Wedbush adds Comerica, Western Alliance to Best Ideas List, removes two others

Wedbush is adding Comerica (CMA), Western Alliance (WAL) to the firm’s Best Ideas List, while removing First Horizon (FHN) and First Citizens (FCNCA). The firm says Comerica is the most liability sensitive bank in its regional bank coverage, and should benefit from a lower rate environment. Although Western Alliance is technically asset sensitive, Wedbush believes that the bank should benefit from lower rates in the form of lower ECR deposit costs, and through higher origination volumes in the mortgage business. On the flip side, the firm points out that First Horizon screens asset sensitive, and it believes additional Fed rate cuts as implied by the forward curve could pressure net interest income growth during the down-rate cycle. While Wedbush thinks First Citizens has performed well since its SVB acquisition, it fears that declining rates could pressure its net interest income as it is the most asset sensitive bank in its coverage. The firm has Outperform ratings on Western Alliance and Comerica after upgrading the latter, and Neutral ratings on First Horizon and Firts Citizens following downgrades this morning.