- FB Financial ( NYSE: FBK ) stock dropped 4.5% in Tuesday afternoon trading after Piper Sandler analyst Stephen Scouten downgraded the Nashville-based bank to Neutral after the company guided for lower net interest margin in Q4 2022.
- "Overall Y/Y NII growth will remain solid, but no longer at the pace we had expected given what sounds to be rapid deposit cost increases," the analyst wrote in a note to clients.
- However, FB Financial ( FBK ) is now guiding to lower NIM in Q4 compared with Piper's assumption for a 19 basis point Q/Q expansion.
- In addition, the bank said mortgage losses will recur in Q4 2022 due to lower rate lock volume and a decline in mortgage servicing rights valuation. "We had been modeling breakeven for mortgage in Q1 2023 previously, but are now assuming some modest losses until H2 2023," Scouten said.
- The Neutral rating agrees with the SA Quant rating of Hold and diverges from the average Wall Street rating of Buy.
- In September, SA contributor ALG Research had already considered FBK's valuation unappealing.
For further details see:
FB Financial stock slides after Piper Sandler cuts stock to Neutral on NIM guidance