Moody's lowers Hudson Valley

Moody's Investors Service said it downgraded Hudson Valley Bank's long-term bank deposits rating to Ba1 from Baa2, its short-term obligations to Not Prime from P-2 and its standalone bank financial strength rating to D+/ba1 from C-/baa2. The outlook is stable.

Moody's said the rating downgrade reflects Hudson Valley's weakened business franchise.

Hudson Valley faces the challenge of generating loans in a low-risk manner, away from its traditional activity of making high yielding commercial real estate loans, the agency said. Moody's expects this transition to pressure its net-interest margin while at the same time expenses are expected to rise as it enhances its risk infrastructure in part to support its new lending business.

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