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KBW downgrades Washington Trust Bancorp


D.A. Davidson & Co. analyst Kevin Reevey initiatedcoverage of Green Bay, Wis.-based Associated Banc-Corp and Milwaukee-based

The analyst initiated coverage of Associated Banc-Corp withan "underperform" rating and a 12-month price target of $18.

His 2016 and 2017 EPS estimates are $1.24 and $1.38,respectively.

The analyst set his 12-month price target at a discount of2% to its peer group on the basis of its price-to-earnings multiple. Theanalyst believes the company deserves a discounted price target, as he does notexpect Associated Banc-Corp to show any near-term growth. The analyst alsonoted that the company's profitability and asset metrics are below peers,although its management team is "pulling all of the right levers" toimprove its operating performance.

Reevey initiated Bank Mutual with a "neutral"rating and a 12-month price target of $8.25.

His 2016 and 2017 EPS estimates are 37 cents and 41 cents,respectively.

The analyst initiated the company at a 17% discount to itsMidwestern savings bank peer group on the basis of price-to-tangible bookvalue. The analyst thinks the company should trade at a discount as it isreporting below-peer operating metrics and profitability. The analyst does notsee a near-term catalyst that can boost the company's trading price, althoughthe company's management team is trying to move its reported financials closeto peer levels.


Damon DelMonte, a Keefe Bruyette & Woods Inc. analyst,downgraded Westerly, R.I.-based Washington Trust Bancorp Inc. to "marketperform" from "outperform," with a 12-month price target of $41.

The analyst also lowered his 2016, 2017 and 2018 EPSestimates to $2.60 from $2.62, to $2.73 from $2.80, and to $2.95 from $3.00,respectively.

The analyst lowered his investment rating on the companybased on the recent appreciation in its stock price. The company closed at$40.22 on Sept. 30, which the analyst noted reflects reduced upside to hisprice target.

DelMonte also revised his expected net interest margin in lightof the uncertainty around upcoming rate hikes. The analyst now thinks thecompany will generate lower margin in the coming periods. As a result, DelMontethinks the company's earnings will be under pressure because of lower marginsand slower-than-anticipated loan growth.