Moody’s lifts Regions Financial, Regions Bank

Moody's Investors Service said it upgraded certain ratings of Regions Financial Corp.

Regions' senior unsecured, issuer and subordinated debt ratings were upgraded to Baa2 from Baa3. Its noncumulative preferred stock was upgraded to Ba1 (hyb) from Ba2 (hyb), and its short-term issuer rating was upgraded to Prime-2 from Prime-3.

Regions Bank's standalone baseline credit assessment was upgraded to baa1 from baa2. Long- and short-term deposit ratings were upgraded to A2/Prime-1 from A3/Prime-2, while senior unsecured and subordinate debt ratings were upgraded to Baa2 from Baa3. The counterparty risk assessment (CR assessment) was upgraded to A3 (cr) from Baa1 (cr), while the short-term CR assessment of Prime-2 (cr) was unchanged.

Following the upgrade, the outlook is stable.

Moody’s said Regions' improvement in risk management prompted the upgrade. The agency believes Regions has successfully overhauled its risk management infrastructure, and it is no longer a potential constraint to Regions' risk profile.

Going forward, this improvement should reduce earnings volatility in future economic cycles compared to Regions' performance in the last economic downturn. It should also better defend Regions' current good asset quality, Moody’s added.

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