Time to get in on financial stocks?

There are some great deals out there in finance stocks that have been battered down along with the rest of the industry. While some companies have turned out to be disasters, there are a few diamonds in the rough.

Excellent article from smartmoney.com:

Financial Stocks for the New Year
This New Year's we're toasting banks that say "no thanks" to a bailout.

Yes, it turns out that at least a few banks in America still have some dignity left. More importantly, they have capital. Unlike their hat-in-hand peers, these banks say they're doing just fine on their own and won't be needing taxpayer dollars to get through the credit crisis.
Even more impressive, two of the eight banks on the list actually increased their earnings through the first nine months of 2008. Hudson City Bancorp (HCBK: 15.29*, -0.67, -4.19%), of Paramus, N.J., grew its net profit a whopping 47% to $321 million through the third quarter. And Honolulu-based Bank of Hawaii (BOH: 44.26*, -0.91, -2.01%) increased net profit 7% to $153 million.

"The common denominator for all of these guys is they have held up really well. Their fundamentals have done much better than the average in the industry," says Morningstar analyst Jaime Peters, who has been following the issue.

As part of its Wall Street bailout, the Treasury Department offered to spend up to $250 billion on capitalizing financial institutions. Companies had until mid-November to apply for the help.
One irony is that Wall Street giants like Citigroup (C: 6.97*, +0.26, +3.87%), which once had a market cap of more than $100 billion, really needed the government handout amid the credit crisis. Yet some small regional players such as Prosperity Bancshares (PRSP: 28.99*, -0.60, -2.02%) and Cullen/Frost Bankers (CFR: 50.02*, -0.66, -1.30%), both located in Texas, have enough capital that they're willing to turn down Uncle Sam's offer.