Wells Fargo analyst Timur Braziler has assumed coverage of Associated Banc-Corp (ASB), Banc of California (BANC), First Horizon (FHN), and First Interstate (FIBK) as part of a broader research note on Mid-Cap Banks, downgrading the four names to Equal Weight from Overweight. The firm states that it is turning “more selective” on the sector amid risk to earnings from rising interest rates and credit risk. For Banc of California, the analyst also notes merger benefits of PacWest deal being delayed until after closing, and for Associated Banc-Corp, the analyst states that higher rates hurt the company more. The firm adds that heading into Q3 results, its Top Picks in the Sector are Western Alliance (WAL), where deposits should create a “beat and raise story” and FNB (FNB). Wells Fargo is also positive on its “core holdings” Pinnacle Financial (PNFP) given that its relatively less exposure to commercial real estate and East West Bancorp (EWBC).
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