• Net Earnings: $169 million, or $1.13 per share, an 18% improvement year-over-year.
• Net Interest Margin: Increased to 3.10% from 3.05% in the previous quarter.
• Average Cost of Interest-Bearing Deposits: Decreased by 26 basis points compared to the previous quarter.
• Adjusted Pre-Provision Net Revenue (PPNR): $267 million, a 10% increase from the previous year.
• Efficiency Ratio: Seasonally higher but improved over last year's period.
• Net Loan Losses: $16 million, or 11 basis points annualized.
• Diluted Earnings Per Share: $1.13 compared to $1.34 in the prior period and $0.96 in the year-ago period.
• Net Interest Income: Increased by $38 million year-over-year, declined by $3 million from the prior quarter.
• Customer-Related Income: $158 million, a 10% decrease from the previous quarter.
• Adjusted Non-Interest Expense: Increased by $24 million to $533 million.
• Average Loans Growth: 0.5% over the previous quarter, 3% over the year-ago period.
• Average Deposit Balances: Declined 1.9% from the prior quarter.
• Total Funding Costs: Declined by 11 basis points during the quarter.
• Common Equity Tier 1 Ratio: 10.8%.

• Warning! GuruFocus has detected 2 Warning Sign with SFBS.

Release Date: April 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Zions Bancorp NA (NASDAQ:ZION) reported a net earnings increase of 18% year-over-year, reaching $169 million or $1.13 per share.
• The net interest margin improved for the fifth consecutive quarter, rising to 3.10% from 3.05% in the previous quarter.
• The company was recognized by Coalition Greenwich as one of the top 10 banks in the industry, ranking third nationally in serving middle market clients.
• Zions Bancorp NA successfully acquired four branches in the Coachella Valley, adding approximately $630 million in deposits and $420 million in loans.
• The allowance for credit losses is well aligned with the current economic outlook, and loan charge-offs remained low, indicating strong credit quality management.

Negative Points

• Deposits decreased both on an ending and average basis in the first quarter, despite the acquisition-related deposits.
• Non-interest income saw a decline due to reduced capital market fees and a higher effective tax rate.
• The company faces challenges in forecasting future results due to heightened economic uncertainty and market volatility.
• There was a notable increase in 30 to 89 day past-due loans, raising concerns about potential credit quality issues.
• The outlook for loan growth is uncertain, with expectations of slower growth due to economic conditions and trade policy impacts.

Q & A Highlights

Q: What are you hearing from middle market and small business customers in terms of sentiments? A: Harris Simmons, CEO, noted that businesses are grappling with the uncertainty of trade policies, particularly tariffs. Many businesses are unsure of the long-term impacts and are cautious about making significant investments. The sentiment is one of uncertainty, with businesses waiting to see how policies will unfold.

Q: Can you provide more details on your net interest income guidance and the risks involved? A: Harris Simmons, CEO, explained that the guidance is based on current yield curves and assumes moderate loan growth. However, the uncertainty in trade policies and economic conditions could impact this outlook. The bank is prepared for tepid loan growth due to these uncertainties.

Q: What are your expectations for loan growth, and are there any areas of strength? A: Derek Steward, Chief Credit Officer, mentioned that while commercial and industrial (C&I) loan growth is slow due to uncertainty, there is increased activity in commercial real estate (CRE). The bank expects some growth in CRE, although interest rates will play a role in this.

Q: Are there any expenses that can be adjusted if the revenue environment weakens? A: Harris Simmons, CEO, confirmed that the bank is focused on managing expenses and has already reduced headcount by about 3% from last year. While they are prepared to adjust expenses if necessary, they aim to maintain long-term growth and avoid cuts that could hinder future opportunities.

Q: How do you view the regulatory outlook, and are there any changes that could benefit Zions? A: Harris Simmons, CEO, expressed optimism about the current administration's approach to regulation, which seems to focus on sensible and risk-based oversight. He believes this could be beneficial for the banking industry, as it aims to avoid unnecessary regulatory burdens.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.