Downgrades
* Compass Point's Laurie Havener Hunsicker downgraded Franklin, Tenn.-based Franklin Financial Network Inc.'s stock rating to "sell" from "neutral," citing valuation.
The analyst lowered Franklin Financial's EPS estimates to $2.81 from $2.86 for 2018 and to $2.88 from $2.95 for 2019, and kept Franklin Financial's stock price target at $36.
The recent price increase in Franklin Financial's stock price follows the announcement of the company being added to S&P SmallCap 600 Index, wrote the analyst.
Hunsicker also wrote that Franklin Financial "is one of the most sensitive banks in our coverage on deposit pricing pressure." She further added: "Despite the noise in the [net interest margin] caused by public deposits, it is notable that [Franklin Financial] is a top performing, whistle-clean, high-growth community bank in one of the most desirable and fastest growing markets in the Southeast."
* Boston-based Berkshire Hills Bancorp Inc.'s stock rating was also downgraded to "sell" from "neutral" on valuation by Hunsicker.
The analyst kept Berkshire Hills Bancorp's stock price target at $38.
The analyst wrote that Berkshire Hills Bancorp continues to grow in Boston after closing its acquisition of Commerce Bancshares Corp. Regarding future M&A, Berkshire Hills Bancorp's "tone regarding M&A seems to have downshifted per the [first-quarter] earnings call," added Hunsicker.
