Zions Bancorp NA's stock (ZION, -5.41%) experienced a 5.7% decline on Thursday following the bank's failure to meet analyst estimates for net interest income and pre-provision net revenue (PPNR). In an announcement made after the closing bell on Wednesday, the bank disclosed that its PPNR had dropped by 23% to $255 million. This decrease was attributed to the cost of funds surpassing the increase in earning asset yields.
Citi analyst Keith Horowitz commented on the situation, stating that the bank's core PPNR figure fell short of consensus estimates by 4 cents per share, as well as missing his own estimate by 7 cents per share. Despite this setback, Horowitz maintained a buy rating on the stock due to identifying value within the bank, particularly considering its stable outlook for net interest income.
Zion's net interest income also experienced a decline, dropping by 12% to $585 million. Analysts polled by FactSet had projected net interest income to reach $595.3 million. It is important to note that PPNR is determined by adding non-interest income to net interest income and subtracting noninterest expense.
Zion's third-quarter earnings of $1.13 per share exceeded the FactSet consensus estimate by 2 cents per share. While facing challenges in certain areas, the bank continues to show resilience in its overall performance.
- Stock falls after missing analyst estimates
- PPNR decreases by 23% due to increased cost of funds
- Citi analyst maintains a buy rating citing value within the bank
- Net interest income declines, but overall outlook remains stable
- Third-quarter earnings surpass consensus estimate