For the second consecutive day M&T Bank Corp. of Buffalo was the highlight of a tentative session for bank shares, as it announced stronger-than-expected second-quarter earnings to kick off the big-bank reporting season on a positive note.
M&T, the first of the 50 largest banks to report earnings for the quarter, posted a profit of $9.07 per diluted share, topping the $8.98 First Call/Thomson Financial consensus estimate. Shares of M&T jumped $14.8125, or 3.25%, to $470.5625, more than wiping out a decline of $3.25 on Monday, when the company announced an agreement to acquire Premier National Bancorp of Lagrangeville, N.Y. 
Denis Laplante, an analyst at the New York investment firm Fox-Pitt, Kelton, said M&T's slight downturn was predictable because of the deal announcement, and said its earnings report showed good results in loan quality and growth. "The fundamentals were better than expected," he said.
Premier National's shares were unchanged Tuesday after surging $6.625, to $20, Monday.
Analysts say they expect little activity in the bank group for the next few sessions as investors await what will be a heavy flow of earnings news beginning next week. All of the top 25 banking companies are expected to report earnings next week.
Elsewhere, the New York securities firm Paine Webber included 10 new regional banks in its equity ratings. Four of the new banks - TCF Financial Corp. of Minneapolis, Synovus Financial Corp. of Columbus, Ga., SouthTrust Corp. of Birmingham, Ala., and BB&T Corp. of Winston-Salem, N.C. - began with "buy" ratings
Shares of BB&T gained 75 cents or 2.8% to $27.625, while SouthTrust shares rose 12.5 cents or 0.5% to $25.3125. TCF Financial climbed 31.25 cents or 1.1% to $28.625 and Synovus added 56.25 cents or 3.0% to close at $19.1875.
American Banker's index of the 50 largest banks rose 0.35%, while its index of 225 banks fell 0.63%. The broad market was mixed, with the Dow Jones industrial average climbing 80.61 points, to 10,727.19, while the Nasdaq composite and the Russell 2000 index of small-capitalization stocks both fell.
