Shares of National City Corp. rose a healthy $1.50, to $69.6875, on Monday after the Cleveland banking company said it intends to double its base of authorized shares to 1.4 million.
The announcement sparked new investor interest in the shares, which have recently lagged.
National City said the added shares could be used in connection with acquisitions or general corporate purposes.
"The stock has underperformed" in comparison with that of similar companies and the Standard & Poor's 500, said analyst Michael L. Mayo of Credit Suisse First Boston. Monday's price jump was "National City playing catch-up," he said.
Others said the renewed interest in National City is occurring ahead of anticipated strong first-quarter results.
"National City should have pretty good earnings growth, in the 17% range," said analyst Fred A. Cummings of McDonald Investments, Cleveland. He views National City as "a very well-managed company. They are a solid franchise, fully in control of their own destiny."
Meanwhile, most other bank stocks tallied gains as the stock market resumed its post-Dow 10,000 rally.
For the session, the Standard & Poor's bank index was up 1.60% and the Dow Jones industrial average added 1.63%, while the Nasdaq bank index was up 1.64% and the S&P 500 added 0.76%.
Shares of City National Corp., Beverly Hills, advanced $1.125, to $31.50, after favorable comments from analyst Joseph Morford of First Security Van Kasper.
"By almost any measure, City National ranks as one of the top-performing community banks in the country," Mr. Morford said. The company's shares are undervalued given its "tremendous franchise value and superior earnings performance," he said.
Mr. Morford expects City National to post first-quarter earnings per share of 54 cents, beating Wall Street's consensus estimate of 52 cents. He also thinks City National's "solid momentum should carry through for the next several quarters."
Shares of Hibernia Corp. improved 62.5 cents, to $12.125, after its president, Stephen A. Hansel, told investors that the New Orleans banking company would "power through" its loan problems.
Hibernia reported first-quarter net income of $29.6 million, off 28% from a year earlier.
Hibernia's earnings dip may be an anomaly. Analysts are expecting mostly upbeat reports.
"Bank earnings are going to come in pretty good this quarter," said David C. Stumpf of A.G. Edwards, St. Louis.
