Printer Friendly

U.S. NATIONAL BANK OF OREGON SUBORDINATED CAPITAL NOTES RAISED TO 'A' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 1 /PRNewswire/ -- U.S. National Bank of Oregon's 7.75 percent subordinated capital notes due 2002 are raised to 'A' from 'A-' by Fitch. The bank's short-term rating for structured transactions is raised to 'F-1' from 'F-2.' The ratings reflect the financial condition of the consolidated U.S. Bancorp (USBC) organization, particularly its improving asset quality and strong capital position. The credit trend is stable. Factors which may impede further improvements in the company's rating include below-average operating efficiency, which has restrained profitability net of non-recurring income items, and a potential inability to expand its primary banking franchise through acquisition due to the saturation of the company's existing markets.
 USBC made steady progress in improving its asset quality since 1991, when non-performing assets (NPAs) reached 2.75 percent of total loans and other real estate owned (OREO). As of June 30, total NPAs had been reduced to $270 million, or only 1.97 percent of total loans and OREO. Within the company's sizable commercial loan portfolio, non-accrual loans declined to $40 million, or 0.89 percent of related outstandings, from 1991's level of $121 million, or 2.79 percent. Reserve coverage of non-accrual loans also improved, reaching 108 percent at the end of 1993's second quarter vs. 81 percent in 1991.
 Capital continues to be a real strength of USBC. The company boosted its equity to 8.23 percent of total assets as of June 30 from an already strong 7.45 percent in 1991. Furthermore, the company's leverage, Tier 1, and total risk-based capital ratios totaled a comfortable 7.37 percent, 8.51 percent, and 11.55 percent, respectively.
 Despite its strong balance sheet, USBC will need to improve its core profitability in order to be considered among the industry's elite. Although the company's return on average assets (ROA), excluding accounting changes, has consistently exceeded 1.00 percent and totaled 1.23 percent through the first six months of 1993, non-recurring fee income contributed to these results. Adjustments to USBC's earnings during 1993's first half for gains on the sale of mortgage servicing rights, employee loans, and corporate trust businesses push the company's ROA to below 1.00 percent. The principal culprit in USBC's earnings mix is its level of operating expenses relative to its total revenues. While most banks in the 'A' rating class post operating efficiency ratios below 60 percent, non-interest expenses consumed 65 percent of USBC's total operating revenues during 1993's first half.
 -0- 9/31/93
 /CONTACT: Scott J. O'Donnell, 212-908-0531, or Christopher M. Siedman, 212-908-0524, both of Fitch/


CO: U.S. National Bank of Oregon ST: New York, Oregon IN: FIN SU:

TW -- NY025 -- 7862 09/01/93 10:24 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Sep 1, 1993
Words:450
Previous Article:CYCOMM ISSUE FULLY SUBSCRIBED
Next Article:PICA $178.7 MILLION SPECIAL TAX REVENUE BONDS RATED 'BBB+' BY FITCH -- FITCH FINANCIAL WIRE --
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters