The rating agencies took the following actions last week:
Dime Savings Bank of New York: Moody's assigned a B3 rating to a proposed preferred stock offering. The agency noted that Dime's capital position is improving and that the thrift has a strong franchise in the New York metropolitan area. However, high nonperforming assets remain a concern.
Single-family mortgages make up the majority of Dime's nonperforming assets, Moody's said. "These assets were poorly underwritten, low-documentation loans from the 1980s, which have resulted in unusually high losses," the agency said.
The new preferred stock is expected to lift Dime's risk-based capital ratio above 10% from 9.29% at June 3O. The Office of Thrift Supervision had required a 10% risk-based ratio by Dec. 31, 1994.
Shawmut National Corp.: Standard & Poor's revised the ratings outlook to positive from stable but affirmed senior debt at BBB-minus, subordinated debt at BB-plus, and preferred stock at BB.
Uninsured certificates of deposit and letters of credit issued by subsidiary banks were also affirmed, at BBB/A2.
"The outlook revision reflects continued strengthening of Shawmut's financial performance measures as asset-quality pressures continue to subside," the agency said. It cited several recent bulk sales and auctions of problem real estate portfolios.
"Continued progress in Shawmut's asset quality should permit further improvement in performance measures leading to a ratings upgrade," Standard & Poor's added.
Washington Mutual Savings Bank: Standard & Poor's raised preferred stock to BBB-minus from BB-plus and uninsured certificates of deposit to BBB-plus/A2 from BBB/A2.
"The upgrades reflect the bank's greatly enhanced consumer banking franchise in Washington and Oregon and improving trends in profitability and asset quality," Standard & Poor's said.
The agency added that Washington Mutual's risk profile has remained unchanged despite a flurry of acquisitions, the largest being the purchase of Pacific First Bank, Seattle, last April.
Wells Fargo & Co.: Fitch Investors Service revised its outlook on the company to improving from uncertain. Senior debt was affirmed at A-minus, subordinated debt at BBB-plus, and preferred stock at BBB.
"The former credit trend was partially reflective of California's unstable economic environment, primarily in the commercial real estate sector," Fitch said. "While those economic factors have not been fully resolved, Wells Fargo is generating important levels of core earnings even in the face of a hostile economic climatc."
Zions Bancorp.: Stantard & Poor's Corp. placed debt ratings on review for possible upgrade. Under review are BB-plus subordinated debt and A3 commercial paper ratings. The agency said it also may upgrade BBB long-term uninsured CDs and letters of credit. It cited the company's continuing strong performance.
S&P said it will meet with management next quarter to discuss Zions' performance and the integration of Discount Corp., a primary dealer of Treasury securities being bought by Zions.
"If ratings are raised, Zions' subordinated debt could go to BBB-minus and commercial paper rating to A2," Standard & Poor's said.
