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There are several financial stocks that are taking a beating today after a rash of downgrades by Merrill Lynch (NYSE: MER) this morning. It has definitely been a couple of tough months for the financials as investors worried about what impact the declining housing market would have on their bottom lines. In the past week or so things have seemed to at least level off,, but according to Merrill Lynch there may still be some troubles ahead for a handful of Mid-Cap banks out there.
The banks that Merrill discussed today are those that the company views as being vulnerable to margin deterioration in the face of lowered earnings expectations and the possibility of future rate cuts by the Federal Reserve. Banks that Merrill views as possessing "asset sensitive" balance sheets (meaning their assets reprice quicker than their liabilities) were on the top of the list of downgrades.
Here are a couple of the banks to Merrill lowered today:
- City National Corp (NYSE: CYN) - downgraded to a sell from a neutral; stock is down 1.5%
- Cullen/Frost Bankers Inc. (NYSE: CFR) - downgraded to a sell from a neutral; stock is down 3.3%
- First Midwest Bancorp (NASDAQ: FMBI) - downgraded to a sell from a neutral; stock is down 3.1%
- Texas Capital Bancshares (NASDAQ: TCBI) - downgraded to a sell from a neutral; stock is down 6.7%
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