Banks are entering a golden age marked by bulging cash coffers and earnings growth of 20 percent during the next few years, says banking analyst Dick Bove.

"There's so much cash in some of the banks in the United States that they're actually selling at below their cash value per share," Bove, of Rochdale Securities, tells CNBC.

Such high liquidity levels will pumping earnings up 20 percent a year, which, as Bove puts it, "will be far faster than what you're going to see from the industrial averages."

Furthermore, fears that legal woes from sloppy mortgage practices will hurt the banking sector will not pose a serious threat, Bove says.

Plus any losses that could come from compensating investors who bought mortgage-backed securities — if they comes to pass at all — won't seriously hurt earnings, as most banks have written off bad mortgages.

"Bad loans are coming down in the industry," Bove says. "Chargeoffs are coming down ... Essentially we're talking about ancient history."

With Republicans now in control of the House of Representatives, financial reforms heralded by Democrats such as the Dodd-Frank law may come under fire.

Representative Spencer Bachus, R-Ala., the new chairman of the House Financial Services Committee, says the Dodd-Frank law has caused the "pendulum to swing too far toward regulatory micro-management," Bloomberg reports.

"With prudent and careful attention to unintended consequences, rules can be written that achieve the consumer protection and safety and soundness needed by our society that does not slow economic activity or prevent job creation."