Fitch downgrades Emigrant

Fitch Ratings said it downgraded Emigrant Bancorp Inc.'s long-term issuer default rating to B- from BB+, senior debt to CCC/RR6 from BB+ and individual rating to D/E from C/D. The B short-term issuer default rating, 5 support rating and "No Floor" support floor were affirmed.

The agency also downgraded the trust preferred stock of Emigrant Capital Trust I and Emigrant Capital Trust II to CC/RR6 from BB-.

The outlook is negative.

The agency said the downgrade reflects significant degradation of asset quality metrics over the last six months. Using the latest regulatory report filed with the Federal Reserve Bank, nonperforming assets represent 11.3% of loans and other real estate on March 31. Previously, delinquencies had been focused on the residential loan book, Fitch said.

Offsetting the high level of nonperforming assets in this book are conservative loan-to-values. The agency said this negated any recognition of losses upon disposition of the property, but Fitch does not view this as sustainable.

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