Zions Bancorporation Chairman and CEO Harris Simmons commented, “Second quarter operating results reflect a solid ($2 billion, or 3.2%) rebound in customer deposits over the past three months, but also a higher cost of funds, which reduced net interest income to levels comparable with those of a year ago. While noninterest-bearing deposits decreased $2.3 billion during the quarter and were displaced by interest-bearing deposits, the interest savings generated from our demand deposits increased by approximately 28% over the past three months.
“Customer-related noninterest income increased 5% over the prior year quarter, while operating expenses increased 9% — approximately half of which was due to severance and higher FDIC insurance costs. Credit quality remained strong, with continued reductions in nonperforming and classified loans, and annualized net charge-offs of a modest 0.09% of total loans. We’re pleased to see the operating environment stabilizing, and we expect to see continued improvement in the months ahead.”