The upside and downside of asset-sensitive balance sheets aren’t mirror images of each other, but it is nevertheless safe to say that highly asset-sensitive banks like Comerica (CMA) have a lot to lose as the Fed shifts toward rate cuts. Making matters worse, Comerica’s low-cost deposit base doesn’t give much leeway for further cuts and the high loan/deposit ratio limits flexibility. Oh, and based upon second quarter results, it looks like there are some credit concerns in the energy portfolio.
It’s not so surprising that these shares have been weak – down more