It's time to give Banc One Corp. another chance, one analyst contends.

The Columbus, Ohio, banking company's stock-hammered since last month's disappointing, and by some accounts confusing, earnings announcement-has a lot going for it, said Ruchi Madan of PaineWebber Inc.

The selloff, which dragged shares almost 25% lower in the past month, was "overdone," Ms. Madan said Thursday. She added that her analysis of the earnings suggested strong performance in the quarters ahead.

To underscore her confidence, Ms. Madan lifted her rating on the shares to "buy" from "attractive."

The positive view runs counter to the sentiment of most analysts who follow Banc One. The majority remains unconvinced that internal operations will flourish anytime soon or that the pending merger with First Chicago NBD Corp. will produce out of the gate.

Still, there is no denying that Banc One stock may offer opportunity on pricing alone.

Banc One is trading at roughly 13.5-times its 1998 earnings per share, based on the consensus of First Call, a sister company of American Banker that tracks analysts' estimates.

Of the 30 largest banking companies, shares of Banc One trade most cheaply, Ms. Madan said.

Ms. Madan estimates Banc One will earn $4.10-meaning it is trading at an even cheaper 11.3 times earnings. And she said that projection could end up being conservative, depending on how the home refinancing market goes in coming months.

Ms. Madan said expense growth, which has been high among investors' worries, should slow in the third quarter.

"That may reduce concerns that expenses are 'out of control' at Banc One," she said.

In trading Thursday, Banc One shares dropped 68.75 cents, to $45.9375, as most bank stock fell.

In general, though, the overall market seemed to shrug off word that President Clinton ordered bombings in hostile parts of Afghanistan and Sudan to prevent more attacks of U.S. facilities.

The afternoon announcement simply slipped into a generally downward day. The Standard & Poor's bank index dipped 2.13% and the Dow Jones industrial average 0.94%.

Smaller banks were impacted but not to the degree they have been in recent days. The Nasdaq bank index dropped 0.39% and the S&P 500 0.59%.

Banks and thrifts remained sluggish despite signs the financial services industry continues to consolidate. The latest indication: American International Group Inc.'s $18 billion deal to buy SunAmerica Inc.

Chase Manhattan Corp. was off $2.50, to $65.375; Citicorp fell $4.9375, to $139; and J.P. Morgan slipped $3.875, to $122.8125.

Among regionals Fleet Financial Group shed 62.5 cents, to $77.75; Hibernia Corp. was down 31.25 cents, to $16.6875; and KeyCorp lost 62.5 cents, to $30.875.

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