Utah’s Zions Bank stocks plummeted after the collapse of Silicon Valley Bank

President Scott Anderson says the Salt Lake City-based institution “remains strong” with “access to tens of billions of dollars in readily available liquidity.”

(Chris Samuels | The Salt Lake Tribune) A branch of Zions Bank in Cottonwood Heights, Monday, March 13, 2023.

Shares in Utah-based Zions Bancorp slumped Monday as the fallout from the collapse of two other major banks ripped through the US financial system.

In a personal letter sent to bank customers on Monday, Zions Bank President and CEO Scott Anderson acknowledged that the failures of Silicon Valley Bank in California and Signature Bank in New York City “cracked markets and nerves many people,” but he said that Zions’ remained in strong financial shape, with “tens of billions of dollars of readily available liquidity available.”

Still, Zions’ stock price fell 44.1% early Monday when trading opened on the NASDAQ, falling from $40.35 to $22.55 before those losses narrowed to about 26% by midday.

First Republic Bank, a San Francisco-based regional bank; Western Alliance Bancorp, a Phoenix-based bank holding company; and PacWest Bancorp, headquartered in Beverly Hills, Calif., also saw their shares battered in early trade along with Zions as part of a broader negative reaction to the financial sector from nervous investors. Several regional banks, including Zions, suspended trading on Monday as prices plummeted.

As federal regulators looked to take over the two failed banks, President Joe Biden also sought to reassure Americans that the US banking industry was safe and that customer deposits “will be there when you need them.”

Anderson noted in his letter that the Treasury Department and federal bank regulators acted quickly to protect depositors in the two bank failures and prevent the problems from spreading. That, he said, “should allay concerns about the banking industry’s ability to fully and timely meet its obligations to each depositor.”

The two collapsed institutions also have unique characteristics, he pointed out, that make them unstable in the face of rising interest rates – characteristics Zions does not share. What separates SVB and Signature Bank “from others has been their extremely high growth rates over the last few years,” the CEO said, “and their focus on large, uninsured deposits from clients in the technology and cryptocurrency industries, respectively.”

Zions’ deposits, Anderson said, are held in 1.4 million accounts for amounts far smaller than the average balance at Silicon Valley Bank, which made the Santa Clara-based bank “much more vulnerable to the kind of outflows that they experienced last week. The situation was similar at Signature Bank.”

According to Anderson, Zions has access to billions of dollars in liquidity “without having to sell securities. The credit quality of our loan and securities portfolios has been excellent over the past several years and our capital remains strong.”

Headquartered in Salt Lake City, the bank holding company serves clients primarily in Utah, Idaho and Wyoming and employed nearly 10,000 full-time employees at the end of last year. It reported annual net sales of $3.2 billion in 2022 and total assets of approximately $90 billion.

According to its annual report, it operates seven affiliated banks, including Zions, as well as California Bank & Trust, Amegy Bank of Texas, National Bank of Arizona, Nevada State Bank, Vectra Bank Colorado, and The Commerce Bank of Washington.

https://www.sltrib.com/news/2023/03/13/utahs-zions-bank-shares-plummet/ Utah’s Zions Bank stocks plummeted after the collapse of Silicon Valley Bank

Justin Scaccy

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