With a month to go in the third quarter, analysts are not red-flagging bank stocks, despite the commonly shared view that credit quality should worsen as the year progresses.

For a variety of reasons, any bad news on earnings may be slower to develop in this quarter than in the past.

One reason is that banks are waiting for the results of their Shared National Credit Reviews, which are expected in the latter half of the month.

"The $64,000 question this quarter will be credit and whether or not increased provisions will be necessary," said David C. Stumpf, senior bank analyst at A.G. Edwards & Sons.

Though many syndicate managers have a good idea of whether regulators think they should earmark certain of these large loans as nonperforming assets, the same does not hold true for banks that participated in a credit but did not lead it.

That means some syndicate managers will be waiting for the report to come out before they have a real sense about whether assets which have been looking weaker need to be thrown into the nonperforming bin.

"Even though the lead agent bank might have preliminary results of the exam, the manager may not be talking to the participating banks' syndicate managers," said Brock Vandervliet, an analyst who follows small- and mid-cap bank stocks at Lehman Brothers.

"It often comes down to whether the manager knows the people at the other bank," he said.

There's a second regulatory event that could push bad news on bank earnings to the end of the month: Securities and Exchange Commission passage last month of a rule requiring corporations to make financial information available to the public whenever they talk to analysts or investors.

"What's changing things most this quarter is the regulation," said Henry C. Dickson, senior banking analyst at Lehman. "There will be wider range of estimates, because any guidance we have is what we got before the rule [was passed]," he said.

Though the SEC rule does not take effect until Oct. 23, and many corporations are still in the dark on how rigorously it will be applied to activities like attendance at investor conferences, that has not stopped some banks from choosing the silent option.

Jennifer Thompson, an analyst at Putnam Lovell Securities in New York who covers the super-regional banks, said four of the institutions she covers - National City Corp., Firstar Corp., U.S. Bancorp, and Bank One Corp. - declined to give their regular quarterly earnings guidance.

"Some of these companies are being more conservative and have decided they will only talk when everyone can be there," such as in a conference call made available to the public, Ms. Thompson said.

Despite these two wild cards, the general consensus for bank earnings is that the third quarter could be a pleasant surprise.

"A lot of investors are waiting for bad news" that may not come, Ms. Thompson said.

Many banks have already increased their credit provisioning, because of a thorough scrubbing of their loan portfolios in the second quarter, when the Shared National Credit Reviews took place.

Syndicated loans, which received a lot of attention in the second quarter, are not the only asset-quality issue banks are facing.

"Based on the information we have now, we're less worried about the impact of the Shared National Credit exam than we were a month ago," Mr. Stumpf said.

But there is ample evidence to suggest that commercial credit, including smaller loans than those sold through a syndicate, in general is deteriorating, he said.

Credit quality aside, there is another factor that should aid bank earnings in the third quarter: a stabilizing interest rate environment.

In the second quarter many banks reported compressed net interest margins, as the Federal Reserve Board's interest rate hikes increased the banks' funding cost before they could start charging more on loans.

But with indications that the Fed is done or almost done with these upward moves, the banks' margins should already be improving.

"You should see the effects of asset repricing catching up with their liability repricing on the net interest margin this quarter," Ms. Thompson said.

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