Though many investors are bailing out of bank stocks, some bankers see the current market as an opportunity to buy.

Sovereign Bancorp of Wyomissing, Pa., said this month that it would buy as much as 5% of the shares of Peoples Bancorp, a Lawrenceville, N.J., company it had previously agreed to acquire.

"It's ridiculous how cheap that stock is," said Jay S. Sidhu, Sovereign's president and chief executive officer.

In an interview, Mr. Sidhu said weak stock prices in the financial industry have created "some compelling investment opportunities."

His $21 billion-asset company, Mr. Sidhu said, will sometimes buy in as a passive investor and occasionally as a potential acquirer. Sovereign would "consider investments in other high-quality, undervalued financial institutions," he said.

Dennis S. Marlo, chief financial officer, said the company holds stakes in 12 companies, each of less than 5% of the shares outstanding.

Sovereign cannot buy back its own stock because it is using the pooling of interests accounting method for its planned merger with $875 million- asset Peoples. The Securities and Exchange Commission will not allow a share buyback until several months after such a deal is closed. Companies are allowed to buy back shares while accomplishing a merger under the purchase accounting method.

The buyback prohibition is unfortunate in the current climate, said Wayne Bopp, an analyst at Robert W. Baird & Co.

Associated Banc-Corp. of Green Bay, Wis., which has two acquisitions pending, has joined a growing list of banks that have restructured mergers in order to buy back their stock.

Associated announced a deal in February for $162 million-asset Citizens Bankshares of Shawano, Wis. It initially was to be treated as a pooling of interests. But Associated's share price has since fallen about 25%.

Joseph Selner, Associated's chief financial officer, said that given the low price for its stock the company had recently restructured the Citizens deal as a purchase so it could buy 900,000 of its own shares.

Associated has not changed the accounting for its agreement to buy $190 million-asset Windsor Bancshares of Minneapolis. The Wisconsin company, which announced the deal this month, is keeping its options open, Mr. Selner said.

In the past month, BB&T Corp., Colonial BancGroup, and Carolina First Corp. also announced they would change merger agreements from poolings to purchases.

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