• On 21 May 2013, Moody’s announced rating actions on MBIA Insurance Corp., National Public Finance Guarantee Corp., MBIA Inc. and other related entities. Because of the large number of credits across several asset classes affected by these rating actions, including Moody's-rated securities that are guaranteed or "wrapped" by these companies, ratings appearing on this website may not yet reflect current information. For current information on affected credits, please visit www.moodys.com/fig.
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Rating Action:

Moody's upgrades Regions (senior to Ba1); outlook is stable

Global Credit Research - 17 Dec 2012

New York, December 17, 2012 -- Moody's Investors Service upgraded the long-term ratings of Regions Financial Corporation and its subsidiaries. Regions Financial Corporation was upgraded to Ba1 from Ba3 for senior debt. Its lead bank, Regions Bank, was upgraded to Baa3 from Ba1 for long-term deposits and to Prime-3 from Not-Prime for short-term deposits. The standalone bank financial strength rating was affirmed at D+, but its baseline credit assessment was raised to baa3 from ba1. The holding company's short-term rating was affirmed at Not-Prime. Following the rating action, the outlook is stable.

This concludes the review for upgrade that began on October 3, 2012.

RATINGS RATIONALE

The upgrade reflects Regions' improved asset quality. The upgrade also incorporates Regions' enhanced risk management infrastructure and reduced asset concentrations placing the company in a better position to weather another real estate cycle.

Regions' asset quality has continued to improve with positive trends seen in most metrics, including net charge-offs and delinquencies. Moody's noted that while Regions' nonperforming assets (NPAs) have also improved, they remain unusually high. Moody's noted that Regions' NPAs include a sizable component of accruing troubled debt restructurings (TDRs). Moody's cited that Regions is broader in its interpretation of rules governing TDRs compared to banking peers. Consequently, Regions' NPAs are larger than peers, but Moody's expects that their loss content will be comparatively lower.

Regarding Regions' risk management, it has strengthened its personnel and reorganized and enhanced its committee structures. The company has also reduced its risk appetite as demonstrated by management's concerted efforts to lower asset concentrations in the past two years. Regions' combined exposure to commercial real estate and home equity was significantly lowered to 2.3 times tangible common equity (TCE) at September 30, 2012, compared to 3.7 times TCE at December 31, 2010.

Nonetheless, Moody's added that Regions still faces earnings pressure in the current protracted low interest rate environment that could lead the bank to take on additional risks either in its securities portfolios or by diversifying into other business segments. The effectiveness of Regions' risk management, including in containing concentrations, will be a key driver of any future positive rating actions.

The last rating action on Regions was on October 3, 2012 when Moody's placed the ratings on review for upgrade.

The principal methodology used in this rating was Moody's Consolidated Global Bank Rating Methodology published in June 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Regions Financial Corporation headquartered in Birmingham, Alabama, reported total assets of $122 billion at September 30, 2012.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Information sources used to prepare each of the ratings are the following: parties involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entities, obligations or credits satisfactory for the purposes of issuing these ratings.

Moody's adopts all necessary measures so that the information it uses in assigning the ratings is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Thuy Nguyen
Asst Vice President - Analyst
Financial Institutions Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Robert Franklyn Young
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's upgrades Regions (senior to Ba1); outlook is stable
No Related Data.

 

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