are making no excuses for their battered sector.

"We're not in the right place at the right time,'' said Benjamin A. Plotkin, chief executive officer at Ryan, Beck & Co., a Livingston, N.J., securities firm. "We have a market that likes large-cap, high-growth stocks.''

Nonetheless, Mr. Plotkin and two other bank stock experts who spoke this week at the annual conference of America's Community Bankers say there are signs that small regional and community banks and savings institutions will fare better in 2000.

"I see a 10% to 15% appreciation for the group over the next year. We're putting money into the group,'' said Joseph A. Stieven, director of financial institutional research for Stifel, Nicolaus & Co., a St. Louis securities firm.

Smaller financial institutions have been outmatched by large banks and the general market. All three groups suffered during the big summer 1998 selloff, but large banks and the broader market rebounded and small banks have languished.

The American Banker index of the 50 largest banks and the Standard & Poor's 500 are both up 10% this year through Nov. 2, while the Nasdaq bank index -- a good measure of small-bank activity -- has lost a percentage point.

Experts attribute the poor share-price performance to a marked decline in bank and thrift takeovers in the past year and, as Mr. Plotkin noted, investors' continued fascination with large-capitalization technology-oriented companies.

Analysts say they do not expect these trends to disappear but that small banks are due for an upturn.

"The pendulum has swung back too far,'' said Mark Fitzgibbon, managing director for equity research at Sandler O'Neill & Partners in New York. "This is a wonderful time to be buying bank stocks if you can identify banks that can be oversold for technical reasons as opposed to fundamental reasons.''

Mr. Stieven offered, "People have gotten so bearish on bank stocks that things can't get worse.''

During their presentation the stock analysts isolated factors that contribute most to investor acceptance and resulting share-price gains.

Mr. Fitzgibbon distinguished between what individual and institutional investors desire in a bank stock. While most retail investors, for example, like to see banks employ excess capital to make dividend payments, institutional investors would rather see more tax-efficient capital uses such as a share buyback; banks need to decide which investors they really want to court and act accordingly, Mr. Fitzgibbon said.

He said his research indicated that two statistical yardsticks -- return on equity and nonperforming assets as a percentage of total loans -- have a particularly large impact in determining whether a small bank trades at a premium to its peers.

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