For a small western bank, Zions BanCorp (NASDAQ:ZION) has turned itself into a formidable banking conglomerate in a few short years. Starting in 1997, Zions started acquiring banking operations and expanded its footprint under several different brand names.
Today Zions has 497 branches in 10 western and mid-west states. The largest concentrations are; 127 in Utah, 94 in California, 83 in Texas, 71 in Nevada, 53 in Arizona, 40 in Colorado and 25 in Idaho.
Zions has consistently maintained a positive net interest margin regardless of the direction of interest rates. Zions is not subject to the subprime issue as loans are primarily to small businesses. Zions is not directly active in the real estate mortgage sector. In the unlikely event of a U.S. recession, Zions has adequate reserves and a strong performing portfolio obtained through strict credit standards.
Estimated earnings growth including charges for the latest (Amegy) acquisition is 12.2%. Estimated EPS for 2007 is $6.01.
When calculating the evaluation line for 2007/08, sector underperformance was accounted for.
ZION 1-yr chart
Disclosure: no conflicts.