Zions Bancorporation (ZION)

Zions Bancorp net earnings applicable to common shareholders increased 20.7% to reach $579.3 million in 2006 apart from experiencing strong loan and deposit growth. Major portion of its lending caters to mid size business, tied to the prime rate or LIBOR. Moreover the strong loan growth coupled with low cost deposits would help it post stable net interest margins. Endorsing the same its net interest margin for 2006 stands at a phenomenal 4.63%, the best amongst its peer group.





Though efficiency ratio has taken a hit it is expected to improve once Amegy integration is completed. Its superior credit risk management systems along with loan policies and procedures, and compliance examinations have helped it keeping its asset quality good over the years. Its loan portfolio is conservatively managed avoiding exposure to sub prime lending with strong underwriting practices. After building its capital ratios it has planned for $400 million share repurchase program.





Zions sees huge growth prospects in Nevada and Arizona with U.S. Census Bureau projecting the areas population to double in the coming years. Texas remains another promising area, with its local brand identity and local relationship would help it serve them better. A huge amount of investments have been made in treasury management products that primarily cater to the small businesses and acquisition of Amegy would facilitate it better. It is also positive over its wealth management business Contango Capital Advisors expected it to break even in 2007. The management expects the economic conditions in the geographical area it serves to be strong in 2007 and all set to beat the market.