ZION

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Performance was characterized by meaningful year-over-year earnings improvement, driven by net interest income growth, customer-related fee income, and exceptional credit quality with net charge-offs at only 2 basis points. - Management attributed the sequential net interest margin decline to higher deposit costs and a deliberate build-up of lower-yielding money market balances following significant deposit growth that outpaced loan demand. - The acquisition of Basis Investment Group's multifamily agency business is a strategic pivot to create a differentiated, one-stop platform for commercial real estate clients, addressing housing demand in the Western U.S. - The 'Strategic 6' product suite, including WealthSelect and new deposit accounts, is designed to deepen client relationships and capture market share in the $100,000 to $1 million investable asset segment. - Capital markets growth reflects a multi-year investment in talent and technology, nearly doubling annual fee income since 2020 through diversified products like commodities hedging and investment banking. - Management noted that while loan growth was soft in the third quarter, particularly in Texas, they view regional market disruption from competitor M&A as a significant long-term opportunity for talent and client acquisition. - Net interest income is projected to increase 8% to 12% by Q3 2027, predicated on an asset-sensitive balance sheet and a forward curve assuming three rate hikes through June 2027. - Management assumes a deposit beta in the upper 40s to low 50s, reflecting a more competitive repricing environment compared to previous cycles and a shift toward interest-bearing products. - Loan growth guidance is tempered to 2% to 4% for 2027, primarily due to expected interest rate headwinds impacting commercial real estate activity and disciplined underwriting standards. - The multifamily agency platform is expected to scale significantly, with revenue targets of $17 million to $20 million in 2027, growing to $30 million to $40 million over the medium term. - Positive operating leverage of 40 to 50 basis points is expected for full-year 2026, which includes the dilutive near-term impact of the Basis acquisition integration costs. - A presentation change regarding interest paid on derivative cash collateral increased reported deposit costs by 3 basis points but had no impact on the overall cost of funds. - The Basis acquisition added $229 million in goodwill and intangibles, which impacted capital ratios but is viewed as a high-value strategic entry into agency lending. - Management utilized excess liquidity to pay down $2.7 billion in short-term FHLB borrowings year-over-year, prioritizing a reduction in wholesale funding costs. - Unrealized losses in AOCI increased by $122 million due to higher term rates, though management noted that 50% of this impact was offset by active hedging strategies. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management confirmed that reaching a mid-3.50% NIM by 2027 is realizable under the current forward rate curve and assumed deposit behavior. - The trajectory depends on the successful remix of investment securities into higher-yielding loans and the continued reduction of high-cost brokered deposits. - Management characterized the Q3 loan softness in Texas as a seasonal anomaly rather than a structural trend, noting that pipelines remain healthy. - They view competitor M&A in the Texas market as a 'positive' disruption that allows Zions to aggressively target displaced clients and bankers. - Management suggested there is room to increase capital absorption and buybacks moving forward, given the constructive operating environment and strong capital generation. - They noted that their AOCI is partially 'frozen' due to transfers to held-to-maturity, providing a level of protection against rate-driven capital volatility. - Management admitted current wealth penetration is 'really low' due to a lack of historical trust acquisitions, representing a significant organic growth opportunity. - Recent incentive compensation adjustments for bankers are now fully aligned to drive cross-selling between commercial banking and advisory services.

Image source: The Motley Fool. Mon, Oct 19, 2026 - Senior Director of Investor Relations - Jason Arbuckle - Chairman and Chief Executive Officer - Harris Simmons - Executive Vice President and Chief Financial Officer - Ryan Richards - President and Chief Operating Officer - Scott McLean - Chief Credit Officer - Derek Steward Operator: Greetings. Welcome to Zions Bancorp Third Quarter Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Jason Arbuckle. Thank you. You may begin. Jason Arbuckle: Thank you, Cleo, and good evening, everyone. Welcome to our conference call to discuss Zions Bancorporation's Third Quarter 2026 results. My name is Jason Arbuckle, Senior Director of Investor Relations. And before we begin, I would like to remind you that during the call, we will make forward-looking statements. Actual results may differ materially. We encourage you to review the forward-looking statements and non-GAAP disclosures in our press release and on Slide 2 of today's presentation, which apply equally to statements made during this call. A copy of the earnings release and the presentation are available at our website, zionsbancorporation.com. For our agenda today, Chairman and Chief Executive Officer, Harris Simmons, will provide opening remarks. Following Harris' comments, Chief Financial Officer, Ryan Richards, will review our financial results and outlook. And also with us today are Scott McLean, President and Chief Operating Officer; and Derek Steward, Chief Credit Officer. After our prepared remarks, we will hold a question-and-answer session. This call is scheduled for 1 hour, and I will now turn the time over to Harris Simmons. Harris Simmons: Thanks very much, Jason, and good evening, everyone. We're reasonably pleased with our financial results for the third quarter, which reflect meaningful year-over-year earnings improvement and continued progress on our strategic priorities. Going to the slides. Slide 3 summarizes second quarter results versus the prior quarter and last year's third quarter. Net earnings available to common was $262 million or $1.78 per share, an increase of 20% compared to $1.48 in last year's third quarter and an increase of 2% compared with $1.74 last quarter after adjusting for that quarter's large equity securities gains. The increase from a year ago was due to growth in net interest income and customer-related noninterest income, modest loan growth and exceptional credit performance. The net interest margin was 3.23%, down 4 basis points from the prior quarter and down 5 basis points from a year ago. When compared to the prior quarter, average loans grew 3.7% on an annualized basis, led by commercial lending. Average customer deposits grew 8.8% on an annualized basis. Credit losses were modest at 2 basis points annualized of average loans. Slide 4 presents the recent history of our earnings performance, together with the impact of the provision for loan losses on quarterly results. Notable items in each of the recent quarters are also included on this slide. As shown on Slide 5, adjusted pre-provision net revenue was $338 million. It increased 2% from the prior quarter, reflecting improvement in adjusted taxable equivalent revenue, which more than offset a modest increase in adjusted noninterest expense. Adjusted pre-provision revenue declined $14 million or 4% from the prior year period, which represented a particularly strong comparison quarter. In addition, results for the current quarter included $4 million of expense associated with the recently acquired multifamily agency platform that was not included in our original forecast. Turning to Slide 6. Our Capital Markets division continues to be an important driver of fee income growth. Since launching the business in 2020, we have nearly doubled the annual fee income contribution by investing steadily in talent, technology and product capabilities, including investment banking, commodities hedging, real estate capital markets and multifamily agency capabilities, which I'll discuss in more detail on the next slide. Before moving on, I'll note that the $136 million fee income number shown for 2026 is annualized based on our performance through September 30. Given the momentum we are seeing across the business and our expectations for the fourth quarter, we anticipate the full year results to come in somewhat above that level. Turning now to Slide 7. I'd like to highlight the acquisition of Basis Investment Group's multifamily agency lending business, which closed during the third quarter. This acquisition represents an important step in building what we believe can be a highly differentiated multifamily franchise. Our goal is straightforward: to provide clients with a single source of financing solutions across market rate, affordable construction, bridge, agency and CMBS products. With this acquisition, we are now 1 of only 4 banks in the country that combines direct access to both Fannie Mae designated underwriter servicer and Freddie Mac's Optigo programs, together with originations to third-party CMBS conduit platforms. When combined with the broader capabilities of the bank, this creates a differentiated one-stop multifamily platform capable of serving clients throughout the life cycle of an asset. In addition to the talented team that joined us from Basis, we have added seasoned lenders with deep experience in multifamily agency lending and servicing to help scale the platform. We're excited about the opportunities this creates and the talent that we have assembled. This acquisition enhances our ability to serve commercial real estate clients and in particular, those in the Western United States, where we see a real market opportunity with population growth and housing affordability issues that drive demand for multifamily products. Included in the quarter were approximately $4 million of expenses associated with our newly acquired multifamily agency platform, including personnel and other integration-related costs and approximately $300,000 of revenue. We expect the financial benefits to build gradually over time as the platform is integrated and production ramps up. For 2027, we anticipate approximately $17 million to $20 million of revenue and $12 million to $13 million of expense, recognizing that we are in the early process of scaling the business. Over the medium term, we expect the business to generate approximately $30 million to $40 million of annual revenue. The pace of growth and ultimate revenue potential will be influenced by market conditions, including the interest rate environment. Moving to Slide 8. We see wealth management as a compelling growth opportunity given our broad customer base and the size of wealth assets under management relative to the size of our banking franchise. We have seasoned affiliate and wealth leadership teams focused on continuing to enhance coordination between our banking and advisory businesses, which we believe positions us to deepen client relationships and capture additional growth opportunities. A key component of our strategy is a product we call Wealth Select, which is a new offering that expands our addressable market by allowing us to serve clients with approximately $100,000 to $1 million of investable assets through a scalable advisory model. Wealth Select helps us engage clients earlier, deepen relationships over time and create a pathway for those relationships to grow alongside their financial needs. Slide 9 provides more information about what we refer to as our Strategic 6 products. While each serves a different client segment and business need, they all share a common objective, which is strengthening sustainable growth through our branch footprint and core deposits, small business relationships and fee income. We continue to be encouraged by the early results. For example, year-to-date at September 30, we've opened over 14,000 Gold accounts for consumers, totaling approximately $275 million in new-to-bank deposits and 1,300 Business Beyond accounts, bringing in about $120 million in new deposits. In addition, we currently rank #10 nationally in SBA 7(a) lending based on approval volume, #9 in SBA's 504 loans. While the near-term financial contribution is modest relative to the size of the bank, these products are helping us grow long-term relationships and creating opportunities to deliver additional banking, payments, lending and wealth management solutions over time. With that overview, I'll turn the call over to our Chief Financial Officer, Ryan Richards, to walk through the quarter in more detail and walk through our outlook. Ryan? R. Richards: Thank you, Harris, and good evening, everyone. Beginning on Slide 10, you can see the 5-quarter trends for net interest income and net interest margin. Taxable equivalent net interest income was $684 million, up $7 million or 1% from the prior quarter and up $12 million or 2% from the year ago quarter. Earning asset yields were relatively stable sequentially, while our cost of funding increased, resulting in a decline in the net interest margin compared to the prior quarter. Slide 11 provides additional detail on the drivers of net interest margin, which decreased 4 basis points from the prior quarter and 5 basis points from a year ago. The linked quarter decline was primarily driven by higher deposit costs and growth in lower-yielding assets. As Harris noted in his opening remarks, deposit growth significantly outpaced loan growth during the quarter, with average customer deposits growing by 8.8% on an annualized basis. This compares with annualized loan growth of 3.7% during the quarter and a slight decrease in ending loan balances. We used this excess funding to pay down short-term FHLB borrowings with the residual deployed into money market investments, which increased meaningfully during the quarter. Moving forward, these lower-yielding money market balances, which are dilutive to our net interest margin, will be utilized to fund loan growth and/or reduce broker deposits as those balances mature. The total cost of deposits increased 11 basis points to 1.59% during the quarter. This increase was driven in part by a recent change in how we present interest paid on cash collateral associated with our derivatives portfolio. Earlier this year, we began presenting derivatives and related cash collateral on a net basis. Beginning this quarter, we reflected the interest costs associated with the cash collateral held and the cost of deposits as opposed to short-term borrowings. This increased our reported cost of deposits by approximately 3 basis points, but had no impact on our overall cost of funds. As Harris noted in our earnings release, we expect our asset-sensitive balance sheet to produce stronger net interest income in a higher rate environment. For the third quarter of 2027, we anticipate net interest income to increase by approximately 8% to 12%. Our outlook is based on the forward curve as of September 30, which assumes 3 rate increases occurring in December, March and June, respectively. The forecast assumes our cost of deposits rise to around 2% from current levels of 1.59%, which includes migration of some noninterest-bearing deposits into interest-bearing products. If deposit pricing and mix trends develop more favorably than we have assumed, there is potential for net interest income to exceed our guidance. Moving to noninterest income on Slide 12. Customer-related noninterest income was $192 million compared with $182 million in the prior quarter and $163 million a year ago. Excluding the net credit valuation adjustment, adjusted credit -- customer-related noninterest income was $182 million compared with $181 million in the prior quarter and up $8 million or 5% from the year ago quarter. As Harris mentioned earlier, capital markets continue to deliver strong performance and remains on pace for a strong fourth quarter. In wealth, we are seeing encouraging momentum and remain focused on executing our strategy to drive growth and deepen client relationships. Looking ahead to the third quarter of 2027, we expect adjusted customer-related fee income to grow 6% to 9% relative to the third quarter 2026 results of $182 million. We anticipate broad-based growth across our fee businesses, led by continued momentum in capital markets. Turning to Slide 13. Adjusted noninterest expense was $549 million, representing an increase of $3 million or 1% from the prior quarter. And as Harris mentioned earlier, included $4 million of expense related to the newly acquired multifamily agency platform. Technology, telecom and information processing expense increased $4 million, driven by higher application software, licensing and maintenance costs. Additionally, deposit and regulatory expense increased $5 million related to the decrease to our FDIC special assessment in the prior quarter. Expenses were higher year-over-year, reflecting higher incentive compensation, increased professional outsourced services and higher technology costs. We will continue to manage expenses prudently while investing to support growth. For the third quarter of 2027, we expect adjusted noninterest expense to increase by approximately 4% to 6% relative to the third quarter of 2026. We also continue to expect positive operating leverage for the full year 2026. Our initial outlook of 100 to 150 basis points of operating leverage did not contemplate the acquisition of the multifamily agency platform from Basis. Including the impact of that acquisition, we now expect operating leverage of approximately 40 to 50 basis points. Excluding the acquisition, operating leverage would approach the low end of our prior expectations of 100 to 150 basis points. Slide 14 presents trends in average loans and deposits. Average loans grew 3.7% annualized during the quarter, primarily within the commercial and industrial portfolio and increased 2.7% year-over-year. Loan yields remained relatively stable sequentially and were down 28 basis points year-over-year, primarily reflecting lower interest rates. Looking ahead, we expect loan growth to be between 2% to 4% for the third quarter of 2027 compared with the third quarter of 2026. Our outlook reflects current pipeline activity, customer utilization trends and the broader economic environment. Given the expected path of interest rates, we are tempering our outlook for loan growth, particularly within commercial real estate. Average deposits increased $17 billion from the prior quarter, driven -- average deposits increased $1.7 billion from the prior quarter, driven largely by an increase in interest-bearing deposits. The cost of total deposits was 1.59%, an increase of 11 basis points sequentially, primarily reflecting deposit repricing and to a lesser extent, the presentation change related to interest paid on cash collateral associated with our derivatives portfolio. Our deposit growth allowed us to reduce wholesale funding sources during the quarter, tempering the increase in total cost of funding. Year-over-year, the cost of deposits declined 8 basis points, primarily due to lower interest rates. Slide 15 presents the 5-quarter trend of our average and ending funding sources. Our total funding costs increased to 1.75% compared with 1.69% in the prior quarter. Period-end deposit balances increased by $1.3 billion compared with the prior quarter, driven by a $1.8 billion increase in customer deposits, partially offset by a decrease of $448 million in broker deposits. Short-term borrowings decreased $376 million linked quarter and declined by $2.7 billion versus the prior year quarter. Turning to Slide 16. The investment securities portfolio continues to serve as an important source of on-balance sheet liquidity and a tool to balance interest rate risk. During the quarter, principal and prepayment-related cash flows from investment securities of $631 million were partially offset by reinvestment of $296 million. The continued paydown of lower-yielding mortgage-backed securities supports earning asset remix and/or a reduction in wholesale funds. The estimated price sensitivity of the portfolio, inclusive of hedging activity was 3.4 years. Credit quality remains strong, as shown on Slide 17. Net charge-offs were 2 basis points of average loans annualized, and the nonperforming asset ratio was 50 basis points compared with 48 basis points from the last quarter. Classified and criticized balances declined 12% and 8%, respectively, during the quarter. The allowance for credit losses ended the quarter at 1.1% and remains well positioned relative to our risk profile with 207% coverage of nonaccrual loans. Our capital position remains strong, as shown on Slide 18. The common equity Tier 1 ratio remained stable at 11.8% during the quarter, notwithstanding a $229 million increase in goodwill and intangible assets arising from our newly acquired multifamily agency business. We expect continued strong capital generation through earnings and improvement in AOCI. Related improvements resulted in a 13% increase in tangible book value per share versus the prior year. When compared with June 30, 2026, unrealized losses in AOCI increased by $122 million, reflecting declines in the fair value of AFS securities resulting from increased term interest rates. This mark-to-market impact was tempered by pay-fixed, receive-floating interest rate swaps designated as hedges of our AFS securities to reduce volatility in our AOCI balance. It also bears noting that a significant portion of our unrealized losses recorded in AOCI related to securities previously transferred from AFS to held to maturity, the related balance of which does not fluctuate with mark-to-market changes. Slide 19 summarizes the outlook we've discussed across loans, net interest income, fee income and expenses. This outlook remains our best estimate based on current information and is subject to the risks and uncertainties discussed in our forward-looking statements. This concludes our prepared remarks. As we move to the question-and-answer section of the call, we request that you limit your questions to 1 primary and 1 follow-up question to enable other participants to ask questions. Cleo, please open the line for questions. Operator: [Operator Instructions] Thank you. Your first question comes from Bernard Von Gizycki with Deutsche Bank. Bernard Von Gizycki: Just on the first question on the NII guide of up 8% to 12%. Can you just break down some of those assumptions like the deposit growth and mix, beta and just the rate hikes assumed within that period of time? R. Richards: Yes. Thank you, Bernard, for the question. Listen, I've tried to call out in my prepared remarks that we are anticipating 3 rate hikes as part of that guidance. So December, March and June. We certainly expect a larger contribution in terms of deposit growth coming from interest-bearing deposits, expecting the noninterest-bearing deposit growth would be very modest in that type of rate environment. We also kind of sort of observed or expected relative to the last rate hiking cycle when we were pretty much awash with deposits and perhaps could have been more patient. We are now in a position that's a very competitive market. And so we're anticipating that it will be a slightly different deposit repricing behavior than what we might have experienced in the last cycle. And so our guidance that you might have heard in my prepared remarks, we've allowed for an increase in deposit costs to the extent of about 40 basis points increase in deposit costs. That would imply sort of a beta in the upper 40s to low 50s is sort of the assumption that we're thinking of. As in prior quarters, the contributions that you would expect there, of course, variable rate repricing is a given. Fixed rate loans is a significant contributor there. We see potential for 3 to 4 basis points on earning asset yields arising from the fixed rate loan repricing. And of course, the continued remix out of investment securities into loans, but also this notion that we continue to kind of reinvest a portion of our investment securities. And there, we expect 2 to 3 basis points of earning asset pickup as well. So think about sort of a 5 to 7 basis point increase in earning asset yields in that rate environment is how we're thinking about it. Bernard Von Gizycki: Great. Maybe just a follow-up. Maybe just longer term, I know you guys have talked about this 350 NIM. And I think intra-quarter, maybe you've dialed it back a little bit maybe with the timing. Just thoughts on maybe when you could reach that? Is it still kind of a goal? Just any commentary you can add on that. R. Richards: Yes. Thanks, Bernard. Listen, we -- I think when we talked about the mid-3s NIMs, we always sort of conditioned in the past of the kind of rate environment that we would be in. There's tons of uncertainty in the future about how deposits behave. We know that. But we do see scenarios that would allow us to operate in the mid-3s moving forward with this type of rate environment. Of course, that's always dependent upon deposit growth, the rate paid on those deposits, the beta. But we think with some reasonably conservative assumptions that we can reach those mid-3 levels in 2027. Operator: Your next question comes from John Pancari with Evercore ISI. John Pancari: First, yes I commend you on providing the quantitative ranges to the outlook and simplifying your NII outlook, I definitely think it is definitely helpful. So appreciate that. The -- just in terms of the implication to the margin, I know you didn't provide a margin outlook. But given the dynamics that you just walked through, in terms of deposit costs dynamic and some of the earning asset shifts. How do you view the trajectory of the margin, particularly as you see some of the growth on the asset side shifting away from CRE as you indicated. R. Richards: Yes. Great color, John. And maybe we should have a moment of silence for moderately increasing. Let's take just a moment to celebrate those terms. Listen, you're right. I mean, we do expect some growth from CRE. It'll probably be a little bit more pressure from the rate environment, but if you think about even not going back that far in time, at a point in time where we're getting a pretty outsized contribution from consumer loan growth. And given our guidance, which is reasonably modest at 2% to 4% of loan growth, we really pointed to C&I, owner-occupied and a little bit lesser contribution from CRE. That's still typically a better outcome than consumer-led growth. So that, coupled with the traditional things you've heard us talk about over time, the remix of securities into loans, the less of the headwind of the discontinued swaps, are all contributors to, I think, a brighter prospect for NIM. And of course, you heard Harris talk about our underlying strategic offerings that we continue to grind away at and building that new relationship. That will also be very, very important as we continue to drive down our wholesale borrowing costs. We've been very, very successful year-over-year and driving down our brokered deposits and our other short-term borrowings, and we really look for that to continue. John Pancari: Great, Ryan. And then if I could just hop over to capital. Maybe you could just give a little more color just around how we should think about the pace of buybacks for the coming quarters and not just maybe fourth quarter, but as you look at next year, any reason to think that despite the volatility in the rate backdrop that you can't stay on the $75 million level? Or is there -- should we think about some change in that piece? R. Richards: John, with all those things, I think we're subject to regulatory approvals and where the Board wants us to go. But listen, with the kind of rate environment that I just described, provided that it holds that can translate, as you can see in our guide to some pretty positive outcomes for us. So I wouldn't be giving up on capital absorption and the potential to potentially grow in that type of operating environment. But I don't want to prejudge outcomes with our regulators and the Board. But I think that we see scenarios where we could actually increase our capital absorption moving forward. If you think about our results this quarter, certainly, the mark-to-market and the runoff of the term rates was challenging for the industry we actually fared pretty well on that basis. A bigger driver of capital absorption this quarter for us was the goodwill and the intangibles that we absorbed through the multifamily agency business, when setting that aside, with the hedges we have in place and the fact that a very large portion of our AOCI is sort of frozen from the transfer into HTM, we have a very, very good performance on a relative basis. If you think about the mark-to-market, we had about 50% or better offset with the hedges that we have in place that we call out in the appendix of our materials. So I think with that extra level of protection and a potential for a very positive operating environment there may be room to do a little more. Operator: Your next question comes from Dave Rochester with Cantor Fitzgerald. David Rochester: On the loan growth outlook, with your reeling in your expectations for CRE loan growth within that, which it sounds like is a driver for slowing. Is that just a function of greater competitive pressures, or is it less activity given higher rates that you're expecting? Or are you becoming somewhat concerned about credit in that area, given your rate and economic outlook? Or is it a little bit of everything? And then if you could talk about the total pipeline today, if that's improved at all versus last quarter and utilization trends that you mentioned as well, that would be great. Derek Steward: Thanks, Dave. This is Derek. And on to the commercial real estate side as far as growth there, pipeline is actually pretty good right now. It is competitive, but we're being very disciplined in our underwriting as well as risk selection as far as our approach there. I think just given the competitive environment, given some of the supply/demand issues that are going on in our market as well as just the increase in interest rates could have an impact on the CRE growth. But as you look in the last quarter, we actually had pretty good growth in CRE. Actually, it was able to offset a number of payoffs that we had that exited from our classified book. As far as the rest of the portfolio, pipeline has been good in the C&I. I think this quarter, just at the period we had a little decrease in utilization. Second quarter was actually strong utilization and just saw a little decline in some capital call usage and number of other just general business activity seems just utilization was down for the quarter. Scott McLean: Dave, this is Scott. I might add a little more color to that, too. I think Derek covered the CRE as well as just other topics related to the pipeline. But 3Q, if you look at H8 data, total loan growth was down and C&I growth was down, and we tracked pretty close to what H8 data was. And I don't know why third quarter seemed to be soft. They were -- third quarter last year was soft. Third quarter in '23 was soft, I don't know if it's summer vacation or what it is, but there is something about the third quarter going on. If you look at Slide 25, just another way to kind of think about what's happening Basically, what you can see there is we're basically no growth for the quarter. You can see that negative $9 million over there in the bottom right-hand corner. And we kind of fundamentally need about $500 million to -- $500 million to $600 million to get a kind of a good solid 3% to 4% growth rate. And basically, it's happening at Amegy. Amegy was down $293 million for the quarter and as opposed to being up $150 million to $200 million. That's kind of the difference between $500 million to $600 million in quarterly growth, which isn't great. We'd like for it to grow better, but that's kind of 3% to 4% growth. And to put that in additional perspective, if you look at Slide 26, where you see the year-over-year growth, 3Q '26 versus 3Q '25. You'll see that Amegy, those first 2 lines, C&I, excluding oil and gas and owner-occupied, it produced over half of the C&I and owner-occupied growth year-over-year. So they've been outperforming all of our other affiliates for some time in terms of C&I growth, including owner-occupied, they just happened to have a soft quarter. And so I don't -- we're not especially worried about that. It just happened to be a soft quarter for them. Otherwise, I think we would have seen growth more in line with $500 million to $600 million for the quarter. And their pipeline are just fine. There's nothing unusual about their pipeline [ just call it ]. David Rochester: Got it. I thought that you had mentioned CRE is potentially slowing down in terms of growth going forward, and that's why you were a little bit lower on your loan growth expectations, is that... Scott McLean: Right, it's a low-growth number. It's kind of a 1% to 3% sort of growth number as what we're trying to achieve anything slightly less than the growth rate of the overall portfolio. So that's a moderately consistent message for us over time. David Rochester: And can you just talk about just switching gears to wealth and wealth expansion that you're trying to drive here. What's the penetration of wealth in your current customer base. Can you talk about any recent incentive changes or any new targets you have for hires or anything like that, that will help drive greater growth in that line over the next year? Scott McLean: Sure. Taking incentive comp first, we made some incentive comp adjustments 12 to 18 months -- 12 to 24 months ago, that quite frankly, created some churn in our bankers. And we sort of thought that might happen. And so this kind of no growth period that we've had in wealth fees that total about $58 million, plus or minus right now. And there's been -- we've kind of had a no growth phase. We think the incentive comp elements, both for our wealth colleagues and our private banking colleagues around the company are aligned better now. And that everybody sort of adjusted to it. The -- and so that's the incentive comp side. The answer to your question of what our penetration and what's the outlook? Our penetration is really low and the outlook is really positive. Any data I would give you, you would say, boy, "your penetration is really low, guys come on now." And part of that is because the dog didn't eat our homework papers, but they -- we just have never had a large trust business that we acquired. And most of our peers either acquired large trust businesses somewhere in their past or they grew one, and we just never did. So we're kind of starting from behind. But we think the calling efforts with our private bankers, wealth bankers, our commercial bankers and the energy level we have there right now is really positive. Operator: [Operator Instructions] Your next question comes from Chris McGratty with KBW. Christopher McGratty: Great. I'll echo the new guide, thank you for doing that. The operating leverage, I guess a question on operating leverage. Is there anything in the crystal ball that would say that some degree of operating leverage next year wouldn't be possible as well. And I hear you on the full impact from the deal. But I guess, from the NII momentum and the expenses that you may need to invest in the company, any reason why operating leverage shouldn't continue? R. Richards: Listen, hopefully, I understood that, frankly, Chris, if not just reguide me here. But certainly, based upon how we guided to the third quarter 2027, we see very positive prospects for operating leverage. I mean some of our assumptions and models would point to 6 points or better out that quarter. And we don't typically go too far afield for that. But even for the full year 2027, we're seeing the prospects for a pretty positive spread there. So that's where you're going -- and that's probably the color if you're looking at something else, please let me know. Scott McLean: I think the other thing Yes, I think the other thing, Ryan was talking about was our full year operating leverage in '26. And he was commenting about we were guiding to 100 to 150. We've talked about that all year for 2026. The third quarter has obviously been a little soft here. We actually saw it coming. And -- but we still think for the fourth quarter, I won't repeat what he said, but that's what he was talking about in terms of the operating leverage there being a lower number. R. Richards: I think it's a good call, Scott. Thank you for, of course, correcting. I mean -- if we look at the adjusted PPNR that we had this quarter relative to what Harris noted, very strong third quarter 2025. I would just generally remind everybody that, that was actually shaping up to be a very, very strong quarter for us. And on PPNR, it was, but we had the credit matter that presented that quarter that kind of was kind of our tone for that quarter. But underlying that, on a year-over-year basis, certainly a contributor to our softer PPNR -- just PPNR performance and they're kind of eroding some of our potential for operating leverage in this quarter, we saw some increase in incentive accruals. Our incentive accruals are sensitive to credit performance. So we've had really truly outstanding credit performance this year. So while the core performance is a little bit softer against a strong comp, the credit has been excellent. And there's been some other things that showed up in the third quarter that are different on the noninterest fee income side, noncustomer related. There was a pretty sizable difference in terms of our equity securities gains and losses period-over-period, that was about a $15 million delta. And then in the prior year quarter, we also had higher dividends and other income, FHLB dividends and other matters. So it would be understandable if people sort of looked at our full year and said, "Hey, tough quarter for operating leverage, tough PPNR versus a strong comp, can you still get there for the full year?" And we do see, as I guided, once you adjust for Basis, not having been our run rate, we think we can get close to the lower end of our prior guide of 100 to 150 basis points. Some things were to break our way, could we fit our way in there? Possibly, but we'll just see how the quarter shapes up. Christopher McGratty: Okay. And then just a follow-up on capital. And the -- I have you just under 9% on the adjusted CET1. I just want to confirm that one. And then any change in uses of capital, you talked about the Basis deal, the fee income momentum, depository acquisitions, I guess, would be the question from there. Any change in appetite? R. Richards: I don't think much -- I would agree with your assessment. I think we would show ourselves on a market capital basis being just shy of 9% as well. So I don't think anything that you would hear from this management team would change about how we would think about capital deployment, other than just what I said already that moving forward, we could have a more constructive operating environment for capital -- capital actions, I should say. Operator: Your next question comes from Ryan Kenny with Morgan Stanley. Ryan Kenny: Can you walk through some of the dynamics that you're seeing on deposit competition. Is it intensifying significantly? Is it more on the retail side, more on the commercial side? Any geography within your footprint where things are getting significantly more competitive? R. Richards: I don't think so. I think it's -- I mean it's just a very -- across the board is a competitive environment out there. I don't think we're seeing a lot of impact from kind of neobanks and that kind of thing. And certainly, that's out there, something that the whole industry will be watching here in the next few years. But no, I think it's -- it's a competitive deposit market, but it's manageable. I think probably more price competition on the asset side than on the liability side. But yes, it's just competitive all over. Ryan Kenny: And it sounds like the spot rate for interest-bearing deposits was up only a couple of basis points versus the average, so given that the rate hike came in September, does that mean that clients were asking for higher rates throughout the quarter? And could you see that dynamic going forward where deposits reprice ahead of future rate hikes? Harris Simmons: I think a lot of -- I mean, a lot of the deposit growth was in kind of higher cost deposits. We've moved a lot of money back on the balance sheet for customers that we chased away a few years ago when everybody was awash in liquidity. And so bringing that back on, our goal, as we said before, was really just bringing down our total cost of funding. And so it's -- a lot of the growth was higher cost deposits and certainly lower cost than our marginal cost of funding. That was -- that's kind of what you saw this quarter. Operator: Your next question comes from Ken Usdin with Autonomous Research. Kenneth Usdin: Ryan, I just wanted to ask you a question on the swap adds. I'm presuming that Slide 27 with the simulated repricing of earning assets and loans reflects the adds from this quarter? And then just related, do you have any additional purchases in the future built into the 3Q 27 outlook on top of what you already bought in the third quarter? R. Richards: Ken. I'll speak to it maybe in broad strokes, so we've got Matt Tyler here in the room, our Corporate Treasurer, he could probably drill down maybe another level before I take it. But I think that the message -- the big picture message that we're trying to convey with our hedging activity is we're sensitive to both earnings sensitivity and sort of tangible common equity or EV sensitivity. That's why you see both sides these hedges. What you've been seeing and I think what you're alluding to on the sort of received fixed side is we do tend to measure on a relative basis as being more asset sensitive than others. I said it before, I'll say it again, these are not common methodologies of measuring things. But we do want to be also thoughtful and perhaps prudent. And what goes up, sometimes goes down. And so while that asset sensitivity is serving us well, we think in this type of environment, things can always reverse. And so we've -- on the receive-fixed side, really trying to think about the downside sensitivity should rates reverse and minus 100, minus 200 rate environment and maybe take a little bit of the edge off of how we would measure there. So we did add some hedges during the quarter. I think you would have seen reference to that and that related slide to that end and a little bit more modest activity as we think about that TCE protection on the pay-fixed, and Matt, I'd invite you to add anything if you want to? Matthew Tyler: Yes. The additional hedging, I mean, we've really been keeping our cash flow hedges, which are the received fixed shorter maturities kind of under 2 years. So we're kind of just rolling those out as time goes on. which has been most of the activity. If you have 2 years hedged 2 months from now, it won't be 1.5 years, so 2 quarters from now. So we've just been kind of rolling those on a continuous basis forward, over time. R. Richards: I think maybe coming full circle, could there be more hedging activity built into that guidance. Certainly, if we were to persist in adding those short-term receive fixed hedges. Operator: Your next question comes from Timur Braziler with UBS. Timur Braziler: Maybe just starting on the funding side. I'm just wondering, what's the remaining portion either on wholesale or broker that you're still looking to reduce going forward? Maybe another way of asking that is how close are we to having asset growth be more closely aligned with deposit growth. . R. Richards: Yes. That's a great question. I'll get started and invite other members of the team here to jump in. which you called out is a really important part of our story. Our success year-over-year in paying down broker deposits, paying down wholesale borrowing sources. Having this really positive deposit growth story this quarter, enabled us to pay down our FHLB borrowings almost straight away. Where it was a little more tricky is there's, of course, a term structure to broker deposits. And so it takes a little bit more time for those to run off. we show, I believe, in the fourth quarter, we have about $2.2 billion worth of maturity of broker deposits. And we already said that we're sort of overbuilding our money market position that could be redeployed. So I do think as part of -- as we think about this moving forward is to continue to pay down those sources of funding that aren't with clients. This is kind of what Harris was talking about. We would rather be reaching out to our clients and serving them and even these higher-cost products when they bring net new balances to us, than paying away to a broker or some other wholesale funder. So that's sort of where we see this going on the funding side. Harris Simmons: So Ryan, in terms of timing, I would just add that on the brokered deposits, that they're certificates of deposit, they have an average maturity of about 3 months, which think about it, half of it is going to roll off within 3 months. And we're bringing that down as we manage -- we launch it all the time as we manage funding coming in from deposits. It just isn't instantaneous like if we had borrowings from the Home Loan, for example, which would be a payoff. But the -- it will adjust very quickly. And we've seen a lot of it. We brought down a lot so far this quarter as it's matured. Scott McLean: It's versus June 30 of last year. It's down about $3 billion to $4 billion. It was at about our overnight -- our broker deposits and overnight borrowings, net of money market investments was about $6.5 billion, then if you adjust for long-term debt, we've issued, et cetera, it's down about $3 billion to $4 billion. And it's been very intentional. It's not been serendipitous. And we still have about a little over $7 billion in client funds off balance sheet and almost 100% guaranteed, when we bring them back on their -- the cost is accretive to our overnight cost of funding, which Harris was mentioning earlier. Timur Braziler: Okay. And then -- maybe I can take another shot at John Pancari's question. So I appreciate the color on deposits. So getting to, call it, 2% a year from now, so 40 basis points higher, let's call it, 10 basis points a quarter. And then average earning assets are going up, call it, 5 to 7 basis points a quarter. I would imply, I think, that you need margin expansion in order to get to your NII guidance. Is there -- is the bulk of that increase from just funding mix, asset mix, I guess, how are you thinking about margin over the course of the next 12 months in terms of that NII guide? R. Richards: Yes. Listen, I think it has to be. Yes, all of it. It's both funding mix, it's asset mix -- sorry, yes, asset mix, and it's our sensitivity to the rising rate environment. It's the drive of the net new relationships through these very granular things that Harris described, all the things combined with that sensitivity to 3 future rate hikes, sets up pretty well for us if it all pulls through at that level. And again, reiterating that we recognize that, that's a pretty -- that's a stronger price response on deposits than what we would experience previously, and we hope that there's some conservatism in that, but we'll see. Operator: Our next question comes from David Smith with Truist Securities. David Smith: I'll drill down on the funding a little bit more. Could you help us size the impact of the -- on the deposit costs of bringing that off-balance sheet funding back on the balance sheet? Scott McLean: Okay. Deposit costs will increase as Harris was noting, cost of funding will decrease, all things being equal. David Smith: And for the impact on the third quarter specifically, though? R. Richards: Actually, as it relates to sequential quarters, the amount in off-balance sheet deposits didn't change appreciably. It was pretty across, but there was plenty of evidence of us inviting in other net new balances that we knew were away from us to come in, in the way that exactly how Scott and Harris have described, quantifying that impact. I don't think I have a good number for you now, but that's pretty much I'd say over the last 12 to 18 months, we've attracted certainly north of $3 billion of client deposits that are focused deposit efforts that are accretive to cost of funding. It would be otherwise just be higher cost deposits. David Smith: And then you had mentioned competition being stronger on the loan side than on the deposit side right now. Would you characterize that as more just on yield and cost or more on covenant dynamics or some of both right now in terms of where you're not just stepping down to where the competition is? Derek Steward: It's some of both. This is Derek, David, yes. I mean we're seeing primarily pricing competition, but I would say on structure, covenants, et cetera, but again, we're maintaining our discipline there on the structural side and maintaining our underwriting and just the risk selection. And we're, again, having good luck at still winning our fair share. It's just a more competitive environment, I'd say, today. . David Smith: Is there any change in that assumed in the outlook for deposit growth next year or pretty consistent to where competition levels sit today? R. Richards: Yes. I don't think I guess, open question that's been discussed, I think by analysts and others about the amount of sensitivity that people report versus the actual sensitivity that people will actually experience because we've had this higher for longer rate environment, and the prospect of rate hikes will there be a stronger price sensitivity on the upside. And so we've allowed for some of that in sort of the guidance that we provided and the deposit beta that I would have communicated earlier on this call. Operator: Your next question comes from David Chiaverini with Jefferies. David Chiaverini: I wanted to first start on the capital markets outlook and the pipeline. It sounds positive. Also curious as to what extent could higher rates impact or be a headwind to the new multifamily businesses you acquired as it relates to that $30 million to $40 million contribution over the medium term? Scott McLean: This is Scott. I'll start with it. Related to the Basis business, the $30 million to $40 million was several years out. I can't remember the script, it's -- yes, medium term, and interest rates certainly can have an impact. But the production of multifamily in the country is there's just a real vibrance to it still. And so -- but you're right, interest rates can have an impact on it. It is a flow business for most people. So the production builders that are doing this they build and sell. Derek may have more color on that. But it's not a hold and then get lucky on rates kind of thing. And then the interest rate business, the interest rate hedging business that we have, which is about a $30 million-ish revenue business just on interest rate hedging for our clients. That as rates continue to go up, that could actually be impacted some, although we haven't seen too much weaknesses there. One of the things to notice in this to know in this quarter's capital markets revenue, it included almost no investment banking or M&A advisory work. And that's a practice we started about 18 months ago. And our franchise is really fertile grounds for small- and medium-sized business M&A. And we have a very nice pipeline there. It's just very lumpy. So we're very optimistic about that M&A business going forward. And then our garden variety syndications, foreign exchange, the bond underwriting that we do, et cetera, is -- we think moving along at a pretty nice rate. Derek Steward: I'd just add, I mean, higher rates will be a little bit of a headwind. But I think we also have the tailwind of we really have a lot of ground to plow here. I think we're seeing a lot of interest from middle market kinds of clients. We've had a long relationship with the investment banking point for example, we think that can turn a really nice business across the West. And so Capital Markets businesses by their nature are kind of lumpy, and we get that. But we think it really is a nice value add for us from a client base that needs it. So. David Chiaverini: Yes. No, I agree. I think that multifamily acquisition is differentiating, which is a nice segue into my kind of follow-up on the capital question as it relates to M&A, in terms of refreshed thoughts, are other whether nonbank or whole bank M&A, what are your current thoughts there? Derek Steward: Pretty much unchanged. I mean I would be very opportunistic. I think it's kind of likely to be something -- I mean like this multifamily agency platform. I mean we've long had a really solid commercial real estate business here. And we also know there's kind of a limit to what you can do with a balance sheet with a regional bank and without creating concerns. And so I mean, we -- it was a really nice fit. And we've been looking for some time. We've actually looked at a couple of other opportunities and haven't made it. So we're really pleased to have this. It's just a really nice strategic fit for us. But over time, we'll look back on this 10 years from now and say, what a fabulous thing that was. I think that's kind of what we're looking for. are things that just fit well. And probably a little on the smaller side and particularly the valuation. Look, we need to see some better valuation before we start thinking about becoming very aggressive. But anyway, I think that's been kind of a consistent theme. Operator: Your next question comes from Janet Lee with TD Cowen. Sun Young Lee: You talked about the deposit beta in the upper 40s to low 50s. The different launching point for where we are in the rising rate cycle versus the last one? Are you assuming that the NIB mix can stay relatively stable-ish from here in the low to mid-30s? Or I know that you said a lot of the deposit growth will be coming from interest-bearing, obviously, but I just wanted to see if there's any thoughts there. Scott McLean: Yes. Thanks for the question, Janet. Listen, I think it would be reasonable to assume that interest-bearing deposits would take a larger share moving forward in that higher rate environment. We're doing a lot of great things. We'll continue to do a lot of great things. building out the granular strategies that Harris discussed. And that's something you do over many months and years and most valuable part of our franchise. But pressing forward, I think those noninterest-bearing balances are going to be harder to come by. So I could anticipate potentially a little bit of a slightly different mix there. Sun Young Lee: Got it. And sorry to beat on the dead horse, but I just want to make sure that I heard it correctly. I believe you've said to Bernard's question earlier that your net interest margin could reach that mid-3 -- 350 level in 2027. Is that what you're assuming in your NII for the third quarter of next year, year-over-year? Scott McLean: Listen, we do see very healthy NIMs. We don't provide NIM guidance. It certainly has been our practice because of all the variables that go into it. But as a general matter, just restating what I mentioned before, it really is beholden to the operating environment. And if we do see the rate hikes that we see in our forecast with the type of deposit behavior we described, we think it's realizable to be operating at that level. Operator: Your next question comes from Anthony Elian with JPMorgan. Anthony Elian: Ryan, I know you don't guide on deposits. Any more color you can give us on what drove the strength in deposits in 3Q and really trying to get at the degree to which you expect this high single digits annualized level to persist in 4Q and beyond. If I look at Slide 9, the products you outlined, it just seems like the momentum you have should continue. R. Richards: Yes. Listen, thanks for the question. I mean -- if you look across the past 2 quarters, it's been a little uneven, right? So the last quarter, we showed up with really, really healthy loan growth. Utilization picked up really, really positive, but we fell a little bit flat on deposits. This quarter, we showed up with a really strong deposit growth and not a whole lot of period-end loans to show for. So it is useful to kind of step back, zoom out a little bit and kind of think of longer time horizons. If I think back a year-over-year period, you think about loan growth around 4%, customer deposit growth, about 5% when we talk about ending balances, that's pretty solid, right? It's -- and if you think about the growth of our market, that probably tells you we're getting the growth in our market, we're probably not reaching for it. So going forward, does it persist at an 8.8% average annualized growth? I'm not sure. It's a lot of -- and probably not, but it's a lot of the same type of deposit gathering that Harris alluded to before. There's -- a lot of the growth came from money market balances. There was what we referred to as our gold suite balances. And these are higher cost deposits. The most important part is we just keep grinding away at what you referenced in that slide and those more granular deposit gathering strategies. That's where I think we'll be having a chance to delight shareholders over a longer period of time. Harris Simmons: Yes. I mean we could see 0.75%, 1% growth in our total deposits coming from these things that we're really focusing on the small business, consumer noninterest-bearing kinds of accounts or low interest-bearing kinds of accounts. It's not just about deposit growth, it's about the quality of the deposits, the cost of the deposits, the stickiness of the deposits. Over time, that really makes a difference, but it takes -- I mean, it's like telling people around here, this is a marathon. This isn't a sprint. We'll be talking about this 10 years from now. as a consistent kind of the kind of foundation we're trying to create under everything else that goes on, corporate deposits, everything else. So I hope that's helpful. But that's where a lot of our focus is, but it's a longer-term kind of -- some of this will be watching paint dry a little bit. Anthony Elian: Yes, that's fair. And then on basis, you pointed to $30 million to $40 million of annual revenue over the medium term. What's the level of expense you expect to firm that business in the medium term? I think you pointed Ryan to $12 million to $13 million of expense in '27? R. Richards: Yes. I mean a very reasonable question. I think we just want to be careful not to get too far over our skis. It's pretty early on here. We closed the deal at the end of July. We certainly want to have some experience. So we did quote all those numbers you cited, and we said we expect this to scale over time. That requires investment to continue to build out the talent against a very good backdrop of talent as is now. So probably would hold off or a little bit more experience before we guide more deeply into the expense, how that grows through 2027 through 2028. We did say for full year 2027, $12 million to $13 million of expenses. Beyond that, it will just depend on the pacing of how much we add in talent and further capability. Anthony Elian: Fair enough. And echoing the comments on the updated guidance presentation. Thank you for that. Operator: Your next question comes from Jon Arfstrom with RBC Capital Markets. Jon Arfstrom: Just 1 -- 2 quick ones. On Basis, the smaller revenue number for the quarter, I think I understand it, you just closed the deal, but do you expect contributions from the revenue side to step up as soon as the fourth quarter? Harris Simmons: Yes. I mean look, we're still kind of setting the table. But I expect better fourth quarter revenue than the third quarter. It closed kind of the end of July, and there's a little bit there in the pipeline. But I mean, it's just building. So I don't think we thought a lot about what the fourth quarter is going to look like. We thought more about what next year is likely to look like. That's where we sit in the 17% to 20%. We think it's kind of the target. But I don't think we have anything we'd say about the fourth quarter yet. Jon Arfstrom: Yes. I just -- it was just a small number, Harris, and I didn't know if it was acquisition, and there is some other reason behind that. Harris Simmons: Yes. Jon Arfstrom: Scott, just 1 for you. You mentioned Slide 25, the Amegy loan trends earlier in the call. This has come up? And is it any more or less competitive in Texas. There have been questions around those markets because of new regional bank entrants there? And just confirming you weren't seeing anything new impacting your ability to grow in Texas, just it's such a growth. Scott McLean: The only thing we're seeing now is that the disruption there because of these acquisitions, the acquisition of Comerica, clearly the acquisition of Cadence, the acquisition of Veritex, a few other small, that is all opportunity for us. I've said this for several quarters, and it's just -- it's opportunity and it's not just because I'm saying it and its corporate speak. If we had our fellows from Texas on the phone, he would they would not speak with granularity that we can't talk about on a call like this, but that's what we hear internally. And there is disruption. We've already seen it. And so our calling programs are highly focused those -- they've always been on those banks, but we especially focused on it right now. And there will be competition for people, too. So there's a negative side of this, but we've seen that for decades with folks parachute into Texas. Jon Arfstrom: Yes. So more positive than negative from your point of view? Scott McLean: Absolutely. I'm sorry. The bottom line is yes, more positive. Operator: This now concludes our question-and-answer session. I would like to turn the floor back over to Jason Arbuckle for closing comments. Jason Arbuckle: Great. Thank you, Cleo, and thank you all for joining today and participating. We appreciate your interest in Zions Bancorporation. If you have additional questions, please reach out to the Investor Relations team at the e-mail and phone numbers provided on our website. We look forward to connecting with you throughout the coming months. This concludes our call. Operator: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines, and have a wonderful day. Before you buy stock in Zions Bancorporation, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Zions Bancorporation wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $376,696!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,333,920!* Now, it's worth noting Stock Advisor's total average return is 925% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 20, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Zions (ZION) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

- Interested in Zions Bancorporation, N.A.? Here are five stocks we like better. - Third-quarter earnings improved: Zions reported net earnings of $262 million, or $1.78 per share, up 20% year over year, supported by higher net interest income, customer-related fees, modest loan growth and strong credit performance. - Growth outlook remains positive despite margin pressure: Net interest margin declined to 3.23% as deposit costs rose, but management expects net interest income to increase 8%–12% in the third quarter of 2027 and projects 2%–4% loan growth. - Multifamily lending acquisition expands fee strategy: Zions completed its Basis Investment Group acquisition, adding Fannie Mae and Freddie Mac agency lending capabilities. Management expects the platform to generate $17 million–$20 million of revenue in 2027, while credit quality and capital ratios remained stable. - 3 High-Yield Banks for Investors to Buy on the Dip Zions Bancorporation, N.A. (NASDAQ:ZION) reported third-quarter 2026 net earnings available to common shareholders of $262 million, or $1.78 per share, as higher net interest income and customer-related fee income helped drive year-over-year improvement. Chairman and Chief Executive Officer Harris Simmons said earnings per share increased 20% from $1.48 in the third quarter of 2025. Adjusted for large equity securities gains in the prior quarter, earnings were also up 2% sequentially from $1.74 per share. → ManpowerGroup Stock Sinks on Q3 Results, But Fundamentals Stay Solid - New York Community Bank stock plummets amid real estate risks "We are reasonably pleased with our financial results for the third quarter," Simmons said, citing growth in net interest income, customer-related non-interest income, modest loan growth and "exceptional credit performance." Tax-equivalent net interest income totaled $684 million, rising $7 million, or 1%, from the prior quarter and $12 million, or 2%, from a year earlier. Net interest margin was 3.23%, down 4 basis points from the second quarter and 5 basis points from the prior-year period. → Does the AI Selloff Put Alphabet's Breakout in Doubt? - Banking and trucking: Is the economy rolling toward troubles? Chief Financial Officer Ryan Richards said the sequential margin decline reflected higher deposit costs and growth in lower-yielding assets. Average customer deposits increased at an 8.8% annualized rate during the quarter, exceeding annualized loan growth of 3.7%. The company used excess deposit funding to reduce short-term Federal Home Loan Bank borrowings and place residual funds in money market investments. Richards said those lower-yielding money market balances could eventually be used to fund loan growth or reduce brokered deposits as those deposits mature. → 3 Stocks Delivering Bigger Dividends Despite Market Uncertainty Total deposit costs increased 11 basis points sequentially to 1.59%. About 3 basis points of that increase resulted from a presentation change involving interest paid on cash collateral related to the company's derivatives portfolio, Richards said. The change did not affect total funding costs. For the third quarter of 2027, Zions expects net interest income to increase 8% to 12% from third-quarter 2026 levels, based on a forward curve as of Sept. 30 that assumes interest-rate increases in December, March and June. The outlook assumes deposit costs rise to approximately 2% from 1.59%, including some migration from noninterest-bearing deposits into interest-bearing products. Richards said the bank expects deposit betas in the upper 40% to low 50% range under that scenario. He also said fixed-rate loan repricing and reinvestment of securities could lift earning-asset yields, while continued funding and asset mix changes may support margin expansion. Customer-related non-interest income was $192 million, compared with $182 million in the preceding quarter and $163 million a year earlier. On an adjusted basis excluding a net credit valuation adjustment, customer-related fee income was $182 million, up 5% from the prior-year quarter. Capital markets remained an important contributor to fee income, according to management. Simmons said the division has nearly doubled its annual fee-income contribution since its 2020 launch through investments in talent, technology and product capabilities including investment banking, commodities hedging, real estate capital markets and multifamily agency lending. During the third quarter, Zions closed its acquisition of Basis Investment Group's multifamily agency lending business. The acquired operation gives Zions direct access to Fannie Mae's Delegated Underwriting and Servicing program and Freddie Mac's Optigo program, alongside third-party CMBS conduit originations. The company said it is now one of four banks combining those agency lending capabilities. Management plans to offer financing options across market-rate, affordable housing, construction, bridge, agency and CMBS products, with a particular focus on commercial real estate clients in the Western U.S. The newly acquired platform contributed approximately $300,000 of revenue during the quarter, while personnel and integration costs totaled about $4 million. Zions expects the operation to produce $17 million to $20 million of revenue and $12 million to $13 million of expense in 2027. Over the medium term, management expects annual revenue of approximately $30 million to $40 million, although Simmons said interest-rate conditions could influence the pace of growth. Zions expects adjusted customer-related fee income to grow 6% to 9% by the third quarter of 2027 compared with the $182 million reported for the latest quarter, led by continued capital-markets momentum. Average loans increased 3.7% on an annualized basis in the third quarter, primarily led by commercial and industrial lending, and rose 2.7% from a year earlier. Ending loan balances declined slightly from the prior quarter. Management expects loan growth of 2% to 4% in the third quarter of 2027 relative to the year-earlier period. The outlook reflects current pipelines, utilization trends and the economic environment, with more tempered growth expected in commercial real estate. Chief Credit Officer Derek Steward said commercial real estate pipelines remain healthy but that the bank is maintaining underwriting and risk-selection discipline amid competitive conditions, supply-demand considerations and higher interest rates. President and Chief Operating Officer Scott McLean said the company's Amegy affiliate in Texas had a softer quarter, though he characterized its pipelines as sound and said recent bank acquisitions in Texas could create opportunities through market disruption. Average deposits increased $1.7 billion sequentially, primarily through interest-bearing deposits. Period-end customer deposits increased $1.8 billion, partially offset by a $448 million reduction in brokered deposits. Short-term borrowings fell $376 million from the preceding quarter and $2.7 billion from a year earlier. Adjusted non-interest expense totaled $549 million, up $3 million sequentially. Beyond the Basis-related costs, technology, telecommunications and information-processing expense rose on software licensing and maintenance, while deposit and regulatory expense increased following a prior-quarter reduction in the FDIC special assessment. Zions expects adjusted non-interest expense to rise 4% to 6% by the third quarter of 2027. For full-year 2026, it expects operating leverage of about 40 to 50 basis points including the Basis acquisition, or near the low end of its prior 100-to-150-basis-point outlook excluding the deal. Credit quality remained strong, with net charge-offs at 2 basis points of average loans on an annualized basis. The nonperforming asset ratio was 50 basis points, compared with 48 basis points in the prior quarter. Classified balances declined 12%, while criticized balances fell 8%. The allowance for credit losses ended the quarter at 1.11% of loans and covered nonaccrual loans by 207%. Zions' common equity tier 1 ratio remained 11.8%, despite a $229 million increase in goodwill and intangible assets tied to the multifamily agency acquisition. Tangible book value per share rose 13% from a year earlier. Richards said the company sees potential for continued capital generation in a favorable operating environment, though future capital actions remain subject to board and regulatory approvals. Zions Bancorporation, N.A. is a regional financial services company headquartered in Salt Lake City, Utah. Through its affiliated banks, the company provides banking and related financial services to individuals, small businesses, middle-market companies, and institutional clients. Its offerings include commercial and industrial lending, commercial real estate financing, small-business banking, consumer loans, residential mortgages, deposit accounts, treasury management, investment services, and private banking. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "What Zions Bancorporation, N.A. (ZION) Said on Its Q3 Earnings Call" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

- Zions Bancorporation National Association reported third quarter 2026 net income of US$263 million and GAAP earnings of US$1.78 per share, with net interest income of US$684 million and net charge offs of US$3 million, compared with US$56 million a year earlier. - Credit costs appeared subdued during the quarter, as very low net charge offs coincided with growing earnings and completion of the Basis Multifamily Finance I, LLC acquisition, which broadens Zions Bancorporation National Association's commercial real estate capabilities. - This analysis will explore how Zions Bancorporation National Association's low net charge offs and stronger earnings may influence the existing investment narrative around fee growth. See how Zions Bancorporation National Association compares on credit quality and earnings resilience next to a curated 32 resilient stocks with low risk scores that have kept risk scores in focus. To own Zions Bancorporation National Association, you need to believe its mix of fee businesses, disciplined underwriting and tech investments can offset slower revenue expectations and intense deposit competition. The latest quarter supports that operating story. Net income of US$263 million and earnings of US$1.78 per share came alongside very low net charge offs of US$3 million. In the near term, the key swing factor remains how net interest income and deposit costs evolve while Western US economies stay stable. The biggest risk is still a regional downturn or sharper pricing pressure for funding, which could quickly change today's benign credit metrics and squeeze the earnings base. The third quarter earnings release is the clearest reference point for this update. Zions Bancorporation National Association reported net interest income of US$684 million for the quarter and US$2,023 million for the first nine months, with nine month net income of US$949 million. Earnings per share from continuing operations for that period reached US$6.40 on a basic basis. Those results sit alongside a thesis that leans on cost efficiency, digital and AI driven process changes and broader fee income from areas such as capital markets and the multifamily agency platform. Very low recent net charge offs help management stay on the front foot with these plans, although any turn in Western US credit conditions or deposit pricing remains an ongoing execution risk. Zions Bancorporation National Association's narrative projects US$3.8b revenue and US$949.6 million earnings by 2029. This assumes revenue growth of 1.3% per year and an earnings decrease of about US$250 million from current earnings of roughly US$1.2b. Uncover how Zions Bancorporation National Association's fair value indicates a 15% potential upside to its current price that may not last much longer. Three fair value estimates from the Simply Wall St Community span roughly US$72.73 to a very high US$44,072.55 per share, so retail views on Zions Bancorporation National Association vary widely. When you set that against risks around Western US exposure and deposit pricing pressure, there are strong reasons to compare several contrasting viewpoints before deciding how these earnings trends fit your own expectations. Explore 2 other Zions Bancorporation National Association fair value estimates, including one that suggests it could be worth just $72.73. Don't just follow the ticker. Dig into the data and build a conviction that's truly your own. - A great starting point for your Zions Bancorporation National Association research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision. - See our latest analysis for Zions Bancorporation National Association. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate Zions Bancorporation National Association's overall financial health at a glance. If you want to pressure test your view on Zions Bancorporation National Association against other opportunities, a quick pass through a few focused stock lists can help you see how risk, income and valuation line up across the market. - If capital preservation is front of mind, compare Zions Bancorporation National Association's profile with a curated 32 resilient stocks with low risk scores that have kept risk scores a primary filter for inclusion. - If dependable income is a priority, stack its payout against a group of 8 dividend fortresses that combine higher yields with an emphasis on durability. - If you are hunting for under the radar potential, weigh this bank against a set of 20 high quality undiscovered gems that pair solid fundamentals with relatively low market attention. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ZION. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. - Net Earnings: $262 million, or $1.78 per share; up 20% YoY from $1.48 and up 2% QoQ from $1.74 (adjusted). - Net Interest Income: $684 million, up $7 million (1%) QoQ and up $12 million (2%) YoY. - Net Interest Margin: 3.23%, down 4 bps QoQ and down 5 bps YoY. - Adjusted Pre-Provision Net Revenue: $338 million, up 2% QoQ; down $14 million (4%) YoY. - Customer-Related Non-Interest Income: $192 million vs. $182 million prior quarter and $163 million a year ago; adjusted $182 million, up 5% YoY. - Adjusted Non-Interest Expense: $549 million, up $3 million (1%) QoQ; includes $4 million from newly acquired multifamily agency platform. - Average Loans: Grew 3.7% annualized QoQ, led by commercial lending; up 2.7% YoY. - Average Customer Deposits: Grew 8.8% annualized QoQ; average deposits up $1.7 billion from prior quarter. - Cost of Total Deposits: 1.59%, up 11 bps sequentially; down 8 bps YoY. - Total Funding Costs: 1.75% vs. 1.69% in prior quarter. - Credit Losses: Net charge-offs 2 bps annualized of average loans; non-performing asset ratio 50 bps vs. 48 bps last quarter. - Allowance for Credit Losses: 1.1% of loans; 207% coverage of non-accrual loans. - Capital Markets Fee Income: $136 million annualized as of September 30; full year expected somewhat above that level. - Multifamily Agency Platform: ~$300,000 revenue and ~$4 million expense in quarter; 2027 outlook of $17$20 million revenue and $12$13 million expense. - Common Equity Tier 1 Ratio: Stable at 11.8%. - Tangible Book Value Per Share: Up 13% YoY. - Strategic Six Products: Over 14,000 gold accounts opened (~$275 million new-to-bank deposits) and 1,300 business accounts (~$120 million new deposits). - Warning! GuruFocus has detected 4 Warning Signs with ZION. - Is ZION fairly valued? Test your thesis with our free DCF calculator. Release Date: October 19, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Net earnings available to common increased 20% year-over-year to $262 million, or $1.78 per share, driven by growth in net interest income and customer-related non-interest income. - Average customer deposits grew 8.8% annualized, significantly outpacing loan growth, which allowed Zions Bancorp NA (NASDAQ:ZION) to pay down short-term FHLB borrowings and reduce wholesale funding. - Credit quality remains strong with net charge-offs of just 2 basis points annualized and non-performing assets at 50 basis points; classified and criticized balances declined 12% and 8%, respectively. - Capital markets fee income continues to grow, nearly doubling since 2020, and is expected to exceed the annualized $136 million run rate for the full year 2026. - The acquisition of Basis Investment Group's multifamily agency lending business positions Zions Bancorp NA (NASDAQ:ZION) as one of only four banks with direct access to Fannie Mae, Freddie Mac, and CMBS platforms, creating a differentiated multifamily franchise with expected medium-term revenue of $30 million to $40 million. - Net interest margin declined 4 basis points sequentially and 5 basis points year-over-year to 3.23%, primarily due to higher deposit costs and growth in lower-yielding assets. - Adjusted pre-provision net revenue declined 4% year-over-year, reflecting a strong comparison quarter and $4 million of expenses from the multifamily agency acquisition. - Full-year 2026 operating leverage guidance was reduced to approximately 40 to 50 basis points from the initial 100 to 150 basis points, largely due to the acquisition and softer third-quarter performance. - Loan growth outlook was tempered to 2% to 4% for the third quarter of 2027, with particular caution on commercial real estate due to competitive pressures and higher interest rates. - Deposit costs are expected to rise to around 2% from 1.59%, implying a deposit beta in the upper 40s to low 50s, which could pressure net interest margin if competition intensifies. Q: Can you break down the assumptions behind the 8% to 12% net interest income (NII) guidance for Q3 2027, including deposit growth, mix beta, and rate hikes? A: CFO Ryan Richards explained that the guidance assumes three rate hikes (December, March, June). The bank expects deposit costs to rise by about 40 basis points, implying a beta in the upper 40s to low 50s. This is based on a competitive deposit market requiring more aggressive pricing than in the last cycle. Additionally, they anticipate a 5 to 7 basis point increase in earning asset yields from fixed-rate loan repricing and securities remixing. Q: With the updated NII outlook, how do you view the trajectory of the net interest margin (NIM), particularly regarding the mid-3s target? A: CFO Ryan Richards stated that while they don't provide specific NIM guidance, they see scenarios allowing them to operate in the mid-3s in 2027, assuming the projected rate environment and reasonably conservative deposit assumptions. He noted that achieving this depends heavily on deposit behavior and the operating environment. Q: What is driving the tempered outlook for loan growth, specifically regarding commercial real estate (CRE), and what are the pipeline and utilization trends? A: Chief Credit Officer Derek Steward noted that while the CRE pipeline is good, growth is tempered by competitive pressures, supply-demand issues, and higher rates. He emphasized disciplined underwriting. President Scott McLean added that Q3 is historically soft, and a $293 million decrease at Amegy Bank (despite strong year-over-year performance) was a major factor in the modest quarterly growth, though their pipelines remain healthy. Q: Can you provide more color on the financial expectations for the newly acquired multifamily agency platform (Basis) and the impact of higher rates on this business? A: CEO Harris Simmons and President Scott McLean explained that the Basis acquisition creates a differentiated one-stop shop for multifamily financing. For 2027, they anticipate $17 million to $20 million in revenue and $12 million to $13 million in expense, with medium-term revenue of $30 million to $40 million. While higher rates are a headwind, the business is a flow business (build and sell), and they see significant opportunity in the Western U.S. market. Q: How should we think about the pace of share buybacks going forward, given the current rate backdrop and capital levels? A: CFO Ryan Richards indicated that the positive operating environment could allow for increased capital absorption and potentially more buybacks, subject to regulatory approval and Board discretion. He noted that while mark-to-market impacts were challenging for the industry, Zions fared relatively well due to hedges and the transfer of securities to held-to-maturity, offsetting the goodwill impact from the Basis acquisition. Q: What are the dynamics of deposit competition currently, and are you seeing clients reprice deposits ahead of future rate hikes? A: CEO Harris Simmons described the environment as competitive across the board, though manageable. He noted that much of the recent deposit growth came from bringing client funds back on-balance sheet from off-balance sheet accounts. While these are higher-cost deposits, they are accretive to the total cost of funding compared to wholesale borrowings. CFO Ryan Richards added that they expect interest-bearing deposits to take a larger share moving forward. Q: Can you discuss the operating leverage outlook for 2026 and 2027, including the impact of the Basis acquisition? A: CFO Ryan Richards adjusted the full-year 2026 operating leverage expectation to 40-50 basis points (including Basis), down from the original 100-150 basis points, though excluding the acquisition, it would approach the low end of the original guide. For 2027, he sees prospects for a "pretty positive spread" and operating leverage of 6 points or better for Q3 2027, driven by NII momentum. Q: What is the strategy behind the wealth management expansion, and what is the current penetration rate? A: President Scott McLean admitted that penetration is "really low" compared to peers, largely because Zions never acquired a large trust business. However, he views the outlook as positive. The bank has adjusted incentive compensation to reduce churn and align goals. They are focusing on "Wealth Select" to serve clients with $100k to $1 million in investable assets and leveraging commercial bankers to drive referrals. Q: How are you managing the funding mix, specifically regarding brokered deposits and wholesale borrowings? A: CFO Ryan Richards and Corporate Treasurer Matt Tyler explained that strong deposit growth allowed them to pay down short-term FHLB borrowings. They plan to continue reducing brokered deposits as they mature (average maturity of three months) and deploy excess money market balances into loan growth. The goal is to align asset growth with client deposit growth rather than relying on wholesale funding. Q: What is the status of the Capital Markets business, and what are the growth drivers? A: CEO Harris Simmons highlighted that Capital Markets fee income has nearly doubled since 2020. The bank is seeing momentum in investment banking (M&A advisory), multifamily agency, and interest rate hedging. While M&A is lumpy, they have a strong pipeline. The acquisition of Basis adds capabilities to serve clients throughout the asset life cycle, particularly in the Western U.S. Q: Can you elaborate on the competitive landscape in Texas, particularly regarding recent bank acquisitions? A: President Scott McLean stated that the disruption from acquisitions (Comerica, Cadence, Veritex) is viewed as an opportunity for Zions. He noted that while there is competition for talent, the bank is focused on calling programs targeting customers of those acquired banks. He characterized the situation as "more positive than negative" for Zions' growth prospects in the region. Q: What is the credit quality outlook, and are there any concerns in the CRE portfolio? A: Chief Credit Officer Derek Steward reported strong credit quality with net charge-offs at 2 basis points and a decline in classified and criticized balances. While the CRE market faces headwinds from rates and supply, Zions is maintaining discipline in underwriting and risk selection. CFO Ryan Richards added that the allowance for credit losses remains well-positioned with 207% coverage of non-accrual loans. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Zions Bancorporation National Association (ZION) just released third quarter 2026 results, giving investors fresh numbers on profitability, interest income and credit quality as they reassess the regional bank stock. At a share price of US$63.14, Zions Bancorporation National Association has given holders a 6.57% year to date share price return, while the 1 year total shareholder return of 23.47% and 3 year total shareholder return of about 13x suggest that investors have been gradually reassessing both its earnings power and risk profile as quarterly results and items such as the Basis Multifamily Finance acquisition are released to the market. Scan how Zions Bancorporation National Association stacks up against other regional lenders by reviewing our hand-picked list of solid balance sheet and fundamentals (25 results) as a starting universe for further research. After a strong three year run and a fresh earnings beat, Zions Bancorporation National Association now asks a simple question of new money: Does the current price still offer enough upside for the risk you are taking? Against the last close of $63.14, the most followed narrative pegs fair value for Zions Bancorporation National Association at about $72.73, which indicates potential upside if those assumptions hold. The ongoing investment in digital capabilities, including a modern, AI-enabled core banking platform, is presented as positioning Zions Bancorporation National Association to respond to rising demand for efficient, tech-driven banking services. Management now highlights AI as a way to substitute for outsourced functions and potentially remove a meaningful slice of vendor-driven costs, which would support future net margin and earnings efficiency under those assumptions. See why 11 investors see Zions Bancorporation National Association as 13% undervalued. Result: Fair Value of $72.73 (UNDERVALUED) Still, Zions Bancorporation National Association remains exposed to Western US economies and intense deposit competition. Either of these factors could pressure credit costs or net interest income. Find out about the key risks to this Zions Bancorporation National Association narrative. Plenty in this update points both ways, with risks and rewards pulling in opposite directions. Move quickly to stress test the story against your own checklist and then weigh the 4 key rewards and 2 important warning signs. If Zions Bancorporation National Association has sharpened your focus, you can keep your momentum by using the Simply Wall St Screener to spot fresh opportunities others might overlook. - Target quality at a discount by reviewing our hand picked 35 high quality undervalued stocks that can help you focus on businesses trading below their estimated worth. - Strengthen your income playbook as you assess resilient payers within the 8 dividend fortresses that may fit a yield focused approach. - Prioritize capital protection by scanning the 32 resilient stocks with low risk scores that surfaces companies with sturdier risk profiles for cautious portfolios. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ZION. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Zions Bancorporation National Association came into Tuesday with a choppy three-month record and a flat month, then the Q3 2026 print hit and the stock jumped 2.3% to US$64.59. Traders reacted to a clean headline, net income to common of US$262 million and earnings of about US$1.81 per share. The real story sits on a longer clock. Profitability over the past year has strengthened, with the trailing net margin now near 32%. The P/E multiple remains well below peers, so short-term price relief meets a banking franchise that the market still prices with caution. Like the earnings beat but uneasy about a low P/E that could signal market skepticism? Check out our screener of 31 resilient stocks with low risk scores to compare Zions Bancorporation National Association against peers with sturdier risk profiles. - Revenue (Q3 2026 vs. Q3 2025): US$889 million vs. US$812 million (up about 9.5%) - Net Income to Common, excluding extra items (Q3 2026 vs. Q3 2025): US$262 million vs. US$218 million (up about 20.2%) - Basic EPS (Q3 2026 vs. Q3 2025): US$1.81 vs. US$1.48 (up about 21.9%) - Net Interest Margin, or NIM (Q3 2026 vs. Q3 2025): 3.23% vs. 3.28% (down 5 basis points) Ask Charlie what Zions' new multifamily deal really changes. The bullish narrative says Zions Bancorporation National Association can turn heavy tech and AI spending into leaner operations and better efficiency. "The main thing that has to go right is that investments in technology, AI and outsourced services actually translate into the positive operating leverage that management is targeting." Q3 shows mixed progress. Earnings and customer-related fees moved higher, helped by very low credit costs. Yet adjusted noninterest expense rose 1% quarter on quarter, and full year 2026 operating leverage guidance is now 40 to 50 bps, well below the earlier 100 to 150 bps ambition. Bears question whether funding pressure and deposit campaigns eventually eat into Zions Bancorporation National Association's profitability. "The company's funding advantage is an important part of the current thesis. However, recent commentary highlights intense competition for deposits and targeted campaigns that already price close to wholesale levels." Latest results partly echo that concern. Net interest income ticked up, yet NIM fell to 3.23% as deposit costs increased and money market balances grew. Management now assumes deposit costs climb from 1.59% to roughly 2% and cuts 2026 operating leverage expectations, which shows funding remains a real pressure point rather than a resolved issue. One Narrative has put a figure on that disagreement. → See the Narrative with its higher Fair Value, assumptions and all. Zions Bancorporation National Association reported a clean quarter that shifted attention to its earnings quality. The real opportunity is focusing on stocks that could be undervalued before new information changes how they are assessed. - Company 1 - 49% below our estimate - uses a digital-first lending platform and government-backed programs to attract small business borrowers away from slower branch-centric competitors. - Company 2 - 24% below our estimate - sells test systems and components that help utilities and aerospace contractors upgrade aging equipment for higher load and tighter performance requirements. - Company 3 - 40% below our estimate - uses specialty deposit verticals and a modernized payments platform to deepen ties with business clients seeking integrated cash management and lending solutions. Three companies from the same screener. Open every one of the 34 undervalued companies on it → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ZION. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Zions (ZION) reported $893 million in revenue for the quarter ended September 2026, representing a year-over-year increase of 2.4%. EPS of $1.78 for the same period compares to $1.54 a year ago. The reported revenue represents a surprise of +0.01% over the Zacks Consensus Estimate of $892.91 million. With the consensus EPS estimate being $1.64, the EPS surprise was +8.54%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Zions performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: - Net interest margin: 3.2% versus 3.3% estimated by seven analysts on average. - Efficiency Ratio: 61.9% compared to the 62.3% average estimate based on seven analysts. - Net charge-offs to average loans and leases: 0% compared to the 0.1% average estimate based on seven analysts. - Average balance - Total interest-earning assets: $85.42 billion versus the four-analyst average estimate of $84.79 billion. - Total nonperforming assets: $315 million versus the three-analyst average estimate of $304.82 million. - Tier 1 leverage ratio: 9.2% compared to the 9.4% average estimate based on three analysts. - Tier 1 risk-based capital ratio: 11.9% versus the three-analyst average estimate of 12%. - Total risk-based capital ratio: 13.9% versus 14.1% estimated by three analysts on average. - Total nonaccrual Loan: $311 million compared to the $298.72 million average estimate based on three analysts. - Total Noninterest Income: $197 million compared to the $195.18 million average estimate based on seven analysts. - Commercial account fees: $49 million compared to the $49.79 million average estimate based on six analysts. - Other customer-related fees: $15 million versus $15.79 million estimated by six analysts on average. View all Key Company Metrics for Zions here>>> Shares of Zions have returned -2.9% over the past month versus the Zacks S&P 500 composite's +1.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zions Bancorporation, N.A. (ZION) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

SALT LAKE CITY, Oct. 19, 2026 /PRNewswire/ -- Zions Bancorporation, N.A. (NASDAQ: ZION) ("Zions" or "the Bank") today reported net earnings applicable to common shareholders of $262 million, or $1.78 per diluted common share, for the third quarter of 2026. This compares with net earnings of $221 million, or $1.48 per diluted common share, in the third quarter of 2025, and $452 million, or $3.05 per diluted common share, in the second quarter of 2026. Harris H. Simmons, Chairman and CEO of Zions Bancorporation, commented, "Third quarter earnings per share increased 20% to $1.78, up from $1.48 a year ago. The higher earnings were primarily a reflection of improved credit quality, as net loan charge-offs were $3 million, down from $56 million a year ago. Although an increased pace of loan payoffs, combined with a highly competitive market, produced flat loan growth compared to the second quarter, customer deposits grew nearly 10% annualized from second quarter levels." Mr. Simmons continued, "Short- and medium-term interest rates began to rise in the last month of the quarter, and we expect that our moderately asset-sensitive balance sheet should produce stronger net interest income in a higher rate environment, while we're seeing continued improvement in noninterest income that we expect will continue into next year." Mr. Simmons concluded, "We were pleased to complete the acquisition of Basis Multifamily Finance I, LLC, a subsidiary of Basis Investment Group, at the end of July. This multifamily finance platform becomes an important strategic advantage in serving our commercial real estate clients, particularly in the fast-growing western markets we serve." For the complete third quarter 2026 earnings release, including detailed financial schedules, please visit www.zionsbancorporation.com. Supplemental Presentation and Conference Call Zions has posted a supplemental presentation to its website in advance of its discussion of third quarter financial results, scheduled for 5:30 p.m. ET on October 19, 2026. Media representatives, analysts, investors, and the general public are invited to participate by calling (877) 709-8150 (domestic and international) and entering the meeting number 13763140, or by joining the on-demand webcast. A link to the webcast will be available on the Company's website at www.zionsbancorporation.com. Following the event, the webcast will be archived and accessible for 30 days. About Zions Bancorporation, N.A. Zions Bancorporation, N.A. is one of the nation's premier financial services companies with annual net revenue of $3.4 billion in 2025, and total assets of approximately $89 billion at December 31, 2025. The Bank operates principally through seven separately managed, geographically defined bank divisions, each operating under its own local brand and management, and serving customers primarily in 11 Western states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. Zions is a consistent recipient of national and state-level customer survey awards recognizing excellence in small- and middle-market banking. It is also a leader in public finance advisory services and Small Business Administration lending. Zions is included in both the S&P MidCap 400 and NASDAQ Financial 100 indices. Additional investor information, along with links to local banking brands, is available at www.zionsbancorporation.com. Forward-Looking Information The earnings release contains "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and assumptions regarding future events and outcomes. However, they are inherently subject to known and unknown risks, uncertainties, and other factors that could cause actual results, performance, achievements, industry developments, or regulatory outcomes to differ materially from those expressed or implied. Forward-looking statements may include, among others: - Statements concerning the beliefs, plans, objectives, goals, targets, commitments, designs, guidelines, expectations, anticipations, and future financial condition, operating results, and performance of Zions Bancorporation, National Association, and its subsidiaries (collectively "Zions Bancorporation, N.A.," "the Bank," "we," "our," "us"); and - Statements preceded or followed by, or that include, terminology such as "may," "might," "can," "continue," "could," "should," "would," "believe," "anticipate," "estimate," "forecast," "expect," "intend," "target," "commit," "design," "plan," "project," "will," or similar words and expressions, including their negative forms. Forward-looking statements are not guarantees and should not be relied upon as representing management's views as of any subsequent date. Actual results and outcomes may differ materially from those expressed or implied. Factors that could cause such differences include, but are not limited to: - Changes in the quality, composition, and concentrations of our loan and investment securities portfolios; - Changes in economic, political, and market conditions nationally and within our key markets in the Western United States, including changes in interest rates, inflation, monetary policy, fiscal, trade, and tax policies, government actions, and other macroeconomic factors that affect our financial results, customer activity, credit demand, and borrower performance; - Changes in deposit levels and composition, access to wholesale funding, and the availability and cost of liquidity sources; - Changes in our credit ratings; - Competition from traditional and nonbank financial service providers, including credit unions, financial technology companies ("fintechs"), private credit funds, special-purpose charters, and other new and evolving industry participants; - Our ability to execute strategic initiatives, manage expenses, attract and retain talent, and achieve our business objectives; - Geopolitical developments, including wars, global conflicts, and environmental or catastrophic events, such as fires, natural disasters, pandemics, and other disruptions that may affect our operations and customers; - Increased demand for and risks associated with the adoption and integration of emerging technologies and products, including tokenized deposits, stablecoins, blockchain, and artificial intelligence ("AI"); - The occurrence of fraud, theft, or other forms of misconduct perpetrated by external parties, including customers and business partners, or by our own employees; - Our ability to develop, maintain, and secure resilient technology systems and effective controls to detect and respond to fraud, cybersecurity threats, data breaches, and other operational disruptions, including increasingly sophisticated AI-enabled attacks; - Our ability to effectively oversee third-party providers and mitigate risks arising from supplier performance failures, cybersecurity incidents, technology disruptions, data breaches, or other operational deficiencies; - Changes in accounting standards, asset valuations and impairments, and our ability to access capital and funding markets on favorable terms; - The impact of existing and proposed laws and regulations, supervisory expectations, and the outcome of legal or regulatory proceedings; - Adverse developments affecting the banking industry that may negatively impact depositor, investor, or market confidence and public opinion; and - Other assumptions, risks, and uncertainties described in the earnings release and our other SEC filings. We caution against placing undue reliance on forward-looking statements, as they reflect our views only as of the date they are issued. Except as required by law, we expressly disclaim any obligation to update any factors or publicly announce revisions to forward-looking statements to reflect future events or developments. View original content to download multimedia:https://www.prnewswire.com/news-releases/zions-bancorporation-national-association-reports-third-quarter-financial-results-302912931.html

Zions (ZION) came out with quarterly earnings of $1.78 per share, beating the Zacks Consensus Estimate of $1.64 per share. This compares to earnings of $1.54 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +8.54%. A quarter ago, it was expected that this financial holding company would post earnings of $1.57 per share when it actually produced earnings of $1.74, delivering a surprise of +10.83%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Zions, which belongs to the Zacks Banks - West industry, posted revenues of $893 million for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 0.01%. This compares to year-ago revenues of $872 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Zions shares have added about 8.3% since the beginning of the year versus the S&P 500's gain of 11.9%. While Zions has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Zions was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.69 on $905.79 million in revenues for the coming quarter and $7.48 on $3.57 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - West is currently in the top 18% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Columbia Banking (COLB), has yet to report results for the quarter ended September 2026. The results are expected to be released on October 22. This bank holding company is expected to post quarterly earnings of $0.77 per share in its upcoming report, which represents a year-over-year change of -9.4%. The consensus EPS estimate for the quarter has been revised 0.4% higher over the last 30 days to the current level. Columbia Banking's revenues are expected to be $687.95 million, up 18.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zions Bancorporation, N.A. (ZION) : Free Stock Analysis Report Columbia Banking System, Inc. (COLB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research