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The Zacks Analyst Blog Highlights: Umpqua Holdings, First Financial Bankshares, Associated Banc-Corp and F.N.B.

For Immediate Release

Chicago, IL - June 03, 2016 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Umpqua Holdings Corp. ( UMPQ ), First Financial Bankshares Inc. ( FFIN ), Associated Banc-Corp ( ASB ) and F.N.B. Corp. ( FNB ).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Thursday's Analyst Blog:

4 Bank Stocks You Should Dump Even If Fed Raises Rates

The expectations of a rate hike in June heightened after the release of the minutes from the April FOMC meeting. Further, Federal Reserve Chair Janet Yellen looked aggressive on rate hike in her most recent speech at Harvard University. She added, "Growth looks to be picking up from the various data we monitor."

Essentially, the final decision by the Fed in its meeting on Jun 14-15 will depend largely on overall economic growth, labor markets scenario and inflation target of 2%.

After a prolonged low rate environment, the impact of rising rates is typically beneficial for most banks. Notably, after the December rate hike, most asset sensitive banks experienced a decent increase in net interest income and net interest margin in the first quarter 2016.

While the possibility of another rate hike gives the banks hope of a boost in bottom line, the overall challenging environment leaves little room for offsetting the pressure. Profitability of banks continues to be limited by several issues including heightened regulations, stiff competition and increasing costs in several areas - ranging from huge legal bills for settling legacy issues to investments in updated technology and cyber-security platform.

Other issues include volatility in oil prices that has affected the asset quality of some banks, given their exposure in the energy sector. High provisioning by the banks to cover the soured loans of the energy companies continue to dent the financials over the past several quarters.

Additionally, factors including the negative interest rate policies in Eurozone and Japan, China's slowdown and weakness in emerging markets continue to contribute to global growth concerns. These are definitely a threat to a number of banks that have substantial international exposure.

As such, banks have been undertaking defensive measures including aggressive restructuring and cost containment by scaling back non-core operations, reducing footprint, reduction in headcount and looking for ways to increase non-interest revenues.

Nevertheless, such measures are not strong enough to generate a stable growth pattern. Also, another possible rate hike would not be sufficient to defy the larger challenges in the industry.

Amid such backdrop, we suggest investors to dump certain stocks that do not look attractive even after the Fed raises rate in the coming months.

While the task of selecting such stocks may seem quite difficult, our Zacks Stock Screener makes it easier.

Stocks to Avoid

We have shortlisted four stocks in the banking industry with a market capitalization of at least $2 billion, carrying a Zacks Rank #4 (Sell) or #5 (Strong Sell). These stocks have witnessed downward estimate revisions over the last 60 days.

Umpqua Holdings Corp. ( UMPQ ): The Oregon-based bank carries a Zacks Rank #4. Over the last 60 days, the Zacks Consensus Estimate for the company revised more than 3% downward to $1.22 per share for 2016.

First Financial Bankshares Inc. ( FFIN ): Based in Texas, the company currently has a Zacks Rank #4. Over the last 60 days, the Zacks Consensus Estimate for the company declined 1.2% to $1.63 per share for 2016.

Associated Banc-Corp ( ASB ): The Wisconsin-based company with a Zacks Rank #4 witnessed nearly 5% decline in the Zacks Consensus Estimate over the last 60 days to $1.20 per share for 2016.

F.N.B. Corp. ( FNB ): Based in Pennsylvania, the company currently has a Zacks Rank #4. Over the last 60 days, the Zacks Consensus Estimate for the company declined more than 2% to 92 cents per share for 2016.

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Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

About Zacks Equity Research

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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UMPQUA HLDGS CP (UMPQ): Free Stock Analysis Report

FIRST FIN BK-TX (FFIN): Free Stock Analysis Report

ASSOC BANC CORP (ASB): Free Stock Analysis Report

FNB CORP (FNB): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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