S&P Cuts 5 Banks to “Junk” Status
June 28, 2009 by Dana Truro · Leave a Comment
On June 17, 2009, S&P downgraded the credit ratings or outlooks on 22 banks. In this post, we take a closer look at the five regional banks that were cut to “junk” status.
When any credit-rating service downgrades a company from ‘BBB’ to ‘BB” – which occurred with these five banks – this reclassifies its debt from investment grade to “junk” status. According to S&P’s definition of ‘BB’, any adverse business, financial or economic conditions could lead to the bank’s inadequate capacity to meet its financial commitments.
Conducting business with any bank that has been cut to “junk” status, means being safety-conscious and paying attention to the bank’s performance. As a depositor, cash accounts at all FDIC-insured institutions are guaranteed up to $250,000. To learn about the protection on your bank accounts, visit the FDIC.gov.
Additionally, if you are looking for objective appraisals about your bank or would like to explore your options, you can visit Bankrate. Their Safe & Sound ratings provide trustworthy and free ratings for businesses and consumers. Bankrate does advise “to evaluate independently all financial institutions, consider other information — including the strength of the financial institution’s management — and to contact financial institutions individually to seek answers to their questions.”
For the exception of Whitney Bank, all of these banks sustained net losses in 2008 compared with 2007. Click on the bank link for stock performance.
|
Cut to S&P “Junk” Status (Year-Ended 12/31) |
Total Net Income 2008 |
Total Net Income 2007 |
| Carolina First Bank
Greenville, SC
|
($547,118,000) |
$73,276,000 |
| Citizens Republic Bancorp
Flint, MI
|
(393,052,000) |
100,842,000 |
| Huntington Bancshares
Columbus, OH
|
(113,800,000)
|
75,200,000 |
| Synovus Financial
Columbus, GA
|
(582,438,000) |
526,305,000 |
| Whitney Bank
New Orleans, LA
|
58,585,000
|
151,054,000 |
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Tags: "Junk" Status, Credit-rating services, FDIC-Insured Banks, Regional Banks, S&P downgrades
Having lived in New England for 40 years (college, graduate school and work), I like simplicity and clarity in my daily life. This helps avoid ambiguity, especially important when dealing with complex issues. My goal, therefore, is to provide my readers with accurate information about topics of financial importance to help you make informed choices.