In perhaps the ultimate sign of a transformed banking industry, takeover speculation has reached the doors of J.P. Morgan & Co.

Morgan's share price surged Friday on market speculation that the New York institution, long regarded as the nation's premier banking house, could be subject to a merger or acquisition.

Deutsche Bank AG, Germany's largest bank, and Bankers Trust New York Corp., were being mentioned as possible suitors as shares of Morgan rose steadily on heavy volume throughout the morning. There was no firm evidence of a deal, however.

The stock ended the day Friday at $111.75, up $4.375, after being as high as $114.75 earlier in the day. A spokesman at Morgan declined to comment on either the market rumors or the activity in the shares.

Most analysts downplayed the prospect of Morgan as a target. At the same time, they did not entirely dismiss the notion that the company, once so indisputably independent, could now be vulnerable.

"People are reassessing their perception of Morgan," said analyst Marni Pont O'Doherty at Keefe, Bruyette & Woods Inc. She said it was possible to imagine strategic reasons for the company to team with another institution.

For instance, Morgan's first-class U.S. commercial and investment banking relationships could be invaluable to an overseas firm. Domestically, the $262 billion-asset company could team with another money- center to become a powerhouse in retail and private banking.

Certainly, Morgan is no longer seen as being untouchable.

The company, while retaining its position as the nation's fourth-biggest commercial bank, endured a rocky performance last year that raised questions about its prowess as a player amid the swift currents of international finance.

Morgan has also been growing at a slower pace than competitors and producing lackluster earnings relative to its peers.

All the while, market forces are inexorably pushing change. "We've got mergers going on all over the world," said George Salem of Gerard Klauer Mattison & Co. "The emphasis is now on size."

But, Mr. Salem views Morgan as an unlikely acquisition candidate right now. "This is not a sick bank. Morgan does not need a rescue," he said.

Other bank watchers echoed the sentiment, but none completely discounted the possibility. "Global consolidation will continue," said Bradley Ball at Credit Suisse First Boston. "You can never say never."

Elsewhere, the auction for First Commercial Corp., Little Rock, Ark. appeared near a close on Friday, with Regions Financial Corp., Birmingham, Ala., apparently the leading suitor.

Although other companies could still come in with higher bids, people familiar with the situation said Regions had offered $2.6 billion for First Commercial.

If a deal is struck it would be the biggest ever for the Alabama bank, which had $23 billion of assets as of Dec. 31.

Regions' reported offer translates to 26 times First Commercial's 1997 earnings. It struck some analysts as high, but the company has shown a willingness to ante up for acquisitions in recent months.

Regions executives have confirmed that the bank was a finalist in December's auction for Deposit Guaranty Corp., but lost to First American Corp., which offered 27 times earnings for the Jackson, Miss., bank.

News of Regions' bid for First Commercial was first reported on Friday by The New York Times.

Regions has made more than 40 acquisitions in recent years, its chairman and chief executive Carl E. Jones Jr. said in a recent interview. But these deals have mainly been for community banks. Its biggest deal to date was the $728 million acquisition of First National Bancorp, Gainesville, Ga., in 1996. Regions' asset size grew 22% in 1997.

If Regions were to acquire First Commercial, it would mark the bank's first foray into Arkansas. Through its many acquisitions, the bank has expanded from its Alabama base into Georgia, South Carolina, Louisiana, and Florida.

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