Banks rolled out solid second-quarter earnings in the last two weeks, but many investors reacted as if the banks had posted losses.

One indication: The Standard & Poor's bank stock index dropped 4.51% in the two weeks during which the earnings were announced. The Dow Jones industrial average slipped just 1.2% in those weeks, and the S&P 500 just 0.6%.

"Shareholders have become much more skittish about bank stocks, even though banks are reporting quality earnings," said Michael Granger, a bank analyst at Fox-Pitt, Kelton.

"If there is any hint of imperfection, justified or unjustified, investors start running for the exits," he said.

David Ellison, a portfolio fund manager at FBR Fund Advisors, a mutual fund that invests in financial companies, thinks the answer is simpler. "Investors are just bored. This quarter's earnings reports are filled with words such as exceptional, perfect and 'love us because our earnings were great.'"

Investors "want to hear that things are really bad, but that they are going to get better," Mr. Ellison said. "People make money buying stocks when things are horrible, not the other way around."

But in the second quarter, even banks with solid performance failed to add verve to their stocks. Bank One Corp., which reported a 22% increase in earnings for the quarter, fell 1.7% on the day of the announcement.

On Monday, Citigroup Inc. reported a 21% increase, yet its stock held steady for the day and then fell 3% in the two days after the announcement. Shares of Wells Fargo & Co., with a 29% earnings jump, fell 1% on Tuesday, the first day of trading after the report.

State Street Corp., which reported a 14% earnings increase last week, was not as fortunate. Its stock dipped as much as 9% on the day earnings were announced and was down 13% within two days. Investors were annoyed that the Boston-based company failed to highlight a nonrecurring gain, which inflated its revenues and earnings.

"Investors took that stock behind the woodshed and beat it mercilessly," said an analyst at a large New York brokerage, who asked that his name not be used.

And investors are still cracking the whip. As of Wednesday, none of those bank stocks had risen to pre-earnings-report levels.

All players in the markets agree that the harsh treatment comes at a time when bank fundamentals are glowing.

According to Keefe, Bruyette & Woods Inc., 115 banking companies reporting second-quarter earnings averaged :

A 13% rise from a year earlier in per-share earnings.

A 10% rise in operating earnings.

A 9% rise in loans outstanding.

Only a 0.6% rise in nonperforming assets.

Banks are in a financial Eden, said Dale Jacobs, president of New York- based Financial Investors Inc.

"The economy is wonderful, bank managements are doing all the right things, improved earnings will continue, and so will mergers," he said. "But some investors are saying that banks can't repeat this performance.

"My response to that is: How many years does it take to convince you? Banks are doing just fine, thank you very much."

Still, many investors think the future for banks is far from trouble- free. Analysts have griped about slowing loan growth, are braced for deteriorating credit quality, and wonder if banks' computers actually are year-2000 compliant.

A significant rise in interest rates also could prove troublesome to banks, said Mr. Granger of Fox-Pitt Kelton. "Historically, recessions have been spawned by increasing interest rates," said Mr. Granger. "Credit quality starts to deteriorate and loan demand begins to slow."

The last time investors sold on good second-quarter earnings reports was late in 1994, after interest rates spiked 300 points in 12 months.

"Even in the mid-1980s, when the environment also was good, investors still didn't exhibit this degree of skepticism," FBR's Mr. Ellison said. The reason was a lot of banking companies still had problems.

Banks are not the only companies to suffer from investor cynicism. Shares of Microsoft,, and International Business Machines Corp. fell after the companies reported strong earnings, Mr. Ellison said.

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