Zions Bancorporation Chairman and CEO Harris Simmons commented, “The fundamentally solid results that we and many other banks produced in the first quarter were overshadowed by concerns about liquidity and capital strength in the wake of two prominent bank failures in mid-March. Deposits across the industry had been declining in recent quarters after growing rapidly during the pandemic, and although we and other banks experienced negative impacts from these bank failures, our own deposits (excluding any brokered deposits) at quarter end were 18% greater than pre-pandemic (12/31/19) levels, with noninterest-bearing demand deposits up 31% during that period, and loans up 16%.
“We continued to evidence very good credit quality during the quarter, with no net charge-offs and continued strong credit metrics. Both regulatory and economic capital also remained durable during the quarter, reflecting in part the increased value of a solid base of smaller core operating deposit accounts whose value has increased even as the value of fixed-rate earning assets has diminished in a period of higher interest rates. With growing attention on commercial real estate, or CRE, portfolios, we would note that we’ve carefully managed the growth in this portfolio for a number of years. Over the past decade, our CRE portfolio has grown at a compounded annual rate of only 2.5%, and a mere 0.1% of the portfolio is currently in nonperforming status.
“Finally, while events during the quarter accelerated a change in funding mix and costs that we expect will reduce the near-term quarterly ‘run rate’ of revenue by approximately 4%, we expect an increased focus on operating costs will offset a portion of this impact.”