[0] Fitch Lowers Riggs Bank Ratings; Affirms Riggs National Corp; Rating Outlook Stable.Business Editors NEW YORK--(BUSINESS WIRE)--Jan. 16, 2002 Fitch lowers the long-term, short-term and individual ratings of Riggs Bank Riggs Bank was a Washington, DC-based commercial bank with branches located in the surrounding metropolitan area and offices around the world. For most of its history, it was the largest bank in the nation's capital. N.A. (the bank) to 'BB+', 'B' and 'C/D' from 'BBB-', 'F3', and 'C', respectively. All ratings for Riggs National Corp. (Riggs) are affirmed (see list below for complete rating actions). Fitch's rating action is based on Riggs' recent announcement of charges related to a variety of items, including technology related contract cost overuns, impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges related to capitalized technology costs and other restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . The charges will have a similar, but far greater dampening effect on 2001 earnings, as heightened credit costs related to a sizeable national syndicated loan Syndicated Loan A very large loan in which a group of banks work together to provide funds for one borrower. There is usually one lead bank that takes a small percentage of the loan and syndicates the rest to other banks. Notes: Also known as a "syndicated bank facility. portfolio had on 2000 earnings. Moreover, the company's venture capital business, which was designed to enhance and diversify revenues, provided meaningful gains in 2000, but layered in additional losses for 2001. Looking ahead, even after these actions, we believe Riggs will be challenged to achieve profitability levels consistent with higher rated banking peers. Offsetting, Riggs' retains a liquid balance sheet, with marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has and core deposit funding, as well as an ample parent company cash position that supports a meaningful amount of trust preferred securities. These equity-like instruments help bolster capital ratios well in excess of regulatory minimums. We believe Riggs will continue to be challenged, as will its peers, as it wrestles with the slowdown in the capital markets and overall economy. Yet unlike its peers this challenge will be somewhat exacerbated by its high expense base, which continues to be expanded by costs associated with recent revenue diversifying initiatives. The Rating Outlook is Stable. Riggs has a long history in the metropolitan D.C. market providing a unique mix of services to corporate, governmental, and retail clients. While operations are anchored with traditional banking services, Riggs has developed an expertise in wealth management for affluent individuals and as a financial counselor to foreign embassies and the diplomatic community worldwide. Over the past few years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time company has broadened its capabilities in investment products with the creation of a full service broker-dealer, building an in-house mortgage operation, international private bank, and venture capital funds Venture Capital Funds An investment fund that manages money from investors seeking private equity stakes in small and medium-size enterprises with strong growth potential. Notes: as well. However, to date, many of these initiatives have yet to be proven as effective recurrent contributors to earnings. Riggs' margin businesses continue to be affected by a highly liquid balance sheet, while fee businesses have not gathered sufficient momentum to offset the cost outlays Outlays Payments on obligations in the form of cash, checks, the issuance of bonds or notes, or the maturing of interest coupons. necessary to develop new initiatives. Past loan quality issues, particularly those related to Riggs' syndicated book, have been addressed, and current asset quality indicators are strong, and buttressed but·tress n. 1. A structure, usually brick or stone, built against a wall for support or reinforcement. 2. Something resembling a buttress, as: a. The flared base of certain tree trunks. b. by solid a level of reserves. Riggs National Corporation --Short-term 'B'; --Long-term 'BB+'; --Individual 'C/D'; --Support '5'; --Long-term Rating Outlook Stable. Riggs Bank National Association --Short-term 'B'; --Short-term deposit 'F3'; --Long-term 'BB+'; --Long-term deposit 'BBB-'; --Individual 'C/D'; --Support '5'; --Long-term Rating Outlook Stable. Riggs Capital --Preferred Stock 'BB'. Riggs Capital II --Preferred Stock 'BB'. |
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