U.S. bank stocks fell on Tuesday after reports that the Obama administration might charge banks more than $100 billion made investors worry about the sector's profits.

Major U.S. banks' stock prices saw deeper declines than their regional bank counterparts.

The Obama administration is considering charging the nation's largest banks more than $100 billion to recoup losses from the Troubled Asset Relief Program.

That's a really big number for the banking industry, particularly the biggest banks, to swallow, said Jefferson Harralson, a Keefe, Bruyette and Woods Inc analyst.

The proposed fee represents a steep payment for large banks already struggling to generate earnings and paying higher Federal Deposit Insurance Corp premiums, analysts said.

It would also come after many have already repaid billions of dollars in government bailout aid.

The KBW Bank Index <.BKX> -- a leading sector index -- declined 1.96 percent to 46.11 in Tuesday trading. The sell-off comes after a brief rally for bank stocks from the end of December through the early days of January.

Some of these names got ahead of themselves, said Jeff Davis, a bank analyst with FTN Equity Capital Markets.

The largest U.S. banks, like Bank of America Corp and JPMorgan Chase & Co posted stock price declines greater than 3 percent. Citigroup Inc's stock price dipped 2.75 percent.

Regional bank stocks posted smaller declines through mid-day. Regions Financial Corp declined 1.42 percent to $6.23, and Fifth Third Bancorp traded at $11.05 per share, a 1.34 percent decline.

(Reporting by Joe Rauch. Editing by Robert MacMillan)