SALT LAKE CITY, March 26, 2014 /PRNewswire/ -- Zions Bancorporation (NASDAQ: ZION) today received the results of the Board of Governors of the Federal Reserve System's (FRB) review of Zions' capital plan under the FRB's 2014 Comprehensive Capital Analysis and Review (CCAR). Last week the FRB released its Dodd-Frank Act Stress Test (DFAST) results, which did not include any capital actions proposed by Zions; the FRB estimated that Zions' Tier 1 Common ratio would fall to 3.6% under a hypothetical severely adverse economic scenario. The Federal Reserve's CCAR results published today added the effect of Zions' proposed capital actions, which included the issuance of approximately $400 million of common equity. This raised the aforementioned 3.6% Tier 1 Common ratio to 4.4%, which is below the 5.0% CCAR minimum capital ratio. As of December 31, 2013, Zions' actual Tier 1 Common ratio was 10.2%.
As a result of the capital shortfall under this hypothetical scenario, Zions was notified today by the Federal Reserve that it objected to Zions' capital plan. The FRB did not object to certain capital actions, including the maintenance of a common dividend payment of $0.16 per share annually and continued payment of dividends on preferred equity.
Today, Zions reported its 2014 company-run stress test results, as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Zions projected a minimum DFAST Tier 1 Common ratio of 5.9% under the supervisory severely adverse scenario, which increased to 6.9% with the approximately $400 million proposed common equity issuance. Zions' results differ from those of the FRB primarily in loan loss provisions, pre-provision net revenue, risk-weighted asset growth, and securities impairment charges. The full report will be available in the "News and Events" section of Zions' website at zionsbancorporation.com, on the "Dodd-Frank Act Stress Test Results" page.
As originally announced on February 12, 2014 and reiterated in a press release on March 20, 2014, Zions will re-submit its capital plan by April 30, which plan will incorporate revised capital actions, the effects of the Volcker Interim Final Rule (published January 14, 2014) and actions taken by Zions to significantly reduce risk in its securities portfolio.This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that relate to possible capital actions by Zions, including the redemption or repurchase of outstanding securities or the issuance of additional securities. The nature of any such actions will depend in large part on factors beyond the control of Zions including, among other things, capital market conditions, macroeconomic conditions, further regulatory developments and other factors described in Zions' most recent annual and quarterly reports filed with the Securities and Exchange Commission. Actual results or achievements may differ materially from the statements provided in or implied by this press release. Except as required by law, Zions disclaims any obligation to update any statements or to publicly announce the result of any revisions to any of the forward-looking statements included herein to reflect future events, developments, determinations or understandings.
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