Which bank will follow the trail blazed by Bank of America (BAC) and be next to exit the government's bank rescue program? Probably not Citigroup (C), where taxpayers' own a 34% stake that the Treasury Department doesn't want to sell until it's sure the company won't need to raise more capital.
Then there's Wells Fargo (WFC), recipient of $25 billion in assistance, a bit more than half of the $45 billion Citi and Bank of America each got. But with hefty exposure to California's still-radioactive real estate market and without a capital cushion to match BofA's, it's not a strong candidate either.
Instead, look to Fifth Third Bancorp (FITB), the Cincinnati-based bank that took $3.4 billion to mend its bruised balance sheet late last year.
To pay back the government without hurting its capital levels, which act as a buffer against losses, Fifth Third would likely only need to raise an additional $1 billion, less than many other banks that took bailout funds and were subject to regulators' "stress tests" in the spring, according to analysts at CreditSights, an independent debt research firm.
Coming up with the money should be a lot easier and cheaper for Fifth Third now than it would have been earlier this year. Its stock has risen a from $1.03 a share on Feb. 20, its 2009 low point, to $10.47 in midday trading on Monday, a whopping 725% gain.
And it may not need as much of a cushion as some of its rivals among regional banks, wrote Morgan Keegan analyst Robert Patten in a note to clients distributed after the lender reported third-quarter earnings in October. Charge-offs of bad loans fell and Fifth Third said it may put less money aside to make up for those costs, "both encouraging signs that credit losses could be nearing a peak," he said.
JPMorgan Chase (JPM), Goldman Sachs (GS) and Morgan Stanley (MS), as well as numerous smaller banks, have all repaid the money they received from the bank rescue fund.
It's those repayments that have led officials to slash the projected cost of the recent bailouts by $200 billion. And some observers even think American International Group (AIG), the troubled insurer saved last September, may ultimately be able to repay the $180 billion that taxpayers have pledged to support it.
But it's worth remembering that while Fifth Third, which boasted some $111 billion in assets at the end of September, according to Fed data, isn't exactly small, it's nowhere near the size of Citi or AIG. It's good news for the Treasury that it may be the next to repay its investment, but there are still some very big financial companies facing very big questions about when and how they'll follow suit.
Which bailed-out bank will be next to exit TARP?