Looking much further ahead to bake in Alexopoulos' expectations for continued improvement in the company's return on equity, the shares trade for just 7.5 times his core 2017 EPS estimate of $3.89.

But Alexopoulos has a neutral rating on Zions Bancorporation, as the company's return on tangible equity is "still below its cost of capital."

Zions' ROA was 0.67% and its ROTCE was 8.5% for the 12-month period ended Sept. 30, according to Thomson Reuters Bank Insight.

The analyst's December 2014 price target for Zions is $31.00.

KeyCorp

Shares of KeyCorp of Cleveland closed at $12.96 Friday. The shares have returned 56% this year and trade for 12.7 times the consensus 2014 EPS estimate of $1.02.

The company's ROA for the past 12 months through Sept. 30 was 1.00%, while its ROTCE was 10.00%, according to Thomson Reuters Bank Insight.

Looking way ahead, KeyCorp trades for 7.6 times Alexopoulos' 2017 EPS estimate of $1.70.

The analyst also sees KeyCorp as a current value play among mid-cap banks he covers, since the shares trade at 12.2 times his 2014 EPS estimate of $1.06, which represents a "26% discount to the group."

"Although the list of value names in the mid- and small-cap bank space has thinned with the YTD move in the stocks, we still find KEY trading at one of the cheapest valuations and view the stock as positioned to outperform over the next year as the positive operating leverage story takes over and the turnaround bears fruit," Alexopoulos wrote.

His December 2014 price target for KeyCorp is $14.00.

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

>Contact by Email.

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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