With fourth-quarter earnings reports just three weeks away, some bank analysts say they are wondering whether expectations are low enough.

“You shouldn’t be overly optimistic,” said Andrew Collins, an analyst at ING Barings. But though profits may come up short, bank stocks may still turn out to be winners thanks to the continued weakness in the Nasdaq stock market, Mr. Collins said. Investors are taking money out of technology stocks and could divert it into financial shares, as they have done several times this year, he said. “As the Nasdaq continues to weaken, bank stocks should be OK.”

Another bright spot, Mr. Collins said, is that loan demand may have grown faster in the fourth quarter than in the third, and that banks may have fed this demand with cheap funds — deposits that otherwise might have gone to mutual funds.

Bank shares were mixed in Wednesday trading. The American Banker index of top 50 banks climbed only 0.71%, and the index of 225 banks rose 2.55%. The Nasdaq composite increased 1.84%, and the Dow Jones industrial average rose 1.04%.

The earnings outlook declined steadily throughout the year as analysts reacted to profit warnings and signs that credit quality was deteriorating throughout the industry, not just at a select few companies.

This month Chase Manhattan Corp., J.P. Morgan & Co. (which Chase is buying), and Bank of America Corp. sent the markets into a tailspin by disclosing that profits would fail to meet expectations because of sluggishness in capital markets activities. In Bank of America’s case, rising problem loans were also fingered as a culprit.

In a research note, Susan L. Roth, an analyst at Credit Suisse First Boston, wrote that analysts’ yearend profit expectations have fallen 7% on average since the beginning of the year, and that she expects the average banking company to report earnings growth of 6% to 8%.

“Take out the more rapidly growing securities processing companies, and expectations come down to no better than flat, year over year,” she wrote.

Fees from asset management and securities processing businesses are expected to increase 15% to 20% at companies that specialize in those areas, like Bank of New York Co., State Street Corp., and Northern Trust Co., Ms. Roth wrote. For other companies with “more vanilla personal trust and investment management businesses,” Ms. Roth estimates growth of between 5% and 7%.

Mr. Collins said analysts will be looking closely at the gross national product’s growth rate. He said that he expects loan-loss provisions to rise significantly in the near term, but “we should turn the corner after the second quarter.”

That assertion, however, depends on a soft landing for the U.S. economy, Mr. Collins said. If the GDP grows less than 2%, rising credit costs will continue to hit bank earnings next year, he said.

Rosalind Looby, an analyst at Credit Suisse who covers midsize companies, wrote in a research note that some regions may fare worse than others.

“It’s fair to say that we’re worried about some of our Southeastern banks,” including Regions Financial Corp. in Birmingham, Ala., and Union Planters Corp. in Memphis, she wrote. “It will take a few quarters for associated nonperformers to materialize.”

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