Financial Performance Overview

Zions Bancorporation is a regional bank holding company headquartered in Salt Lake City, Utah. In the first quarter of 2024, Zions reported net income applicable to common shareholders of $143 million, or $0.96 per diluted share. This compares to net income of $198 million, or $1.33 per diluted share, in the first quarter of 2023.

The year-over-year decrease in earnings was driven by lower net interest income and higher noninterest expense, partially offset by a lower provision for credit losses.

Net Interest Income Down on Higher Funding Costs

Net interest income decreased 14% to $586 million. This was mainly due to higher funding costs, which more than offset higher earning asset yields.

Specifically:

• Interest expense increased 94% due to higher interest rates paid on deposits and other borrowings
• This was partially offset by a 15% increase in total interest income from higher yields on loans and securities

On average, interest-earning assets decreased 3%, while interest-bearing liabilities increased 12%.

Credit Quality Remains Strong

• The provision for credit losses was $13 million, compared to $45 million a year ago
• Net loan charge-offs remained low at 0.04% of average loans
• Nonperforming assets increased modestly from 0.31% to 0.44% of loans

The allowance for credit losses increased to 1.27% of total loans, providing substantial coverage for potential future losses.

Noninterest Income Flat; Expenses Up Modestly

• Noninterest income was flat at $151 million
• Noninterest expense increased 3% to $526 million, driven by higher regulatory assessments

Common Equity and Capital Ratios Improved

• Common equity increased 2% from December 31, 2023 to $5.3 billion
• Common equity tier 1 capital ratio improved to 10.4%
• Tangible common equity ratio increased to 5.0%

Business Highlights

Loan Growth Continues

• Total loans increased 3% from December 31, 2023, driven by growth in:
  • Consumer 1-4 family residential mortgages
  • Commercial real estate loans

Deposits Decline Modestly

• Total deposits decreased 1% to $74.2 billion
• The mix of deposits shifted somewhat from noninterest-bearing (35% of total deposits) to interest-bearing
• The bank maintained a strong liquidity position, with available liquidity equal to 130% of uninsured deposits

Net Interest Margin Increased Modestly

• The net interest margin increased to 2.94% from 2.91% last quarter
• This reflected higher earning asset yields, partially offset by higher funding costs

Expenses Driven by Regulatory Assessments

• Noninterest expense increased due to a special assessment by the FDIC
• This was partially offset by lower incentive compensation accruals

Share Repurchases

• Zions repurchased 0.9 million common shares for $35 million in the first quarter

In summary, Zions reported solid first quarter earnings supported by strong credit quality, loan growth, and ample liquidity. The bank is well positioned to benefit from rising interest rates while continuing to meet the financing needs of customers and communities.

Table 1: Key Financial Metrics

Metric	Q1 2024	Q4 2023	Q1 2023
Net Income (millions)	$143	$116	$198
Diluted EPS	$0.96	$0.78	$1.33
Net Interest Margin	2.94%	2.91%	3.33%
Loans Growth	3%	0%	7%
Deposits Growth	-1%	0%	3%
Nonperforming Assets % of Loans	0.44%	0.39%	0.31%
Common Equity Tier 1 Capital	10.4%	10.3%	9.9%