ZION — Zions Bancorporation, National Association

Zions Bancorp (ZION) Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Earnings: $262 million, up 19% from Q3 2025 and 31% year-over-year.
• Diluted EPS: $1.76, compared to $1.48 last quarter and $1.34 a year ago.
• Net Interest Margin (NIM): Expanded for the eighth consecutive quarter to 3.31%.
• Customer Deposits: Grew 9% annualized; average deposits increased 2.3% from the prior quarter.
• Average Loans: Flat compared to Q3 2025, but period-end balances increased by $615 million.
• Credit Quality: Net charge-offs at 5 basis points annualized; nonperforming assets at 52 basis points of loans.
• Tangible Book Value per Share: Increased 21% year-over-year.

2. Strategic Updates and Business Highlights

• Revenue Growth: Driven by improved funding mix and lower reliance on short-term borrowings.
• Charitable Contribution: Included a $15 million donation to the foundation, impacting EPS by $0.08.
• Capital Markets Fees: Achieved a 25% increase year-over-year, with a goal to double these fees since the launch of Zions Capital Markets in 2020.
• Focus on Small Business Lending: Significant growth in SBA loans, with a near doubling in the number of loans made.
• Investment in Growth: Increased marketing and business development expenses to support growth initiatives.

3. Forward Guidance and Outlook

• 2026 Outlook:
  • Net Interest Income: Expected to moderately increase relative to 2025, assuming 225 basis point cuts to the Fed funds rate.
  • Customer-Related Fee Income: Anticipated to be at the top end of guidance due to strong momentum across various product areas.
  • Adjusted Noninterest Expense: Expected to moderately increase, with a focus on maintaining positive operating leverage of around 100 to 150 basis points.
  • Loan Growth: Projected to moderately increase, driven by commercial loans, particularly in C&I and owner-occupied subcategories.

4. Bad News, Challenges, or Points of Concern

• Loan Growth: Average loans were flat, indicating potential challenges in demand despite positive outlooks.
• C&I Classified Loans: Noted an increase in classified loans, which could signal underlying credit quality concerns.
• Market Competition: Increased competition in attractive markets, prompting higher marketing and tech spending.
• Economic Uncertainty: Borrowers remain cautious due to macroeconomic factors, which could impact loan demand and growth.

5. Notable Q&A Insights

• Expense Guidance Clarification: CFO Ryan Richards emphasized that the base for expense guidance should exclude the charitable contribution for clarity.
• Loan Growth Dynamics: Harris Simmons noted that while there is cautious optimism, borrowers are still uncertain due to economic conditions.
• Capital Return Plans: Harris indicated that share buybacks could begin in the second half of 2026, contingent on capital levels and regulatory approvals.
• AI and Outsourcing Impact: The reduction in FTEs is attributed to increased outsourcing and the implementation of AI technologies to streamline operations.
• Competitive Landscape: Harris acknowledged ongoing competition but stated that the focus on growth initiatives is not solely driven by new entrants.

This summary encapsulates Zions Bancorp's financial performance, strategic initiatives, forward-looking guidance, and key challenges as discussed in the Q4 2025 earnings call.