Fitch Affirms Sky Financial Group; Maintains Negative Rating Outlook.Business Editors CHICAGO--(BUSINESS WIRE)--Jan. 9, 2004 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. all ratings for Sky Financial Group, Inc. (SKYF, 'BBB'/'F3') and its principal subsidiaries following SKYF's announcement today of an agreement to acquire Second Bancorp (SECD SECD Stack, Environment, Code, Dump SECD Soft Error Cluster Distribution , unrated). Fitch also maintains a Negative Rating Outlook. A complete list of ratings follows at the end of this release. Fitch's rating actions reflect SKYF's continued good earnings performance and asset quality, as well as the additive additive In foods, any of various chemical substances added to produce desirable effects. Additives include such substances as artificial or natural colourings and flavourings; stabilizers, emulsifiers, and thickeners; preservatives and humectants (moisture-retainers); and nature of the transaction; while at the same time recognizing SKYF's reduced capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. and increasing leverage. SECD ($2.1 billion in assets and 33 offices) will add to SKYF's presence and deposit market share in its northwestern Ohio markets. SKYF continues to generate good core earnings and has developed stronger fee income contribution. In addition, management has successfully integrated previous acquisitions and realized projected cost savings in these transactions. This includes last year's acquisition of Metropolitan Financial Corporation (METF METF Mayban Ethical Trust Fund ). SKYF's level of problem loans and loan losses continue to place it comfortably within its rating category even with the addition of METF. The acquisition of SECD will set SKYF back in its efforts to rebuild capital to more historical operating levels (6.5% tangible common equity to tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. ) by the second quarter of 2005. While liquidity has improved slightly since SKYF's last acquisition, the parent company continues to rely on its revolving line of credit Revolving line of credit A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. for long-term funding needs and maintain a negative working capital position. Lack of improvement in parent company liquidity will continue to pressure SKYF's ratings. The following ratings for Sky Financial Group, Inc. and its subsidiaries are affirmed and long-term ratings maintain a Negative Rating Outlook: Sky Financial Group, Inc. -- Long-term senior, 'BBB'; -- Short-term, 'F3'; -- Individual, 'B/C'; -- Support, '5'. Sky Bank -- Long-term deposits, 'BBB+'; -- Long-term senior, 'BBB'; -- Short-term nondeposit obligations, 'F3'; -- Short-term deposits, 'F2'; -- Individual, 'B/C'; -- Support, '5'. Sky Trust, N.A. -- Long-term senior, 'BBB'; -- Short-term, 'F3'; -- Individual, 'B/C'; -- Support, '5'. Sky Financial Capital Trust I First Western Capital Trust I Mid Am Capital Trust I Metropolitan Capital Trust I Metropolitan Capital Trust II -- Trust preferred, 'BBB-'. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion