...Stable Outlook for Sector: The stable outlook for the mid-tier regional bank universe is supported by good liquidity levels, solid capital, declining nonperforming assets (NPAs) and low credit costs. The strengths are balanced by Fitch Ratings' expectation of declining or flat earnings, continued home equity risk and weakening commercial underwriting standards. Nonperforming Assets Declining: Nonperforming asset levels continue to improve across the industry yet remain well above historical levels. At first-quarter 2014, the median NPA level for the mid-tier group was 2.6%. Included in the NPA number is 0.4% of foreclosed assets and 0.4% of TDRs. Fitch expects continued reduction of NPAs for most banks in the group. However, banks with large home equity portfolios could face stagnant or increasing levels of NPAs as said loans begin to amortize. Core Earnings Weakness: Core earnings, as measured by pre-provision net revenue (PPNR) divided by average assets, for the mid-tier group continue...
