Zions Bancorp Q4 Profit Misses View, But Revenues Top

(RTTNews) - Multi-bank holding company Zions Bancorp. (ZION) reported Monday a turnaround to profit in the fourth quarter from last year, which was weighed down by hefty net impairment losses on investment securities. Earnings per share missed analysts' expectations, while quarterly revenues topped their estimates.

"We are encouraged with the continued strength of our capital and credit quality and believe the Company is well positioned for the next several quarters and years," Chairman and CEO Harris Simmons said in a statement.

The Salt Lake City, Utah-based company reported net income applicable to common shareholders of $73.21 million or $0.36 per share for the fourth quarter, compared to a net loss of $59.44 million or $0.32 per share in the prior-year quarter.

The company noted that its prior-year fourth-quarter earnings per share were adversely impacted by impairment losses on collateralized debt obligation securities as a result of the Volcker Rule and the risk reduction strategies.

On average, 24 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.

Net interest income for the quarter edged down to $430.43 million from $432.04 million from last year, while total non-interest income was $129.40 million, compared to a loss of $31.15 million a year ago. Eighteen Wall Street analysts had a consensus revenue estimate of $555.29 million for the quarter.

The provision for loan losses was $11.59 million, compared to a negative $30.54 million last year.

Total non-interest expense for the quarter declined to $412.19 million from $494.75 million a year ago. Net interest margin for the quarter declined to 3.25 percent from 3.33 percent in the prior-year quarter.

The company noted that credit quality metrics were stable to slightly improved, as nonperforming lending-related assets and classified loans each declined 3 percent this quarter from the prior quarter, and net charge-offs were 0.17 percent annualized of average loans.

"We know there is concern regarding the potential effect of the decline of oil and gas prices on Zions' credit quality and loan growth. Our team of energy bankers and executives, most of whom are at our Amegy Bank affiliate, has decades of energy lending experience through multiple oil and gas cycles. We are actively managing our energy-related exposure, including both individual credits and the portfolio as a whole," Simmons added.

ZION closed Monday's regular trading at $25.12, up $0.31 or 1.25% on a volume of 3.85 million shares. However, the stock declined $0.52 or 2.07 in after-hours trading.