Fitch Reviews Regional Banks - Analyst Blog
February 15 2013 - 6:30AM
Zacks
Recently, Fitch Ratings concluded the peer review of 16 mid-tier
regional banks. The group includes banks with total assets varying
from $10 billion to $36 billion.
The other features of the mid-tier regional banks as highlighted by
Fitch include homogenous business plans, dependency on spread
income from loans and investments, and share repurchases. Further,
mid-tier banks lack geographical diversification as well
diversified revenue streams. Long-term Issuer Default Ratings
(IDRs) for these banks are dispersed with a low of ‘BB-' and a high
of 'A+'.
Fitch has affirmed the IDRs of Associated
Banc-Corp (ASBC), BOK Financial
Corporation (BOKF), Cullen/Frost Bankers,
Inc. (CFR), East West Bancorp, Inc.
(EWBC), First Horizon National Corporation (FHN),
First Niagara Financial Group Inc. (FNFG),
Hancock Holding Company (HBHC), People's
United Financial Inc. (PBCT), Synovus Financial
Corporation (SNV), Webster Financial
Corp. (WBS), UMB Financial Corporation
(UMBF) and Bank of Hawaii Corporation (BOH).
Sufficient capital levels, robust earnings and funding profile of
these companies, along with strong asset quality, prompted the
rating agency to affirm the ratings.
The IDRs of Cathay General Bancorp (CATY) and
First National of Nebraska were upgraded. Elevated operating
performance and constantly improving credit quality and sturdy
capital levels were the reasons for the rating upgrade of these 2
banks.
IDRs of Fulton Financial Corporation (FULT) and
TCF Financial Corporation (TCB) were downgraded
since these have weak asset quality, comparatively higher funding
costs and balance-sheet risks along with a slow economic
recovery.
Further, Fitch affirmed its outlook on most of the banks with the
exception of Cathay General (which moved to ‘Stable’ from
‘Positive’), First National (‘Stable’ from ‘Positive’) and Synovus
Financial (‘Positive’ from ‘Negative’).
In our point of view, the reasons for upgrade/downgrade and
reaffirmation are well justified. The ratings allocation will prove
beneficial to an already stressed financial sector. Further, this
will reinforce investors’ confidence in the overall financial
sector. In addition, this will likely help these financial
institutions to withstand another financial crisis. Most
importantly, this could ultimately result in less involvement of
taxpayers’ money in the bailout of troubled financial
institutions.
ASSOC BANC CORP (ASBC): Free Stock Analysis Report
BANK OF HAWAII (BOH): Free Stock Analysis Report
BOK FINL CORP (BOKF): Free Stock Analysis Report
CATHAY GENL BCP (CATY): Free Stock Analysis Report
CULLEN FROST BK (CFR): Free Stock Analysis Report
EAST WEST BC (EWBC): Free Stock Analysis Report
FIRST HRZN NATL (FHN): Free Stock Analysis Report
FIRST NIAGARA (FNFG): Free Stock Analysis Report
HANCOCK HLDG CO (HBHC): Free Stock Analysis Report
PEOPLES UTD FIN (PBCT): Free Stock Analysis Report
SYNOVUS FINL CP (SNV): Free Stock Analysis Report
TCF FINL CORP (TCB): Free Stock Analysis Report
UMB FINL CORP (UMBF): Free Stock Analysis Report
WEBSTER FINL CP (WBS): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Cathay General Bancorp (NASDAQ:CATY)
Historical Stock Chart
From Jun 2024 to Jul 2024
Cathay General Bancorp (NASDAQ:CATY)
Historical Stock Chart
From Jul 2023 to Jul 2024