ZIONS(ZIONL) - 2024 Q3 - Quarterly Report

Financial Performance - Diluted earnings per share (EPS) increased to $1.37, up from $1.13 in Q3 2023, reflecting higher net interest income and a lower provision for credit losses [19]. - Net interest income rose by $35 million, or 6%, compared to the prior year, with a net interest margin of 3.03%, up from 2.93% [19]. - Net interest income for Q3 2024 was $620 million, a 6% increase from $585 million in Q3 2023 [20]. - Total interest income rose to $1,104 million in Q3 2024, compared to $1,010 million in Q3 2023, marking a 9% increase [174]. - Net income for the three months ended September 30, 2024, was $214 million, an increase of 22.3% compared to $175 million for the same period in 2023 [175]. - Net income for the nine months ended September 30, 2024, was $568 million, compared to $554 million for the same period in 2023, an increase of 3% [174]. Loan and Lease Growth - Total loans and leases grew by $2.0 billion, or 3%, primarily driven by increases in the consumer residential mortgage and commercial and industrial loan portfolios [19]. - Total loans and leases outstanding increased to $58,884 million as of September 30, 2024, up from $57,779 million at December 31, 2023, and $56,893 million at September 30, 2023 [119]. - The total loan and lease portfolio increased by $1.1 billion, or 2%, reaching $58.9 billion, with significant growth in the consumer 1-4 family residential mortgage portfolio [69]. - The average balance of commercial loans was $30.553 billion, generating $1.383 billion in interest income, with a yield of 6.05% [36]. Credit Quality and Losses - The provision for credit losses was $13 million, a decrease from $41 million in the prior year period [19]. - Nonperforming assets totaled $368 million, or 0.62% of total loans and leases, up from $219 million, or 0.38% [19]. - Classified loans increased to $2.1 billion, or 3.55% of total loans and leases, compared to $769 million, or 1.35% [19]. - Net loan and lease charge-offs were $3 million, or 0.02% of average loans and leases, down from $14 million, or 0.10% in the prior year quarter [19]. - The allowance for credit losses (ACL) was $736 million as of September 30, 2024, slightly down from $738 million a year earlier, with a ratio of ACL to total loans and leases at 1.25% compared to 1.30% in the prior year [40]. Deposits and Funding - Customer deposits (excluding brokered deposits) increased by $1.7 billion, or 2%, reaching $70.5 billion compared to $68.8 billion [19]. - Average deposits decreased by $0.7 billion, or 1%, to $75.0 billion, with average noninterest-bearing deposits decreasing by $3.2 billion, or 11% [29]. - Total borrowed funds decreased by $1.4 billion, or 29%, from the prior year quarter, primarily due to a reduction in security repurchase agreements [19]. - Total deposits increased to $75,718 million as of September 30, 2024, compared to $74,961 million at the end of 2023, reflecting a growth of 1% [173]. Noninterest Income and Expenses - Noninterest income accounted for approximately 22% of net revenue in Q3 2024, down from 24% in Q3 2023, with a total noninterest income of $172 million, a decrease of $8 million or 4% year-over-year [48]. - Total noninterest expense increased by $6 million, or 1%, year-over-year for the three months ended September 30, 2024, totaling $502 million [51]. - Adjusted noninterest expense (non-GAAP) for Q3 2024 was $499 million, slightly up from $493 million in Q3 2023, reflecting a 1% increase [174]. - The efficiency ratio improved to 62.5% from 64.4% due to an increase in adjusted taxable-equivalent revenue [52]. Capital and Shareholder Equity - Total shareholders' equity increased by $694 million, or 12%, to $6.4 billion as of September 30, 2024, compared to $5.7 billion at December 31, 2023 [153]. - Common equity tier 1 capital increased by 6% to $7.206 billion, with a common equity tier 1 capital ratio of 10.7% as of September 30, 2024, compared to 10.2% in the prior year [160]. - The tangible common equity ratio increased to 5.7% as of September 30, 2024, compared to 4.4% in the prior year [167]. - Dividends on common stock paid during the third quarter of 2024 amounted to $61 million, maintaining the same level as the previous year [158]. Investment Securities - The amortized cost of total investment securities decreased by $1.6 billion, or 7%, from December 31, 2023, largely due to principal reductions [62]. - The total investment securities amount to $20,588 million in amortized cost, with estimated fair value at $19,519 million as of December 31, 2023 [198]. - The total available-for-sale securities have an estimated fair value of $9,495 million as of September 30, 2024, with gross unrealized gains of $1,238 million [198]. - The total held-to-maturity securities have an estimated fair value of $10,024 million as of September 30, 2024, with gross unrealized losses of $215 million [198].