Zions Bancorporation's (ZION, Financial) share jumped by 4.2% pre-market trading today, as its latest earnings reveal a strong momentum. Its Q3 net earnings climbing to $204 million—a solid 21% increase from last year's $168 million. Earnings per share jumped to $1.37, reflecting a healthy boost in net interest income, which rose 6% to $620 million. The bank's net interest margin ticked up to 3.03%, driven by higher returns on its interest-earning assets. Despite the ongoing pressure from elevated interest rates, Zions navigated the landscape effectively, keeping funding costs in check and boosting profitability.
Loan growth was a standout, with total loans and leases expanding by 3% to $58.9 billion. Yet, the quarter wasn't without its challenges. Classified loans surged, particularly in the multifamily commercial real estate space, showing signs of market strain. Still, Zions kept risk under control, with net charge-offs barely registering at 0.02% of average loans. Even amid rising loan classifications, the bank demonstrated disciplined credit management and resilience.
The bank also made strategic moves to grow its footprint, announcing an agreement to acquire four FirstBank branches in California's Coachella Valley. This expansion is set to strengthen its position in a competitive market, pending regulatory approval. CEO Harris H. Simmons expressed confidence in Zions' trajectory, highlighting the firm's stable deposits and growth in tangible equity as pillars of its solid performance.
