Zions Bancorp Q1 Profit Misses View, But Revenues Top

(RTTNews) - Multi-bank holding company Zions Bancorp. (ZION), which failed the Federal Reserve's annual stress test, reported Monday a profit for the first quarter that declined from last year, despite revenue growth, on continued net interest margin pressure. Earnings per share missed analysts' expectations by a penny, while quarterly revenues missed their estimates.

"After a strong fourth quarter, our first quarter loan growth was somewhat slower; however, our capital levels continue to improve and we are optimistic as we look at the underlying economic strength within our footprint," Chairman and CEO Harris Simmons said in a statement.

The Salt Lake City, Utah-based company reported net income of $76.19 million or $0.41 per share for the first quarter, lower than $88.32 million or $0.48 per share in the prior-year quarter.

On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $0.42 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew to $554.79 million from $539.34 million in the year-ago quarter, and topped twenty Wall Street analysts' consensus estimate of $543.69 million.

Net interest income for the quarter decreased to $416.47 million from $418.12 million last year, while total non-interest income was $138.32 million, higher than $121.22 million a year ago.

The provision for loan losses was a credit of $0.61 million, compared to a credit of $29.04 million last year.

Total non-interest expense for the quarter edged up to $398.06 million from $397.35 million a year ago. Net interest margin for the quarter declined to 3.31 percent from 3.44 percent in the prior-year quarter.

The company noted that credit quality remained strong as gross loan and lease charge-offs were $20.8 million, the lowest level since 2007.

The Company recorded a total of $993 million par amount of sales and paydowns of CDO securities, thereby reducing the exposure by 45 percent compared to the par value recorded at December 31, 2013.

"We are pleased with the successful reduction in our CDO securities portfolio, which improved the Company's risk profile while also improving both its tangible and Tier 1 common equity levels, as many of these securities had high risk weightings and were sold at prices above the values recorded at December 31, 2013," Simmons added.

ZION closed Monday's regular trading session at $30.23, up $0.01 or 0.03% on a volume of 2.40 million shares.