While most banks met or beat first-quarter earnings estimates, some analysts are unimpressed. They say fees and trading revenues propelled the performance while obscuring steady slippage in more traditional profitability drivers, like lending.

"Basic, core bank earnings are idling," said Lawrence W. Cohn, research director at Ryan, Beck & Co., Livingston, N.J. "They're not showing much loan growth at all."

Bank of New York Co., Hibernia Corp., and KeyCorp all got high marks this quarter for quality earnings that mixed loan growth with recurring fee income. The market rewarded the accomplishments by boosting their share prices.

At the same time, few distinctions are being drawn in cases where earnings are less than robust. For instance, Chase Manhattan Corp. was up $4.4375 a share, to $139.125, and Citicorp gained $2.25, to $160.25, after reporting high trading profits Tuesday.

The institutions fell short on core earnings and relied on factors like nonrecurring events to fuel income.

PNC Bank Corp. is also in this group. "Without the benefits of falling reserve levels, share repurchases, and securities gains, PNC has experienced nil earnings growth for over the last year or so," said David C. Stumpf, banking analyst at A.G. Edwards & Sons.

The situation could become acute, since banks lose the chance to sell other products and services linked to loans never made, analysts say.

"If banks can't grow loans in this environment, what will happen when the economy slows?" Mr. Cohn asked.

To be sure, interest income on loans still accounts for more than 50% of banks' net earnings. But that ratio has been decreasing as banks build fee businesses to better compete with other financial services firms and to weather cyclical bumps in business.

Banks are prudent to cultivate various revenue sources, said Frank J. Barkocy, banking analyst at Josephthal & Co. "It gives you a bit more stability in your earnings structure," he said.

At the same time, as credit quality concerns grow, fee income offsets the pressures to make questionable loans, he said.

Though noninterest-income businesses like mutual fund sales are sustainable, impressive gains from trading, securities sales, and asset sales can be deceiving.

These revenue sources "can't continue forever" at such a pace, Mr. Cohn said.

The Standard & Poor's bank index slipped 0.60%, and the Dow Jones industrial average gained 0.47%. The Nasdaq bank index increased 0.23%; the S&P 500, 0.25%.

Banks and thrifts, large and small, continue buyback programs to boost their stock prices. But Leeds Federal Bankshares, Baltimore, dipped 12.5 cents, to $20.875, after announcing plans to repurchase up to 275,000, or 5.3%, of its outstanding shares.

Of late, the stock price has not "adequately reflected" the company's long-term business and earnings prospects, said Gordon E. Clark, chief executive officer of the $291 million-asset institution.

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