Zions Bancorp. in Salt Lake City reported higher quarterly earnings that reflected increased lending and a reduction in its loan-loss allowance.

The $66.5 billion-asset company said Monday that its first-quarter profit rose 79% from a year earlier, to $231 million.

Zions Chairman and CEO Harris H. Simmons
Harris Simmons, Zions's chairman and CEO, said in a press release that the company's first-quarter results reflected strong positive operating leverage and credit quality.


Net interest income increased by 11% to $542 million. Total loans rose by 5%, to $45.1 billion, led by a 7% rise in commercial lending and an 8% increase in consumer loans. The net interest margin expanded 18 basis points, to 3.56%.

Noninterest income rose by 5%, to $138 million, as wealth management and trust income climbed by 20%, to $12 million. Capital markets and foreign exchange income increased by 14%, to $8 million.

The quarter included a negative loan-loss provision of $40 million. The company set aside $23 million a year earlier.

The reduction resulted from a "sustained trend of improving credit quality, particularly in the oil- and gas-related portfolio, and minimal incurred losses-to-date from Hurricane Harvey," the company said in its release.

Noninterest expense fell slightly, to $412 million. Salaries and employee benefits rose by 3%, to $269 million, offsetting a 9% decrease in occupancy costs, which totaled $31 million. Zions' efficiency ratio improved to 61.3%, from 65.9% a year earlier.

Zions also struck an upbeat tone about its opportunities to grow in 2018.

"Business confidence and economic conditions across the western U.S. are strong, and we are optimistic about the year ahead,” Harris Simmons, Zions’ chairman and CEO, said in a press release.

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Jackie Stewart

Jackie Stewart covers community banks and mergers and acquisitions for American Banker.