Less than two years after the megamerger that created Chase Manhattan Corp., company officials have subtly altered their pitch to investors, and the market likes what it's hearing.
Shares climbed $1 to $112.375 Thursday in the wake of a session with analysts at the bank's New York headquarters at which officials emphasized growth rather than cost savings.
They "gave a strong presentation about the potential for growth and successes to date," said banking analyst Joel Silverstein of Prudential Securities. Mr. Silverstein reiterated his "buy" recommendation for the $280.7 billion-asset banking company.
"A lot of focus has been on merger savings," Mr. Silverstein said. "Now, you'll see them leveraging their strong business units."
He said the company's national consumer focus targets credit card and mortgage operations as areas for growth. The mortgage unit, under Thomas Jacob, is doing very well after a slow start following the merger, mortgage industry executives say.
Mr. Silverstein also reiterated his "buy" recommendation on NationsBank Corp., noting the company had filed its proxy in connection with its planned purchase of Barnett Banks Inc., and "everything looks to be on track" for the deal to close on schedule.
Shares of NationsBank were up 56.25 cents to $67.4375.
Bank shares joined a broad rally encouraged by signs of stability from overseas. Japan's stock market rose after the government indicated it will help banks get rid of bad loans that have been crippling the economy.
Among large banks, Citicorp rose $1.75, to $127; J.P. Morgan & Co., gained 75 cents to $116.125; and Wells Fargo & Co. climbed $5 to $295.875.
Bank stock investors are encouraged by current market conditions. "It's a better time now than it was two weeks ago," when the markets were swaying, said James D. Oelschlager, chief investment officer at Oak Associates, a money management firm in Akron, Ohio.
The recent selloffs of bank shares was "overdone," he said. Oak Associates, which manages $6.8 billion of assets, has been buying shares of Citicorp and NationsBank, he said.
Among regional banking companies, Cleveland-based National City Corp. rose $2.625, to $67. The company agreed this week to buy an investment company that serves upper end customers.
The company, Sterling Ltd. Co., manages about $435 million of assets for about 100 families. The move should help National City better market itself as a private asset management company, analyst said.
Countrywide Credit Industriesshares rose $2.5625%, to an all-time high of $41.0625. Smith Barney analyst Thomas O'Donnell released a research note attributing the surge to takeover speculation.
Mortgage industry sources said domestic banks were unlikely acquirers because Countrywide books its servicing assets in a different fashion than most banks. Some said Countrywide had been shopping itself to a foreign institution. Last month, National Australia Bank bought HomeSide Inc.
People's Heritage Financial rose $1, to $42.375, after Lehman Brothers reiterated a "strong buy" recommendation.
The Portland, Me., institution "is poised to see multiple expansion," said Lehman Brothers analyst Bruce Harting. He sees earnings growth better than that of the broad banking industry through acquisitions, including the pending purchase of CFX Corp.
The CFX purchase, for $627 million in stock, "looks very accretive even before potential revenue enhancements and leverage are considered," Mr. Harting said.