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Zions (ZION) Q3 Earnings & Revenues Top Estimates, Down Y/Y
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Zions Bancorporation’s (ZION - Free Report) third-quarter 2020 net earnings per share of $1.01 surpassed the Zacks Consensus Estimate of 86 cents. However, the bottom line compares unfavorably with the year-ago quarter’s $1.17.
Results reflect higher non-interest income and a rise in deposits balance. However, a significant rise in provision for credit losses and expenses, along with a fall in net interest income are concerns.
Net income attributable to common shareholders was $167 million, down from the prior-year quarter’s $214 million.
Revenues Decline, Expenses Down
Net revenues for the third quarter came in at $712 million, down marginally year over year. However, the top line surpassed the Zacks Consensus Estimate of $708 million.
Net interest income in the quarter came in at $555 million, down 2% from the prior-year quarter. This downside resulted from a fall in interest income. Net interest margin contracted 42 basis points (bps) year over year to 3.06%.
Non-interest income amounted to $157 million, up 7.5% from the year-ago quarter. This upswing resulted from a rise in loan related fees and commercial account fees.
Adjusted non-interest expenses came in at $440 million, flaring up 6% from the prior-year quarter.
Efficiency ratio was 62.2%, up from the 57.3% reported in the prior-year period. A rise in efficiency ratio indicates a decrease in profitability.
Balance Sheet: A Mixed Bag
As of Sep 30, 2020, net loans held for investment were $53.9 billion, down from the $54.3 billion recorded at the end of the prior quarter. Total deposits were $67.1 billion, up 2.1% from the $65.7 billion recorded at the end of second-quarter 2020.
Credit Quality Deteriorates
The ratio of non-performing assets to loans and leases as well as other real estate owned expanded 20 bps year over year to 0.68%. Provision for credit losses was $55 million compared with the $10 million reported in the year-earlier quarter.
Moreover, net loan and lease charge-offs were $52 million at the end of the reported quarter compared with the $1 million witnessed in the year-earlier quarter.
Capital & Profitability Ratios Deteriorate
Tier 1 leverage ratio was 8.3% as of Sep 30, 2020, compared with the 9.3% recorded at the end of the prior-year quarter. Tier 1 risk-based capital ratio of 11.4% remained flat, year on year.
At the end of the September quarter, return on average assets was 0.89%, down from 1.25% as of Sep 30, 2019. Also, return on average tangible common equity was 11%, down from the 14.2% witnessed in the year-ago quarter.
Share Repurchases
During the September-end quarter, the company did not repurchase any shares.
Our Viewpoint
Zion’s balance-sheet position strength was derived from a rise in deposits strong during the third quarter. Moreover, a rise in non-interest income bodes well for the company.
However, a decline in interest rates amid the Federal Reserve's accommodative policy stance is expected to hurt the company’s margins and revenues in the days to come. Further, a rise in provisions is a concern for the company.
Zions Bancorporation, N.A. Price, Consensus and EPS Surprise
Texas Capital Bancshares (TCBI - Free Report) , SEI Investments (SEIC - Free Report) and East West Bancorp (EWBC - Free Report) are scheduled to announce third-quarter results this week. While SEI Investments and Texas Capital Bancshares will release earnings figures on Oct 21, East West Bancorp will report on Oct 22.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Zions (ZION) Q3 Earnings & Revenues Top Estimates, Down Y/Y
Zions Bancorporation’s (ZION - Free Report) third-quarter 2020 net earnings per share of $1.01 surpassed the Zacks Consensus Estimate of 86 cents. However, the bottom line compares unfavorably with the year-ago quarter’s $1.17.
Results reflect higher non-interest income and a rise in deposits balance. However, a significant rise in provision for credit losses and expenses, along with a fall in net interest income are concerns.
Net income attributable to common shareholders was $167 million, down from the prior-year quarter’s $214 million.
Revenues Decline, Expenses Down
Net revenues for the third quarter came in at $712 million, down marginally year over year. However, the top line surpassed the Zacks Consensus Estimate of $708 million.
Net interest income in the quarter came in at $555 million, down 2% from the prior-year quarter. This downside resulted from a fall in interest income. Net interest margin contracted 42 basis points (bps) year over year to 3.06%.
Non-interest income amounted to $157 million, up 7.5% from the year-ago quarter. This upswing resulted from a rise in loan related fees and commercial account fees.
Adjusted non-interest expenses came in at $440 million, flaring up 6% from the prior-year quarter.
Efficiency ratio was 62.2%, up from the 57.3% reported in the prior-year period. A rise in efficiency ratio indicates a decrease in profitability.
Balance Sheet: A Mixed Bag
As of Sep 30, 2020, net loans held for investment were $53.9 billion, down from the $54.3 billion recorded at the end of the prior quarter. Total deposits were $67.1 billion, up 2.1% from the $65.7 billion recorded at the end of second-quarter 2020.
Credit Quality Deteriorates
The ratio of non-performing assets to loans and leases as well as other real estate owned expanded 20 bps year over year to 0.68%. Provision for credit losses was $55 million compared with the $10 million reported in the year-earlier quarter.
Moreover, net loan and lease charge-offs were $52 million at the end of the reported quarter compared with the $1 million witnessed in the year-earlier quarter.
Capital & Profitability Ratios Deteriorate
Tier 1 leverage ratio was 8.3% as of Sep 30, 2020, compared with the 9.3% recorded at the end of the prior-year quarter. Tier 1 risk-based capital ratio of 11.4% remained flat, year on year.
At the end of the September quarter, return on average assets was 0.89%, down from 1.25% as of Sep 30, 2019. Also, return on average tangible common equity was 11%, down from the 14.2% witnessed in the year-ago quarter.
Share Repurchases
During the September-end quarter, the company did not repurchase any shares.
Our Viewpoint
Zion’s balance-sheet position strength was derived from a rise in deposits strong during the third quarter. Moreover, a rise in non-interest income bodes well for the company.
However, a decline in interest rates amid the Federal Reserve's accommodative policy stance is expected to hurt the company’s margins and revenues in the days to come. Further, a rise in provisions is a concern for the company.
Zions Bancorporation, N.A. Price, Consensus and EPS Surprise
Zions Bancorporation, N.A. price-consensus-eps-surprise-chart | Zions Bancorporation, N.A. 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.
Earnings Schedules of Other Banks
Texas Capital Bancshares (TCBI - Free Report) , SEI Investments (SEIC - Free Report) and East West Bancorp (EWBC - Free Report) are scheduled to announce third-quarter results this week. While SEI Investments and Texas Capital Bancshares will release earnings figures on Oct 21, East West Bancorp will report on Oct 22.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>