Zions Bancorporation’s ZION fourth-quarter 2024 earnings per share (EPS) of $1.34 surpassed the Zacks Consensus Estimate of $1.26. Moreover, the bottom line surged 71.8% from the year-ago quarter.

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Results were primarily aided by higher net interest income (NII) and non-interest income. Also, higher loans and deposits were other positives. However, higher provisions and a rise in adjusted non-interest expenses were major headwinds.

Results in the reported quarter included certain notable items that were negligible to earnings. After considering it, net income attributable to its common shareholders (GAAP) was $200 million, rising 72.4% year over year. We had projected the metric to be $175.9 million.

Earnings for 2024 were $4.95 per share, which beat the Zacks Consensus Estimate of $4.85. Moreover, the bottom line rose 13.8% from the year-ago period. We had projected earnings of $4.81 per share. Net income attributable to common shareholders was $727 million, up 13.7% year over year. Our estimate for the metric was $712.9 million.

Zions’ Revenues Increase, Expenses Rise

Net revenues (tax equivalent) were $832 million, up 12.3% year over year. Further, the top line beat the Zacks Consensus Estimate of $792.5 million.

Net revenues (tax equivalent) for 2024 were $3.18 billion, up marginally year over year. The top line beat the Zacks Consensus Estimate of $3.13 billion, which is the same as our projection for the metric.

NII was $627 million, up 7.5%. The increase was mainly attributed to lower funding costs alongside growth in average interest-earning assets. Likewise, net interest margin (NIM) expanded 14 basis points (bps) to 3.05%. Our estimates for NII and NIM were $609.6 million and 2.99%, respectively.

Non-interest income rose 30.4% to $193 million. We had projected non-interest income to be $162.2 million.

Adjusted non-interest expenses increased 4.1% to $509 million. Our estimate for the metric was $510.1 million.

Adjusted efficiency ratio was 62%, down from 65.1% in the prior-year period. A decline in the efficiency ratio indicates an increase in profitability.

As of Dec. 31, 2024, net loans and leases held for investment were $58.7 billion, up roughly 1% from the prior quarter. Total deposits were $76.2 billion, up marginally.

Credit Quality for ZION Deteriorates

The ratio of non-performing assets to loans and leases, as well as other real estate owned, expanded 11 bps year over year to 0.50%. In the reported quarter, the company recorded net loan and lease charge-offs of $36 million against $9 million loan and lease charge-offs in the prior-year quarter.

Provision for credit losses was $38 million in the reported quarter, up significantly from $12 million in the year-ago quarter.

Zions’ Capital Ratios Improve, Profitability Ratios Rise

Tier 1 leverage ratio was 8.3% as of Dec. 31, 2024, stable from the prior-year quarter. Tier 1 risk-based capital ratio of 11% increased from 10.9%.

Further, as of Dec. 31, 2024, the common equity tier 1 capital ratio was 10.9%, up from 10.3% in the prior-year period.

At the end of the fourth quarter, the return on average assets was 0.96%, up from 0.57% in the prior-year quarter. Return on average tangible common equity was 16%, up from 11.8% in the year-ago quarter.

Our Take on ZION Stock

Zions’ decent balance sheet position and improving fee income alongside relatively higher interest rates bode well for the future. However, persistently increasing operating expenses, high funding costs and significant exposure to commercial loans amid an uncertain macroeconomic outlook are concerns.

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 Banks

KeyCorp’s KEY fourth-quarter 2024 adjusted earnings from continuing operations of 38 cents per share beat the Zacks Consensus Estimate of 33 cents. Further, the bottom line reflected a 52% jump from the prior-year quarter.

KEY’s results benefited from a rise in adjusted non-interest income, higher NII, and lower expenses and provisions. Improvement in the deposit balance was another positive. However, a lower loan balance was an undermining factor. Further, higher deposit costs weighed on the NIM.

M&T Bank Corporation’s MTB fourth-quarter 2024 adjusted net operating EPS of $3.92 beat the Zacks Consensus Estimate of $3.70. The bottom line compared favorably with earnings of $2.81 per share in the year-ago quarter.

Results have benefited from a rise in loans and leases and non-interest income. A decline in expenses and provision for credit losses were other positives. However, a fall in deposit balance was a headwind for MTB.

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