SALT LAKE CITY, June 16, 2015 /PRNewswire/ -- Today, Zions
Bancorporation (NASDAQ: ZION) (the "Company") announced that it has
sold the remainder of its collateralized debt obligation securities
("CDOs"). The sale of the securities is expected to substantially
reduce modeled risk to capital, particularly under severely adverse
economic scenarios.
During the second quarter of 2015, the Company sold a total of
$574 million (amortized cost) of CDOs
for proceeds of $437 million,
generating a realized pre-tax loss of $137
million. Prior to these sales, the Company received
paydowns and payoffs of approximately $13
million in the second quarter of 2015. The value achieved
through the sales represents a moderate improvement relative to the
carrying value as of March 31, 2015,
which reflected an unrealized loss of $149
million. Zions previously announced that it had sold
$81 million of CDOs through
June 1, which is included in the
$574 million total for the quarter.
Of note, because the unrealized loss of $149
million was included in GAAP capital as of March 31, 2015, the exit from the CDOs at a
somewhat better value is slightly accretive to pro forma GAAP book
value and capital ratios.
Pro Forma Regulatory Capital Impact
As a result of this transaction, Zions would expect a slight
increase to its pro forma March 31,
2015 regulatory capital ratios. The realized loss on the
securities adversely impacts the regulatory capital level; however,
the securities had a weighted average risk weighting of 178% and
accounted for approximately 2% of the Company's $46.3 billion of risk-weighted assets at
March 31. Therefore, the net
reduction of capital is more than offset by the reduction of
risk-weighted assets and should have a slightly beneficial effect
on the Company's regulatory capital ratios.
Expected Earnings Impact
The annual interest income from these securities was
approximately $9 million, which is
expected to be replaced in the near term with additional purchases
of U.S. agency mortgage-backed securities.
About Zions Bancorporation
Zions Bancorporation is one of the nation's premier financial
services companies, consisting of a collection of great banks in
select western U.S. markets with combined total assets exceeding
$55 billion. Zions operates its
banking businesses under local management teams and community
identities in 11 western and southwestern states: Arizona, California, Colorado, Idaho, Nevada, New
Mexico, Oregon,
Texas, Utah, Washington and Wyoming. The company is a national leader in
Small Business Administration lending and is a consistent recipient
of numerous Greenwich Excellence awards in banking. In addition,
Zions is included in the S&P 500 and NASDAQ Financial 100
indices. Investor information and links to subsidiary banks can be
accessed at www.zionsbancorporation.com.
Forward-Looking Information
Statements in this press release that are based on other than
historical data or that express the Company's expectations, goals,
targets, and operational objectives and initiatives regarding
future events or determinations are forward-looking within the
meaning of the Private Securities Litigation Reform Act of 1995.
Statements based on historical data are not intended and should not
be understood to indicate the Company's expectations regarding
future events. Forward-looking statements provide current
expectations, goals, targets, the intended outcome of certain
operational initiatives or forecasts of future events or
determinations. These forward-looking statements are not guarantees
of future performance or determinations, nor should they be relied
upon as representing management's views as of any subsequent date.
Forward-looking statements involve significant risks and
uncertainties, and actual results may differ materially from those
presented, either expressed or implied, in this press release.
Factors that could cause actual results to differ materially from
those expressed in the forward-looking statements include but are
not limited to factors discussed in the Company's most recent
Annual Report on Form 10-K and Quarterly Report on Form 10-Q, filed
with the Securities and Exchange Commission ("SEC") and available
at the SEC's Internet site (http://www.sec.gov).
Except as required by law, the Company specifically disclaims
any obligation to update any factors or to publicly announce the
result of revisions to any of the forward-looking statements
included herein to reflect future events or developments.
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SOURCE Zions Bancorporation