Zions Bancorporation Builds Its Case For An Enhanced Post COVID-19 Growth Profile

Zions Bancorporation (ZION) wasn’t one of my preferred ideas after fourth quarter earnings, as I was concerned about the bank’s weak spread, operating, and pre-provision profit leverage, and while Zions has basically tracked the average performance of its peer group, I certainly didn’t expect the 40% downturn.

Zions had a pretty good first quarter, but in the face of significant uncertainty regarding the economy, the loan book, and reserve adequacy, I’m not surprised that investors don’t really care. It’s going to take a while longer for investors to get comfortable with the probable trajectory of the economy and Zions’ reserve/capital position. While I do think the shares are now undervalued, a lot of the share price performance rests on whether management has indeed de-risked the balance sheet over the last decade.

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Zions Bancorporation Builds Its Case For An Enhanced Post COVID-19 Growth Profile