(Reuters) – Zions Bancorporation on Wednesday missed analysts’ estimates for third-quarter profit, as higher interest payment on deposits squeezed the lender’s interest income.
U.S. regional banks have been forced to pay out higher rates of interest on deposits to prevent customers from fleeing to high-yielding alternatives following the Federal Reserve’s monetary tightening and the banking crisis earlier this year.
Shares of the lender were down 4.4% in the extended trading.
Zions’ cost of total deposits for the third quarter was 1.92%, compared with 0.10% a year earlier. Total deposits fell 1% to $75.4 billion.
The lender’s NII was $585 million, compared with $663 million in the year-ago quarter.
Zions reported a profit of $168 million, or $1.13 per share, for the three months ended Sept. 30, compared to analysts’ average estimates of $1.15, according to LSEG IBES data.
(Reporting by Sri Hari N S in Bengaluru; Editing by Sriraj Kalluvila)
