This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Zions: Bank Stock Winner

The Federal Reserve has kept the short-term federal funds rate in a range of zero to 0.25% since late 2008, and the FOMC has repeatedly said this "highly accommodative" policy was likely to remain appropriate at least until the U.S. unemployment rate dropped below 6.5%. The July unemployment rate was 7.4%, improving from 7.6% in June.

The steepening of the yield curve is good news for most banks, however, it can take quite some time for it to provide a major boost to net interest margins, because some assets are still repricing at lower rates from several years back.

The Federal Reserve will hold its annual conference in Jackson Hole, Wyo., beginning on Thursday. According to KBW analyst Brian Gardner, "Given the lack of a keynote speech by Fed officials at Jackson Hole, the minutes will probably be the more significant of the two events this week as the markets search for further clues on the timing as well as the composition of tapering of large scale asset purchases."

Janet Yellen -- vice chairwoman of the Federal Reserve Board and considered the frontrunner by many to succeed Federal Reserve Chairman Ben Bernanke next year -- will not be giving a speech at the Jackson Hole Conference. However, she will moderate a panel discussion on Friday. "[W]e expect every word she utters to be dissected," Gardner wrote in a note to clients on Friday.

KBW Bank Index (I:BKX) was rose 1% to close at 64.50, with all 24 index components ending with gains. Big banks showing 2% gains included Morgan Stanley (MS), which closed at $26.31; Cullen/Frost Bankers (CFR), at $73.11; and Regions Financial (RF), closing at $9.86.

Zions

Shares of Zions Bancorporation have returned 38% this year, following a 32% return during 2012. The shares trade for 1.3 times their reported June 30 tangible book value of 22.09, and for 15.2 times the consensus 2014 EPS estimate of $1.95. The consensus 2015 EPS estimate is $2.27.

2013 has been another year of transition for Zions, following last year's repayment of $1.4 billion in federal bailout funds received through the Troubled Assets Relief Program, or TARP. This year the company has continued to reposition its balance sheet, through the redemption of $285 billion in 8.0% Series B trust preferred shares, an announced call of $800 million in 9.5% Series preferred shares, and the redemption of $257 million in senior notes with a coupon of 7.75%. Zions has replaced some of that funding by issuing $800 million in preferred shares with a weighted average dividend rate of 6.23%.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,982.59 +22.02 0.13%
S&P 500 1,978.91 +0.57 0.03%
NASDAQ 4,444.9090 -4.6550 -0.10%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs