for the same period was 17.5%, which is also a strong figure.

Premium valuations appear warranted for USB and Wells Fargo, but the shares are still relatively cheap, considering that each easily traded above 20 times forward earnings estimates before the credit crisis of 2008.

Shares of U.S. Bancorp closed at $37.83 Tuesday. The shares have returned 21% this year and trade for 11.8 times the consensus 2014 earnings estimate of $3.20 a share, among analysts polled by Thomson Reuters.

Wells Fargo closed at $42.96 Tuesday. The stock has returned 28% this year and trades for 10.7 times the consensus 2014 EPS estimate of $4.01.

-- 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.

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