Banc One's already lackluster stock has weakened again, as investors fret that the superregional is an unlikely buyer of other major banks this year.
On Monday, Bane One's shares were down 75 cents to $32.35 at the close, a drop in value of 8.2% from the stock's most recent high on April 15 and 24% below its 52-week high of $42.25.
"The stock has been soft," said George M. Salem of Prudential Securities Inc., who last Friday sliced his 1994 earning estimate for the banking company to $3.20 per share from $3.35.
In part the weakness may be linked to the Columbus, Ohiobased bank's own statement that further increases in short-term interest rates could damage its net interest margin, the analyst said.
But, Mr. Salem added, "it is quite evident now that they can't buy anything of substance this year with their stock in the penalty box."
Banks mostly make purchases with their stock as the currency. A depressed stock price makes acquisitions more expensive by raising the level of dilution for the acquirer's own shareholders.
Having lost its traditional stock price premium over other banks, Banc One could be placed in the unaccustomed role of bystander just as the era of unrestricted nationwide interstate banking finally dawns.
In particular, Bane One may be in a less favorable position than others - such as BankAmerica Corp. - to enter the now off-limits Florida market through a major acquisition.
Barnett Banks Inc., Jacksonville, which is Florida's largest bank, is seen as a major takeover target once interstate banking restrictions are dissolved.
Florida is a member of the Southeast Compact, which limits dealmaking to banks inside a group of southern states.
Congress is moving rapidly toward enacting legislation that would lift the restrictions. Florida itself also may take action. Concern About Derivatives But Frank J. Barkocy, senior analyst at Advest Inc., said Bane One may still be able make some important acquisitions through combinations of cash and stock.
The biggest problem for its stock has been the "ongoing concern about derivatives," he said. "No matter how much they suggest they have the situation under control, it still rears its ugly head."
Mr. Salem has a "hold" rating on Bane One's stock. Mr. Barkocy rates it "accumulate."
Bane One's price weakness was especially glaring on Monday as many other banks rallied in a generally strong stock market. Stocks were helped by an improved bond market.
Other Gainers and Losers
Among the big gainers, Bankers Trust New York Corp. improved by $1,625 to $68.50, Chemical Banking Corp. by 75 cents to $35.50, BankAmerica by 75 cents to $44, and Citicorp by 87.5 cents to $37.625.
Also gaining were Wells Fargo & Co., up $1.25 to $146.25, and Bank of New York Co., up 50 cents to $55.875.
On the losing side, besides Bane One, was Northern Trust Corp., down $1 to $40.75.