2009-06-26 23:16:02 -
Fitch Ratings has downgraded the long-term Issuer Default Ratings (IDR) on AMCORE Financial, Inc. to 'RD' from 'CCC' (AMFI) and AMCORE Bank, N.A. to 'RD' from 'B-'. A complete list of all ratings follows at the end of this release.
AMFI announced that it has agreed to a Consent Order with the Office of the Comptroller of the Currency and a
Written Agreement with the Federal Reserve System. As a result of these regulatory actions, AMFI is in default on its $20 million revolving line of credit with JPMorgan Chase due April 15, 2010. Today's announcement regarding the two new regulatory actions adds to Fitch's concerns previously noted in the last Rating Action Commentary dated Jan. 28, 2009.
The Consent Order requires increasing the bank's Tier I leverage ratio above 8%, Tier I capital ratio above 9%, and Total Risk Based Capital ratio above 12% by Sept. 30, 2009. Bank level capital ratios at March 31, 2009 were 4.62%, 6.22%, and 8.84%, respectively. Fitch expects that AMFI's ability to raise capital in an amount to meet the Consent Order is extremely limited. The Consent Order also requires the development of a capital plan within 30 days and a liquidity risk management program within 60 days.
The parent level Written Agreement restricts the payment of dividends from the bank to the holding company without prior regulatory approval, the payment of common dividends, and the payment of interest on its $50 million of trust preferred securities without prior regulatory approval.
AMFI is also required to develop a capital plan and a cash flow projection.
Previous rating actions have centered on AMFI's weak asset quality, pressured capital and parent company liquidity positions, and increased reliance on wholesale funding. The ratings at the bank and holding company highlight Fitch's view that AMFI is under significant financial pressure.
Fitch has downgraded the following ratings.
AMFI
--Long-term IDR to 'RD' from 'CCC';
--Short-term IDR to 'RD' from 'C'.
AMCORE Bank, N.A.
--Long-term IDR to 'CC' from 'B-';
--Long-term deposits to 'CCC/RR3' from 'B';
--Short-term deposits to 'C' from 'B'.
In addition, Fitch has affirmed the following.
AMFI
--Individual at 'E';
--Support at '5';
--Support Floor at 'NF'.
AMCORE Bank, N.A.
--Short-term IDR at 'C';
--Individual at 'E';
--Support at '5';
--Support Floor at 'NF'.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com :
.
Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site. The issuer did not participate in the rating process other than through the medium of its public disclosure.
Fitch Ratings, ChicagoJulie Solar, 312-368-5472Doris
Hoffmann, 312-368-2057Brian Bertsch, 212-908-0549(Media
Relations, New York)
brian.bertsch@fitchratings.com : mailto:brian.bertsch@fitchratings.com
