by Angus Robertson
The number of US banks on the FDIC’s Problem Banks list has grown to from 829 to 860, a fact reflected in recent analyst activity. There were 14 downgrades of regional banks by analysts tracked by Alacra Pulse in the last 30 days, exceeding the 9 upgrades during the same period. Of these banks, 6 have a positive rating , 2 are negative and the remaining 15 are neutral.
Notable on the positive side was M&T Bank (MTB), which was upgraded to Buy by Stifel Nicolaus and to Outperform by RBC Capital after it agreed to acquire the ailing Wilmington Trust. RBC has a price target of $86. BMO Capital today initiated coverage on the Buffalo, NY bank with an Outperform rating and $85 target.
Jefferies & Co earlier this month started coverage with a Hold rating and $88 target. Keefe, Bruyette & Woods and Credit Suisse boosted their price targets on MTB to $79 and $90, respectively, while Citigroup moved to $86 from $80 with a Hold rating. M&T closed Tuesday at $77.11.
BB&T (BBT) was upgraded to Buy with a target of $28 at Janney Montgomery Scott, despite being one of several regional ranks whose credit ratings were downgraded by Moody’s. Citigroup maintained a Buy rating and trimmed its target to $35 from $38 after the bank announced its third quarter earnings. Noted banking analyst Dick Bove at Rochdale Securities is a buyer of BB&T with a target of $28. Bove likes the fact that loan volumes are improving. BB&T closed Tuesday at $23.59.
Also upgraded despite a Moody’s downgrade was Zions Bancorporation (ZION), lifted to Neutral from Underperform by Credit Suisse with a target of $26. Jefferies & Co initiated coverage of Zions with a Buy rating and $26 target, while D.A. Davidson started it at Buy with a $31 target. Morgan Stanley maintained its Overweight rating. Zion’s closed Tuesday at $19.55.
On the negative side Credicorp (BAP) was downgraded to Underweight by HSBC and Green Banchares (GRNB) was downgraded to Sell by Raymond James Financial. Analyst Mark Muth, of Howe Barnes Hoefer & Arnett, said that while there is no immediate worry that the subsidiary, GreenBank, will fail, holding company Green Bankshares probably needs to raise $100 million to $125 million.
Banks downgraded to a neutral rating included CoBiz Financial (COBZ), Columbia Banking System (COLB), Fidelity Southern (LION), First Financial (FFBC) First Security Group (FSGI), Glacier Bancorp (GBCI), KeyCorp (KEY), National Penn Bancshares (NPBC), Northern Trust (NTRS), Provident Financial (PFS), Signature Bank (SBNY) Sterling Bancshares (SBIB) and United Community Banks (UCBI).