Zions Bancorp's Profit Edges Lower

By Josh Beckerman And Julie Steinberg 

Zions Bancorp said its earnings edged down in the most recent quarter as a key measure of lending profitability declined, though net interest income rose slightly.

Earnings came in above Wall Street estimates.

Zions said results "were generally in line with our expectations," and said the bank strengthened its reserves "in light of continuing stress in the energy sector."

The company said "loan growth was subdued during the quarter; however, we continue to exercise caution with regard to underwriting standards and remain disciplined with respect to pricing."

The bank posted earnings of $75.3 million, down from $76.2 million in the prior-year period. On a per-share basis, earnings fell to 37 cents from 41 cents.

Analysts had expected 36 cents a share, according to Thomson Reuters.

Net interest income at the Salt Lake City-based bank rose to $417.3 million from $416.5 million.

Zions in recent years has cleaned up its balance sheet, shedding risky collateralized debt obligations that featured prominently in the 2008 financial crisis.

In the most recent quarter, it reclassified all of its remaining held-to-maturity CDO securities, or about $79 million at amortized cost, to available-for-sale securities. The Wall Street Journal reported last month that the bank was considering selling off its entire portfolio.

Net interest margin, an important measure of lending profitability, fell to 3.22% from 3.31% a year earlier.

Write to Josh Beckerman at [e-mail] and Julie Steinberg at [e-mail]

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