Mellon Financial ( MEL) and FleetBoston ( FBF) are making strides to ease a Friedman Billings Ramsey analyst's concerns, and they were both upgraded to outperform from market perform Tuesday. Shares of Mellon rose $1.17, or 4%, to $28.87 at 4 p.m. EDT on the New York Stock Exchange, while Fleet added 34 cents, or 1.1%, to $31.15. Analyst Christopher Siedman believes Mellon is making progress in improving its institutional asset management franchise, and he sees optimistic trends in the company's private banking business and its mutual fund division Dreyfus. On this basis, he upped the company's rating and raised its price target to $33 from $29. Siedman expects better profit margins from Mellon's asset management business, in part, because cost-cutting could raise pretax margins from the midsingle digits to at least the midteens by the end of the year. Meanwhile, Dreyfus "has posted net inflows throughout the equity market downturn on the strength of huge inflows into its money market funds," Siedman said. The funds now focus more on equities, about 54% of long-term managed assets, up from 30% in 1995, which eases Siedman's concern about the possible loss of low-margin assets. Mellon's wealth-management unit and its private-banking business are both gaining ground, as well, Siedman said. The analyst raised Fleet's investment rating because the bank is improving its retail and wealth-management units. Siedman said Fleet's expected solid earnings could also be a result of several factors -- the company's improvement of Quick & Reilly and its investment-management franchise, a conservative approach to international operations and progress in repairing its standing in its core retail markets. Additionally, Fleet's exposure in Latin America and loans to risky companies have eased and aren't a threat to future profits. Seidman raised his full-year EPS estimates on the company to $2.43 from $2.40 in 2003 and to $2.80 from $2.70 in 2004. Analysts expect $2.37 a share and $2.72 a share, respectively. Based on the higher earnings estimates, the analyst also lifted his 12-month price target to $36 from $28.