Moody's Investors Service downgraded a number of regional and community-based banks on concerns about their exposures to commercial real estate. The rating agency also looked at the potential losses in the affected banks' CRE portfolios.
Among those downgraded were Independent Bank Corp., RBC Centura Banks' bank financial strength rating, Regions Financial Corp., Susquehanna Bancshares' short-term bank rating, Synovus Financial Corp., Trustmark Corp., Western Alliance Bancorp. and Zions Bancorp. Fulton Financial Corp. and its subsidiaries were placed on review for a downgrade while Associated Banc-Corp and its subsidiaries had their ratings affirmed but the outlook was changed to negative from stable. The rating agency said it judged potential losses relative to each bank's regulatory capital surplus and each bank's ability to generate capital through core earnings and other capital growth initiatives. Prior to the recent downgrades, Moody's had downgraded the ratings of several other regional banks including Colonial BancGroup, First Horizon National Corp., First Tennessee Bank and Flagstar Bancorp. Moody's had placed several banks on a review for a downgrade including National City Corp. and Sovereign Bancorp., and changed Marshall & Ilsley Corp.'s rating outlook to negative from stable.