Most bank stocks ''do well through thick and thin,'' comments Richard Schmidt , senior analyst at Advest Inc., a securities firm based in Hartford, Conn. ''They are nothing to get excited about - unless you get into a dynamic environment, like now.''
The dynamic environment is being whipped up by deregulation, mergers, interest rates, and poor foreign loans. Bank stock analysts say it's generating an overcast outlook for investment in the old tried and true - the major money-center stocks. Meanwhile, they add, investors of certain regional bank stocks and thrifts now going public could be in for some sunshine.
''We envision continued contrasting patterns of bank stock performance, with selected quality regionals outperforming the overall market, and money-center banks doing no better, or a bit worse, than broad stock market indexes,'' writes George Salem in his latest report on bank stocks for A. G. Becker Paribas Inc., a New York brokerage house.
Mr. Salem points out that regional banks, like Security Pacific in California or Norwest Bank Corporation in Minnesota, have better loan quality and loan demand than many of their money-center rivals. These massive banks, which include Manufacturers Hanover Trust Company and Chase Manhattan in New York, ''face years'' of working out their problem loans to third-world countries, Salem writes. The money-center banks are also suffering from a decline in commercial loans, which Salem expects will not improve until early next year at the earliest.
''You could find one or two money-center bank (stocks) that will do well . . . but from the investor side, there are enough negatives that you might do better elsewhere,'' Advest's Mr. Schmidt agrees. The market's dim assessment of these banks is reflected in the low price/earnings multiples of their stock. They are selling at prices only about five times the level of earnings, while regional bank stocks are selling at six, seven, and eight times earnings.
The regionals have it over the money centers in a number of areas, Schmidt says. One is that, compared with the money centers, their costs are less. The money-center banks ''buy a lot and lend a lot'' to the world's largest companies and to other countries, he explains. ''The (profit) spreads are narrow.'' The banks count on volume, but commercial loans are on the downswing now. Regional banks, on the other hand, have lower costs of funds. And they are dealing with smaller firms on a more personal basis, and thus may get better spreads, Schmidt says.
C. Edward Hodges, a bank analyst at Prescott, Ball & Turben, another brokerage firm, believes regionals have the upper hand because of their ''merger appeal.'' Deregulation is prompting a wave of interstate banking and mergers over the industry. Bank holding companies are looking around and could offer ''a substantial premium'' to shareowners holding securities of a bank that they buy out.
For stockholders with a share in the holding companies, the appeal is great too. These companies will ''hold huge market positions . . . and won't suffer the vicissitudes of interest rates as much as money-center banks will,'' Mr. Hodges explains.
But deregulation is the cause of more than mergers. It is allowing thrifts to go beyond the world of savings accounts and mortgage loans and into commercial loans and higher-paying accounts. The thrifts, however, need a lot more capital to venture forth into this new world. The quickest and least expensive way to get it is to sell stock.
''Over the next five years we will see a dramatic amount of S&Ls going public ,'' Hodges says.
The increase has already been dramatic. Robert Chaut, a senior research analyst at A. G. Becker, says S&L conversions really didn't get under way until 1976. Up through last year, he says, S&Ls had only raised about $650 million through the stock market. So far this year, they have sold almost $2 billion in new securities, ''and they'll sell another billion or two before the year is up, '' Mr. Chaut continues.
Interest rates is what has made them so appealing to investors. Bank and thrift stocks are among the most sensitive to interest rates, and with rates steadily coming down in the last year and a half, banks have had no trouble raising the kind of capital they wanted through the stock market.
But the decline in interest rates has skidded to a stop and it looks as if they will at least stay flat until the end of the year, Chaut says. Now banks have trouble getting the prices they want.
For instance, Philadelphia Savings Fund Society expected to sell 32 million shares in August at $15 to $20 a share. ''But the market was down during that period and interest rates were up,'' says a spokesman at the bank, so the bank did not price or issue its shares to the public. It will do so later this month, but at a price in the $11-to-$15 range.
For investors, this kind of pricing could mean a good buy. ''New conversions are being done at relatively large discounts, so you do get a better value,'' Chaut says. On the other hand, the S&Ls haven't been able to pay dividends, as regionals or money centers have. This can make S&L stock unnattractive for shareholders who need dividend income.