Shares of Compass Bancshares fell 3.88% on Friday after several analysts downgraded the Birmingham, Ala., company, which predicted that earnings per share will be less this year than previously predicted.

D. Paul Jones, chairman and chief executive officer of Compass, said in a conference call Thursday that investors should look for earnings of between $2.08 and $2.12 per share this year, rather than the $2.15 to $2.27 analysts had expected. Compass’ fourth-quarter per-share earnings of 50 cents missed the consensus of Wall Street analysts by three cents. Despite a welcomed 23% gain in noninterest income from a year earlier, an 8% increase in nonperforming assets and expenses surprised analysts.

The market reacted sharply to the news by sending shares of Compass down during afternoon trading on Thursday. The selloff continued Friday on another bleak day for bank stocks. Compass closed down 87.5 cents, to $21.6875.

The American Banker index of top 50 banks lost 0.65%, and the index of 225 banks fell 1.35%. The Nasdaq composite was up 1.93%, while the Standard & Poor’s 500 index was dropped 0.4%.

“The magnitude of the downward guidance was surprising, particularly given how well Compass’ earnings had been holding all year,” wrote Marni Pont O’Doherty, an analyst at Keefe, Bruyette & Woods Inc., in a research note on Friday. She downgraded the stock to “market perform” from “outperform,” and wrote that her action reflects “the lack of a compelling argument” for the stock to rise.

Jon Balkind of Fox-Pitt, Kelton Inc. lowered his rating to “hold” from “accumulate.” Robert Patten of UBS Warburg also cut Compass to “hold” from “buy.” Christopher M. Mutascio of Legg Mason Wood Walker Inc. downgraded the stock two tiers to “market perform” from “strong buy.”

Mr. Patten said that Compass’ management disappointed investors with its conservative guidance, and should the company fail to deliver results in line with its peer group in the future, it could become a merger target.

“Obviously they missed the quarter,” said Rosalind Looby, an analyst at Credit Suisse First Boston, who initiated coverage for Compass on Jan. 10 with a “buy” rating. Despite the revised earnings outlook for this year, she did not change her rating.

Jason Goldberg of Lehman Brothers also said there was no reason for a downgrade. He kept the company on a “strong buy” and said the market was overreacting to the earnings forecast.

He said that Compass “is not falling off the cliff,” and that he is confident its investment strategy will pay off eventually. Besides its home state, Compass serves areas in good economic shape, such as Texas, Florida, and Colorado, he said.

Mr. Goldberg said he is impressed with the company’s ability to generate more business from its small-business contacts, not just in lending, but in deposit collecting, which improved its margin.

Separately, Hibernia Corp. in New Orleans reported a 64% decline in fourth quarter profits, to $17.4 million, or 20 cents a share.

The company said it is comfortable with the analyst consensus estimate of $1.33 per share for this year’s earnings.

Excluding securities transactions, non-interest income rose 21%, to $66.5 million. Net interest income rose 3%, to $154.1 million.

Hibernia had a loan loss provision of $70 million in the fourth quarter. Nonperforming assets fell 23% from the third quarter, to $88.8 million, and were about flat from a year earlier. Total net chargeoffs, however, increased to 1.82% from 0.6% in the third quarter.

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