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The U.S. Treasury Department's plan for its as-yet undefined stress test has analysts voicing new wariness about investing in some banks.

The stock market has been spooked by Treasury's promise of a stress test, announced with little detail this week as part of the Obama administration's Financial Stability Plan. The fear is that the test will seal the fate of some investments in banks without any advance notice to shareholders.

Sanford C. Bernstein & Co. LLC analyst Kevin J. St. Pierre wrote in a research report Friday that Fifth Third Bancorp (FITB) is "essentially 'un-investable' at this point" because the outcome of the test could mean that the bank needs additional capital if the economy worsens and loan losses double from what Sanford Bernstein has projected.

Fifth Third isn't alone in the un-investable category. St. Pierre's report shows that Regions Financial Corp. (RF) and SunTrust Banks Inc. (STI) might also be on "quicksand" because they might need to do capital raises that would hurt common shareholders; KeyCorp (KEY) might be moving in the same direction.

Representatives of Fifth Third, SunTrust and Regions declined to comment on the Sanford Bernstein report. KeyCorp wasn't immediately available for comment.

Stress tests often look at how different extreme economic conditions will affect banks' loans and investments.

But without much detail from the Treasury, bankers and analysts have been left to speculate about the nature of the test. In a separate report, Sanford Bernstein called the test "mysterious."

Some bankers and other observers say the test might simply be some extended or altered version of the regulatory safety and soundness exam bankers have to go through at least once a year.

In an interview with Dow Jones Newswires, BB&T's Chief Credit Officer Clarke Starnes said, "We have had conversations with our regulators and at this point they haven't heard what the approach is" that the Treasury Department might use for the stress test.

Analysts are meanwhile trying to find guidance by taking another look at last year's bank failures and government-assisted acquisitions, and loan-loss ratios under economic stress.

In a report published Wednesday, Jason Goldberg at Barclays Capital ranked banks by the hit their capital could take if he applied markdowns to the loan portfolio based on cumulative losses in Barclay's (BCS) securitized products groups, and the measures used by JPMorgan Chase & Co (JPM) when it bought Washington Mutual Inc.; Wells Fargo & Co. (WFC) in its acquisition of Wachovia Corp.; and PNC Financial Services Group Inc. (PNC) when it took over National City Corp. He divided those marks by the sum of third-quarter capital, preferred stocks from government investments through the Capital Purchase Program, and the loan-loss reserve.

Applied to Synovus Financial Corp. (SNV), the bank's capital could be reduced by as much as $4.9 billion, a mark that would exceed its entire capital base.

The capital of M&T Bank Corp. (MTB) and BB&T Corp. (BBT), two banks many analysts consider well run, would be reduced by 91% and 90%, respectively. Synovus declined to comment, and M&T didn't immediately return phone calls.

M&T Bank Corp. and BB&T Corp. might illustrate just how difficult it is for analysts to find "one-size-fits-all" analysis.

Goldberg warned that the list is simply a quick cheat sheet. For example, the analysis doesn't take the quality of a bank's underwriting into consideration.

"We had to come up with something quickly" to help investors, he said. "I'd hope Treasury is more thoughtful than that" when it comes up with its own loan-loss analysis.

BB&T's Starnes said the bank performs its own stress test every month, and it would be misleading to assess the Winston-Salem, N.C. company's loan book using the same measure applied to companies that have exotic mortgages, lend to large national home builders or originate loans outside their home markets.

BB&T does none of those. Despite a sizable share of loans tied to real estate, "Our products are very traditional" with equity and personal guarantees required from borrowers, Starnes said. "We have a very granular portfolio" that has less risk than the ones the Barclays Capital report uses as a comparison, he said.

Sanford Bernstein said in the stress-test report, "Bank and thrift failures are a function of capital, liquidity and regulatory risks. Some of the largest 'failures' of last year were the result of a combination of these factors."

Liquidity refers to money that banks need to fund their day-to-day operations. Longer term, capital is needed to make investments and, most importantly right now, to provide a cushion for delinquent loans. Liquidity risk is largely mitigated at this point - banks are liquid enough to be able to make the loans their borrowers want. But capital and regulatory risk are "alive & kicking," the report said.

While regulators put in place programs to prevent bank failures through capital infusions, those programs could essentially wipe out common equity at some banks, leading to "common equity failures," Sanford Bernstein wrote.

Not all banks looked bad.

"Banks with higher capital levels are analyzable and investable," St. Pierre said in an email to Dow Jones Newswires. "I'd put Comerica Inc. (CMA), M&T Bank Corp. (MTB) and Capital One Financial Corp. (COF) in that camp."

While Fifth Third declined to comment, it appears not to share St. Pierre's concerns. The analyst said he recently met with the management of Fifth Third and, "justifiable or not," St. Pierre "noted a conspicuous absence of panic among the team, though with a clear recognition of the headwinds they face."

Fifth Third took aggressive measures in the fourth quarter to provide for future loan losses and isolate soured loans to be sold off.

Chief Executive Kevin Kabat said in a recent interview with Dow Jones Newswires that the Cincinnati company's core banking business has been performing well despite the rise in delinquencies. He pointed to rising earnings before taxes and the provision Fifth Third put aside to cover current and future loan losses.

-By Matthias Rieker, Dow Jones Newswires; 201-938-5936; matthias.rieker@dowjones.com