A tougher market may help Commerce Bancorp in New Jersey stand out from the crowd, analysts say.

Earnings at the Cherry Hill banking company can keep growing 15% a year or more, they estimate. Profit growth at similar companies could retreat as loan growth slows and fee income dwindles, they say.

"This one's a keeper," said Edward Najarian, banking analyst at Wheat First Union. "You want an institution with a strong focus and sustained earnings per share momentum."

Commerce Bancorp is showing up on the short list of more analysts, who are searching for jewels among the battered regional banks.

Industry watchers say the selloff of regional bank stocks has been excessive, but market volatility and signs of a slowing economy have made them hesitant to recommend all such stocks.

Commerce Bancorp shares, which gained 50 cents to close at $39.875 on Tuesday, could top $50 a share in the next 12 months, analysts say.

The $4.4 billion-asset company is a standout among commercial banks, said Cassandra Toroian, a banking analyst at Ryan, Beck & Co.

"An aggressive expansion strategy and a proven ability to be a true retailer" make it a master at gathering low-cost deposits that fuel earnings growth, Ms. Toroian said.

The company's recent deal to acquire Prestige Financial Corp., with $310 million of assets and eight branches in central New Jersey, is considered a example of adaptability.

Commerce had generally expanded by opening new branches.

But this year it has made two acquistion deals-the one with Prestige is the second-to expand into tough-to-crack areas, analysts said.

Commerce plans to add almost a dozen new branches and introduce its sales culture to Prestige, while allowing a local board to run the unit.

"If a downturn in the domestic economy is looming, it certainly won't be evident in third-quarter results" for Commerce, said David Stumpf, a banking analyst at A.G. Edwards & Sons.

Per-share earning will probably turn out to have grown 15% in the third quarter, mostly because of core operations rather than securities gains, Mr. Stumpf said.

He also expects "above average" growth of 16% for the entire year, 15% in 1999, and 13% or more in 2000.

The praise came as broad stock market indexes posted modest gains on sentiment that overseas markets, while not improving much, offered no new negative developments.

The Standard & Poor's bank index rose 1.23%, and the Dow Jones industrial average was off 0.45%. The Nasdaq bank index slipped 0.32%, while the S&P 500 rose 0.58%.

Citicorp dropped $1.50, to $95.125, and Travelers Group 25 cents, to $39.375. The Fed is to consider their merger plan today.

Among other gainers was J.P. Morgan, whose stock rose $2, to $88.0625.

That was a partial recovery from a decline Monday after Merrill Lynch & Co. reduced its estimate of Morgan's earnings.

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