We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zions' (ZION) Q3 Earnings Top Estimates on Higher Revenues
Read MoreHide Full Article
Zions Bancorporation (ZION - Free Report) reported third-quarter 2016 earnings of 57 cents per share, which surpassed the Zacks Consensus Estimate of 50 cents. Moreover, this compared favorably with the year-ago earnings of 41 cents per share.
Better-than-expected results were primarily driven by higher revenues. Further, growth in deposits acted as a tailwind. However, these were partially offset by an escalated provision for loan losses and non-interest expenses. Also, capital position deteriorated during the quarter.
Net income applicable to common shareholders came in at $116.9 million, up 38.8% from the year-ago quarter.
Rising Revenues Support Results While Escalated Expenses Hurt
Net revenue (FTE basis) was $614.1 million, up 11.4% year over year. Further, the figure surpassed the Zacks Consensus Estimate of $603.8 million.
Net interest income increased 10.3% year over year to $469.2 million. Further, net interest margin improved 25 basis points (bps) year over year to 3.36%.
Non-interest income amounted to $144.9 million, up 15% from the year-ago quarter. The improvement was due to an increase in customer-related fees, net gain on securities, dividends and other investment income, and absence of loss on fair value and non-hedge derivative income, partially offset by a fall in other non-interest income.
Adjusted non-interest expenses increased 5.6% from the year-ago quarter to $403.8 million. Nonetheless, efficiency ratio was 66.0%, down from 69.1% a year ago. A fall in efficiency ratio indicates an improvement in profitability.
Strong Balance Sheet
As of Sep 30, 2016, total loans, net of allowance, were almost in line with the prior quarter at $41.9 billion. Also, total deposits rose nearly 1% from the previous quarter to $50.8 billion.
Credit Quality Weakened
The ratio of nonperforming lending-related assets to net loans and leases as well as other real estate owned increased 45 bps year over year to 1.37%.
Further, provisions for loan losses came in at $18.8 million, compared with $18.3 million in the prior-year quarter. Nonetheless, net charge-offs were $30 million, down from $31 million in the year-ago quarter.
Capital Ratios Deteriorated But Profitability Improved
Under the Basel III rules, Tier 1 leverage ratio came in at 11.3%, as of Sep 30, 2016, down from 11.6% in the prior-year quarter. Tier 1 risk-based capital ratio came in at 13.5% compared with 14.4% in the year-ago quarter.
Return on average assets was 0.84% as of Sep 30, 2016, up from 0.69% as of Sep 30, 2015. Also, as of Sep 30, 2016, tangible return on average tangible common equity was 7.88%, up from 6.05% a year ago.
Our Viewpoint
Zions remains well positioned for future growth based on consistent improvement in loans and deposits. Also, the company’s efforts to restructure its balance sheet continue to be impressive. Further, its persistent cost control initiatives will help support the bottom line, going forward.
Nevertheless, we remain apprehensive of an asset-sensitive balance sheet and regulatory restrictions, which are likely to weigh on the company’s financials in the near term. Further, Zions’ significant exposure to the stressed energy sector loans continues to be a matter of concern.
First Republic Bank’s adjusted earnings per share for third-quarter 2016 came in at $1.00, beating the Zacks Consensus Estimate of 99 cents. A sizeable increase in net interest income and non-interest income during the quarter was primarily responsible for the bottom-line improvement. On the flip side, the quarter recorded higher expenses.
SVB Financial Group reported third-quarter 2016 earnings per share of $2.12, which comfortably surpassed the Zacks Consensus Estimate of $1.75. Better-than-expected results were primarily driven by a rise in net interest income and fee income. Further, a decline in provisions for loan losses supported the results. However, higher non-interest expense remained a headwind.
BofI Holding, Inc. will announce its first quarter fiscal 2017 results on Oct 27.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Zions' (ZION) Q3 Earnings Top Estimates on Higher Revenues
Zions Bancorporation (ZION - Free Report) reported third-quarter 2016 earnings of 57 cents per share, which surpassed the Zacks Consensus Estimate of 50 cents. Moreover, this compared favorably with the year-ago earnings of 41 cents per share.
Better-than-expected results were primarily driven by higher revenues. Further, growth in deposits acted as a tailwind. However, these were partially offset by an escalated provision for loan losses and non-interest expenses. Also, capital position deteriorated during the quarter.
Net income applicable to common shareholders came in at $116.9 million, up 38.8% from the year-ago quarter.
Rising Revenues Support Results While Escalated Expenses Hurt
Net revenue (FTE basis) was $614.1 million, up 11.4% year over year. Further, the figure surpassed the Zacks Consensus Estimate of $603.8 million.
Net interest income increased 10.3% year over year to $469.2 million. Further, net interest margin improved 25 basis points (bps) year over year to 3.36%.
Non-interest income amounted to $144.9 million, up 15% from the year-ago quarter. The improvement was due to an increase in customer-related fees, net gain on securities, dividends and other investment income, and absence of loss on fair value and non-hedge derivative income, partially offset by a fall in other non-interest income.
Adjusted non-interest expenses increased 5.6% from the year-ago quarter to $403.8 million. Nonetheless, efficiency ratio was 66.0%, down from 69.1% a year ago. A fall in efficiency ratio indicates an improvement in profitability.
Strong Balance Sheet
As of Sep 30, 2016, total loans, net of allowance, were almost in line with the prior quarter at $41.9 billion. Also, total deposits rose nearly 1% from the previous quarter to $50.8 billion.
Credit Quality Weakened
The ratio of nonperforming lending-related assets to net loans and leases as well as other real estate owned increased 45 bps year over year to 1.37%.
Further, provisions for loan losses came in at $18.8 million, compared with $18.3 million in the prior-year quarter. Nonetheless, net charge-offs were $30 million, down from $31 million in the year-ago quarter.
Capital Ratios Deteriorated But Profitability Improved
Under the Basel III rules, Tier 1 leverage ratio came in at 11.3%, as of Sep 30, 2016, down from 11.6% in the prior-year quarter. Tier 1 risk-based capital ratio came in at 13.5% compared with 14.4% in the year-ago quarter.
Return on average assets was 0.84% as of Sep 30, 2016, up from 0.69% as of Sep 30, 2015. Also, as of Sep 30, 2016, tangible return on average tangible common equity was 7.88%, up from 6.05% a year ago.
Our Viewpoint
Zions remains well positioned for future growth based on consistent improvement in loans and deposits. Also, the company’s efforts to restructure its balance sheet continue to be impressive. Further, its persistent cost control initiatives will help support the bottom line, going forward.
Nevertheless, we remain apprehensive of an asset-sensitive balance sheet and regulatory restrictions, which are likely to weigh on the company’s financials in the near term. Further, Zions’ significant exposure to the stressed energy sector loans continues to be a matter of concern.
ZIONS BANCORP Price, Consensus and EPS Surprise
ZIONS BANCORP Price, Consensus and EPS Surprise | ZIONS BANCORP Quote
Currently, Zions carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other West Banks
First Republic Bank’s adjusted earnings per share for third-quarter 2016 came in at $1.00, beating the Zacks Consensus Estimate of 99 cents. A sizeable increase in net interest income and non-interest income during the quarter was primarily responsible for the bottom-line improvement. On the flip side, the quarter recorded higher expenses.
SVB Financial Group reported third-quarter 2016 earnings per share of $2.12, which comfortably surpassed the Zacks Consensus Estimate of $1.75. Better-than-expected results were primarily driven by a rise in net interest income and fee income. Further, a decline in provisions for loan losses supported the results. However, higher non-interest expense remained a headwind.
BofI Holding, Inc. will announce its first quarter fiscal 2017 results on Oct 27.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>