Ever since the meltdown in the fall of 2008, it seems like there has been a constant stream of large cap bank legal issues and, worse for shareholders, huge cash penalty liabilities. In a new research note, UBS says that the legal troubles that have been such an overhang for the past seven years may be finally coming to an end, and perhaps so is the damage on bank balance sheets.

While acknowledging that there still may be some final penalties meted out in the currency and LIBOR rigging scandals, there is a light at the end of the tunnel. Shareholders who have been concerned over the incessant legal issues may feel better about buying these top companies now.

Bank of America

This stock seems to have been in the penalty box the longest and may offer investors a good entry point. Bank of America Corp. (NYSE: BAC) reported solid first-quarter earnings that were driven by lower expenses and the absence of substantial legal costs, which had strangled the bank for years. The first-quarter 2015 results saw year-over-year improvement and earnings of $0.27 per share were substantially up from a net loss of $0.05 per share in the prior-year quarter. Some analysts think $2 per share earnings is not out of the question for the money center giant. Total 2015 earnings estimates are expected up 284% from last year.

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The company has a ubiquitous presence in the United States, providing various banking and financial products and services for individual consumers, small and middle market businesses, institutional investors, corporations and governments in the United States and internationally, as well as operating 5,100 banking centers, 16,300 ATMs, call centers, online and mobile banking platforms

Bank of America investors are paid a 1.2% dividend. The stock is rated Neutral with a $16 price target at UBS. The Thomson/First Call consensus price target is $18.24. Shares closed Thursday at $16.73.

Citigroup

The stock may offer investors outstanding upside, and the UBS team says that the currency settlements were fully reserved for by the bank. Citigroup Inc. (NYSE: C) is also very cheap, trading at just 10.2 times estimated 2015 earnings. The nation’s fourth-largest bank by assets delivered first-quarter earnings that jumped to $1.52 per share, from $1.23 a year earlier. Analysts had expected Citigroup to earn $1.39 per share. While the stock has bounced sharply off the lows printed in early February, it still looks like a compelling buy here, especially with a dividend increase in the mix and a recent dip in the price.

Numerous Wall Street analysts cite the fact that Citigroup will be a leader in buyback payouts to shareholders. Combined with the bank’s strong domestic and international business, and a better overall economy, plus the headline risk over bank stress tests having been removed, shares purchases look wise here.

Citigroup shareholders are currently paid a miniscule 0.1% dividend, which will increase. The UBS price target is posted at $61, and the stock is rated Buy. The consensus price target is lower at $62.50. Shares closed Thursday at $54.84.

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Goldman Sachs

This company continues to be the gold standard of Wall Street banks, and it may still face some settlements, but it also has a small currency business compared to others. Goldman Sachs Group Inc. (NYSE: GS) has a gigantic institutional equity, debt and derivatives business, an ultra-high net worth clientele, top investment banking and capital markets expertise, and the firm continues to be a dominant force around the world. The bank is one of the most sought after in the world, and it is one of the very few firms that dictate who can be a client.

In investment banking, the company has the preeminent client franchise. Goldman Sachs advised on more than $1 trillion of announced transactions last year, the highest level since 2007. It has also maintained a leading market share over the past 25 years. It maintained a market position when M&A activity was dominated by technology in 1999, by financials in 2008 and by natural resources in 2014. The bottom line is, regardless of where market strength is in any given year, Goldman Sachs is up to the task.

Goldman Sachs shareholders are paid a 1.3% dividend. The stock is rated Neutral at UBS, with a $200 target. The consensus target is $207.75, and the stock closed Thursday near that level at $204.95.

JPMorgan

This stock trades at a very low 11.4 times estimated 2015 earnings, and also it has settlement funds fully reserved. JPMorgan Chase & Co. (NYSE: JPM) is expected to benefit from commercial loan growth and an upturn in capital spending. Wall Street analysts agree that the stock seems attractively valued on 2015 estimated price-to-earnings and a very solid price-to-book value. Some on Wall Street have cautioned that last year’s divestiture of the physical commodities business could provide an earnings headwind next year.

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Improvement in loan growth, terrific equity capital markets and a steady increase in deposits will be a solid plus. Trading at a discount to many of the large cap banks on 2015 earnings estimates helps upside potential as well. With $2.6 trillion in assets on a worldwide basis, and one of Wall Street’s savviest leaders in Jamie Dimon, the stock is a solid buy for investors.

JPMorgan investors are paid a 2.7% dividend. The stock is rated Neutral at UBS, with a $65 target, and the consensus target is $70.41, Shares closed on Thursday at $66.65.

Morgan Stanley

Morgan Stanley (NYSE: MS) is another one of the white glove Wall Street firms that has a smaller currency operation. The bank continues to show tremendous growth, and it is running neck and neck with Goldman Sachs as the bank of choice for high-profile initial public offerings. Trading at a price-to-earnings multiple of 12.9 times estimated 2015 earnings, that seems extremely reasonable given the 2015 expectations for EPS growth of more than 20%. The company also has 539 billion in cash equivalents on its balance sheet, versus $288 billion in total debt.

Morgan Stanley recently raised its dividend to $0.15 and will buy back up to $3.1 billion in stock, after the Federal Reserve System signed off on the company’s plan in the first quarter. Morgan Stanley says it will buy back the stock over five quarters, starting this quarter.

Morgan Stanley investors are paid a 1.6% dividend. The stock is rated Buy at UBS, with a $43 target. The consensus price objective is $39.96. Shares closed Thursday’s trading at $38.04.

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The UBS team refers to the years of going after the big, bad banks as a version of legal whack-a-mole. While they obviously need to pay for any legal infractions, they also have been overly chastised as scapegoats for everything that is bad everywhere, especially on Wall Street.

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