Shares of Zions Bancorp (ZION, +6.26%) experienced a significant increase of 7.9% in after-hours trading on Wednesday. The regional bank exceeded profit expectations, attributing its success to a rise in customer deposits despite facing higher costs. The company’s net income for the quarter stood at $175 million, or $1.11 per share, compared to $203 million, or $1.29 per share, during the same period last year. This result surpassed the estimated $1.08 per share forecasted by FactSet.
Zions also reported a net interest margin of 2.92%, slightly higher than FactSet’s predicted margin of 2.86%. Although total deposits decreased by 6% from the previous year, they saw a 7% increase from the prior quarter, reaching $74.3 billion. Harris Simmons, Chief Executive of Zions Bancorp, highlighted the “rebound in customer deposits over the past three months” but acknowledged the impact of higher costs on net interest income, which now mirrors figures from a year ago.
These insights from Zions Bancorp reflect similar sentiments expressed by United Community Banks Inc. (UCBI, -1.19%) regarding the recent turmoil in the regional banking sector following the collapse of Silicon Valley Bank. United Community Banks attributed the rise in deposit costs and the subsequent pressure on net interest margins to “industry-wide deposit price competition.”
Zions Bancorp’s impressive performance and ability to navigate these challenges demonstrate its resilience in the face of adverse market conditions.
Key Highlights:
- Zions Bancorp’s shares surge by 7.9% in after-hours trading.
- The company reports net income of $175 million, or $1.11 per share, surpassing expectations.
- Net interest margin stands at 2.92%, slightly higher than anticipated.
- Total deposits reach $74.3 billion, showing a 7% increase from the previous quarter.
- Higher costs impact net interest income, returning figures comparable to the previous year.