Banking, finance, and taxes

Zions Comes Up Short on Bank Stress Tests: The Dividend Can Wait

Zions Bancorporation (NASDAQ: ZION) was the one large bank which did not meet the criteria of the latest stress tests that the banks were rallying ahead of. What is interesting is that this was not baked into the cake because the rally was up 3.2% at $32.99 on Thursday.

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.

Credit card companies are handing out rewards and benefits to win the best customers. A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges. See our top picks for the best credit cards today. You won’t want to miss some of these offers.

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.