Zions Bancorp Q4 Earnings: Strong Performance Amid Devastating Wildfires
Zions Bancorp, one of the leading banks in the US, has reported a strong performance in its fourth quarter and full-year earnings for 2024. Despite the devastating wildfires that affected Southern California earlier this month, the bank's focus remained on the safety and well-being of its employees, customers, and their families.
Chairman and Chief Executive Officer Harris Simmons acknowledged the impact of the wildfires during the conference call, stating that the company has a very limited amount of residential exposure in the burn zones due to insurance in place. He also mentioned that the bank anticipates any losses or credit impacts to be minimal, with programs in place to work with borrowers that may need payment restructuring due to the fires.
The key metrics for the year and quarter are presented on Slide 3 of the presentation. Zions Bancorp reported a 19% increase in adjusted pre-provision net revenue relative to the prior year quarter, driven by interest-bearing liabilities repricing downward faster than earning asset yields. The net interest margin expanded for the fourth consecutive quarter, reaching 3.05%, compared to its trough of 2.91% in the year-ago quarter.
The efficiency ratio improved significantly, with a 62% decrease from the prior year. Customer deposits increased on both an ending and average basis in the fourth quarter and full year, while noninterest-bearing demand deposits remained relatively stable. Average loan growth was modest at 1.1% on a linked-quarter basis and 3.2% for the full year.
Net loan losses were higher in the quarter at $36 million or 24 basis points annualized, with two-thirds of the net loss amount attributable to a single commercial and industrial credit. However, the levels of nonaccrual loans in the portfolio remained low and decreased by 18% during the quarter due to significant equity and strong guarantor support.
Zions Bancorp's financial results for Q4 were $200 million or $1.34 per share, compared to $0.78 in the prior year quarter. The provision for credit losses this quarter had a negative impact of $0.21 per share. Despite these challenges, the bank's adjusted pre-provision net revenue reflected an improvement of 4% on a linked-quarter basis and 19% over the prior year period.
