We’ve received a number of responses to the bullish report, posted here last week, wherein we discussed how Synovus Financial’s (SNV) stock price might quintuple over the next several years.

Most of the comments were skeptical—which is exactly what one would you expect for a stock that’s so unloved by investors it is lately trading at just 0.4 times tangible book value. I’ll address those comments and questions in a moment. But first, a few words about one particular objection we get just about every time we write about a stock that's in one of our portfolios: our analysis is to be discounted, the skeptics say, since all we’re trying to do here is “talk our book,” and “pump and dump” the stock we are highlighting.

If you want to know which beaten-up bank stocks will provide the most ample returns from here, go back and look at what happened last cycle. Back in 1990, after bank stocks bottomed in November, the charge was led by those banks that still had significant credit quality problems and were still reporting quarterly losses. Then, as the cycle rolled on, the companies steadily managed through their credit issues and eventually returned to normalized profitability—and their stock prices zoomed.

Two of my biggest winners back then were Barnett Banks, at that time the largest bank headquartered in Florida, and Valley National, the largest in Arizona. Both were located in growth areas, and both had above-average exposure to commercial real estate loans. At first, investors (me included) underestimated the magnitude of the companies’ credit problems. It wasn’t pretty. The stocks got clobbered as the market extrapolated problems in selected loan portfolios to the loan portfolios overall, and then significantly overestimated the ultimate size of the companies’ credit losses.

Ask a bank CEO which capital standards his regulators care most about, and what minimum levels they’re insisting on, and he’ll look as if you’d asked him to count to 100 in Mandarin. He won’t have a clue.

Among the bank stocks that have gotten walloped as a result of the Great Credit Crunch—and there are plenty—one of our favorites is Boston Private Financial Holdings (BPFH). In fact, the stock is one of our largest positions.

I assume Sen. Chris Dodd knows how the free enterprise system works and that, with his new bill that would require credit card lenders to immediately freeze rates on existing balances, he’s simply playing to the pitchforks in my home State of Connecticut, where he’s having to scramble from behind in his 2010 reelection bid.

What other explanation can there be? Back in May, recall, Congress passed a law that will restrict the ability of card lenders to raise rates and impose fees on their customers. The card industry opposed the bill, but made no secret of the fact it can adapt to the bill’s new rules. Since then, understandably, lenders have selectively increased rates and imposed fees, in anticipation of their soon-to-be-restricted ability to dynamically price when the new law goes into effect in February. The people who voted for the law should have expected this to happen. The card lenders’ lobbyists must have promised them it would. This isn’t an instance of card companies putting an extra squeeze on their customers. They’re simply reacting to a changed regulatory environment.

I hope that, by now, I don’t have to remind anyone that my antipathy toward growth-through-M&A banking strategies knows no bounds.

Last week I attended the SNL Bank M&A Symposium in New York. That may not seem like a big deal to you, but it is to me. I’m something of a banking-conference aficionado, and have been going to them for years. (I’ve even hosted a few.) And I must say, last week’s event ranks up there with the most interesting I’ve been to.

Which is a bit of a surprise. Other than government-assisted deals, bank M&A activity has been virtually non-existent lately. You’d think, then, that a banking M&A conference in 2009 would be a bit of a snoozer. But this one wasn’t. The speakers were (for the most part) a distinguished group who had some interesting things to say.

Despite the turmoil the mortgage lending industry has been through over the past two years . . .

Hold on a minute. “Turmoil” doesn’t really describe what the industry has endured, does it? Four of the ten largest depositories from 2006 have either failed or been sold in government-assisted transactions. Another two are on federal life support. Two of Wall Street’s six big investment banks have collapsed, with a third sold in an emergency deal. The private subprime lending business has ceased to exist. The GSEs have been nationalized. The FDIC is on the verge of going broke. And don’t even ask the total amount investors have lost via MBS writedowns; my mind can’t hold a number that big.

If you think I’m having trouble resisting the temptation to go on one last, extended, triumphal rant on what an all-season disaster Ken Lewis’s CEO-ship at BofA (BAC) has been, you don’t know the half of it ( . . . Fleet . . . LaSalle . . . US Trust . . . dilution . . . restatements . . . “recognition” awards . . . brawkkk!).

Oh, forget it. Let’s just leave it that a) Lewis’s idiotic get-big-by-doing-deals strategy chronically diluted shareholders for years and finally ended in one last, spectacular, entirely avoidable disaster, b) his management “style” had the effect driving BofA’s top talent out the door with regularity, and c) he leaves an organization that has no coherent strategy or obvious successor as CEO, and that’s been forced to suck on the federal teat. Nice legacy.

Take a look at the following, which appears in the valuation section of a sell-side report out last week on Fifth Third Bancorp (FITB), initiating coverage with a “Market Perform” rating.

[W]e have opted for a price-to-tangible book value methodology, in light of the uncertainties surrounding earnings and true book value. FITB currently trades at 1.1x tangible book value (TBV), a 66% discount to its historical average of 3.1x, and below the current large-cap regional bank peer group average of 1.8x. [Emph. added]

The annual Barclays financial services conference, held last week here in New York, couldn’t have been more timely. This time last year, recall, there was substantial doubt that the industry could even survive in its present form. Now a year (and several hundred billion federal dollars) later, the outlook for the industry has improved dramatically, even if things aren’t anywhere near back to normal.

This is a great time to hear from financial services providers directly how they’re managing through their problems, and what they expect in the near future. Here are my takeaways:

One of the more successful investing strategies we’ve followed this year is what I’ll call, for lack of anything snappier, the Buy-Banks-The-World-Thinks-Are-At-Death’s-Door approach. It works exactly the way you’d think: Find a bank that is a) loaded down with bad loans (preferably in Arizona, California, Florida or Nevada, for maximum investment terror), b) losing money, c) likely to keep on losing money in coming quarters, d) perceived to be short of capital, and e) likely to raise capital.

Then, once you find such a bank, estimate losses over this cycle and, if you’re comfortable with your numbers and the institution’s financial strength, buy the stock aggressively.

It looks to us as if Wintrust Financial’s (WTFC) acquisition of AIG’s life insurance premium business, which closed in July, is shaping up to be a much better deal than we (and the rest of Wall Street) first realized.

In particular, the accretion of the discounted loans acquired in the deal will be heavily front-loaded, which means the deal should deliver an early, substantial earnings pop. The company will use those extra earnings, we believe, to clean up some problem assets, in order to set up for a good 2010. While the Street appears reasonably close on what Wintrust will likely earn in 2010, it’s still short by about 40 cents per share—largely because of the outsized early accretion.

We don’t have a position in MB Financial (MBFI), but the company is getting such a good deal in its acquisition of the branches of the just-seized Corus Bankshares that I can’t help but make a comment.

Wait a minute. I was under the impression the FDIC wants new private capital to enter the banking business. And I was also under the impression the agency prefers it be supplied by actual bankers (as opposed to, say, private equity investors). So someone please explain to me this:

Federal regulators have derailed First Financial Bank’s ambitions to be the next new bank in the Washington, D.C., area, allegedly for reasons that have at least one local economist scratching his head.

It’s been awhile since I’ve had a chance to engage in an extended squawk about what a train wreck Bank of America (BAC) has become under Ken Lewis. I’ve been busy! But the company’s management changes of the past few weeks (and years) show yet again the depth of the problems the company faces. The moves may seem dramatic, but they won’t do much to fix what ails BofA. Nothing short of the ouster of Lewis—and the sooner, the better—can do that.

Meanwhile, the management shuffles are just window dressing. In the latest round, Liam McGee, head of retail and a 20-year veteran of the company, has been given the heave-ho. The move comes just weeks after Lewis’s old pal Amy Brinkley, BofA’s incompetent chief risk officer, was shown the door. Meanwhile, the company has been through four CFOs in the past five years, and has conspicuously failed to retain key Merrill Lynch executives.

Can you believe it’s already been six months since the Treasury announced it would put the country’s big banks through a bunch of stress tests? Why, it seems only yesterday, doesn’t it?

The government has made plain that it wants private capital to flow into the banking industry. It is so emphatic on the matter, in fact, that it even forced a number of institutions to raise not-insignificant amounts of capital, on not-so-great terms to existing shareholders, after the stress tests this spring.

Yet at the same time, there’s no shortage of private capital, in the form of private equity funds, sitting on the sidelines clamoring to get in to the banking business.

Banks will start to report their second-quarter earnings this week. I’m not going out on a limb, I don’t think, if I predict that some of the reports will be better than the consensus expects and others will be worse. But nearly all will be closely scrutinized for what’s going on regarding bank investors’ main worry these days: credit quality. Everyone (including me) expects the recent negative trends to stay negative: nonperforming assets will rise, net chargeoffs will rise, and additions to loan loss reserves will rise. For each institution, the only question is by how much.