Zions Bancorporation beat estimates on earnings per share last quarter, boosting its share price after a 13% plunge on Thursday.
Earnings per share were US$1.48, up from $1.37 year-over-year and above Zacks estimates of $1.40. The Salt Lake City-based bank’s share price plummeted last week after it announced a $50 million loss from two commercial and industrial loans.
“We’re pleased with the Company’s core earnings, which included 14% growth in pre-provision net revenue over the prior year period, and 18% on an adjusted basis,” said Zions CEO Harris Simmons.
“The quarter’s credit results were marred by a $50 million charge-off, and a $10 million specific reserve established against the approximate remaining balance, arising from loans to two related companies in which apparent irregularities and misrepresentations were recently detected. Legal action has been initiated to pursue recovery of the amounts owed from guarantors of the credits.”
Zions’ net interest income was $672 million, rising 8%, which the company credited to lower funding costs. Its net interest margin was 3.28%, up from 3.03%.
Loans and leases increased 2% to $60.3 billion, driven by 7% growth in consumer loans. Excluding the $50 million charge, its net charge-offs were $6 million.
Total deposits dropped 1% to $74.9 billion, while customer deposits rose 1% to $71.1 billion. Its CET1 capital ratio was 11.3%, up from 10.7%.
Zions’ California Bank & Trust subsidiary has filed a lawsuit against fund managers Andrew Stupin and Gerald Marcil and their association Deba Shyam, whose Cantor Group funds received around $60 million in loans from California Bank & Trust in 2016 and 2017.
The suit alleges that Stupin, Marcil, and Shyam “systematically eliminated the collateral protections that were supposed to secure the bank’s loans”.
Zions’ (NASDAQ: ZION) share price finished after-hours trading at $52.70, following a close at $51.98. Its market capitalisation is $7.67 billion.
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