Zions' Q1 Earnings Top Estimates on Higher NII & Fee Income

Core Viewpoint - Zions Bancorporation reported strong first-quarter 2025 adjusted earnings per share (EPS) of $1.24, exceeding expectations and showing a significant year-over-year increase of 29.2$795 million, a 7.1% increase year-over-year, although it fell short of the Zacks Consensus Estimate of $808.3 million [4] - NII was reported at$624 million, up 6.5%, attributed to lower funding costs and a favorable mix in average interest-earning assets, with a net interest margin (NIM) expanding by 16 basis points to 3.10% [4] - Non-interest income rose by 9.6% to $171 million, surpassing projections [5] - Adjusted non-interest expenses increased by 4.3$533 million, slightly below estimates, with an adjusted efficiency ratio of 66.6%, indicating improved profitability [5] Loan and Deposit Trends - As of March 31, 2025, net loans and leases held for investment were $59.2 billion, reflecting a 1$76 billion [6] Credit Quality - The ratio of non-performing assets to loans and leases increased by 7 basis points year-over-year to 0.51%, with net loan and lease charge-offs rising to $16 million from$6 million in the prior-year quarter [7] - Provision for credit losses was $18 million, marking a 38.5% increase from the year-ago quarter [7] Capital and Profitability Ratios - The Tier 1 leverage ratio remained stable at 8.4%, while the common equity tier 1 capital ratio improved to 10.8% from 10.4% year-over-year [8] - The tier 1 risk-based capital ratio decreased to 10.9% from 11% in the prior-year quarter [8] - Return on average assets increased to 0.77% from 0.70%, while return on average tangible common equity slightly decreased to 13.4% from 13.7% [9] Future Outlook - The company’s rising loan demand and improving fee income, along with higher interest rates, are positive indicators for future performance, although increasing operating expenses and high funding costs present challenges [11]