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.
ASSOC BANC CORP (ASBC): Free Stock Analysis
BANK OF HAWAII (BOH): Free Stock Analysis
BOK FINL CORP (BOKF): Free Stock Analysis
CATHAY GENL BCP (CATY): Free Stock Analysis
CULLEN FROST BK (CFR): Free Stock Analysis
EAST WEST BC (EWBC): Free Stock Analysis
FIRST HRZN NATL (FHN): Free Stock Analysis
FIRST NIAGARA (FNFG): Free Stock Analysis
HANCOCK HLDG CO (HBHC): Free Stock Analysis
PEOPLES UTD FIN (PBCT): Free Stock Analysis
SYNOVUS FINL CP (SNV): Free Stock Analysis
TCF FINL CORP (TCB): Free Stock Analysis
UMB FINL CORP (UMBF): Free Stock Analysis
WEBSTER FINL CP (WBS): Free Stock Analysis
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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
BOK Financial Corporation
Cullen/Frost Bankers, Inc.
East West Bancorp, Inc.
First Horizon National Corporation
First Niagara Financial Group Inc.
Hancock Holding Company
People's United Financial Inc.
Synovus Financial Corporation
Webster Financial Corp
UMB Financial Corporation
Bank of Hawaii Corporation
). 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
) 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.
Fulton Financial Corporation
TCF Financial Corporation
) 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