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Zions Bancorporation (ZION - Free Report) is a regional bank in the right part of the country to cash in on the growing US economy: the west. This Zacks Rank #1 (Strong Buy) is expected to see double digit earnings growth in both 2017 and 2018.

Zions Bancorporation is a regional bank headquartered in Salt Lake City, Utah with total assets exceeding $65 billion. It has a market cap of $8.9 billion and operates in 11 states including Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington and Wyoming.

It offers all of the full range of banking services including wealth management and commercial loans.

Another Beat in the Second Quarter

On July 25, Zions reported its second quarter results and beat the Zacks Consensus Estimate by 11 cents. Earnings were $0.73 compared to the consensus of $0.62. It has now beaten 5 quarters in a row.

Net loans and leases rose by $941 million to $43.7 billion from $42.5 billion year-over-year. The gains came from an increase of $647 million in commercial loans and $302 million in 1-4 family residential loans.

It's seeing real improvement in its credit loss provisions. It was just $10 million in the second quarter, down from $18 million in the first quarter. That is also significantly lower than the $31 million credit loss provision in the second quarter of 2016.

Zions saw improvement in its oil and gas-related loan portfolio as non-performing assets fell $37 million in that area year-over-year.

The allowance for credit losses for oil and gas-related loans decreased during the second quarter but still exceeded 8% of the total loan portfolio.

Capital Plan for 2017-2018

The Federal Reserve approved the bank's capital plan for July 1, 2017 to June 30, 2018. That entailed doubling the currently quarterly dividend to $0.24 by the second quarter of 2018 from the current $0.12.

It's current dividend is yielding 1.1% but that will obviously be increasing.

It will also increase its share repurchase for the entire capital plan period to $465 million. In the second quarter, it repurchased $45 million.

Estimates Soar

Analysts liked what they heard as rough times appear to be waning for Zions.

10 estimates have been revised higher in the last 60 days pushing the Zacks Consensus up to $2.81 from $2.58. That's earnings growth of 41.3% as it made just $1.99 last year.

Analysts are also bullish on 2018 as earnings are expected to rise another 10.7%.

Is It Finally Breaking Out?

Shares recently saw 5-year highs but have come off those levels a bit.



But all bank stocks have struggled to find upward momentum in 2017.

Zions is trading with a forward P/E of 15.4 which is under that of the S&P 500, which is trading with an average P/E of 19.8.

If you're buying into the turnaround story in the banks, especially those in oil and gas, then Zions is one regional bank you might want to keep on your short list.

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