Regions Financial Corp., 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. The lender climbed 5.4 percent to $6.08 at 9:41 a.m. in New York trading.
Regions is seeking to join larger U.S. lenders in returning U.S. rescue funds. Chief Financial Officer David Turner told investors March 5 that repayment of the $3.5 billion bailout it got in 2008 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 had climbed 34 percent this year to $5.78 through yesterday’s close of trading in New York, the third-best performance in the 24-company KBW Bank Index after Bank of America Corp. and Citigroup Inc.
Regions picked Goldman Sachs Group Inc., JPMorgan Chase & Co., Barclays Plc, Deutsche Bank AG and Morgan Keegan to conduct the offering.