When higher bankruptcies began to erode bank credit quality, Banc One Corp.'s credit card portfolio was one of the hardest hit.

But now a Federal Reserve report is creating hope for a rebound by the Columbus, Ohio-based company, which reported a chargeoff rate of 5.86% in the second quarter.

"There is light at the end of the tunnel," said analyst Michael Mayo of Lehman Brothers Inc.

Based on history, he said, investors can expect Banc One to rebound early next year, as growth in consumer borrowing has started to wane.

On Wednesday, Mr. Mayo pointed out, the Federal Reserve reported that revolving debt increased just 1.3% in June. It was the smallest percentage increase since September 1994.

A peak in the growth of revolving debt preceded a peak in bankruptcies by a few quarters in the 1980s, Mr. Mayo. He also noted that "about 65% of Banc One credit card losses were bankruptcy related."

Mr. Mayo is maintaining his $50 price target for Banc One shares which were up 37.5 cents to $36.50 in trading Thursday.

The company's stock yield is 3.8% compared with the industry 3.4% and its price-to-earnings ratio is 9.9% compared to the industry's 10.2%, he noted.

The rebound from credit quality woes will be less pronounced, Mr. Mayo said, for Wachovia Corp. as well as for Boatmen's Bancshares, which lowered its chargeoffs in the second quarter.

Between now and yearend, shares of Banc One could be less vulnerable than those of its peers to the continuing surge in bankruptcy filings, analysts said.

Anthony Davis of Dean Witter Reynolds acknowledged that Banc One's exposure is slightly higher than other banks. "In June the company's chargeoffs were up 5.20%, which is 30 basis points higher than the major banks that we track."

In spite of this Mr. Davis, who met with Banc One's management Wednesday, said he doubted the slippage in credit cards would hurt earnings.

The bank has the advantage of its double-digit revenues, installment lending and soaring commercial fee income, and sales of annuities and mutual funds, Mr. Davis said.

"It easier to accommodate higher chargeoffs if other segments are doing well," he said.

Technical analyst Ken Tower at UST Securities, in New Jersey, has a "sell" on Banc One shares.

"After reaching $40, the price has moved sideways and is starting to move down," he said. He said the stock reached a plateau after rallying last year.

He said investors are becoming less optimistic about Banc One as bankruptcies rise.

Bankruptcies came to the fore after the Bank of New York reported taking a big reserve against chargeoffs in the second quarter.

In other news, UBS Securities initiated coverage of First Midwest Bancorp with a "buy," rating, sending the Itasca, Ill.-based bank's shares up 75 cents to $28.25.

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