Kroll Bond Rating Agency (“KBRA”) releases research report on risk
reduction for Zions Bancorporation (NASDAQ: “ZION” or the
“Company”). After the Federal Reserve announced in March of this year
that ZION would not have sufficient capital to meet the minimum capital
adequacy requirements under the severely adverse economic scenario in
the Dodd-Frank Act Stress Test (“DFAST”), the Company has made a
concerted effort to improve its risk profile and capital base. The most
recent financial results of ZION indicate that this effort is starting
to produce positive results in terms of higher capital levels and
reduced leverage.
In response to the March DFAST results, ZION issued a statement citing
the Federal Reserve’s higher loss rates assumed for commercial real
estate (“CRE”), greater risk-weighted assets, and lower pre-tax,
pre-provision net revenue in comparison to the projections under the
Bank’s own stress assumptions. ZION also noted that its original
submission to the Fed transpired prior to the sale of certain CDOs in
January and February of 2014, which resulted in a considerable reduction
in risk on the Company’s balance sheet. ZION resubmitted its 2014
Capital Plan in April, which was accepted by the Federal Reserve in July
of 2014. The resubmitted plan included the continued payment of
preferred and common dividends at the current rates as well as a
proposed common equity issuance to occur in the third quarter.
To view the full report, please visit www.kbra.com.
About Kroll Bond Rating Agency
KBRA is registered with the U.S. Securities and Exchange Commission as a
Nationally Recognized Statistical Rating Organization (NRSRO). In
addition, KBRA is recognized by the National Association of Insurance
Commissioners (NAIC) as a Credit Rating Provider (CRP).
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