J.P. Morgan Securities analyst Catherine Murray initiated coverage of Banc One Corp. with a "market performer" rating and started off NationsBank Corp. with a "buy" recommendation.

She favored NationsBank because of its soon to be completed balance sheet restructuring and its low stock price, which already reflects the possibility if dilution from any acquisition the southern banking giant might do.

As a result, she predicted NationsBank stock would have a total return of 20% to 25% in the next 12 months. Banc One would have a price appreciation of only 12% in that time period, she projected, noting that the Columbus, Ohio-based company is still a year away from completing its own balance sheet restructuring.

NationsBank shares finished down 12.5 cents at $59.375, and Banc One shares finished down 25 cents at $31.25.

Both banks are expected to be survivors in a rapidly consolidating industry, but investor fears of dilutive acquisitions have kept their stock prices low. Interestingly, those low prices have hampered their ability to acquire other banks.

"With respect to NationsBank, their philosophy has always been to finance a large acquisition, so if they do one, they will look to the market to help them fund it," Ms. Murray said. "That means by definition they will need deal terms acceptable to the market."

NationsBank's earnings will grow 15% this year and 12% next year, she said. The bank is expected to be interest-rate neutral within two quarters, she said. Contributions from noninterest income, particularly mortgage servicing and investment banking, should grow to 36% of total revenues in 1996, she said. Last year noninterest income accounted for 33% of revenue.

At Banc One, the balance sheet restructuring still has a lot of work left, Mr. Murray said. Also, the company's new corporate centralization policy could lead to cultural clashes that would hamper productivity, she warned.

Natwest Securities Corp. analyst Stephen Berman upgraded Bankers Trust New York Corp. to "accumulate" from "hold." Mr. Berman said the worst was over for the beleaguered bank, which has been rocked by huge derivatives losses in the past year. Shares finished the day up 87.5 cents at $65.

Salomon Brothers analyst Carole Berger upgraded from "hold" to "buy" shares of First Tennessee National Corp., Wells Fargo & Co. and Crestar Financial Corp. She downgraded Mercantile Bancorp. to "hold" from "buy."

Ms. Berger cited First Tennessee's mix of businesses, and predicted the stock would appreciate 20% by yearend. The stock closed up 75 cents at $51.

Wells Fargo is the most profitable company in the Salomon bank universe, she said, and its stock should reach $215 in the next year. The shares were down 87.5 cents at $178.

Richmond, Va.-based Crestar has been very successful with its acquisition strategy in the highly lucrative Virginia-Washington, D.C. market, she said. The bank is also a prime acquisition target, she added. Shares finished up 50 cents at $52.50.

Ms. Berger did not issue a statement on the Mercantile downgrade. The St. Louis bank's shares finished up 25 cents at $43.50.

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