Zions Bancorporation(US:ZION)2025-05-08 20:59Financial Performance - Net earnings applicable to common shareholders increased, with diluted EPS rising to $1.13 from $0.96 in the first quarter of 2024, reflecting a growth of approximately 18%[19]. - Net income for the period rose to $170 million in Q1 2025, up from $153 million in Q1 2024, marking an increase of 11.1%[186]. - Basic earnings per common share increased to $1.13 for Q1 2025, compared to $0.96 for Q1 2024, representing an increase of 17.7%[185]. - Comprehensive income for the period was $300 million in Q1 2025, compared to $236 million in Q1 2024, reflecting a growth of 27.1%[186]. - Net cash provided by operating activities decreased to $179 million in Q1 2025 from $261 million in Q1 2024, a decline of 31.4%[188]. Revenue and Income Sources - Net interest income grew by $38 million, or 6%, compared to the prior year, driven by lower funding costs and a favorable mix in average interest-earning assets[20]. - Customer-related noninterest income increased by $6 million, or 4%, driven by higher loan-related fees and improved capital markets income[23]. - Noninterest income increased to $171 million for the three months ended March 31, 2025, compared to $156 million in the same period of 2024, an increase of 9.6%[185]. - Noninterest expense increased by $12 million, or 2%, mainly due to higher salaries and technology expenses[23]. Loan and Deposit Growth - Total loans and leases increased by $1.8 billion, or 3%, primarily due to growth in the consumer 1-4 family residential mortgage and commercial and industrial loan portfolios[20]. - Total deposits rose by $1.5 billion, or 2%, with customer deposits (excluding brokered deposits) totaling $70.9 billion, compared to $69.9 billion[20]. - Average loans and leases increased by $1.7 billion, or 3%, to $59.6 billion, primarily due to growth in consumer and commercial loans[35]. - Average deposits increased by $1.5 billion, or 2%, to $74.9 billion, with interest-bearing deposits rising by $2.9 billion, or 6%[39]. Credit Quality and Loss Provisions - The provision for credit losses was $18 million, an increase from $13 million in the prior year period, reflecting a cautious approach to potential credit risks[20]. - Nonperforming assets totaled $307 million, or 0.51% of total loans and leases, up from $254 million, or 0.44% in the prior year[23]. - The allowance for credit losses (ACL) was $743 million, with a ratio of ACL to total loans and leases at 1.24%, down from 1.27% a year earlier[47]. - Classified loans totaled $2.9 billion, or 4.82% of total loans and leases, up from $966 million, or 1.66% in the prior year[23]. Capital and Equity - Total shareholders' equity increased by $203 million, or 3%, to $6.3 billion at March 31, 2025, compared to $6.1 billion at December 31, 2024[166]. - Common equity tier 1 capital increased by 7% to $7.4 billion compared to $6.9 billion in the prior year period[175]. - The common equity tier 1 capital ratio improved to 10.8%, up from 10.4%[175]. - Tangible book value per common share rose to $34.95, compared to $29.34 in the previous year[181]. Efficiency and Cost Management - The efficiency ratio improved, indicating better cost management relative to revenue generation[19]. - Adjusted noninterest expense increased by $22 million, or 4%, with an efficiency ratio of 66.6%, down from 67.9%[61]. - The efficiency ratio for the three months ended March 31, 2025, was 66.6%, compared to 62.0% in the previous quarter[183]. Investment and Securities - The amortized cost of total investment securities decreased by $216 million, or 1%, from December 31, 2024, primarily due to principal reductions[70]. - The carrying value of held-to-maturity investment securities was $9,481 million with an estimated fair value of $9,400 million as of March 31, 2025[204]. - Total assets measured at fair value as of March 31, 2025, amounted to $10,593 million, with $1,123 million classified as Level 1[198]. Tax and Regulatory Compliance - An increase of $16 million in income tax expense negatively impacted EPS by $0.11 per share due to a revaluation of deferred tax assets from newly enacted Utah state tax legislation[20]. - The effective tax rate rose to 28.9% for Q1 2025, up from 24.6% in Q1 2024, largely due to new Utah state tax legislation[64]. - The company exceeded all capital adequacy requirements under the Basel III capital rules as of March 31, 2025[173]. Market and Economic Conditions - The company continues to manage interest rate risk through strategies such as interest rate swaps and investments in fixed-rate securities, adapting to changes in customer deposit behavior due to the higher interest rate environment[136][139]. - Earnings at Risk (EaR) for a +200 bps parallel shift in rates is estimated at 7.6% as of March 31, 2025, compared to 8.7% for December 31, 2024[144]. - Economic Value of Equity (EVE) is projected to decrease by 5.9% under a +200 bps parallel shift in rates as of March 31, 2025[144].