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 (NYSE: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 (NYSE: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 (NASDAQ: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 (NYSE:BAP) was downgraded to Underweight by HSBC and Green Banchares (NASDAQ:GRNB-OLD) 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 (NASDAQ:COBZ), Columbia Banking System (NASDAQ:COLB), Fidelity Southern (NASDAQ:LION), First Financial (NASDAQ:FFBC) First Security Group (NASDAQ:FSGI), Glacier Bancorp (NASDAQ:GBCI), KeyCorp (NYSE:KEY), National Penn Bancshares (NASDAQ:NPBC), Northern Trust (NASDAQ:NTRS), Provident Financial (NYSE:PFS), Signature Bank (NASDAQ:SBNY) Sterling Bancshares (NASDAQ:SBIB) and United Community Banks (NASDAQ:UCBI).