ZIONS BANCORPORA(ZIONP) - 2025 Q1 - Quarterly Report

Financial Performance - Net earnings applicable to common shareholders increased, with diluted EPS rising to $1.13 from $0.96 year-over-year, 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]. - 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]. - 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]. - Net interest income increased to $624 million for the three months ended March 31, 2025, compared to $586 million for the same period in 2024, reflecting a growth of 6.5%[185]. 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, up from $69.9 billion[20]. - Average loans and leases increased by $1.7 billion, or 3%, to $59.6 billion, driven by growth in consumer and commercial loans[35]. - Average deposits increased by $1.5 billion, or 2%, to $74.9 billion, with interest-bearing deposits up by $2.9 billion, or 6%[39]. - Total deposits decreased to $75,692 million as of March 31, 2025, down from $76,223 million at December 31, 2024, a reduction of 0.7%[184]. Credit Quality and Loss Provisions - The provision for credit losses was $18 million, up from $13 million in the prior year period[20]. - Nonperforming assets totaled $307 million, or 0.51% of total loans and leases, up from $254 million, or 0.44%[23]. - The allowance for credit losses (ACL) was $743 million, with a ratio of ACL to total loans and leases at 1.24%[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]. - The provision for loan losses for the first three months of 2025 was $17 million, a decrease from $72 million in the previous quarter[134]. Interest Income and Margin - 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]. - The net interest margin improved to 3.10%, an increase of 16 basis points from 2.94%[22]. - Net interest income rose by $38 million, or 6%, with net interest margin improving to 3.10% from 2.94%[24]. Expenses and Efficiency - Noninterest expense increased by $12 million, or 2%, mainly due to higher salaries and technology expenses[23]. - Total noninterest expense increased by $12 million, or 2%, with salaries and employee benefits rising by $11 million due to higher incentive compensation[60]. - Adjusted noninterest expense increased by $22 million, or 4%, leading to 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]. Capital and Shareholder 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]. - The common equity tier 1 (CET1) capital was $7.4 billion, a 7% increase from $6.9 billion in the prior year[175]. - The CET1 capital ratio improved to 10.8%, compared to 10.4% in the previous year[175]. - The tangible common equity ratio was 5.9% as of March 31, 2025, compared to 5.0% a year prior[181]. Investment Securities - The amortized cost of total investment securities decreased by $216 million, or 1%, from December 31, 2024, primarily due to principal reductions[70]. - At March 31, 2025, the total investment securities amounted to $21.6 billion, an increase from $20.1 billion at the end of 2024[70]. - The fair value of held-to-maturity investment securities decreased to $9,400 million as of March 31, 2025, from $9,669 million at December 31, 2024[204]. Risk Management - The company is actively managing interest rate risk through strategies such as interest rate swaps and investments in fixed-rate securities to mitigate the impact of changing interest rates on net interest income[139]. - The average outstanding notional amount for cash flow hedges of assets is projected to be $750 million in Q2 2025, with a weighted average fixed rate received of 3.17%[142]. - Under current deposit assumptions, interest rate risk remains within policy limits despite a decrease in asset sensitivity during Q1 2025[145]. Acquisitions and Branches - Approximately $420 million of consumer and commercial loan balances and $630 million of deposit balances were acquired from the purchase of four FirstBank Coachella Valley branches[20]. - The acquisition of four FirstBank branches included approximately $630 million in deposits and $420 million in loans[194].