First Union Corp., Bank of America Corp., and Washington Mutual Inc. are on analysts' lists this season, but not for being nice.

With the fourth quarter nearing its close and the stock market turning to visions of next month's quarterly reporting period, the three are among those companies considered most likely to begin guiding Wall Street's yearend and 2000 earnings forecasts lower. If so, Bank of America and Washington Mutual would join a growing list of the nation's largest financial companies that have deflated investors' expectations this year. Indeed, profit forecasts for many of the largest companies have fallen steadily throughout 1999 - in some cases precipitously - as a confluence of sluggish revenue growth, margin pressures, and merger integration problems put a damper on once-lofty expectations.

Analysts said there has been a reversal this year of a multiyear trend in which banking companies consistently achieved earnings targets set by Wall Street by building fee income businesses and wringing cost savings out of acquisitions.

This year, projections made in January could not live up to reality in many cases as the largest banks hit the wall in terms of additional growth. "It was really a year in which those [high estimates] were not appropriate," said Carla D'Arista, an analyst at Friedman Billings Ramsey & Co.

If estimates on Wall Street are still too high, it is not because there was a sudden downturn in the industry but because conditions in some cases worsened faster than expected, analysts said.

"Negative industry pressures are having a greater impact" than originally anticipated, said Michael Mayo, an analyst at Credit Suisse First Boston. "The earnings weakness has been there all year, it just depended on when the banks finally recognized it."

Charlotte, N.C.-based First Union and Memphis-based Union Planters Corp. have seen the biggest decline in market expectations for yearend 1999 earnings since issuing profit warnings earlier this year. The analyst consensus for each company dropped 21% from January through last Friday, according to First Call.

At Regions Financial Corp. in Birmingham, Ala., its consensus target for the full year declined 9%. Summit Bancorp in Princeton, N.J., saw analysts lower their profit estimates 8% through the course of the year. Those companies, along with Cleveland rivals National City Corp. and KeyCorp, Bank One Corp. of Chicago, and Minneapolis-based U.S. Bancorp, have also issued profit warnings this year.

First Union's board reportedly met Tuesday to finalize the $235 billion-asset banking company's budget for next year. The company has already issued two profit warnings this year because of higher than anticipated expenses and economic uncertainty. Analysts said First Union had difficulties integrating earlier acquisitions of Philadelphia's CoreStates Financial Corp. and the consumer finance company Money Store.

A spokeswoman for First Union did not return phone calls.

Analysts said they expect First Union to lower Wall Street's outlook for year 2000 earnings in the coming days. Currently, the consensus calls for $3.74 per share in profits for next year, a decline of 24% from the 2000 outlooks set by Wall Street in January, according to First Call.

Bank of America may also begin guiding investor expectations lower for next year. The $621 billion-asset Charlotte banking company has been busily restructuring operations that were combined in its 1998 merger with NationsBank Corp., and some analysts said sluggish revenue growth has resulted. The yearend 1999 analyst consensus for the company was off 2% for the year through last week. Bank of America "could be on the brink of lowering guidance," Mr. Mayo said.

A spokesman, commenting on expectations for yearend 1999, "We have been providing minimal guidance based on uncertain business conditions and we expect to be in that mode for the rest of the year." On year 2000 earnings, the spokesman said the company would continue its practice of providing guidance at an annual analysts meeting in January.

At Washington Mutual, a $181 billion-asset Seattle company, revenues from mortgages have slowed down as that market loses its steam from last year. Executives said recently that more acquisitions may be in the works to maximize the potential of the operations Washington Mutual gained in its 1998 purchase of H.F. Ahmanson & Co. and its 1997 acquisition of Great Western Financial Corp.

Projections for yearend 1999 per-share earnings are already off 5% since January, and 2000 estimates have been lowered 7% since then, according to First Call. Analysts said Washington Mutual may use the fourth quarter to clean out its closet and start the next millennium on positive footing.

"Revenues in mortgages have dried up, and there are still costs from the integrations that haven't come out," said Charlotte Chamberlain, an analyst at Jefferies & Co. Inc. "They may wave the white flag."

A spokeswoman said the company has said recently it is "comfortable" with a range of $3.25 to $3.32 per share for yearend 1999. "We believe that we've given adequate information and see no need for any further details."

Mr. Mayo, from Credit Suisse, said lower expectations may be healthy after all, even if investors may not like them in the short run. "The environment is bigger than the banks," Mr. Mayo said. "The first step toward recovery is for the banks themselves to be more realistic rather than trying to stretch for every last dollar. It's a call to arms."

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