- Stephens analyst Matt Breese downgraded First Commonwealth Financial ( NYSE: FCF ) to Equal Weight from Overweight after the shares outperformed the Nasdaq BKX Index over the past year, YTD, and six months .
- While the bank's fundamentals appear solid, its growth in assets could reduce its fee income due to regulatory requirements, the analyst said. First Commonwealth ( FCF ) shares are slipping 1.6% in Wednesday midday trading.
- "At $9.5B in assets, FCF is knocking on crossing the $10B threshold, which will lower fee income by $13.0M-$13.5M due to the Durbin amendment, impacting interchange income," Breese explained in a note to clients. "Potential lost revenue equals ~$0.11 per share in EPS, or ~7% of our 2023 EPS estimates and would lower our 2023 ROA/ROTCE outlook to ~1.35%/16.0% from ~1.45%/17.5% currently."
- Breese's Equal Weight rating contrasts with the SA Quant rating of Strong Buy .
- Last month, First Commonwealth ( FCF ) delivered Q2 earnings that matched the consensus estimate and revenue that beat.
For further details see:
First Commonwealth Financial downgraded to Equal Weight at Stephens