Zions Bancorporation (ZION) Q2 2024 earnings summary

Executive summary

• Net earnings for 2Q24 were $190 million, with diluted EPS of $1.28, up from $1.11 year-over-year and $0.96 sequentially, aided by gains on business and property sales.

• Net interest margin improved to 2.98% in 2Q24, as asset repricing outpaced funding cost increases.

• Tangible book value per share increased 20% year-over-year, reaching $30.67.

• Completed the FutureCore technology modernization project, enhancing real-time transaction capabilities and operational efficiency.

• Credit quality remained strong, with net charge-offs at 0.10% of loans annualized and allowance for credit losses at 1.24% of total loans.

Financial highlights

• Net interest income was $597 million, up 1% year-over-year; net interest margin was 2.98%, up from 2.92%.

• Adjusted pre-provision net revenue (PPNR) was $278 million, up from $242 million in the prior quarter, but down 6% adjusted year-over-year.

• Efficiency ratio improved to 64.5% in 2Q24 from 67.9% in 1Q24, but up from 62.5% in 2Q23.

• Total loans and leases increased 3% year-over-year, mainly in consumer residential and term CRE portfolios.

• Customer deposits (excluding brokered) rose 5% to $69.5 billion, while total deposits fell 1% year-over-year.

Outlook and guidance

• Net interest income for Q2 2025 expected to be slightly to moderately higher than Q2 2024, assuming stable to slightly increasing loans and deposit mix.

• Adjusted noninterest expense for Q2 2025 projected to be slightly higher than Q2 2024, with technology cost management as a key focus.

• Customer-related noninterest income expected to moderately increase by Q2 2025, driven by expanding capital markets capabilities.

• Loan growth anticipated to be stable to slightly increasing, with small business and marketing initiatives providing incremental support.

• Interest rate risk remains within policy limits, with asset sensitivity expected to increase net interest income by 8.3% in Q2 2025 versus Q2 2024.