News wires that were given access to the Federal Reserve data showed that Zions Bancorp fell short on the minimum capital levels. At the low point of a theoretical recession, Zion’s Tier 1 common ratio would be only 3.5%. The Fed wanted to see 5% as a base under that scenario.
Keep in mind that under the severe recession guidelines, it is a scenario where unemployment hits 11.25% and where GDP would be down 5%. Another focal point was for housing prices to be down by 25%.
Zions has a yield of 0.5% with a $0.04 per quarter dividend for its common stock. Even when you consider that this was raised from only $0.01 per share per quarter in 2013, this 0.5% yield is just too low to attract many investors.
Zions will reportedly resubmits its capital plans to the Federal Reserve in April. Zions was trading down 1.5% at $32.50 in the after-hours, against a 52-week range of $23.10 to $33.33.
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