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Financials had a bad year in 2011, underperforming all other sectors. However if you believe that financials have been oversold, here are some ideas to search for financial stocks with strong prospects.

We began by screening the financial sector for stocks that have outperformed the market, with over 20% return over the last quarter. We then screened for those with high profitability, beating their industry peers on gross, operating, and pretax margins.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these financials are stronger than their peers? Use this list as a starting point for your own analysis.

1. Columbia Banking System Inc. (NASDAQ:COLB): Operates as the bank holding company for Columbia State Bank, which provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in the states of Washington and Oregon. The stock rose 21.12% over the last quarter. TTM gross margin at 91.55% vs. industry average at 71.34%. TTM operating margin at 49.7% vs. industry average at 40.62%. TTM pretax margin at 27.46% vs. industry average at 21.99%.

2. Delphi Financial Group, Inc. (NYSE:DFG): Provides integrated employee benefit services. The stock rose 62.40% over the last quarter. TTM gross margin at 15.53% vs. industry average at 13.93%. TTM operating margin at 15.53% vs. industry average at 10.86%. TTM pretax margin at 13.32% vs. industry average at 9.74%.

3. Eagle Bancorp, Inc. (NASDAQ:EGBN): Operates as the bank holding company for EagleBank that provides various commercial and consumer banking services. The stock rose 22.43% over the last quarter. TTM gross margin at 76.58% vs. industry average at 71.34%. TTM operating margin at 42.84% vs. industry average at 40.62%. TTM pretax margin at 28.87% vs. industry average at 21.99%.

4. Epoch Investment Partners, Inc. (NASDAQ:EPHC): A publicly owned investment manager. The stock rose 23.52% over the last quarter. TTM gross margin at 57.23% vs. industry average at 45.38%. TTM operating margin at 41.61% vs. industry average at 34.14%. TTM pretax margin at 42.07% vs. industry average at 24.47%.

5. Nelnet Inc. (NYSE:NNI): Focuses on providing fee-based processing services, and education-related products and services in the areas of loan financing, loan servicing, payment processing, and enrollment services. The stock rose 24.94% over the last quarter. TTM gross margin at 60.28% vs. industry average at 43.74%. TTM operating margin at 57.42% vs. industry average at 39.9%. TTM pretax margin at 35.07% vs. industry average at 25.15%.

6. Omega Healthcare Investors Inc. (NYSE:OHI): Operates as a real estate investment trust in the United States. The stock rose 26.80% over the last quarter. TTM gross margin at 47.16% vs. industry average at 40.68%. TTM operating margin at 47.16% vs. industry average at 38.25%. TTM pretax margin at 18.% vs. industry average at 15.81%.

7. Protective Life Corp. (NYSE:PL): Engages in the production, distribution, and administration of insurance and investment products in the United States. The stock rose 24.06% over the last quarter. TTM gross margin at 17.62% vs. industry average at 13.53%. TTM operating margin at 17.62% vs. industry average at 10.32%. TTM pretax margin at 14.47% vs. industry average at 9.33%.

8. Pzena Investment Management, Inc (NYSE:PZN): A publicly owned investment manager. The firm also provides investment advisory services to funds. The stock rose 42.96% over the last quarter. TTM gross margin at 53.28% vs. industry average at 43.7%. TTM operating margin at 52.79% vs. industry average at 32.95%. TTM pretax margin at 47.63% vs. industry average at 25.08%.

9. SVB Financial Group (NASDAQ:SIVB): Operates as the bank and financial holding company that provides commercial banking and financial products and services. The stock rose 26.77% over the last quarter. TTM gross margin at 95.23% vs. industry average at 71.35%. TTM operating margin at 55.03% vs. industry average at 40.62%. TTM pretax margin at 42.4% vs. industry average at 21.98%.

10. S&T Bancorp Inc. (NASDAQ:STBA): Operates as the holding company for the S&T Bank, which provides community banking services in Pennsylvania. The stock rose 21.16% over the last quarter. TTM gross margin at 79.28% vs. industry average at 67.94%. TTM operating margin at 46.85% vs. industry average at 39.96%. TTM pretax margin at 29.59% vs. industry average at 21.25%.

11. Texas Capital BancShares Inc. (NASDAQ:TCBI): Operates as the holding company for Texas Capital Bank, National Association that provides various banking products and services for commercial and high net worth customers in Texas. The stock rose 21.22% over the last quarter. TTM gross margin at 86.67% vs. industry average at 67.94%. TTM operating margin at 52.82% vs. industry average at 39.96%. TTM pretax margin at 33.48% vs. industry average at 21.25%.

12. Wells Fargo & Company (NYSE:WFC): Provides retail, commercial, and corporate banking services primarily in the United States. The stock rose 20.97% over the last quarter. TTM gross margin at 83.36% vs. industry average at 71.34%. TTM operating margin at 43.97% vs. industry average at 40.62%. TTM pretax margin at 27.05% vs. industry average at 21.99%.

*Profitability data sourced from Fidelity, all other data sourced from Finviz.

Source: 12 Outperforming Financials With High Profitability