In the week since Bank One Corp. shocked Wall Street and the credit card industry with news that its First USA division was on the skids, bank analysts and investors have been asking themselves if they should have seen it coming.

Most say there was no way to sense how deep First USA's problems ran, though some concede that there were at least faint warning signs such as a slight decline in card receivables between the first and second quarters.

When Bank One and First USA executives disclosed that the holding company would miss its earnings target for 1999 by as much as 8%, they said they, too, were caught off guard by indications that customer attrition is up and growth is faltering.

"If it surprised them, it should be a surprise to us," said David S. Berry, a bank analyst at Keefe, Bruyette & Woods in New York.

Michael J. Ancell, a bank analyst at Edward Jones in St. Louis, said, "There was just no indication that there was anything this wrong."

The news was big enough to knock Bank One's stock price down by as much as 28% and affect other banking sectors' shares.

Katrina Blecher, an analyst at Brown Brothers Harriman & Co. in New York, said there were indications that First USA was struggling to pick up new customers beginning in the second quarter, despite promises that the credit card division would be one of Bank One's most profitable business units in the second half.

Net income from the credit card business was $303 million in the second quarter, up 54% from the year-earlier period. But average managed credit card receivables declined by about $200 million between the first and second quarters, to $68.9 billion.

"That implies they were stretching for growth," Ms. Blecher said.

Meanwhile, some customers were becoming vocal with displeasure about First USA's late-fee practices. In April, a group seeking class-action status filed a lawsuit in Dallas accusing First USA of unfairly charging late fees. The Office of the Comptroller of the Currency received more service complaints from First USA cardholders in the first half of the year than from customers at the next nine surveyed credit card issuers combined.

Bank One executives conceded last week that their previous late-fee policy, which was to charge about $29 if a payment was received on the due date or later, caused some customers to leave. That policy recently was revised so that late fees kick in the day after the due date. First USA said it has also corrected problems in posting some customer payments that were processed by a third party.

Those fixes did not prevent customers from canceling First USA accounts. Attrition spiked by 30% in recent months, with the overall attrition rate moving from the low teens to the high teens, First USA chief executive officer Richard Vague said.

Those trends prompted Bank One to add several sentences to its August 10Q filing with the Securities and Exchange Commission about the brewing troubles at First USA, said Robert A. Rosholt, Bank One's chief financial officer. The company warned that the environment for credit card issuers remained highly competitive while demand for unsecured consumer debt products was moderating.

"This is likely to result in slower growth in receivables and revenue for the credit card industry in the near term," the 10Q said.

If those sentences were meant as a wakeup call, most analysts said it wasn't loud enough.

"The 10Q was boilerplate," said Mr. Ancell of Edward Jones. "There's no way to read between those lines."

Some analysts including Mr. Ancell have been wary of a Bank One misstep ever since Charlotte, N.C.-based First Union Corp. announced this summer that it was falling behind expectations. Mr. Ancell said in July that he was concerned about Bank One's integration of First Chicago NBD Corp., a company it acquired 11 months ago, just as First Union has disappointed the markets with its handling of CoreStates Financial Corp.

Given the pedestal that First USA seemed to occupy within Bank One, the revelation "was a big shock," Mr. Ancell said. "First USA was always a good growth opportunity."

Mr. Berry said that "the assumption was First USA was off on the sidelines and performing beautifully."

Bank One has lost some credibility with analysts. Most said it would take several quarters, if not a year, of predictable earnings growth to repair the loss of confidence and prove that the company is back on track.

Several analysts have turned bearish toward the entire sector. They said they expect additional companies to make earnings-shortfall announcements this year.

"We don't think these are isolated events," said Michael Mayo of Credit Suisse First Boston in New York. "Some issues at Bank One and First Union are going to take a toll on other companies."

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