Bad news for Signet Banking Corp. could be good news for its shareholders.

After the Richmond, Va.-based bank reported flat second-quarter earnings and projected the same for the third quarter, several analysts suggested the bank could be forced to seek a buyer in the next year.

Analysts said Signet's second-quarter earnings of 50 cents per share and the lack of a plan to cut expenses press management either to boost earnings soon or consider a sale.

"The strategy that they are taking in terms of their expense base and monitoring it instead of cutting it dramatically points to the expectation that they may well be putting themselves up for sale," said Merrill Ross, a bank analyst at Wheat First Butcher Singer.

Analysts said First Union Corp. would be a likely buyer because it doesn't have a strong presence in Virginia. A merger with Crestar Financial Corp., an in-state rival, also might make sense because of the cost savings such a deal would offer, analysts said.

Right now, the possibility of a takeover is not reflected in Signet's share price. The stock is trading at 1.5 times book value and has underperformed the market by about 10%, analysts said.

As a result, Ms. Ross raised her rating to "buy" from "outperform," even as she reduced her earning estimates to $2.05 per share for 1996 and $2.35 for 1997, from $2.30 and $2.75, respectively.

The stock fell 25 cents Friday, to close at $21.875. Ms. Ross said Signet could fetch as much as $33 per share in a sale.

Wallace B. Millner 3d, a senior vice president in the capital markets area at Signet, maintained during a conference call with analysts Thursday that the company wants to remain independent.

A bank spokeswoman, Gail Sanders, said Signet is pleased with its current 14.5% return on equity, which is up from 10% before the spinoff of Capital One.

"We are clearly focused on moving to the next level as soon as we can," she said. "This is consistent with our strategic plan of furthering our information-based decision-making and remaining independent."

Nonetheless, several analysts said that if earnings did not improve by early next year, Signet might be forced to reevaluate its options.

Tom Brown, a bank analyst at Donaldson, Lufkin & Jenrette, said Signet's management might consider selling the company by 1997 if earnings did not improve.

"They spent two years testing a loan-by-check program," Mr. Brown said, "and instead of keeping with it after they had some success, they pulled back. After no growth in the second quarter, they said they forgot to reign in expenses, which is a management sin."

Moshe A. Orenbuch, a bank analyst at Sanford C. Bernstein & Co., said Signet has planned a September mailing for its loan-by-check program that could give an indication of the company's ability to generate meaningful returns.

Signet said it might consider divestitures of various business lines, Mr. Orenbuch said.

To be sure, some analysts did not see the quarter's earnings as the beginning of the end for Signet.

"The company has a strategy laid out, and they're going to try to work through it," said Livia Asher, a bank analyst at Merrill Lynch & Co. "We're not talking about a distressed company by any means."

From a shareholder's standpoint, it's a "win-win situation," said Mr. Brown. "Either earnings growth accelerates and the stock increases its price-to-earnings multiple, or earnings don't accelerate and the company is forced to sell."

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