via theorganicprepper:
Right on the heels of seeing a downgrade of the creditworthiness of the United States itself, Moody’s has downgraded ten small to medium banks across the country, citing “financial strain” and “strains that could erode their profitability.” Six more banks are under review, and another eleven have been shifted from “stable” to negative.
If you still have all your money in the banking system, you’re quickly running out of time to change strategies and preserve some of your wealth.
Which banks got downgraded?
The ten banks which were downgraded are:
- Commerce Bancshares
- BOK Financial Corporation
- M&T Bank Corporation
- Old National Bancorp
- Prosperity Bancshares
- Amarillo National Bancorp
- Webster Financial Corporation
- Fulton Financial Corporation
- Pinnacle Financial Partners
- Associated Banc-Corp
According to the Federal Reserve, the largest of these is M&T, which is the 19th largest bank in the country.
More banks are under review.
But the downgrades may not stop there. Moody’s has said that six more banks are “under review.”
Those banks are:
- Bank of New York Mellon Corporation
- Northern Trust Corporation
- State Street Corporation
- Cullen/Frost Bankers
- Truist Financial Corporation
- U.S. Bancorp
Other banks have been given a “negative outlook.”
The bad news doesn’t stop with these 16 banks. Another eleven have been shifted from stable to negative:
- PNC Financial Services Group
- Capital One Financial Corporation
- Citizens Financial Group
- Fifth Third Bancorp
- Huntington Bancshares
- Regions Financial Corporation
- Cadence Bank
- F.N.B. Corporation
- Simmons First National Corporation
- Ally Financial
- Bank OZK
According to the Washington Post:
And Moody’s assigned a negative outlook to 11 more banks, meaning their ratings could be downgraded in the medium to long term. That group also included some of the nation’s biggest lenders, including PNC Financial Services Group, Capital One and Citizens Financial.
Why are these banks struggling?
CBS reports:
In its report, Moody’s highlighted that some of the issues that caused the banking crisis earlier this year haven’t disappeared; banks are still at risk for depositors to withdraw their funds, while the current higher-interest rate environment is knocking down the value of investments lenders made when rates were super low.
The rating agency added that asset risks are also rising for small- and mid-sized banks, especially those with large corporate real estate (CRE) holdings.
“Elevated CRE exposures are a key risk given sustained high interest rates, structural declines in office demand due to remote work, and a reduction in the availability of CRE credit,” it noted.
Smaller banks are especially at risk, given that they have “sizable unrealized economic losses” that could cause investors to lose confidence, it stated in the Monday report.
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