"All U.S. banks will need to take defensive measures to conserve capital and provision for higher expected losses," Fitch analysts said in a report. Fitch cited scarcer opportunities for revenue growth "amid a restrictive rate environment, rising regulatory requirements and capital costs, and less benign credit quality."

The regional banking sector was in turmoil in the spring as Silicon Valley Bank (SVB) abruptly collapsed after grappling with large amounts of unrealized losses spurred by rapidly rising interest rates. Depositors fled SVB within days after it appeared the firm was in trouble, precipitating its abrupt closure.