Investors' concerns over banks earnings in 1995 and beyond are behind a recent downturn in share prices, say Ronald I. Mandle and Mosche Orenbuch, analysts with Sanford C. Bernstein & Co.

Investors worry how banks will boost earnings when credit costs are reduced to normal. Those concerns have held down the relative price-earnings multiples for banks based on 1994 earnings estimates, even though balance-sheet quality and earnings stability have improved.

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