Stocks: Great Western Gains Following an Upgrade By PaineWebber Analyst

Great Western Financial Corp. shares rose Wednesday on an upgrade by PaineWebber Inc. analyst Caren E. Mayer, who noted the thrift's "bank- like" qualities - and its potential gains from the merger of Wells Fargo & Co. and First Interstate Bancorp.

Great Western's share price surged on the upgrade, closing at $24.25 up 62.5 cents.

The thrift has improved its deposit mix in the last six years by increasing its checking account balances to $4.9 billion from $1.9 billion, said Ms. Mayer, who raised her rating to "attractive" from "hold." She added that Great Western also intends to add higher yielding products, such as home equity and student loans.

She said the thrift has benefited from the region's improving economy and the fallout from the Wells-First Interstate deal. Great Western, along with other California thrifts, has picked up executives displaced by the merger as well as customers who don't want to bank with the new entity.

Ms. Mayer's rating for other California thrifts remains "neutral," however.

Ms. Mayer's raised her earnings projections for Great Western slightly, to $2.20 per share this year and $2.65 for 1997. Her one-year price target is between $28 and $29.

In other news, Salomon Brothers Inc. initiated coverage of SouthTrust Corp. with a "hold," saying the Birmingham, Ala.-based bank is not using its capital efficiently.

"If you look forward, some of the conditions facing the industry - such as slowing loans, rising credit costs, and for SouthTrust in particular the potential for increased liability costs - could hit the company very squarely," said analyst Sheri M. Ptashek.

Ms. Ptashek said while the bank has good efficiency and credit quality ratios it would not do well should the market take a turn for the worse.

Ms. Ptashek said her earnings-per-share estimates for the bank are $2.65 in 1996 and $2.90 in 1997, and her 12-month price target is $29

SouthTrust's shares closed at $27.312, up 18.7 cents.

"The stock should trade pretty close to what it is trading now," she said. "There isn't much upside."

Dean Witter Reynolds reiterated its "buy" rating for Citicorp. Analyst Paul A. Mackey has boosted his 1996 earnings estimate for the banking company to $8.50 from $8.20; he raised his 12-month price target to $100 from $90.

Mr. Mackey said that he changed his price projection because Citicorp was rapidly was rapidly approaching the $90 target he set this past March.

"Citibank is a global financial institution without peer," said Mr. Mackey. "It is a misnomer to call it a money-center in New York."

The bank's shares closed at $86.625, up $1.375.

The stock of Trans Financial Bancorp in Kentucky surged more than 11% on about 10 times average daily volume, to close at $17.50, up $1.625.

Douglas M. Lester, resigned Tuesday as chairman and CEO of the $1.8 billion-asset company after two quarters of poor earnings.

Analyst Joseph C. Duwan of Keefe, Bruyette & Woods Inc. said that Mr. Lester "had aggressively (moved) into nonbanking, fee-related business but profitability has suffered."

Mr. Duwan pointed out that Trans Financial's board announced late Tuesday that the Bowling Green-based bank was going back to its "core banking" focus.

"The price has lagged in the past," said Mr. Duwan. "The market believes that it will perform better in the future."

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