Regions Financial Corp. (RF), the 10th- biggest U.S. bank by deposits, sold shares for 2.1 percent more than yesterday’s closing price as it raised $900 million to help repay a taxpayer bailout.
The bank, which yesterday passed a Federal Reserve stress test, sold 152.9 million common shares for $5.90 each, the company said today in a statement distributed by Business Wire.
Regions won Fed clearance this week to raise the funds as it seeks to repay a $3.5 billion rescue it got in 2008 from the Treasury’s Troubled Asset Relief Program, following larger U.S. lenders in returning taxpayer money. Chief Financial Officer David Turner told investors March 5 that repayment will increase the Birmingham, Alabama-based company’s credit grades.
“A TARP repayment and any associated capital raise will benefit us and enable us to get investment-grade ratings,” he said. “When we were downgraded, we became very defensive with our liquidity, which is why we have $4.9 billion in cash at the Federal Reserve.”
The bank’s stock climbed 34 percent this year to $5.78 at yesterday’s close of trading in New York, the third-best performance in the 24-company KBW Bank Index (BKX) after Bank of America Corp. (BAC) and Citigroup Inc. (C)
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