NEW YORK (TheStreet) -- Despite generally positive resultsaand analyst outlooks, bank stocks have underperformed the market since third-quarter earnings kicked off Oct. 14, when Citigroup , JPMorgan Chase and Wells Fargo all reported their results. Most other large and key regional banks have reported their results by now and investors appear underwhelmed. Banks stocks are up just about 1% since Oct. 14, as measured by the KBW Bank Index, while the S&P 500 was up over 4% over the same time period shortly after the start of trading Monday. Read More: How the 10 Biggest Banks Make Money Now Might Surprise You Still, analysts found several positives in third-quarter numbers, and a few outliers, such as State Street , got a nice pop after releasing results. Several analysts remain bullish in their outlook. "We recommend that investors look to buy bank stocks in anticipation of a steeper yield curve and higher short-term rates over the next 12-18 months, which should boost valuations toward normalized levels. We believe this final leg of the bank stock recovery could result in potential appreciation ranging from 25% to 50% for some of the top 20 banks," wrote RBC Capital Markets analyst Gerard Cassidy in a note published Oct. 27. Here are five takeaways: 1. Fixed Income Trading Better than Expected, Especially for Bank of Americaa Fixed income trading was especially strong in the quarter, handily beating the expectations of JPMorgan analyst Kian Abouhossein. Bank of America has done a great job facilitating client trades, according to a report from Deutsche Bank analyst Matt O'Connor. The bank has gained share in both equity and fixed income client trading over the past four quarters, according to O'Connor's research. 2. Analysts Disagree If Banks Are Lending More RBC Capital Markets analyst Gerard Cassidy cited a rise in lending vs.athe second quarter, led by areas like commercial and industrial loans, auto and commercial real estate. Deutsche Bank analysts, however, reported loan growth was flat at large regional banks and actually declined at so-called "money center" banks like JPMorgan and Citigroup. That was in contrast to data from the Federal Reserve, they wrote in a report last week. 3. Costs Under ControlbBut Regulatory Overhang Remainsa "Expense cuts continue but litigation remains a lingering issue for some institutions," writes FBR Capital Markets analyst Paul Miller in a client note on Monday. While Miller believes Bank of America and Flagstar Bancorp have largely put litigation costs behind them, he cited First Horizon National as an example of a bank with "significant regulatory risks outstanding." 4. Mortgage Banking Generally Better than Expected "Most analysts and mortgage industry forecasts had called for a weaker third quarter, and while interest rate locks and/or originations were down at some institutions, JPMorgan, PNC Financial , and others reported higher results" vs.athe second quarter, according to a report from FBR analyst Miller. 5. Banks Getting Back to Basics RBC's Cassidy wrote in a report Monday that "results overall [were] more boring," which, when it comes to banks, is a good thing in Cassidy's view. "The top 20 banks' third quarter earnings results reflect robust capital positions and continued credit improvement. Credit metrics were strong, suggesting the industry will surpass normalization levels in the next 12 months," Cassidy wrote. Read More:aWhat Wells Fargo, JPMorgan and Citigroup Earnings Tell Us About U.S. Housing aFollow @dan_freed a
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