MOODY'S UPGRADES RATINGS OF MERCANTILE BANCORPORATION (SENIOR TO A2); CONFIRMS RATING OF LEAD BANK FOR DEPOSITS
New York, 07-25-97 -- Moody's Investors Service raised the long-term ratings of Mercantile Bancorporation (MTL) -- senior debt from A3 to A2. The ratings of its lead bank subsidiary, Mercantile Bank NA, at A1 for long-term deposits and C for financial strength, were confirmed, but the rating on the bank's subordinated debt was upgraded. These actions conclude a review which commenced on October 28, 1996.
Moody's rating action incorporates the company's recent acquisition activity, which adds significantly to MTL's market positions in Missouri, especially in St. Louis and Kansas City. According to the rating agency, MTL's two in-market mergers should result in substantial cost-savings, although the potential for customer retention and for additional revenue generation is less certain. The rating also reflects Moody's expectation that MTL's asset quality will benefit from management's corrective actions. Moody's added that current tangible capital ratios are very strong, but these could diminish somewhat as the earning asset composition is changed.
The following ratings were upgraded.
Mercantile Bancorporation Inc. -- senior long-term debt from A3 to A2; subordinated and junior subordinated debt from Baa1 to A3.
Mercantile Bank National Association (formerly Mercantile Bank of St. Louis) -- subordinated long-term debt from A3 to A2.
Mercantile Bank of Springfield -- long-term bank deposits from A2 to A1; counterparty ratings and other senior obligations from A2 to A1.
Mercantile Bank of Kansas City -- long-term bank deposits from A2 to A1; counterparty ratings and other senior obligations from A2 to A1.
Mercantile Capital Trust I -- preferred stock from "a3" to "a2".
The following ratings were confirmed.
Mercantile Bank National Association (formerly Mercantile Bank of St. Louis NA) -- long-term bank deposits and other senior and counterparty obligations at A1; short-term bank deposits at Prime-1; and the bank financial strength rating at C.
Mercantile Bank of Springfield -- short-term bank deposits at Prime-1; bank financial stength rating at C.
Mercantile Bank of Kansas City -- short-term bank deposits at Prime-1; bank financial strength rating at C.
The following ratings were withdrawn:
Mercantile Bank of Illinois -- long-term bank deposits at A2; short-term bank deposits at Prime-1; counterparty ratings at A2 and other senior obligations; and bank financial strength rating of C.
Mercantile Bank of Kansas -- long-term bank deposits at A2; short-term bank deposits at Prime-1; counterparty ratings at A2 and other senior obligations; and bank financial strength rating of C.
Mercantile Bancorporation, headquartered in St. Louis, Missouri, had total assets of $22.6 billion at June 30, 1997.
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