Princeton, N.J.-based Summit Bancorp, once considered an ideal takeover candidate, has lost much of its appeal, and its stock has fallen sharply in recent months.

Even as an independent company, investors are not sure how well $35 billion-asset Summit can perform. It has been damaged by falling loan growth and shrinking net interest margins.

Such concerns have sent Summit's stock price plummeting. On Thursday its shares hit a six-month low of $34.5625, tumbling 17% from their May 3 high of $43.75.

The company's price-earnings ratio, based on 1999 earnings estimates, is 13. That is well below the 16 price-earnings ratio of the Putnam, Lovell, De Guardiola mid-cap bank index, said Jacqueline Reeves, a bank analyst at the New York firm.

For years, bank analysts predicted that Summit would be snapped up. They saw it as strong in private banking and middle-market lending. Also, many Fortune 500 companies and their ancillary businesses are based in the New Jersey market.

Part of the reason it appeared on so many takeover lists, said Claire Percarpio, an analyst with Philadelphia-based Janney Montgomery Scott Inc., was its sagging loan growth. Potential acquirers, theoretically at least, thought they could increase loans and ultimately profits. Summit did not return calls.

The company's average loan growth for the second quarter was 0.5%, down from 2.2.% in the first quarter. Last year it registered 1.4% in the first quarter, 2.6% in the second and third quarters, and 3.9% in the fourth quarter, according to data compiled by Janney Montgomery.

The company's net interest margin has fallen steadily, to 3.92% in the second quarter, from 4.18% in last year's first quarter. That is especially bad news because Summit is heavily dependent on interest-rate spread revenue, Ms. Percarpio said.

In addition to its tepid performance, Summit is a victim of the market's current distaste for mergers. "Merger talk about most regionals has dried up" as bank stocks drop, said a bank trader.

In January, Michael Plodwick, a bank analyst at Lehman Brothers & Co., listed 10 companies in his "merger modeler" as possible acquirers of Summit. They included Bank of New York Co.; Bank One Corp. of Chicago; Bank of America Corp. and First Union Corp., both of Charlotte, N.C.; Fleet Financial Group of Boston; Chase Manhattan Corp. and Citigroup Inc., both of New York; and Mellon Bank Corp. and PNC Bank Corp., both of Pittsburgh.

Fleet is unlikely to buy Summit at this time because it is busy with its acquisition of BankBoston. First Union, which is suffering from a dropping share price, is struggling to make its acquisition of CoreStates Financial Corp. work.

Bank One has said that it not likely to make an acquisition soon because of the potential of the Internet, and because it is still busy integrating First Chicago NBD.

Citigroup and Chase are not interested in Summit, said an investment banker who declined to be named.

Large acquisitions by Bank of America, PNC, and Mellon are possible, but not likely considering the beating that most bank stocks have taken.

"Most of the likely buyers are busy," said Ms. Percarpio of Janney Montgomery. "Summit also is not all that eager to sell."

Meanwhile, analysts say they do not expect the company's stock to rebound in the near term. "Summit has been on some analysts' takeover lists for six years, and it still has not been sold," said Ms. Reeves, who has a "hold" on the bank. The market "needs to see a catalyst. And I do not believe that a catalyst is right around the corner."

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