Shares of Signet Banking Corp. on Thursday reversed course, falling 50 cents after gaining 11.6% this week.

Banking industry analysts said the stock, which closed at $27.125, had been boosted by a new wave of takeover rumors, with likely acquirers including such banks as First Union Corp. and Wachovia Corp.

The speculation was likely triggered by Richmond, Va.-based Signet's flat second-quarter earnings and projections of the same for the third quarter.

In the volatile age of bank consolidation, Wall Street has interpreted any such sign of weakness as the equivalent of planting a "For Sale" sign in front of the bank's corporate headquarters.

A number of stock analysts raised their Signet ratings this summer, saying that shareholders would likely benefit from either a sale or improved performance.

In a Sept. 18 report, Thomas F. Theurkauf Jr. of Keefe, Bruyette & Woods Inc. said Signet's information-based strategy has shown "mixed results."

Additionally, Mr. Theurkauf wrote that if "internal performance enhancements do not bear fruit, an outright sale of the bank remains a viable option."

Other analysts said the speculative bubble in the stock in the past week was unwarranted.

"At some point this is a consolidation candidate, but now is just not the right time," said Merrill H. Ross, a bank analyst at Wheat First Butcher Singer.

"I still think that they are vulnerable, but it just doesn't sound like a company that is negotiating a sale," she said.

A company spokeswoman Thursday reasserted Signet's interest in remaining independent.

The stock plunged to $26.25 on Thursday before rebounding.

On Wednesday, Ms. Ross returned to an "outperform" rating on Signet after upgrading the bank to "buy" following Signet's summer announcement.

Ms. Ross also referred to a $320 million tax liability that a company acquiring Signet would face.

Signet has met with consultants to evaluate its cost structure.

Restructuring is expected soon.

In other news, Jefferson Bancshares in Charlottesville, Va., was one of the biggest bank stock gainers on the day, rising $2.68 to close at $27.187.

The $2.1 billion-asset bank announced a $35 million stock buyback program early Thursday morning and a 22-cent dividend.

The stock of Dauphin Deposit Corp. had a third straight strong day on continued takeover speculation, gaining 37.5 cents to close at $32.875.

"Some folks are betting that (a deal for Dauphin) will happen pretty soon," said Charles Whittman, a bank analyst at Wheat First.

Separately, Frank J. Barkocy at Josephthal Lyon & Ross Inc. reiterated his "strong buy" rating on PNC Banking Corp., and raised his 1996 earnings estimate to a range of $2.90-$2.95 from $2.90.

"The company had a smooth transition in absorbing the Midlantic acquisition," he said. "The quarter will reflect some further margin expansion as they have continued to reduce their lower yielding securities portfolio."

Mr. Barkocy increased PNC's price target for the next 12 months to $38 from $36.

Also, Fred Cummings, an analyst at McDonald & Co. raised Providence Bancorp to "buy" from "hold."

Providence gained 25 cents to close at $43.25.

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