November 23, 2009 / 3:18 PM / 10 years ago

UPDATE 1-Zions sees tax refund from cut in securities value

* To cut value of some securities in portfolio

* Adjustment to result in pre-tax losses of $423 mln

* Expects tax refunds

* Stock up 15 pct

Nov 23 (Reuters) - Zions Bancorp (ZION.O) said it will reduce the value of certain securities in its investment portfolio, resulting in a pretax loss of about $423 million on the securities, and expects a tax refund, sending shares up as much as 15 percent.

The transactions will have no material impact on consolidated net income, but will impact the balance sheet by reducing net federal deferred tax assets by about $148 million, the company said.

As a result of the adjustments, the company will receive a cash refund of a substantial majority of the total $340 million of federal income taxes paid in 2007, it said.

The adjustments will be recognized on the company’s consolidated tax return for 2009.

Separately, Zions said it will exchange about 5.6 million depositary shares for common shares to boost its common tangible equity ratio, a measure of capital increasingly important to stock investors and debt rating agencies.

Deutsche Bank Securities Inc and Goldman Sachs & Co are the financial advisers for the exchange offer, the company said in a statement.

Shares of the company were trading up 14 percent at $14.31 in morning trade on Nasdaq. They earlier touched a high of $14.42. (Reporting by Sweta Singh in Bangalore; Editing by Anil D’Silva)

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