Morgan Keegan downgraded Union Planters (UPC

) to underperform.

Analyst Kevin Reynolds says he downgraded the bank holding company from market perform as the extent of a drop off in its mortgage-refinancing business caught management by surprise. He thinks management expected higher volume to persist far longer than it did.

Reynolds says the reduction in Union Planters' 2003 guidance came with a wider margin than he expected, and says the 2004 estimates came in sharply below expectations. He says the company failed to take steps to downsize its mortgage-refinancing operations and expand its adjustable rate-loan business as soon as some peers did in order to offset a drop in the refinancing business.

Reynolds placed his estimates under review for downward revisions.