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Is a Beat in the Offing for Zions (ZION) in Q3 Earnings?
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Zions Bancorporation (ZION - Free Report) is scheduled to report third-quarter 2021 results on Oct 18, after market close. Unlike the previous few quarters, overall loan demand increased marginally in the to-be-reported quarter. While growth in commercial and industrial loan balances (which constitute a large part of Zions’ loan portfolio) was muted; overall growth in loans was decent in the quarter.
The Zacks Consensus Estimate for Zions’ average interest-earning assets for the third quarter is pegged at $81.6 billion, which indicates a marginal rise from the previous quarter’s reported number.
Thus, despite the low interest rate environment, the company’s net interest income (NII), which is its main revenue component, is expected to have improved slightly in the quarter. A rise in interest-earning assets and the steepening of the yield curve are likely to have aided NII growth. The consensus estimate for NII of $556 million indicates a marginal rise sequentially.
Other Key Factors and Estimates for Q3
Fee Revenues: Low mortgage rates continued to fuel the demand for new mortgages in the third quarter, leading to a rise in mortgage originations. However, a gradual slowdown in refinancing activities and faster prepayments weighed on the mortgage banking business, thereby, offsetting some of the gain.
Thus, owing to relatively modest mortgage-banking business performance, Zions’ loan sales and servicing income is not expected to have improved much in the third quarter. The Zacks Consensus Estimate for the same is pegged at $21.20 million, suggesting a marginal rise from the previous quarter’s reported number.
The consensus estimate for commercial account fees of $34.24 million indicates a marginal rise sequentially. Similarly, the consensus estimate for card fees of $24.70 million suggests a 2.9% rise from the prior quarter’s reported figure.
The consensus estimate for retail and business banking fees is pegged at $18.68 million, suggesting a 3.8% rise sequentially. The estimate for capital markets and foreign exchange fees of $18.34 million indicates a rise of 7.9% sequentially.
Despite the expected rise in most of the components, customer-related fee (accounting for more than 85% of Zions’ total non-interest income) is not anticipated to have improved in the quarter. The consensus estimate for the same is pegged at $137 million, which indicates a 1.4% decline from the previous quarter’s reported figure.
The consensus estimate for dividends and other income is pegged at $8 million, indicating no change from the previous quarter.
Hence, the consensus estimate for total non-interest income indicates that the component will decline for the quarter. The estimate is pegged at $148 million, suggesting a decline of 27.8% from the previous quarter’s reported number.
Expenses: Zions has been witnessing a persistent rise in operating expenses over the past few years. As the company continues to invest in franchise, overall costs are expected to have been elevated in the third quarter as well.
Asset Quality: The Zacks Consensus Estimate for total non-performing loans is pegged at $304 million, suggesting a marginal decline from the prior quarter’s reported figure.
What Our Quantitative Model Predicts
According to our quantitative model, the chances of Zions beating the Zacks Consensus Estimate this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Zions is +2.49%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Q3 Earnings & Sales Growth Expectations
The Zacks Consensus Estimate for earnings is pegged at $1.38 per share, which suggests 36.6% growth from the year-ago quarter’s reported number. The estimate has been revised 1.5% upward over the past 30 days.
The consensus estimate for sales is pegged at $708.4 million, which indicates a decline of 1.5% from the prior-year reported figure.
Here are some other finance stocks that you may want to consider as these too have the right combination of elements to post an earnings beat in their upcoming releases, per our model.
Fifth Third Bancorp (FITB - Free Report) is slated to report quarterly earnings on Oct 19. The company, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +0.46%.
Capital One Financial Corporation (COF - Free Report) is slated to report quarterly earnings on Oct 26. The company, which carries a Zacks Rank of 2 at present, has an Earnings ESP of +8.43%.
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Is a Beat in the Offing for Zions (ZION) in Q3 Earnings?
Zions Bancorporation (ZION - Free Report) is scheduled to report third-quarter 2021 results on Oct 18, after market close. Unlike the previous few quarters, overall loan demand increased marginally in the to-be-reported quarter. While growth in commercial and industrial loan balances (which constitute a large part of Zions’ loan portfolio) was muted; overall growth in loans was decent in the quarter.
The Zacks Consensus Estimate for Zions’ average interest-earning assets for the third quarter is pegged at $81.6 billion, which indicates a marginal rise from the previous quarter’s reported number.
Thus, despite the low interest rate environment, the company’s net interest income (NII), which is its main revenue component, is expected to have improved slightly in the quarter. A rise in interest-earning assets and the steepening of the yield curve are likely to have aided NII growth. The consensus estimate for NII of $556 million indicates a marginal rise sequentially.
Other Key Factors and Estimates for Q3
Fee Revenues: Low mortgage rates continued to fuel the demand for new mortgages in the third quarter, leading to a rise in mortgage originations. However, a gradual slowdown in refinancing activities and faster prepayments weighed on the mortgage banking business, thereby, offsetting some of the gain.
Thus, owing to relatively modest mortgage-banking business performance, Zions’ loan sales and servicing income is not expected to have improved much in the third quarter. The Zacks Consensus Estimate for the same is pegged at $21.20 million, suggesting a marginal rise from the previous quarter’s reported number.
The consensus estimate for commercial account fees of $34.24 million indicates a marginal rise sequentially. Similarly, the consensus estimate for card fees of $24.70 million suggests a 2.9% rise from the prior quarter’s reported figure.
The consensus estimate for retail and business banking fees is pegged at $18.68 million, suggesting a 3.8% rise sequentially. The estimate for capital markets and foreign exchange fees of $18.34 million indicates a rise of 7.9% sequentially.
Despite the expected rise in most of the components, customer-related fee (accounting for more than 85% of Zions’ total non-interest income) is not anticipated to have improved in the quarter. The consensus estimate for the same is pegged at $137 million, which indicates a 1.4% decline from the previous quarter’s reported figure.
The consensus estimate for dividends and other income is pegged at $8 million, indicating no change from the previous quarter.
Hence, the consensus estimate for total non-interest income indicates that the component will decline for the quarter. The estimate is pegged at $148 million, suggesting a decline of 27.8% from the previous quarter’s reported number.
Expenses: Zions has been witnessing a persistent rise in operating expenses over the past few years. As the company continues to invest in franchise, overall costs are expected to have been elevated in the third quarter as well.
Asset Quality: The Zacks Consensus Estimate for total non-performing loans is pegged at $304 million, suggesting a marginal decline from the prior quarter’s reported figure.
What Our Quantitative Model Predicts
According to our quantitative model, the chances of Zions beating the Zacks Consensus Estimate this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Zions is +2.49%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Q3 Earnings & Sales Growth Expectations
The Zacks Consensus Estimate for earnings is pegged at $1.38 per share, which suggests 36.6% growth from the year-ago quarter’s reported number. The estimate has been revised 1.5% upward over the past 30 days.
The consensus estimate for sales is pegged at $708.4 million, which indicates a decline of 1.5% from the prior-year reported figure.
Zions Bancorporation, N.A. Price and EPS Surprise
Zions Bancorporation, N.A. price-eps-surprise | Zions Bancorporation, N.A. Quote
Other Stocks That Warrant a Look
Here are some other finance stocks that you may want to consider as these too have the right combination of elements to post an earnings beat in their upcoming releases, per our model.
Fifth Third Bancorp (FITB - Free Report) is slated to report quarterly earnings on Oct 19. The company, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +0.46%.
BankUnited, Inc. (BKU - Free Report) is slated to report quarterly results on Oct 21. The company currently has an Earnings ESP of +1.90% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Capital One Financial Corporation (COF - Free Report) is slated to report quarterly earnings on Oct 26. The company, which carries a Zacks Rank of 2 at present, has an Earnings ESP of +8.43%.