Zions Bancorporation, National Association Reports First Quarter Financial Results

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Zions Bancorporation, National Association reported first quarter 2024 net earnings of $143 million, with a slight decrease compared to the previous year. Despite challenges in net interest income due to past bank failures, the bank saw improvements in net interest margin and earning asset growth. The commercial real estate portfolio performed well, with manageable loan losses. A successful conversion of deposit accounts to a new platform was completed post-quarter end for better customer service.

Positive

• Zions Bancorporation reported net earnings of $143 million for the first quarter of 2024.
• Net earnings per diluted common share were $0.96, down from $1.33 in the first quarter of 2023.
• Taxable-equivalent revenue decreased by 11.3% from the prior year.
• Classified loans in the commercial real estate portfolio increased by only 7%.
• Net charge-offs for the quarter were at a low 0.04% of loans and leases.
• A successful conversion of deposit accounts to a new platform was completed post-quarter end.

Negative

• Net earnings applicable to common shareholders decreased compared to the previous year.
• Taxable-equivalent revenue saw a decrease of 11.3% from the prior year.
• An increase in classified loans was experienced during the quarter.
• Adjusted operating expenses increased by 0.4% from the previous year's quarter.

Financial Analyst

Zions Bancorporation's report of $143 million in net earnings for Q1 2024 shows a decrease from the $198 million figure of the previous year. This decline can be attributed to the residual effects of past bank failures. Despite the drop in net earnings, there is a reported improvement in net interest margin and earning asset growth, which could indicate a potential recovery trajectory. The modest increase in operating expenses by 0.4% suggests tight expense management, offsetting some revenue loss. Investors should note the low annualized net charge-offs at 0.04%, signifying low loan defaults, reflecting prudent credit risk management. The update on the successful conversion to the TCS BaNCS™ platform hints at future operational efficiencies and customer service improvements, potentially leading to cost savings and revenue growth in the long term.

Technology Analyst

The conversion to the new TCS BaNCS™ platform is a significant technological upgrade for Zions Bancorporation. Real-time transaction posting and improved internal processes are key benefits that could lead to enhanced customer satisfaction and operational efficiencies. The strategic investment in technology infrastructure often results in long-term cost savings and an improved competitive edge in the digital banking landscape. For shareholders, the completion of this conversion could translate into better financial performance due to potential market share gains and the ability to attract tech-savvy customers.

Credit Risk Analyst

The reported increase in classified loans in Q1 could raise an eyebrow, yet the context provided reveals that the commercial real estate portfolio is performing well, with only a 7% increase in classified loans. The net recovery in charged-off CRE loans is also encouraging. These factors imply a resilient asset class within the bank's portfolio. The reported manageable expectations of loan losses are comforting for investors, suggesting that the bank's credit risk profile is under control and that provisions for loan losses may not need to be significantly increased in the near term. This could help maintain investor confidence in the bank's credit risk management practices.

SALT LAKE CITY, April 22, 2024 /PRNewswire/ -- Zions Bancorporation, N.A. (NASDAQ: ZION) ("Zions" or "the Bank") today reported net earnings applicable to common shareholders for the first quarter of 2024 of $143 million, or $0.96 per diluted common share, compared with net earnings applicable to common shareholders of $198 million, or $1.33 per diluted common share, for the first quarter of 2023, and net earnings applicable to common shareholders of $116 million, or $0.78 per diluted common share, for the fourth quarter of 2023.

Harris H. Simmons, Chairman and CEO of Zions Bancorporation, commented, "First quarter results continued to reflect the adverse impact on net interest income of the bank failures a year ago, with taxable-equivalent revenue down 11.3% from the prior year. We nevertheless saw incremental improvement in our net interest margin and earning asset growth, and adjusted operating expenses (which exclude an additional FDIC special assessment related to last year's bank failures) increased a modest 0.4% from last year's quarter."

Mr. Simmons continued, "Although we experienced an increase in classified loans during the quarter, our commercial real estate portfolio continues to perform relatively well; classified loans in that portfolio increased only 7%, and we had a slight net recovery in previously charged-off CRE loans during the quarter. We continue to expect that ultimate realized loan losses will be very manageable over the remainder of the year, as indicated by annualized net charge-offs for the quarter which were a very low 0.04% of loans and leases."

Mr. Simmons concluded, "Immediately following quarter end, we completed a very successful conversion of all the deposit accounts at Amegy Bank and Nevada State Bank to our new TCS BaNCS™ platform. We anticipate completing the conversion of substantially all remaining accounts later this summer, providing us the ability to post transactions to our core systems in real time, significantly improve internal processes, and better serve customers."

For the full version of the Bank's 2024 first quarter earnings release, including financial schedules, please visit www.zionsbancorporation.com.

Supplemental Presentation and Conference Call

Zions has posted a supplemental presentation to its website, which will be used to discuss the first quarter results at 9:30 a.m. ET on April 22, 2024. Media representatives, analysts, investors, and the public are invited to join this discussion by calling (877) 709-8150 (domestic and international) and using the meeting number 13745670, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation website at www.zionsbancorporation.com. The webcast of the conference call will also be archived and available for 30 days.

About Zions Bancorporation, N.A.

Zions Bancorporation, N.A. is one of the nation's premier financial services companies with approximately $87 billion of total assets at December 31, 2023, and annual net revenue of $3.1 billion in 2023. Zions operates under local management teams and distinct brands in 11 western states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. The Bank is a consistent recipient of national and state-wide customer survey awards in small- and middle-market banking, as well as a leader in public finance advisory services and Small Business Administration lending. In addition, Zions is included in the S&P MidCap 400 and NASDAQ Financial 100 indices. Investor information and links to local banking brands can be accessed at www.zionsbancorporation.com.

Forward-Looking Information

This earnings release includes "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and assumptions regarding future events or determinations, all of which are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, performance or achievements, industry trends, and results or regulatory outcomes to differ materially from those expressed or implied. Forward-looking statements include, among others:

• Statements with respect to the beliefs, plans, objectives, goals, targets, commitments, designs, guidelines, expectations, anticipations, and future financial condition, results of operations and performance of Zions Bancorporation, National Association and its subsidiaries (collectively "Zions Bancorporation, N.A.," "the Bank," "we," "our," "us"); and
• Statements preceded or followed by, or that include the words "may," "might," "can," "continue," "could," "should," "would," "believe," "anticipate," "estimate," "forecasts," "expect," "intend," "target," "commit," "design," "plan," "projects," "will," and the negative thereof and similar words and expressions.

Forward-looking statements are not guarantees, nor should they be relied upon as representing management's views as of any subsequent date. Actual results and outcomes may differ materially from those presented. Although the following list is not comprehensive, important factors that may cause material differences include:

• The quality and composition of our loan and securities portfolios and the quality and composition of our deposits;
• Changes in general industry, political and economic conditions, including elevated inflation, economic slowdown or recession, or other economic challenges; changes in interest and reference rates, which could adversely affect our revenue and expenses, the value of assets and liabilities, and the availability and cost of capital and liquidity; deterioration in economic conditions that may result in increased loan and leases losses;
• The effects of newly enacted and proposed regulations affecting us and the banking industry, as well as changes and uncertainties in applicable laws, and fiscal, monetary, regulatory, trade, and tax policies, and actions taken by governments, agencies, central banks, and similar organizations, including those that result in decreases in revenue; increases in bank fees, insurance assessments and capital standards; and other regulatory requirements;
• Competitive pressures and other factors that may affect aspects of our business, such as pricing and demand for our products and services, and our ability to recruit and retain talent;
• The impact of technological advancements, digital commerce, artificial intelligence, and other innovations affecting the banking industry;
• Our ability to complete projects and initiatives and execute on our strategic plans, manage our risks, control compensation and other expenses, and achieve our business objectives;
• Our ability to develop and maintain technology, information security systems and controls designed to guard against fraud, cybersecurity, and privacy risks;
• Our ability to provide adequate oversight of our suppliers or prevent inadequate performance by third parties upon whom we rely for the delivery of various products and services;
• Natural disasters, pandemics, catastrophic events and other emergencies and incidents and their impact on our and our customer's operations and business and communities, including the increasing difficulty in, and the expense of, obtaining property, auto, business, and other insurance products;
• Governmental and social responses to environmental, social, and governance issues, including those with respect to climate change;
• Securities and capital markets behavior, including volatility and changes in market liquidity and our ability to raise capital;
• The possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and shareholders' equity, but not on our regulatory capital;
• The impact of bank closures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks;
• Adverse news and other expressions of negative public opinion whether directed at us, other banks, the banking industry, or otherwise that may adversely affect our reputation and that of the banking industry generally;
• Protracted congressional negotiations and political stalemates regarding government funding and other issues, including those that increase the possibility of government shutdowns, downgrades in United States ("U.S.") credit ratings, or other economic disruptions; and
• The effects of wars and geopolitical conflicts, such as the ongoing war between Russia and Ukraine, the war in the Middle East, and other local, national, or international disasters, crises, or conflicts that may occur in the future.

Factors that could cause our actual results, performance or achievements, industry trends, and results or regulatory outcomes to differ materially from those expressed or implied in the forward-looking statements are discussed in our 2023 Form 10-K and subsequent filings with the Securities and Exchange Commission (SEC), and are available on our website (www.zionsbancorporation.com) and from the SEC (www.sec.gov).

We caution against the undue reliance on forward-looking statements, which reflect our views only as of the date they are made. Except to the extent required by law, we specifically disclaim any obligation to update any factors or to publicly announce the revisions to any forward-looking statements to reflect future events or developments.

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SOURCE Zions Bancorporation

FAQ

What were Zions Bancorporation's net earnings for the first quarter of 2024?

Zions Bancorporation reported net earnings of $143 million for the first quarter of 2024.

How did the net earnings per diluted common share compare between the first quarters of 2023 and 2024?

The net earnings per diluted common share were $0.96 for the first quarter of 2024, down from $1.33 in the first quarter of 2023.

What was the percentage decrease in taxable-equivalent revenue from the prior year?

Taxable-equivalent revenue decreased by 11.3% from the prior year.

How much did classified loans in the commercial real estate portfolio increase by?

Classified loans in the commercial real estate portfolio increased by only 7%.

What was the percentage of net charge-offs for the quarter in relation to loans and leases?

Net charge-offs for the quarter were at a low 0.04% of loans and leases.

What major event occurred post-quarter end for Zions Bancorporation?

A successful conversion of deposit accounts to a new platform was completed post-quarter end for better customer service.