(Reuters) - Ratings agency Moody's (NYSE:MCO) on Monday downgraded several mid-sized U.S. banks, warning that the credit strength of lenders will likely be tested by funding risks and weaker profits.
Moody's also said it may downgrade some of the largest U.S. lenders, in a blow to the industry that regained stability after several bank failures earlier this year.
Here's the list of banks and action taken by Moody's:
Bank name Rating Action Outlook Rationale
Pinnacle Downgraded to Changed to Shows several
Financial BAA2 from negative from sources of
Partners BAA1 stable strain on the
banking sector
from funding
pressures,
regulatory
capital
weaknesses and
rising risks
from CRE
exposures
Fulton Downgraded to Negative Shows several
BAA2 from sources of
BAA1 strain on the
banking sector
from funding
pressures,
regulatory
capital
weaknesses and
rising risks
from CRE
exposures
Prosperity Downgraded Stable Shows several
Bank long-term sources of
deposits to strain on the
A1 from AA3 banking sector
from funding
pressures,
regulatory
capital
weaknesses and
rising risks
from CRE
exposures
BOK Downgraded to Stable Shows several
Financial BAA1 from A3 sources of
Corp strain on the
banking sector
from funding
pressures,
regulatory
capital
weaknesses and
rising risks
from CRE
exposures
Webster Downgraded to Stable Shows several
BAA2 from sources of
BAA1 strain on the
banking sector
from funding
pressures,
regulatory
capital
weaknesses and
rising risks
from CRE
exposures
Associated Downgraded to Stable Shows several
Banc-Corp BAA2 from sources of
BAA1 strain on the
banking sector
from funding
pressures,
regulatory
capital
weaknesses and
rising risks
from CRE
exposures
Old Downgraded Negative Shows lower
National Senior level of
Bancorp Unsecured to capitalization
A1 from AA3 , elevated
exposure to
CRE loans and
weaker
liquidity
buffer
compared to
higher-rated
peers
Citizens Affirmed Changed to Shows several
Financial senior negative from sources of
Corp unsecured at stable strain on the
BAA1 banking sector
from funding
pressures,
regulatory
capital
weaknesses and
rising risks
from CRE
exposures
M&T Bank (NYSE:MTB) Downgraded Stable Shows several
Corp senior sources of
unsecured to strain on the
BAA1 banking sector
from funding
pressures,
regulatory
capital
weaknesses and
rising risks
from CRE
exposures
Commerce Downgraded Stable Shows several
Bank long-term sources of
issuer to A3 strain on the
from A2 banking sector
from funding
pressures,
regulatory
capital
weaknesses and
rising risks
from CRE
exposures
Regions Affirm senior Changed to Shows several
Financial unsecured at negative from sources of
Corp BAA1 stable strain on the
banking sector
from funding
pressures,
regulatory
capital
weaknesses and
rising risks
from CRE
exposures
Simmons Affirmed at Negative Shows several
First BAA2 sources of
National strain on the
banking sector
from funding
pressures,
regulatory
capital
weaknesses and
rising risks
from CRE
exposures
Ally Affirmed LT Negative Rating action
Financial bank deposits reflects the
at A3 bank's strong
liquidity and
funding
profile, its
conservative
credit culture
and track
record of good
asset quality
Below are the U.S. banking giants that Moody's have put under review for potential downgrades.
Bank Name Rating Action Outlook Rationale
Bank of Review for Reflects
New York downgrading ongoing strain
Mellon the long-term in the US
issuer banking sector,
ratings, debt including more
ratings, funding
counterparty pressures and
risk ratings potential
regulatory
capital
weaknesses
US Bancorp (NYSE:USB) Review for Reflects its
downgrade of low, though
all long-term improving,
and select level of
short-term capitalization,
ratings rising deposit
costs and
increased use
of wholesale
funding and its
sizable holding
of fixed-rate
assets
Truist Review for Changed to Reflects its
Financial downgrade of ratings under low, though
long-term review from improving,
ratings stable level of
capitalization
along with
weaknesses in
the
asset-liability
management
State Review for Changed to Reflects the
Street downgrade of ratings under strain in the
Corp long-term review from US banking
ratings stable sector,
including more
funding
pressures and
potential
regulatory
capital
weaknesses
Northern Long-term Reflects the
Trust Corp ratings under strain in the
review for US banking
downgrade sector,
including
funding
pressures and
potential
regulatory
capital
weaknesses