Law and regulation

TARP Repayment Will Reduce Zions' 1Q Profit

By Alan Kline March 29, 2012, 12:22 p.m. EDT 1 Min Read

Zions', Regions' Shares Rise, MetLife's, Citi's Fall in Response to Stress Tests

Zions Bancorporation and Regions Financial Corp. were the biggest winners among bank stocks Wednesday after the Federal Reserve gave the two regional companies the go-ahead to finally repay the the Troubled Asset Relief Program.

By Alan Kline

March 14

Zions Bancorporation (ZION) in Salt Lake City said Thursday that its first-quarter earnings will be reduced by roughly 11 cents per share as a result of its repayment of $700 million to the Troubled Asset Relief Program.

Based on the results of a recent stress test, the Federal Reserve Board earlier this month gave the $52 billion-asset Zions the go-ahead to repay the $1.4 billion in Tarp funds. Zions repaid half the amount this week and intends to pay the remaining $700 million later this year. The company has said it would not need to issue new common stock to exit Tarp.

In a Securities and Exchange Commission filing, Zions said that accounting adjustments related to the repayment would be recorded as reduction to earnings. Zions earned 24 cents per diluted share in last year's fourth quarter and analysts polled by Thomson Reuters had estimated that it would earn 28 cents per share this quarter.

Zions' shares were trading at $21.35 Thursday, down 2% from Wednesday's closing price.

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Law and regulation

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