Outlooks On Six U.S. Regional Banks Revised To Stable On Improved Ability To Handle CRE Challenges; Ratings Affirmed

While commercial real estate (CRE) remains a key risk for the U.S. banking system, we think the probability that CRE loans will lead to a material weakening of the creditworthiness of rated banks has declined over the last year. Rated banks have had only gradual deterioration in CRE asset quality while they've reduced exposures and increased credit loss allowances and capital ratios, which better prepares them for CRE challenges over the next few years. Banks have also benefited from continued economic growth, the Federal Reserve's interest rate cuts, resumed deposit growth, and indications that CRE valuations have begun to stabilize. We therefore have revised our rating outlooks to stable from negative on six U.S. regional banks that have significant CRE

...- While commercial real estate (CRE) remains a key risk for the U.S. banking system, we think the probability that CRE loans will lead to a material weakening of the creditworthiness of rated banks has declined over the last year. - Rated banks have had only gradual deterioration in CRE asset quality while they've reduced exposures and increased credit loss allowances and capital ratios, which better prepares them for CRE challenges over the next few years. - Banks have also benefited from continued economic growth, the Federal Reserve's interest rate cuts, resumed deposit growth, and indications that CRE valuations have begun to stabilize. - We therefore have revised our rating outlooks to stable from negative on six U.S. regional banks that have significant CRE exposures and affirmed our ratings on the banks. NEW YORK (S&P Global Ratings) Feb. 19, 2025--S&P Global Ratings today revised its rating outlooks on six U.S. regional banks to stable from negative: - Columbia Banking System Inc....

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