Moody's Investors Service on Thursday upgraded two Virginia banks, Crestar Financial Corp. and Signet Banking Corp., both of Richmond.

The agency attributed the upgrades to reductions in their commercial real estate exposures. The senior debt ratings of both were raised to Baa2 from Baa3, and their commercial paper ratings were upgraded to Prime-2 from Prime-3.

Moody's cited Signet's improved profitability and reserve adequacy. Signet's financial performance has improved significantly since 1990-91, when it established large loan-loss reserves amid severe asset quality deterioration, Moody's said.

It noted that Crestar has improved liquidity by increasing core funding through purchases of deposits.

Separately, Moody's said it may upgrade UJB Financial Corp. and the subsidiary, United Jersey Bank. UJB's preferred stock is rated Ba2. United Jersey Bank has a long-term debt rating of Baa2.

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