First Interstate Bancorp: Duff & Phelps raised the ratings of First Interstate and its major subsidiary banks, and is keeping them on rating watch for a possible upgrade.
The holding company's senior debt was raised to A minus from BBB plus, subordinated debt was raised to BBB plus from BBB, and preferred stock was raised to BBB from BBB minus.
At the subsidiary level, the ratings for all rated banks have been upgraded, with the certificate of deposit ratings raised to Duff 1 and the long-term deposit ratings to A.
The rated banks include First Interstate Bank of Arizona, First Interstate Bank of California, First Interstate Bank of Oregon, First Interstate Bank of Texas, and First Interstate Bank of Washington.
Duff & Phelps is no longer tiering the banks' ratings. Formerly the Arizona and California banks had been rated one level below the Oregon, Texas, and Washington banks.
The upgrades reflect improved nonperforming asset levels, improvement in reserve coverage of problem loans, strengthening of core profitability and capital measures, as well as the reduction in parent-company double leverage.
