Bank stocks have outperformed the overall stock market during the last several weeks.

The difference reflects the industry's strength relative to other businesses, analysts say.

Over the past month, the American Banker stock index has risen 5.09%, compared with a 3.03% rise in the Standard & Poor's 500 composite index. On Thursday, bank stocks fell 0.22% and the S&P 500 dropped 0.70%.

"Banks are winning by default," said Anthony Davis, an analyst at Dean Witter Reynolds. He said that though some banks posted strong third-quarter earnings, about one-third of those he follows failed to meet expectations. "It wasn't as great a quarter as we hoped."

Still, at a time when third-quarter earnings in other businesses disappointed many investors, many banks posted results sufficient to lift their stocks.

Among the 27 regional banks Mr. Davis covers, operating earnings were up 9% from the second quarter but off 3% from a year earlier.

And as earnings in other industries fall back to earth after some booming quarters, bank stocks should perform well, predicted Tony Howard, an analyst with First of Michigan Corp.

"It was very hard for banks to compete when the economic cycle was in sharp recovery, as it was in 1993 and '94," Mr. Howard said.

Lehman Brothers analyst Michael Mayo agreed that investors battered by other businesses might seek refuge in banks. "Investors like a place to hide," he observed.

Banks' willingness to redeploy their growing capital by buying back shares has also made their stock attractive.

Some analysts were concerned about the effect on stock buybacks of a Securities and Exchange Commission ruling in March requiring banks to suspend repurchase programs when they merge with other banks on a pooling of assets basis.

But since then Chase Manhattan Bank, CoreStates, and U.S. Bancorp have instituted or expanded their buybacks, Mr. Mayo said.

As long earnings continue to grow steadily, Mr. Mayo said, banks should continue to buy shares, boosting the value of their stock.

James Schutz, an analyst at Chicago Corp., said earnings should remain strong unless interest rates rise unexpectedly.

Mr. Schutz said that though a few banks, such as Barnett Banks Inc. and First Bank System Inc., failed to meet analysts' expectations, "overall, banks have come through on earnings."

Mr. Howard said earnings were distorted at banks that own savings and loans and therefore had to help replenish the thrift insurance fund. He said the fourth quarter would provide a truer read on those banks.

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