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Key takeaways from the call include:
According to InvestingPro data, Zions Bancorp has a market cap of $5290M and a P/E ratio of 6.3, indicating a low earnings multiple. This is in line with one of the InvestingPro Tips, which mentions that Zions Bancorp is trading at a low earnings multiple. The company’s revenue growth has been accelerating, as evidenced by a 7.38% increase in the last twelve months ending Q2 2023.
During the call, Zions Bancorp revealed that it added $1 billion of pay-fixed interest rate swaps in the third quarter to hedge the value of its investment portfolio. The company expects stable net interest income in the third quarter of 2024 compared to the same period in 2023.
The company’s commercial real estate (CRE) portfolio, which represents 23% of its loan portfolio, is expected to perform well with limited losses. Non-performing assets increased due to two suburban office loans and one C&I loan. But credit quality remains strong, with stable and low classified loan levels.
Zions Bancorp also discussed its deposit growth, driven by existing customers bringing back deposits and higher interest rates on new customer deposits. The company expects this growth to continue, albeit at a slower pace. This aligns with another InvestingPro Tip that suggests Zions Bancorp has raised its dividend for 10 consecutive years, which could be a factor in attracting and retaining depositors.
The company’s executives discussed their outlook on loan growth and expense rationalization efforts. They noted that loan growth is difficult to forecast, with recent trends appearing weak. Yet, they anticipate some growth in the future. Expense objectives have taken longer than expected to achieve, attributed to inflation headwinds and increased technology vendor costs. The company is actively working to reduce expenses.
Zions Bancorp (NASDAQ: ZION) also discussed factors contributing to an increase in the yield of their earning assets over the next few quarters, including cash flow from investments, repricing of cash, and longer resets of loans at higher rates. The company expressed confidence in its diverse and balanced portfolio. For more insights and investment tips, check out InvestingPro’s premium offerings.
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