Perception and reality are both playing impact roles for a banking sector that’s facing elevated challenges, and scrutiny, in the wake of the second and third largest bank failures in U.S. history last month and ongoing economic challenges.

While California-based Silicon Valley Bank and New York’s Signature Bank were closed by regulators within days of each other in mid-March, the The New York Times reports just a month later, the nation’s biggest banks are raking in billions and are likely to keep doing so even if the economy softens. But regional lenders are seen as more at risk and fears remain about the value of investments and loans, especially ones backed by real estate, per the Times.

The March failures were driven in part by customer runs on deposits and bank regulators stepped in to cover the large percentage of uninsured deposits — those in excess of the FDIC’s $250,000 limit for individual depositors — at both institutions. The tactic, aiming to stave off a broader panic, mostly worked as intended, but in the last month hordes of depositors have still migrated away from smaller institutions to the largest U.S. banks perceived as “too big to fail,” a tag made famous thanks to the 2008 financial crisis.

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Another shift wrought in the aftermath of the Silicon Valley and Signature bank closures involves the level of attention paid by the four big U.S. credit reporting agencies to the financial workings of U.S. banks.

Zions Bancorporation director of investor relations James Abbott said the agencies, which include Fitch, Kroll, Moody’s and Standard & Poor’s, were reviewing frequent transactional information provided by Zions in the wake of the failures and in the days following. Zions Bancorporation operates Zions Bank and affiliate banks in Arizona, California, Colorado, Oregon, Texas and Washington.

Abbott said Zions had contingency plans in place to navigate the industrywide upheaval that followed the shutdowns that were working “nearly flawlessly” through the second half of March, and noted three of the four agencies made no changes to the bank’s credit rating status.

But on Friday, Moody’s issued downgrades to 11 U.S. banks, including Zions. The rating agency said strains in the way banks are managing their assets and liabilities are becoming “increasingly evident,” and are pressuring profitability, according to a report by The Wall Street Journal. Recent events “have called into question whether some banks’ assumed high stability of deposits, and their operational nature, should be reevaluated,” the ratings firm said in its report.

While Zions officials describe the change to their rating as “minimal” the bank has also pushed back on the manner in which Moody’s calculated the downgrade and called out errors in the underlying data used in the credit agency’s calculations.

“Moody’s is entitled to its own opinion but not its own set of facts,” Abbott told the Deseret News.

Abbott said Zions’ fiscal track record underscores a conservative and cautious approach to the quality of its loans and noted the bank has, for more than a decade, substantially outperformed the overall U.S. banking sector as well as its peer group of similar sized banks around the country.

While Moody’s noted concerns about potential commercial real estate losses, capital ratios and uninsured deposit volumes in its assessment of Zions, the bank provided a point-by-point rebuttal to the agency, challenging the findings and providing data that Abbott said clearly confutes Moody’s findings.

Zions’ response to Moody’s included historic charts showing Zions achieving “best in class” performance over the past 10 years when it comes to commercial real estate charge offs, or losses, and challenged the method used by the agency when it comes to calculating healthy capital ratios, a measure of a bank’s capital and reserves against total assets. Zions noted its current capital ratio exceeds the “well-capitalized” levels set by federal regulators by more than 50%.

“Moody’s calculates capital in a way that differs materially from what U.S. banking regulators use,” Zions officials wrote in their rebuttal document. “While the ‘Moody’s TCE (Tangible Common Equity)’ ratio is ‘a’ way of calculating leverage, Zions manages itself to maintain strong regulatory capital ratios. Furthermore, Zions conducts regular capital stress tests to ensure the levels will remain ‘well capitalized’ under a significant recessionary economy.”

One of the major underlying factors that led to the closures of Silicon Valley and Signature banks were the very high levels of uninsured deposits at both institutions, over 90% at Silicon Valley and just under 90% for Signature. The demographic of the depositors at those banks was also unique in terms of far fewer accounts with much larger balances, a reflection of both banks’ heavy reliance on venture-backed tech startup clients.

In a note sent to customers just days after the failures of Silicon Valley and Signature banks, Zions Bank President and CEO Scott Anderson outlined the customer differences between those banks when compared to the depositor demographic at Zions.

“Silicon Valley Bank and Signature Bank had singular characteristics that proved to be unstable, particularly in the current environment of rising interest rates,” Anderson wrote. “What set these banks apart was their extremely high growth rates in recent years, and their concentrations of large, uninsured deposits from clients in the technology and cryptocurrency industries, respectively.”

Anderson noted that Zions’ deposits “are held in 1.4 million accounts, and these accounts overwhelmingly tend to be smaller in size and operational in nature. Notably, the average balance of an account at Silicon Valley Bank was about 22 times the size of the average balance in a Zions account, which made Silicon Valley Bank much more susceptible to the kinds of outflows they experienced (March 9-10). The situation was similar at Signature Bank.”

That account granularity was also highlighted in Zions’ dispute of the Moody’s findings.

Zions noted it has “cash and unutilized and immediately available sources of cash” in the amount of $38 billion, easily outstripping its $31 billion in total uninsured deposits. Zions’ insured deposits equaled 55% of total deposits on March 31, a rate approximately in line with industry averages.

Zions also noted its depositor demographic is “dominated by business and personal ‘operating’ accounts — i.e. actively-used checking accounts — which are generally more stable than idle money.”

Abbott said Moody’s outlier ratings change is a reflection of the agency’s penchant for allowing human judgment to override data when it comes to reviews and assessments, not just of Zions’ operations but across the industry.

“Moody’s is overriding its own mathematical models in almost every bank to arrive at a conclusion that would appear to be more about their gut feeling than actual data,” Abbott said. “Zions’ credit quality has been among the very best in the industry for over a decade.”