Having fallen 20% since mid-March, shares of UJB Financial Corp. advanced on Monday after receiving a vote of confidence from Dean Witter, Discover & Co.

Analyst Anthony Davis raised his recommendation to "accumulate" from "neutral."

He said UJB, based in Princeton, N.J., may post stronger-than-expected earnings in the second quarter.

In late trading, UJB was up 75 cents to $23.75, but still well below the 52-week high of $29.375 reached three months ago. The analyst noted that the stock recently traded at 130% of book value, versus 170% for other regional banks.

Real Estate Woes

Like other northeastern banks, UJB's profitability has slumped in the past few years because of sour real estate loans.

But its recovery is about to blossom, according to Mr. Davis.

He anticipates the bank will earn 40 cents a share during the second quarter, up 90% from the 21 cents it tallied in the same quarter last year.

For the full year, he expects UJB to earn $1.75, against $1.09 last year. He estimates next year's earnings at $2.50 per share. He cited falling credit costs and improving asset quality as principal factors.

Another analyst who likes the stock said the bank is also in a position to benefit from resumption of loan growth.

Apparent Strength

"They are tops in middle-market lending in their area," said Anthony J. Polini of Mabon Securities Corp. "And they are going to get more than their fair share of the new loans" as lending growth resumes.

As of March 31, UJB had $1.3 billion of middle-market loan commitments, he said, "and my guess would be that this is stronger than other banks." Some banks do not disclose such data, making comparisons difficult.

Mr. Polini believes that UJB benefits from the difficulties of a major competitor, Midlantic Corp., while the state's largest bank, First Fidelity Bancorp., is focusing on retail banking.

Mr. Polini, who recently joined Mabon from A.G. Edwards & Sons, St. Louis, does not yet have an official rating on the stock, but said "we definitely like it and feel it is a good value at this level."

He expects UJB to earn $1.70 per share this year and $2.25 to $2.50 next year. The stock, he feels, could trade in the low 30s within 12 months.

UJB has periodically been the subject of takeover speculation, but neither Mr. Davis nor Mr. Polini thinks there is a "takeover premium" in its stock at the current price.

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