ZIONP — Zions Bancorporation, National Association

Zions Bancorp 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, with average deposits up 2.3% from the previous 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

• The bank made a $15 million charitable donation to its foundation, impacting EPS by $0.08.
• Zions Bancorp is focusing on small business lending, with a near doubling of SBA 7(a) loans and a 53% increase in dollar volume.
• The bank aims to enhance its marketing and product offerings to drive growth, especially in small and medium-sized businesses.
• Capital markets fees increased by 25% year-over-year, reflecting successful growth initiatives since the launch of Zions Capital Markets in 2020.

3. Forward Guidance and Outlook

• 2026 Outlook:
  • Moderate increases in net interest income and customer-related fee income are expected.
  • Adjusted noninterest expenses are projected to moderately increase, with a focus on growth initiatives.
  • Anticipated operating leverage of 100 to 150 basis points.
  • Loan growth is expected to be led by commercial loans, with a moderately increasing outlook for period-end loan balances.
  • The bank is nearing a position to resume capital distributions, potentially in the second half of 2026.

4. Bad News, Challenges, or Points of Concern

• Loan Growth: Average loans were flat, indicating potential challenges in demand despite increased period-end balances.
• Credit Quality: While overall credit quality remains strong, there was an uptick in classified C&I loans, raising concerns about future performance.
• Market Competition: Increased competition in attractive markets may pressure margins and necessitate higher marketing and technology spending.
• Economic Sensitivity: Borrower sentiment remains cautious due to ongoing economic uncertainties, impacting loan demand.

5. Notable Q&A Insights

• Expense Guidance: CFO Ryan Richards clarified that the base for expense guidance excludes the charitable contribution, indicating a focus on core results.
• NIM Projections: The bank expects NIM to be influenced by deposit growth and the shape of the yield curve, with potential declines in earning asset yields due to anticipated rate cuts.
• Capital Return: Harris Simmons indicated that share buybacks could resume in the second half of 2026, contingent on capital levels and regulatory approvals.
• Loan Growth Dynamics: The bank is optimistic about small business lending growth, supported by new hires and targeted marketing efforts, despite broader economic uncertainties affecting borrower confidence.

This summary encapsulates the key points from Zions Bancorp's Q4 2025 earnings call, highlighting both the positive developments and challenges the bank faces moving forward.