A recent study by Salomon Brothers Inc. reports that some banks are not as well reserved as most investors think.

Bank analyst Carol S. Berger argues traditional analytical tools that measure loan-loss reserves make banks seem better protected against losses than they actually are. And she argued that the traditional measures do not account for rising credit card problems.

Ms. Berger acknowledges that banks in general are reserved better than in the early 1980s.

Because nonperforming loans are at multi-decade lows, the ratio of reserves-to-problem loans looks unusually good, wrote Ms. Berger. Banks' coverage ratios-which measure reserves against nonperforming assets-also look very strong.

But banks' reserves have been in steady decline for the last three years, she noted. Ms. Berger said that ratios such as reserves to historical loss experience are flawed because they assume that past experience will repeat itself.

Relying on coverage ratio produces a false sense of strength, because the recent declines in nonperforming assets skews the picture.

What's more, she wrote: "Some banks hold little or no reserves against credit cards, assuming that in this high margin high profit business they are on a pay-as-you-go basis-that is when loans become 120 or 180 days past due they are charged off. The loss is viewed as an operating expense, and reserves would do little to alter the profitability in this business."

However, when coverage ratios are adjusted for credit card losses, Ms. Berger wrote, "banks are not as well reserved as the more 'classical measures' would suggest."

Ms. Berger has come up with a new adjusted coverage ratio to calculate reserve adequacy. She assumed that credit cards should be equal to a least one year's losses. "Rather than normalizing card losses, we took fourth quarter 1996 credit card chargeoffs and annualized," she explained.

By this measure, Ms. Berger listed 10 as the worse reserved banks in her 50-bank universe, all having reserve coverage of less than 100% for their current nonperformers.

They are Wachovia Corp, First Union Corp., Wilmington Trust, KeyCorp, Barnett Banks Inc., Amsouth Bancorp., Firstar Corp, Bancorp Hawaii Inc., First of America Bank Corp. and Comerica Inc..

"We do not find reserve coverage of less than 100% terribly alarming," wrote Ms. Berger. "It would be highly unusual to loose 100 cents on the dollar. But we feel it is instructive. If the economy were to slow dramatically and actually roll over into recession, those at the bottom of this list would most likely feel the need to more dramatically raise loan- loss provisions."

The 10 best reserved banks in Ms. Berger's study were Norwest Corp, J.P. Morgan & Co., Republic New York Corp., First American Bancorp, Northern Trust Corp., National City, National Commerce Bancorporation, SunTrust Banks Inc., First Bank System Inc. and Mellon Bank Inc.

The top 10 banks are the only ones that show strong ratios by four measures: reserves to total loans, coverage ratio, and total reserves to non performing loans.

In other market news, Robinson-Humphrey upgraded shares of Trustmark Corp. to long-term "buy" from "market performer."

Trustmark shares remained unchanged.

People's Heritage Financial Corp. shares gained $1.25, to $31 on an upgrade Thursday by Merrill Lynch. Merrill upgraded the thrift to "strong buy" from "outperform."

Bank shares generally were off. The Standard & Poor's bank index fell 1.12%, while the Dow Jones industrial average rose 0.67%. The S&P 500 rose 0.60% and the Nasdaq Bank index rose 0.11%.

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