Fitch downgrades ratings on First Niagara
NEW YORK (AP) — Fitch Ratings downgraded its ratings on First Niagara Financial Group Inc. on Wednesday and lowered its outlook on the bank due to concerns about its capital position.
First Niagara Financial, based in Buffalo, N.Y., is the parent company for First Niagara Bank.
The rating agency downgraded the long-term and short-term issuer default ratings on the company one notch from "BBB" to "BBB-", placing it at the bottom of investment grade status. It also lowered its rating outlook to "negative" from "stable."
Fitch said that the company's capital position is too lean following its acquisition of some HSBC Bank branches in the Northeast and a recent restructuring of its balance sheet. The rating agency said the company has limited flexibility to respond if any challenges arise for the company or loan growth jumps. Its capital position is also much lower than its peers.
Although Fitch said the company's core operating revenue is satisfactory, the agency expects the company's earnings may face a challenge due to the tough economy and low interest-rate environment. Additionally, its business has slightly increased its risk by shifting to more commercially oriented loans.
Shares of First Niagara added a penny to $8.07 in late afternoon trading.