Shares of First Fidelity Bancorp. slipped a notch Wednesday after losing their recommendation from Goldman, Sachs & Co.

Analyst Sally Pope Davis said the action was mostly based on the New Jersey superregional bank's price performance, which has been far stronger than other banks recently.


In afternoon trading on Wednesday shares of First Fidelity were off 62.5 cents to $45, while other banks stock were mostly advancing.

"This stock has outperformed the group rather notably almost by virtue of standing still," Ms. Davis said. "As of Tuesday's [market] close, it was up 3% over the past three months, while superregionals are down 12%.

"As a result," she said, "its price-to-earnings ratio has gone from a half-multiple to multiple below other bank stocks during most of the year to a half-multiple above."

On Tuesday, First Fidelity carried a stock price multiple of 8.1 times Ms. Davis' revised estimate for 1995 earnings, versus an average multiple of 7.6 for other super-regionals followed by Goldman.

Goldman's method of stock price targeting mandated that the firm's recommendation be removed. It is now rated a "moderate outperformer."

First Fidelity's stock has been stronger than others because of support from Banco Santander, the Spanish bank, which is seeking to increase its stake beyond 24.9%, and investor Walter Annenberg, who revealed last month that he has acquired a 5% position.

Ms. Davis on Wednesday trimmed her estimate of First Fidelity's earnings next year to $5.65 per share from $5.85. She also reduced her 1996 forecast to $6.20 per share from $6.40. Her estimate for this year remains at $5.10.

The analyst said she lowered her estimates because the bank faces a higher tax rate next year than earlier estimated. But she noted that First Fidelity will "probably make up a lot of that" with strong expense control.

"It's a well-managed bank with rigorous cost control," she noted. "In fact, if they weren't buying Baltimore Bancorp., their expenses might be down for the year."

An analyst who retains a "buy" rating on the stock, Anthony Davis of Dean Witter Reynolds, said he is not troubled by the tax rate and more impressed by First Fiedlity's relative freedom from problems tied to interest rates or derivatives.

"They are not a big player in swaps; they have not made big interest rate bets," he said Wednesday. "It's not that kind of company, and it's one of the big things you don't have to worry about."

Mr. Davis said First Fidelity has "a reasonable amount of variability in its loan portfolio and a big chunk of earning assets funded by core deposits -- 88% versus a 75% average for our universe."

The Dean Witter analyst's estimates are $5.10 per share this year and $5.75 next year.

George M. Salem, the veteran bank stock analyst, will join the New York investment firm of Gerard Klauer Mattison & Co. in January.

Mr. Salem, an analyst for 26 years, left Prudential Securities Inc. in October, saying he wanted to spend less time on marketing efforts and more time on research and investment strategy. He said Wednesday that his new post would make that possible.

"Gerard Klauer Mattison has an entrepreneurial culture where it is more important to make the right calls than to produce an arbitrary number of research reports every year," he said.

The firm, which was formed in 1889, specializes in equity research, institutional sales, trading in listed and over-the-counter securities, investment banking, and syndication.

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