While the broader markets sputtered at week's end, three banks in the Southeast-BB&T Corp., Century South Banks, and First American Corp.-showed some spark, buoyed by strong votes of confidence from analysts.
BB&T's "superior track record, expected revenue growth, and strong markets" make it a compelling selection, said Hope R. Willard at J.C. Bradford & Co.
In raising her rating to "strong buy" from "buy," Ms. Willard said the stock could hit $80 in the 12 months. Shares of the Winston-Salem, N.C., banking company closed Friday at $66.0625, down 25 cents.
The activity occurred as broader markets were see-sawing on jitters over upcoming first-quarter earnings. The Standard & Poor's bank index finished Friday down 0.58% and the Dow Jones industrial average 0.57%. The Nasdaq bank index was up 0.40%, and the S&P 500 fell 0.49%.
The Southeast's strong economy will help banks in that region score an average 12% increase in first-quarter earnings, Ms. Willard said.
BB&T is especially well-connected through its solid positioning in the Carolinas and Virginia and a "proven acquisition discipline that creates a strong base for growth," Ms. Willard said.
She also likes First American, which she upgraded to "strong buy" from "buy" and set a 12-month target of $60. Shares finished Friday at $47.875, down 37.5 cents.
The Nashville banking company consistently produces in-line or stronger- than-promised results through a diversification strategy that has included the purchases of SSI Group, an electronic health-care payment processor, and Invest Corp., a third-party investment product marketer.
First American is taking strides to become "one of the country's top- performing and most highly valued banks," Ms. Willard said.
The stock of Georgia's Century South Banks was up 25 cents, to $24.50, after an upgrade, to long term "buy" from "neutral" by John J. Mason at Interstate/Johnson Lane.
Shares of the $1.1 billion-asset company could hit $31 within 12 months as First American mines its high-growth markets, Mr. Mason said.
First American is on a growth tear that should double assets to $2 billion within two years, Mr. Mason said. "The company is emerging as a player and is positioned for significant future growth" in earnings as well as assets.
State Street Corp. received an upgrade to "strong buy" from "buy" by George A. Bicher at BT Alex. Brown. The stock rose 56.25 cents, to $67.4375.
Mr. Bicher increased 1998 earnings estimates by 4 cents, to $2.74, and 1999's estimate by 5 cents, to $3.20, citing market opportunities for the company's asset management services, like record keeping and accounting.
State Street "is continuing to benefit from very powerful secular trends-low inflation and an aging world population," Mr. Bicher said.
Shares of Dime Financial Corp. bucked the downward trend, jumping $4, to $37, on speculation that the institution was looking for a buyer. The Wallingford, Conn., company rose as high as $39 on the reports, which management declined to comment on.
And shares of Franklin Financial Corp. gained $2.38, to $25, after management announced a 2-for-1 stock split. This is the third time within a year that the Franklin, Tenn., company split its shares.