BUSINESS + ECONOMY

Despite chance for credit downgrade, Zions Bancorporation CEO is sleeping well

Mar 15, 2023, 5:00 PM

Zions Bancorporation CEO and Chairman, Harris Simmons, said Zions Bancorporation has tens of billio...

Zion’s Bank branch at 7015 South Highland Dr. Cottonwood Heights on Tuesday, March 14, 2023. Zions Bank and other regional banking institutions have suffered stock losses amid the fallout from the closures of Silicon Vally and Signature banks. While Zions and some other institutions that have drawn scrutiny and a wave of social media commentary saw big drops in their stock values early this week, all appeared to be recovering on Tuesday as wider fears about the U.S. banking sector ebbed. (Scott G Winterton, Deseret News)

(Scott G Winterton, Deseret News)

SALT LAKE CITY — If anything, when Moody’s Investor Service reported they would investigate a credit downgrade for six American banks, including Utah’s Zions Bank, they were late to the party.

That’s according to Harris Simmons, chairman and CEO of Zions Bancorporation, who spoke with KSL NewsRadio’s Dave and Dujanovic on Wednesday.

Simmons meant that Moody’s talk of a potential downgrade has come after some big disruptions in the banking industry including the collapse of FTX, a global cryptocurrency exchange, in November 2022. That was months before the recent failures of Signature Bank and Silicon Valley Bank.

“[Moody’s] has cut the entire industry outlook to negative, this isn’t just us, as you noted … and they’ve done it despite measures taken to ensure that every bank will have more than adequate liquidity,” Simmons said.

Why did Zions Bank make Moody’s watchlist?

Simmons said it has to do with Zions’ regional nature.

“Well, I think they’re looking at the regional bank space generally. And the regional banks are kind of interesting because we’re publicly traded,” he said.

Could it also be because, as the Salt Lake Tribune recently reported, nearly 51% of Zions’ deposits are not guaranteed by FDIC insurance?

Simmons said no, that’s not unusual at all.

“JP Morgan Chase, the largest bank in the country, is at 53% uninsured,” he said. “Wells Fargo is within a percentage point of that to one or the other, I forget which way. So … that’s not an unusual number.”

Indeed, Reuters reported this week that Zions Bank is among the top five regional banks with the most uninsured deposits.

Simmons said Zions Bancorporation has tens of billions of dollars of liquidity, “much of it sitting in cash in our account at the Fed, and a lot more that can be accessed within a day.”

He went on to say that as far as requests for money, Zions isn’t seeing anything close to what Silicon Valley Bank experienced.

But is he worried? At all?

“I had a good night’s sleep last night. I’ll put it that way.”

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Despite chance for credit downgrade, Zions Bancorporation CEO is sleeping well