WAL - Wells Fargo Analyst Downgrades ASB BANC FIBK FHN Citing Interest Rate Pressures And Credit Risks | Benzinga
Wells Fargo analyst Timur Braziler has assumed coverage of 15 banks in addition to the seven currently covered. The analyst transferred coverage of midcap banks, downgraded 4 to Equal Weight, and became more selective given the risk to earnings (rates, credit) and delayed consolidation benefits, mitigated by inexpensive valuations.
His new ratings are almost equally split between Overweight and Equal Weight after the downgrade of 4 banks to Equal Weight. The main themes reflect the "3 C's" - Competition for deposits in a higher-for-longer rates environment; Credit given increased normalization in CRE and C&I relative to his prior expectations; and Consolidation that can be a solid long-term tailwind but also seems unlikely to impact the near-term much.
Braziler's top picks include F N B Corp (NYSE: FNB), Western Alliance Bancorp (NYSE: WAL), East West Bancorp Inc (NASDAQ: EWBC), Pinnacle Financial Partners Inc (NYSE: PNFP).
FNB benefits by drawing in deposits from lower-cost rural markets and deploying the funds in recently entered, higher-growth geographies.