Outlooks On Five U.S. Regional Banks Revised To Negative From Stable On Commercial Real Estate Risks; Ratings Affirmed

Overview

Stress in commercial real estate (CRE) markets, such as reduced property prices and higher vacancies particularly for investor-owned office properties, has created a rising challenge for banks with sizable loan exposures to CRE.While most rated banks haven't reported a sharp rise in delinquent and nonaccrual CRE loans, increases in criticized and modified loans and increasing loan maturities may foreshadow an eventual material deterioration in asset quality and performance.We therefore revised our rating outlooks on five U.S. regional banks to negative from stable.At the same time, we affirmed our ratings on these five banks, reflecting some mitigating factors, including solid underwriting track records and limited deterioration in asset quality. We also affirmed our ratings on a sixth bank--F.N.B. Corp.--and maintained the stable outlook.

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