Zions Shares Jumped: What You Need to Know

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Utah-based banker Zions Bancorporation (NAS: ZION) were flying high today, gaining as much as 11% in intraday trading after the bank announced plans to use debt to repay its TARP loans.

So what: In short, Zions will be getting the government off its balance sheet and will do it without diluting shareholders with new equity. In a press release yesterday, Zions said the Federal Reserve gave the bank a go-ahead on its plan to repay TARP and other government loans. It was widely expected that Zions would have to issue new stock to make the repayment, but the plan that it's moving forward with is only raising money through debt -- specifically, $600 million in new senior debt.

Now what: Not only is it good news for shareholders that Zions isn't issuing new stock, but the fact that it's been given the green light to repay the loans suggests that regulators believe the bank is on solid footing. For investors excited about dividends, though, it may be notable that included in Zions' plan is the pledge to keep its quarterly dividend at $0.01 at least through 2012.

Want to keep up to date on Zions Bancorporation?Add it to your watchlist.

At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferhas nofinancial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners