Zions Bancorporation, National Association Reports Fourth Quarter Financial Results

Rhea-AI Summary

Zions Bancorporation, N.A. (NASDAQ: ZION) reported net earnings of $116 million for Q4 2023, compared to $277 million for Q4 2022. The Bank also saw strong customer deposit and loan growth, stable net interest margin, and strong credit quality of the loan portfolio. However, operating expenses were impacted by a one-time $90 million FDIC special assessment.

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• None.

Negative

• Operating expenses were impacted by a one-time $90 million FDIC special assessment.

Insights

Financial Analyst

Zions Bancorporation's fourth-quarter financial results indicate a significant year-over-year decline in net earnings applicable to common shareholders, dropping from $277 million to $116 million. This decrease in profitability is a key metric that market analysts and investors would scrutinize, as it reflects the bank's performance in a competitive and potentially volatile market. The reported earnings per diluted common share also saw a decrease from $1.84 to $0.78, which could impact investor sentiment and the bank's valuation in the stock market. Analyzing the factors contributing to this decline, such as the one-time FDIC special assessment, is essential to understand the bank's operational efficiency and risk management strategies.

Furthermore, the reported growth in customer deposits and loans indicates an expanding customer base and possibly an increase in the bank's market share. However, it is crucial to assess the quality of these loans, especially in the context of the moderate increase in classified loans. While the low net charge-off ratio suggests a healthy loan portfolio, close monitoring of these risk indicators is necessary to predict future performance and potential defaults, particularly in an uncertain economic environment.

Economist

The economic context in which Zions Bancorporation operates, particularly the reference to stable or lowering short-term interest rates and moderate economic expansion in the western United States, suggests a cautiously optimistic outlook for regional banks. Interest rates have a direct impact on banks' net interest margins, which is a significant determinant of their profitability. A stable net interest margin in the face of changing interest rates could indicate effective interest rate risk management. Additionally, economic expansion in the region could lead to increased business activity and loan demand, potentially benefiting the bank's financial position. However, the broader economic trends, including inflation, unemployment rates and GDP growth, must be considered when forecasting the bank's growth and profitability.

Market Research Analyst

The emphasis on client acquisition and improved client profitability points to Zions Bancorporation's strategic focus on enhancing customer relationships and service quality. This approach could differentiate the bank in a crowded marketplace and drive long-term loyalty and revenue growth. It is important to analyze the bank's investments in business and technology infrastructure to gauge their potential impact on operational efficiency and customer experience. The bank's performance in these areas could influence its competitive edge and market positioning, which are critical factors for investors evaluating the bank's future prospects.

SALT LAKE CITY, Jan. 22, 2024 /PRNewswire/ -- Zions Bancorporation, N.A. (NASDAQ: ZION) ("Zions" or "the Bank") today reported net earnings applicable to common shareholders for the fourth quarter of 2023 of $116 million, or $0.78 per diluted common share, compared with net earnings applicable to common shareholders of $277 million, or $1.84 per diluted common share, for the fourth quarter of 2022, and net earnings applicable to common shareholders of $168 million, or $1.13 per diluted common share, for the third quarter of 2023.

Harris H. Simmons, Chairman and CEO of Zions Bancorporation, commented, "Fourth quarter operating results reflect the Bank's resiliency, with strong quarter-over-quarter customer deposit growth of $1.7 billion, loan growth of $0.9 billion, a stable net interest margin and continued strengthening of the Bank's capital position. Operating expenses, excluding a one-time $90 million FDIC special assessment related to the bank failures in early 2023, continued to be well managed."

Mr. Simmons continued, "We were particularly pleased with the strong credit quality of our loan portfolio, reflected in an annualized net charge-off ratio of 0.06%. While classified loans moderately increased during the quarter, the portfolio is characterized by strong collateral coverage that has mitigated loss exposure. We are poised for growth in the year ahead, as we expect that our business investments and focus on improved client profitability, combined with stable or lower short-term interest rates and continued moderate economic expansion in the western United States, should result in client acquisition and improvement in our financial results."

For the full version of the Bank's 2023 fourth 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 fourth quarter results at 5:30 p.m. ET on January 22, 2024. Media representatives, analysts, investors, and the public are invited to join this discussion by calling (877) 709-8150 (domestic and international) and entering the passcode 13743994, 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 500 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, often accompanied by words such as "may," "might," "could," "anticipate," "expect," and similar terms, are based on management's current expectations and assumptions regarding future events or determinations, all of which are subject to known and unknown risks and uncertainties.

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;
• The effects of newly enacted 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;
• Protracted congressional negotiations and political stalemates regarding government funding and other issues, including those that increase the possibility of government shutdowns, downgrades in U.S. credit ratings, or other economic disruptions;
• Changes in general industry, political and economic conditions, including continued 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 obligations, and the availability and cost of capital and liquidity; deterioration in economic conditions that may result in increased loan and leases losses;
• Securities and capital markets behavior, including volatility and changes in market liquidity and our ability to raise capital;
• The impact of bank closures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks;
• 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.
• Competitive pressures and other factors that may affect aspects of our business, such as pricing and demand for our products and services, our ability to recruit and retain talent, and 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 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;
• Our ability to develop and maintain technology, information security systems and controls designed to guard against fraud, cybersecurity, and privacy risks;
• Adverse media 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;
• The effects of wars and geopolitical conflicts, such as the ongoing war between Russia and Ukraine and the escalating war in the Middle East, and other local, national, or international disasters, crises, or conflicts that may occur in the future;
• Natural disasters, pandemics, catastrophic events and other emergencies and incidents that may impact our and our customer's operations and business and communities; and
• Governmental and social responses to environmental, social, and governance issues, including those with respect to climate change.

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 2022 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 fourth quarter of 2023?

Zions Bancorporation reported net earnings of $116 million for the fourth quarter of 2023.

What was the impact of the one-time FDIC special assessment on the bank's operating expenses?

The one-time $90 million FDIC special assessment impacted the bank's operating expenses.

What is the ticker symbol for Zions Bancorporation?

The ticker symbol for Zions Bancorporation is ZION.

Where can I find the full version of the Bank's 2023 fourth quarter earnings release?

The full version of the Bank's 2023 fourth quarter earnings release, including financial schedules, can be found at www.zionsbancorporation.com.

When will the conference call to discuss the fourth quarter results take place?

The conference call to discuss the fourth quarter results will take place at 5:30 p.m. ET on January 22, 2024.