Moody's, a leading rating agency, has issued a warning that at least six regional banks in the United States are at risk of having their credit ratings downgraded due to their significant exposure to commercial real estate loans. The banks identified as being at risk include First Merchants Corp., FNB Corp., Fulton Financial Corp., Old National Bancorp, Peapack-Gladstone Financial Corp., and WaFd.

The agency has included the long-term ratings of these regional banks in its potential downgrade assessment list, citing the prolonged high interest rate environment as a major factor exacerbating long-term risks. Moody's noted that during economic downturns, regional banks with substantial commercial real estate loan portfolios are particularly vulnerable to continued asset quality and profitability pressures.

The potential downgrade is a significant concern for these regional banks, as it could lead to increased borrowing costs, reduced access to capital, and a decrease in investor confidence. The banks' exposure to commercial real estate loans, which are often sensitive to interest rates and economic conditions, makes them more susceptible to market fluctuations.

The prolonged high interest rate environment has already had a significant impact on the commercial real estate market, with many properties experiencing reduced values and increased default rates. This has led to a increase in non-performing loans and a decrease in profitability for regional banks with significant commercial real estate loan portfolios.

In conclusion, Moody's warning highlights the potential risks facing regional banks with commercial real estate exposure. The prolonged high interest rate environment and the vulnerability of these banks to economic downturns make them more susceptible to asset quality and profitability pressures. The potential downgrade could have significant implications for these banks, and it is essential that they take steps to mitigate these risks and maintain their creditworthiness.