First Chicago Corp. shares advanced on brisk volume Thursday after analyst Lawrence W. Cohn of PaineWebber Inc. raised his earnings estimate for the bank this year by 12%.

In late trading, First Chicago shares were up $1.125, or 2.6%, to $43.625.

Mr. Cohn, who has a "neutral" rating on the stock, cited strong second-quarter results as the reason he expects earnings of $6.05 a share this year instead of $5.40.

But the analyst said his 12-month price target of $45 a share does not provide enough upside potential to support a "buy" recommendation.

High of $50 Possible

Mr. Cohn said that the stock could trade as high as $50 if the market pushes up the [price-earnings] multiple based on the company's efforts to become more of a regional bank.

At present, he regards First Chicago as a money-center bank. As such, its stock should and does trade at about eight times core earnings which he estimated at $5.60 a share.

He said he was raising his estimate for this year to reflect much better than expected trading and venture-capital results. They were reported earlier this week when the bank unveiled its second-quarter results.

First Chicago said it earned $1.72 per fully diluted share in the quarter, up from 32 cents a year earlier and far ahead of Mr. Cohn's estimate of $1.15.

Mr. Cohn said second-quarter trading results "were exceptional at $92 million," compared with $37 million a year earlier and $54 million in the first quarter.

"The company has changed the management of its trading operation and adopted a somewhat more aggressive philosophy," he said.

The analyst said he "suspects trading results have moved to a new, higher plateau," but will await further results.

Mr. Cohn also said he was raising his estimate for First Chicago's 1994 earnings to $5.30 from $5 "to reflect a higher estimate of credit card fee income and lower loan-loss provisioning."

Credit card income improved to $164 million in the second quarter, be noted, up 40.2% from $117 million a year ago and up 11.6% from $147 million during the first quarter.

Aggressive Program

Increased securitization as well as higher merchant discount and interchange revenues helped card results, he said, and the bank has been running "an aggresive credit card solicitation program in recent months."

Nonperfoming assets actually rose to 1.9% of loans from 1.7% in the first quarter, but the analyst said he was "not concerned with this modest uptick."

First Chicago, he said, "is significantly overreserved," covering 222% of nonperforming assets.

Moreover, he noted, the bank is in the midst. of a major program for selling off lackluster real-estate-related assets.

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