Regional Banks

Global Credit Research Rating Action 12 MAR 2009

Rating Action: Valley National Bank

Moody's reviews US regional bank ratings

New York, March 12, 2009 -- Moody's Investors Service announced that it is reviewing for possible downgrade the bank financial strength ratings (BFSR) of 23 US regional banks and the deposit and debt ratings of 17 of these same institutions. The difference between these two figures is explained primarily by Moody's expectation of higher systemic support for certain institutions which would mitigate bank-level deposit and debt ratings downgrades. At the same time, Moody's has changed the rating outlook to negative from stable on 19 other banks. Moody's expects to complete all of its reviews by mid-May. Today's actions reflect Moody's view that the current housing and economic crisis will lead to significantly higher credit losses than previously anticipated. Although Moody's has been incorporating expected losses on bank loan and security portfolios into its ratings for some time, the sharp decline in commercial real estate prices, increased corporate default expectations, and unabated deterioration in residential loan performance has led Moody's to considerably increase its loss expectations. "These losses are likely to meaningfully weaken the capital position of many banks in 2009," says Managing Director Robert Young. The banks that are likely to be most affected by the outcome of the ratings reviews are those with significant risk concentrations in commercial real estate, specifically construction and land development. "In today's environment, it is extremely difficult for banks to generate capital, both internally through earnings and externally through private sources," says Mr. Young. "Because of this, low capital levels are an increasing threat to banks' sustainability. Therefore, capital has become more important to Moody's assessment of banks' stand-alone financial strength." Moody's BFSR methodology remains unchanged, though the weight attached to certain rating considerations, particularly capital and future earnings prospects, has been increased to better reflect the current crisis. The refinement to Moody's approach to rating banks in this environment is discussed in a Special Comment titled "Calibrating Bank Ratings in the Context of the Global Financial Crisis", which was published in February. Moody's reviews are also prompted by an overall worsening of expected economic scenarios and the rating agency's upwardly revised loss estimations on both residential and commercial real estate loans. "The current operating environment is quite similar to the most challenging risk scenario we evaluated as part of our US Banking System Outlook in June 2008," says Mr. Young. "Under that scenario, we had anticipated the greatest amount of ratings movement, including selective multi-notch downgrades." In addition to an assessment of the deterioration in commercial and residential real estate loans, as well as commercial and industrial loans, the review of each bank will include a consideration of the characteristics of its investment portfolio, focusing particularly on non-agency RMBS securities and investments in bank trust preferred securities. SUPPORT ASSUMPTIONS EXPANDED TO MORE US BANKS Moody's also highlighted the increased probability of systemic support for large regional banks. "Given the US government's specific focus on banks with more than $100 billion in assets," Mr. Young states, "we now regard the probability of government support for these large regional banks as being greater than had been anticipated." To this point, only three regional banks -- U.S. Bancorp, PNC and SunTrust -- previously were considered by Moody's to be potential recipients of government support, but at a level insufficient to impact their ratings. Today, following the clear demonstration of support by regulatory authorities, Moody's believes that the probability of support has increased for an additional five institutions: BB&T, Capital One, KeyCorp, Fifth Third and Regions.

The result for these eight regional banks is that, should any of their BFSRs be downgraded, the increased probability of systemic support could temper the extent of a downgrade, if any, of their bank-level deposit and debt ratings. During its review process, Moody's will also consider the potential for systemic support for smaller regional banks. THREE RATING ACTION CATEGORIES Moody's rating actions can be divided into three broad categories: - Banks that were placed on review for possible downgrade - Banks that had their outlook changed to negative, or that remain on negative outlook - Banks that were affirmed with a stable outlook. Because of the extensive number of issuers included in this press release, the lists below include only the names of the rated bank holding companies. A complete list of ratings that were placed under review for possible downgrade and other entities that were affected by today's actions may be found at: Excel: http://www.moodys.com/cust/getdocumentByNotesDocId.asp?criteria=PBC_115224 REVIEWS FOR DOWNGRADE Moody's placed the BFSRs of 23 US banks under review for possible downgrade. Moody's also placed the deposit and debt ratings of 17 of these same institutions under review. The difference between the two figures results from the influence of potential systemic or parental support on six banks (namely BB&T, BancWest, Capital One, KeyCorp, PNC, and U.S. Bancorp). In these instances, the banks' BFSRs were placed under review, but the deposit and debt ratings (which benefit from support) were affirmed, though with a negative outlook. Banks that were placed on review for possible downgrade or that were already on review, and where it is expected that at least one rating (BFSR, bank deposit/debt, or holding company debt) could be downgraded by up to one notch, include -Astoria Financial Corporation BancWest Corporation BB&T Corporation BMW Bank of North America Capital One Financial Corp. Citizens Republic Bancorp, Inc. First Citizens BancShares, Inc. Fulton Financial Corporation KeyCorp M&T Bank Corporation Pacific Capital Bancorp PNC Financial Services Group, Inc. South Financial Group, Inc. (The) Susquehanna Bancshares, Inc.

Trustmark Corporation U.S. Bancorp United Bankshares, Inc. Banks that were placed on review for possible downgrade or that were already on review, and where it is expected that at least one rating (BFSR, bank deposit/debt, or holding company debt) could be downgraded by up to two notches, include -Fifth Third Bancorp Huntington Bancshares Incorporated SunTrust Banks, Inc. Synovus Financial Corp. UCBH Holdings, Inc. UnionBanCal Corporation Western Alliance Bancorporation Wilmington Trust Corporation Banks that were placed on review for possible downgrade or that were already on review, and where it is expected that at least one rating (BFSR, bank deposit/debt, or holding company debt) could be downgraded by two or more notches, include -BBVAPR Holding Corporation Colonial BancGroup, Inc. (The) Compass Bancshares, Inc. Zions Bancorporation NEGATIVE OUTLOOKS The capital positions and earnings prospects of the banks that had their outlook changed to negative, or that are already on negative outlook remain broadly in line with their current ratings under Moody's revised loss assumptions. However, the negative outlooks reflect the fact that these institutions' ratings could still come under pressure if loss assumptions increase significantly from current levels, or if other aspects of their portfolios, beyond those related to real estate, deteriorate to the degree that capital and earnings are affected. Banks that had their outlook changed to negative or that remain on negative outlook include -American Savings Bank, FSB Associated Banc-Corp BancorpSouth, Inc. Bank of Hawaii Corporation BOK Financial Corporation Citizens Financial Group, Inc. City National Corporation

Comerica Incorporated Commerce Bancshares, Inc. Cullen/Frost Bankers, Inc. First Horizon National Corporation First Midwest Bancorp, Inc. First National of Nebraska, Inc. FirstMerit Corporation Hancock Holding Company Harris Financial Corp. (the outlook on the lead bank's BFSR was changed to negative from stable; a stable outlook was maintained on all other ratings) HSBC USA Inc. Hudson Valley Holding Corp. Independent Bank Corporation Integra Bank Corporation Marshall & Ilsley Corporation Old National Bancorp Popular, Inc. RBC Bancorporation (USA) (the outlook on the lead bank's BFSR is stable; the outlook on all other ratings is negative) Santander Bancorp Sovereign Bancorp, Inc. State Street Corporation SVB Financial Group TCF Financial Corporation TD Banknorth Inc Valley National Bancorp Webster Financial Corporation Whitney Holding Corporation STABLE OUTLOOKS Banks that were affirmed with a stable outlook are those institutions that can absorb a level of stress beyond Moody's expected loss assumptions and remain appropriately capitalized at their current rating level. Banks that were affirmed with a stable outlook include -Amarillo National Bancorp, Incorporated

Bank of New York Mellon Corporation (The) Doral Financial Corporation FirstBank Puerto Rico INTRUST Financial Corporation New York Community Bancorp, Inc. Northern Trust Corporation People's United Financial Inc. Prudential Bank & Trust, FSB Regions Financial Corporation (the outlook on the lead bank's deposit and debt ratings was changed to stable from negative; a negative outlook was maintained on all other ratings) UMB Financial Corporation The principal methodologies used in rating these issuers were "Bank Financial Strength Ratings: Global Methodology" (February 2007) and "Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology" (March 2007), which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating these issuers can also be found in the Credit Policy & Methodologies directory. "To further discuss these actions Moody's will hold a teleconference on Friday, March 13th beginning at 10:00 AM EDT/14:00 GMT/15:00 CET. To register and for additional information, please visit www.moodys.com/events." New York Robert Young Managing Director Financial Institutions Group Moody's Investors Service JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 New York Sean Jones Senior Vice President Financial Institutions Group Moody's Investors Service JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653

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