(Source: Business Wire)
Regions Financial Corporation (NYSE: RF) today announced that it will have raised $2.5 billion when its previously announced exchange offer of common stock for trust preferred securities settles on June 22, 2009. This fully meets the Tier 1 common equity capital requirements prescribed by the Federal Reserve's Supervisory Capital Assessment Program (SCAP).
The company's public equity offering of common stock, announced May 20, 2009, generated net proceeds of $1.769 billion and its public offering of mandatory convertible preferred stock generated net proceeds of $278 million. The company's previously announced offer to exchange common shares for outstanding 6.625% Trust Preferred Securities issued by Regions Financing Trust II, which expired yesterday, and is expected to settle on June 22, 2009, will generate additional Tier 1 common equity of $172 million.
In addition to these public offerings, the company sold shares it owned in Visa Inc. and other securities, which generated capital of $117 million. As a result of these capital raising efforts, Regions also expects that approximately $200 million of deferred tax assets will be included in the company's Tier 1 common equity buffer required by SCAP.
"Our ability to raise this capital in such a short period of time indicates to us that investors recognize Regions' value and the strength of our franchise," said Dowd Ritter, Regions' chairman, president and CEO.
In connection with the SCAP, banking regulators began supplementing their assessment of the capital adequacy of a bank based on a variation of Tier 1 capital, known as Tier 1 common equity. While not codified, analysts and banking regulators have assessed Regions' capital adequacy using the Tier 1 common equity measure. Because Tier 1 common equity is not formally defined by GAAP or codified in the federal banking regulations, this measure is considered to be a non-GAAP financial measure and other entities may calculate it differently than Regions. Since analysts and banking regulators may assess Regions' capital adequacy using Tier 1 common equity, we believe that it is useful to provide investors the ability to assess Regions' capital adequacy on this same basis.
About Regions Financial Corporation
Regions Financial Corporation, with $142 billion in assets, is a member of the S&P 100 Index and one of the nation's largest full-service providers of consumer and commercial banking, trust, securities brokerage, mortgage and insurance products and services.
