Stocks of midsize banks maintained their momentum Tuesday as investors bought shares on merger anticipation for the second straight day.

Fifth Third Bancorp stock rose $1.25 in the bustle, to $87.50. KeyCorp was up $2.5625, to $42.9375, and SunTrust Banks Inc. $2.4375, to $79.1875.

The action followed Monday's announcements of blockbuster merger agreements between BankAmerica Corp. and NationsBank Corp. and between Banc One Corp. and First Chicago NBD Corp.

Unlike the pattern after last week's Citicorp-Travelers Group announcement-bank stocks soared and then fell back the next day-on Tuesday many held and even added to Monday's gains.

This time "we're looking at bank-to-bank deals, and investors seem to be continuing to focus on the midsize franchises," said Joseph Duwan, analyst at Keefe, Bruyette & Woods Inc.

The market is also being buoyed by first-quarter earnings announcements that are dispelling earlier concerns by indicating many banks performed in line with, if not better than, analysts' expectations.

One exception was J.P. Morgan & Co., which dipped dipped 31.25 cents, to $147.3125, after disclosing first-quarter results that included a $215 million charge for job cuts and writeoffs.

The dip in Morgan shares-which are part of the Dow Jones industrial average-did not prevent the index from moving forward. For the day, the Dow was up 1.09%, and the Standard & Poor's bank index rose 0.17%. The Nasdaq bank index was up 0.48%, and the S&P 500 gained 0.55%.

Banking companies with market capitalizations between $10 billion and $25 billion appear most appealing, according to Tuesday's stock activity.

These institutions "are in the wheelhouse of where we do think consolidation will take place," Mr. Duwan said.

Bank United Corp. is "an ideal takeout candidate," according to Thomas H. Hanley of UBS Securities.

Shares of the Houston company rose $2.625, to a record $55.875, as Mr. Hanley initiated coverage with a "strong buy" rating.

"This is a franchise that just keeps looking better and better," Mr. Hanley said of 80-branch, $12.5 billion-asset Bank United, the largest thrift in Texas.

Over the past year, Bank United's commercial loans have increased by 124%, consumer loans by 76%, and retail checking accounts by 21%.

Moreover, Texas recently allowed home equity lending, and the resulting $20 billion annual market could prove a "boon" for well-positioned Bank United, Mr. Hanley said.

Wachovia Corp. shares are also very appealing, given the current merger climate, said John Coffey, banking analyst at Robinson-Humphrey.

Shares of the Winston-Salem, N.C., company rose $1.6875, to $89.9375, as Mr. Coffey raised his ranking to a "strong buy" from a "long-term" buy.

"Given the fundamental outlook, stellar performance ratios, and increasing bank consolidation activity, we view current valuations as an opportunity to buy a Cadillac for the price of a Chevy," Mr. Coffey said in a note to clients.

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