NASDAQ$ZION

Zions Bancorp NA · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Zions Bancorporation reported a decline in net earnings and EPS due to increased provision for credit losses, but highlighted well-controlled operating expenses and a resilient net interest margin.

Zions Bancorporation, N.A. reported first quarter 2020 net earnings of $6 million, a significant decrease compared to $205 million in the same quarter of the previous year. Diluted EPS also declined to $0.04 from $1.04 year-over-year. The decrease was primarily due to a substantial increase in the provision for credit losses, driven by the anticipated economic downturn related to the effects of COVID-19. Despite the earnings decline, the bank highlighted well-controlled operating expenses and a relatively resilient net interest margin.

  • Net earnings decreased to $6 million, with diluted EPS at $0.04, significantly lower than 1Q19.
  • Net interest income was $548 million, compared with $576 million in the prior year.
  • The company adopted CECL and recorded a provision for credit losses of $258 million, compared to $4 million in the prior year.
  • The CET1 Capital ratio was 10.0%, compared with 11.3% in the prior year.

Headline financials

Total Revenue

$682M

Previous: $708M-3.7%
EPS (adj)

$0.04

Previous: $1.04-96.2%
Capital Expenditures

-$28M

Previous: -$25M-12.0%
Free Cash Flow

-$14M

Previous: $188M-107.4%
Net Income

$14M

Previous: $213M-93.4%
Operating Income

$538M

Previous: $556M-3.2%
Gross Profit

$682M

Previous: $704M-3.1%
Cash & Equivalents

$1.96B

Previous: $1.24B+57.9%
Total Assets

$71.5B

Previous: $69.2B+3.3%
Stock-Based Comp

$13M

Previous: $14M-7.1%

Revenue & EPS history

Zions · Revenue · Quarterly

$682M

Q1 2020-3.7%vs Q1 2019
Beat estimate in 8 of 16 quarters(50%)
ActualEstimate

Forward guidance

Zions Bancorporation faces an uncertain economic environment due to the COVID-19 pandemic, but is equipped with a strong capital and reserve position.

Tailwinds

  • Well-controlled operating expenses, decreased 5% from last year
  • Net interest margin remained relatively resilient when compared to the prior quarter
  • Very modest realized loan losses
  • Materially strengthened allowance for credit losses
  • Payment deferral arrangements established for adversely affected clients

Headwinds

  • Challenging economic environment due to the COVID-19 pandemic
  • Potential impacts on customers’ ability to make timely payments on obligations
  • Potential impacts on fee income revenue due to reduced loan origination activity and card swipe income
  • Potential impacts on operating expense due to alternative approaches to doing business
  • Uncertainty regarding the Bank’s ability to meet operating leverage goals

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

+0.1%

Avg return

Earnings day

+1.4%

Avg return

5 days after

+3.1%

Avg return

30 days after

49%

34 / 69 earnings

Positive

+16.9%

Q2 2023

Best reaction

-12.2%

Q3 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-1.7%+2.0%+0.3%
Q4 2025+4.2%-2.7%-2.0%
Q3 2025+1.4%+2.2%-3.0%
Q2 2025-2.0%+0.0%+8.6%
Q1 2025-1.1%+2.8%+7.7%
Q4 2024+0.1%+1.0%-5.0%
Q3 2024+2.5%+0.2%+14.5%
Q2 2024+7.2%+6.8%-3.9%
Q1 2024+4.6%+4.6%+9.7%
Q4 2023+2.8%+5.8%-4.9%
Q3 2023-12.2%-18.2%-1.8%
Q2 2023+16.9%+14.2%+7.1%
Q1 2023+2.2%-7.2%-12.1%
Q4 2022+0.6%+3.7%-4.2%
Q3 2022+7.7%+7.8%+7.7%
Q2 2022-1.0%+0.9%+6.0%
Q1 2022-8.1%-7.0%-9.5%
Q4 2021+7.7%+10.4%+12.9%
Q3 2021+1.8%+6.8%+6.7%
Q2 2021+1.2%+2.5%+8.1%
Q1 2021-6.7%-3.3%+2.3%
Q4 2020-1.7%-2.1%+1.8%
Q3 2020-2.0%+6.6%+25.0%
Q2 2020+3.6%+3.3%+1.1%
Q1 2020-1.5%+1.3%+7.0%
Q4 2019-5.7%-8.1%-8.8%
Q3 2019+7.5%+7.2%+9.3%
Q2 2019-7.1%-2.0%-11.2%
Q1 2019+3.3%+3.1%-4.0%
Q4 2018+2.3%+3.5%+8.2%
Q3 2018+0.4%-0.9%+0.3%
Q2 2018-1.4%-2.5%+2.0%
Q1 2018+2.4%+3.3%+7.8%
Q4 2017+0.8%+0.5%+4.0%
Q3 2017-0.9%+0.7%-0.9%
Q2 2017+3.0%+2.1%+0.1%
Q1 2017-0.9%-2.0%-0.4%
Q4 2016+0.2%+1.6%+5.4%
Q3 2016-0.8%-0.8%+21.0%
Q2 2016+6.4%+6.0%+11.9%
Q1 2016+0.6%
Q4 2015-1.2%
Q3 2015+0.7%
Q2 2015+3.5%
Q1 2015-0.6%
Q4 2014-0.4%
Q3 2014+3.3%
Q2 2014+1.3%
Q1 2014-2.0%
Q4 2013-1.6%
Q3 2013-6.8%
Q2 2013-2.1%
Q1 2013+2.1%
Q4 2009-0.3%
Q4 2012-1.0%
Q3 2012-1.4%
Q2 2012-4.2%
Q1 2012-2.3%
Q4 2010-1.2%
Q4 2008-1.2%
Q4 2011-1.2%
Q3 2011-7.3%
Q2 2011-7.3%
Q1 2010+1.1%
Q1 2011+1.7%
Q3 2010+0.6%
Q3 2009+0.6%
Q2 2010-0.8%
Q2 2009-0.8%

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