10 Bank Stock Value Picks

NEW YORK (TheStreet) -- While the banking industry is clearly in recovery mode, numerous economic and regulatory challenges continue to pressure price multiples for some of the best-known financial players.

Using data provided by Thomson Reuters Bank Insight, we isolated the 10 actively traded bank stocks trading at the lowest multiples to consensus 2013 earnings estimates, among analysts polled by Thomson Reuters.

The stocks are limited to those with average daily trading volume of at least 50,000 shares. Our data set also excludes pure investment banks, such as Morgan Stanley (MS) , which was heavily discounted, with shares trading for less than half their tangible book value and 7.5 times the consensus 2013 EPS estimate of $1.95, based on Friday's closing price of $14.61.

Now that the large banks have finished reporting their second-quarter results, investors are focused on several key challenges and opportunities:

Narrowing margins. With the Federal Reserve committed to keeping short-term interest rates between zero and 0.25%, while the central bank continues to purchase long-term securities in an attempt to continue bringing down long-term rates, most banks are feeling the squeeze. Since the short rates have remained so low for so long, banks can no longer rely on shrinking funding costs to offset lower rates on new or renewed loans and on securities investments.