Fitch Ratings downgraded Fulton Financial Corp.'s long-term issuer default rating to BBB from BBB+, after the bank announced an expected after-tax credit loss of $32 million related to alleged fraudulent activities at a loan borrower.
The rating agency affirmed the bank's short-term issuer default rating at F2.
The ratings outlook is stable.
While the financial impact of the loss is manageable, the incident revealed weaknesses in the Lancaster, Pa.-based bank's preventative controls and credit monitoring procedures for certain large lending relationships, according to Fitch.
The rating agency expects Fulton Financial to strengthen its controls and policies. It continues to view the bank's credit performance history as solid compared to other peers in the same BBB rating category.
