TEXT-Fitch affirms large regional bank ratings following peer review

Tue Oct 30, 2012 1:59pm EDT

Oct 30 - Fitch Ratings has completed a peer review of the 
following 14 rated large regional banks: BB&T Corporation (BBT), Capital One 
Finance Corporation (COF), Comerica Incorporated (CMA), Fifth Third Bancorp 
(FITB), Huntington Bancshares Inc (HBAN), Keycorp (KEY), M&T Bank Corporation 
(MTB), PNC Financial Services Group (PNC), Regions Financial Corporation (RF), 
SunTrust Banks Inc. (STI), US Bancorp (USB), UnionBanCal Corporation (UBC), 
Wells Fargo & Company (WFC), and Zions Bancorporation (ZION). 

Refer to Wells Fargo's individual release for a discussion of rating actions 
taken on WFC.

RATING ACTION AND RATIONALE

All ratings were affirmed. CMA's ratings were affirmed at 'A', but the Rating 
Outlook remains Negative reflecting financial performance that continues to lag 
regional peers. Conversely, HBAN's, RF's, ZION's Rating Outlooks were revised to
Positive from Stable. HBAN's Outlook was revised due to improvements in its risk
profile, earnings performance, and capital profile. RF's Outlook was revised 
given an improving overall risk profile with moderating asset quality and the 
maintenance of a solid capital and liquidity positions. ZION's Outlook was 
revised to Positive reflecting improving profitability, improving asset quality 
ratios, and on balance modestly improved capital ratios. FITB's Rating Outlook 
remains Positive, supported by its strong earnings profile, somewhat offset by 
still elevated levels of problem assets.

The Issuer Default Ratings (IDRs) span a relatively disperse set of ratings from
higher rated WFC and USB (both 'AA-') to RF and ZION (both rated 'BBB-').  The 
majority of this peer group is rated 'A-' with a Stable Rating Outlook. The peer
group is generally comprised of three groupings of banks. 

The first group is comprised of USB, WFC, BBT and PNC, whose ratings are  'AA-' 
or 'A+', supported mainly by strong earnings profiles or moderate risk profiles.
These companies have demonstrated a strong level of consistency through the most
recent crisis, and stable earnings performance. Although non-performing assets 
(NPAs) and/or net charge-offs (NCOs) increased for these companies, the 
companies' capital profiles and reserves were adequate to absorb the associated 
losses. 

The second group includes a much larger diverse set of companies whose credit 
profiles includes various strengths, offset by some attributes that keep them 
from being in the top segment. Ratings in this grouping span from 'A' to 
'BBB+'/Rating Outlook Positive. Companies in this grouping include UBC, COF, 
CMA, FITB, KEY, MTB, and HBAN. Some of these companies continually report solid 
earnings, namely FITB but the ratings still incorporate elevated credit risk, or
in the case of MTB, strong risk-adjusted earnings are offset by a relatively low
capital position. While other companies have strong capital levels, KEY, UBC and
CMA as examples, but whose core earnings profiles lag the peer group.

The last group of large regionals includes STI, RF, and ZION, companies that 
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