Shares of US-listedBoston Private Financial Holdings, a collection of private banks and wealth managers, fell sharply yesterday afterMerrill Lynch analysts cut its rating on the company to "underperform" from "neutral," according to Boston Business Journal.

The stock, which closed Friday at $8.43, at one stage fell by seven per cent on the Nasdaq.

Boston Private Financial's shares  have suffered this year after the holding company disclosed problems with loans at its private bank in California. Investors also are worried about problem loans growing at the company's Florida-based private bank, the publication said.

And last week, the company said it may raise additional capital to bolster its balance sheet.

Meanwhile, Boston Private Financial's First Private Bank & Trust in California entered into an informal supervisory agreement with the Federal Deposit Insurance Corp and the California Commissioner of Financial Institutions. The bank's problem loans have escalated in recent months and federal bank examiners have been analysing its books to see how deep the problems may be.