Shares in Heartland Bank fell as much as 3.8% on Friday after Standard & Poor's warned it is among eight of New Zealand's smaller lenders facing a credit rating downgrade in the next couple of years.
Heartland Bank, which currently has a BBB- rating, says the change reflects the wider risks to the economy, not its own position.
It is reducing its already small exposure to the housing market.
Heartland shares fell as much as three cents to 77 cents.
Standard & Poor's said Heartland's key target markets are showing early signs of an improvement and that could offset any rising economic risks.
The biggest part of Heartland's lending is to businesses, for purchasing plant and equipment, and to the rural sector.
Its lending book for these two sectors was just over $1 billion at the end of December.
Its total consumer lending book stood at $945.8 million, with most of its lending on motor vehicles and other types of consumer lending. It is running down its mortgage book.