Zions Bancorp sees slight decline in 2024 interest income, Q4 profit falls
Jan 22 (Reuters) - Zions Bancorporation forecast on Monday a slight decline in net interest income (NII) for 2024, after posting a 58% drop in its fourth-quarter profit, as lenders shell out more to attract and retain customer deposits.
U.S. regional banks are paying out more on deposits to prevent customers from migrating to higher-yielding alternatives such as money-market funds that have become more attractive in a high-interest rate environment.
The Salt Lake City, Utah-based firm's annual NII forecast compares with LSEG estimates of a 5.2% dip.
Shares of the bank closed up nearly 4% on Monday. The stock was last down about 2% in extended trading.
Zions' net interest margin in the quarter contracted to 2.91% compared with 3.53% a year earlier but was in line with broader industry trends.
The bank's NII, or the difference between what it makes on loans and pays out on deposits, fell 19% to $583 million in the quarter ended Dec. 31.
Total deposits rose 5% to $75 billion in the quarter, while loans and leases inched up 4% at $57.8 billion.
The bank recorded a $90 million charge related to replenishing the Federal Deposit Insurance Corporation's deposit insurance fund, which was drained of $16 billion after Silicon Valley Bank and Signature Bank failed last year.
Its net earnings fell to $116 million, or 78 cents per share, for the quarter, from $277 million, or $1.84 per share, a year earlier. (Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar)
