Wells Fargo Analyst Downgrades ASB, BANC, FIBK, FHN Citing Interest Rate Pressures And Credit Risks
Portfolio Pulse from Anusuya Lahiri
Wells Fargo analyst Timur Braziler has downgraded four banks to Equal Weight from Overweight, citing interest rate pressures and credit risks. The banks are Associated Banc-Corp (ASB), Banc Of California (BANC), First Interstate BancSystem (FIBK), and First Horizon Corp (FHN). Braziler's top picks include F N B Corp (FNB), Western Alliance Bancorp (WAL), East West Bancorp Inc (EWBC), and Pinnacle Financial Partners Inc (PNFP).
October 05, 2023 | 4:30 pm
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NEGATIVE IMPACT
ASB was downgraded to Equal Weight from Overweight due to a higher-for-longer interest rate environment that will pressure NII trends.
The downgrade is due to the pressure on Net Interest Income (NII) trends from a higher-for-longer interest rate environment.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
BANC was downgraded to Equal Weight from Overweight. The analyst still favors the combination with PacWest Bancorp (PACW) but sees limited near-term opportunities for shares to move higher.
The downgrade is due to limited near-term opportunities for shares to move higher until the deal with PACW is closed.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
FHN was downgraded to Equal Weight from Overweight due to idiosyncratic headwinds and the lack of near-term catalysts.
The downgrade is due to idiosyncratic headwinds and the lack of near-term catalysts.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
FIBK was downgraded to Equal Weight from Overweight due to underperformance in the current rising rate environment and several bumps in credit.
The downgrade is due to underperformance in the current rising rate environment and several bumps in credit.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
EWBC is a top pick by the analyst, benefiting from idiosyncratic deposit trends and a conservative approach to lending.
EWBC is a top pick due to its idiosyncratic deposit trends and a conservative approach to lending.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
FNB is a top pick by the analyst, benefiting from drawing in deposits from lower-cost rural markets and deploying the funds in recently entered, higher-growth geographies.
FNB is a top pick due to its strategy of drawing in deposits from lower-cost rural markets and deploying the funds in recently entered, higher-growth geographies.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
PNFP is a top pick by the analyst, being the best bank in the Southeast, the best-performing geography in the U.S.
PNFP is a top pick due to its position as the best bank in the Southeast, the best-performing geography in the U.S.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
WAL is a top pick by the analyst, with industry-leading deposit growth expected to drive the shares higher.
WAL is a top pick due to its industry-leading deposit growth, which is expected to drive the shares higher.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100