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Key Takeaways
- Zions Bancorporation’s first-quarter revenue fell less than expected, and the bank reduced the amount of cash it set aside to pay for bad loans.
- The bank reduced its provisions for credit losses to $13 million from $45 million last year.
- Zions anticipates loan losses will be “very manageable” over the rest of this year.
Shares of Zions Bancorporation (ZION) advanced in intraday trading Monday as the regional bank posted better-than-expected revenue and reduced the money it set aside for bad loans.
The bank reported first-quarter revenue declined more than 11% to $742 million, but that was slightly above analysts’ forecasts compiled by Visible Alpha. Earnings per share (EPS) of $0.96 matched forecasts.
Net interest income was down 14% to $586 million. However, even though net income margin dropped to 2.94% from 3.33% in Q1 2023, it was slightly higher than the 2.91% in the fourth quarter. Noninterest income slipped 3% year-over-year to $156 million.
Zions slashed its provisions for credit losses to $13 million from $45 million in the same period last year. Chief Executive Officer (CEO) Harris Simmons said the bank continues to anticipate 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.”
The company also paid $13 million in a special Federal Deposit Insurance Corporation (FDIC) assessment to cover expenses incurred to cover for bank failures.
Shares of Zions Bancorporation rose 4.4% to $41.69 as of 2:06 p.m. ET Monday but are about 5% lower this year.