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These charts show what has Moody’s worried about regional banks including U.S. Bank and Fifth Third



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Bloomberg/Getty ImagesThe Moody’s ratings downgrades and outlook warnings on a swath of U.S. banks this week show that the industry still faces pressure after the collapse of Silicon Valley Bank.Concern over the sector had waned after second-quarter results showed most banks stabilized deposit levels following steeper losses during the March regional banking crisis. But a new issue may cast a pall over small and midsized banks: They’ve been forced to pay customers more for deposits at a pace that outstrips growth in what they earn from loans.”Banks kept their deposits, but they did so at a cost,” said Ana Arsov, global co-head of banking for Moody’s Investors Service and a co-author of the downgrade report. “They’ve had to replace it with funding that’s more expensive. It’s a profitability concern as deposits continue to leave the system.”Banks are usually expected to thrive when interest rates rise. While they immediately charge higher rates for credit-card loans and other products, they typically move more slowly in increasing how much they pay depositors. That boosts their lending margins, making their core activity more profitab …

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