CHICAGO (AP) ¿ Fitch Ratings said Friday it has downgraded the long-term issuer default ratings of First Midwest Bancorp Inc. and its subsidiary, First Midwest Bank, citing deteriorating credit quality and expected higher credit costs.
The agency also assigned the bank and its holding company a "Negative" ratings outlook.
Fitch lowered the companies' long-term issuer default ratings to "BBB" from "BBB+" and affirmed their short-term issuer default ratings of "F2."
It said it based the changes on First Midwest's "deteriorating credit quality and Fitch's expectation of higher credit costs over the near term."First Midwest started reporting worsening asset quality in its residential land and development portfolio a year ago as the housing market in the Chicagoland area "began to experience significant stress," Fitch said. "This portfolio has continued to exhibit considerable weakness, and now represents nearly 60 percent of the company's nonaccrual assets," the agency said. "However, more recently, signs of weakness in other portfolios have emerged."