FBK - FB Financial cut to Hold at Truist on prospects for lending NIM slowdown

FB Financial ( NYSE: FBK ) stock slid 5.1% in early Wednesday morning trading after Truist analyst Jennifer Demba downgraded the stock to Hold from Buy as credit conservatism as well as a tougher funding backdrop weigh on its loan growth.

Demba also pointed out that the bank's net interest margin is nearing its peak, and "mortgage results will likely contribute little to earnings medium term," as the housing market cools down amid historically high mortgage rates, she wrote in a note to clients.

For its third-quarter results , FBK saw its tax-equivalent net interest margin climb to 3.93% from 3.52% in Q2 and 3.20% in the year-ago period. Demba, meanwhile, thinks NIM will top out at in the low 4% level.

Loans held for investment stood at $9.11B in Q3, up from $8.6B in the prior quarter and $7.3B a year ago.

Seeking Alpha's Quant system had warned investors at the end of August that FBK is at high risk of performing badly due to negative EPS revisions and its overpriced level. Since then, the stock dipped 10.4% , while the S&P 500 index fell 9.6% , as seen in this chart .

Earlier this week, (Oct. 17) FB Financial Non-GAAP EPS of $0.68 misses by $0.12, revenue of $133.98M misses by $5.83M .

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