Business Context and Reporting Period
Company: Zions Bancorporation, National Association
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: March 31, 2026
Business Overview: Zions Bancorporation operates as a bank headquartered in Salt Lake City, Utah, providing a wide range of banking products and services primarily across 11 Western states through seven separately managed affiliates (Zions Bank, CB&T, Amegy, NBAZ, NSB, Vectra, and TCBW). The company focuses on commercial and small business banking, capital markets, commercial real estate lending, retail banking, and wealth management.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Net Earnings (Common Shareholders) | $232 million | $169 million | +37% |
| Diluted EPS | $1.56 | $1.13 | +38% |
| Net Interest Income | $662 million | $624 million | +6% |
| Net Interest Margin (NIM) | 3.27% | 3.10% | +17 bps |
| Noninterest Income | $187 million | $171 million | +9% |
| Noninterest Expense | $562 million | $538 million | +4% |
| Efficiency Ratio (Non-GAAP) | 65.0% | 66.6% | -1.6 pts |
| Provision for Credit Losses | ($7) million (Benefit) | $18 million | Improvement |
| Total Assets | $87.96 billion | $87.65 billion | +0.4% |
| Total Loans and Leases | $61.31 billion | $59.93 billion | +2.3% |
| Total Deposits | $76.91 billion | $74.92 billion | +2.7% |
| Allowance for Credit Losses (ACL) | $713 million | $743 million | -4% |
| CET1 Capital Ratio | 11.6% | 10.8% | +80 bps |
Material Changes vs. Prior Period
- Earnings Growth: Net earnings applicable to common shareholders increased significantly, driven by higher net interest income, increased noninterest income, and a shift from a provision expense to a provision benefit.
- Net Interest Income: Increased $38 million (6%) due to lower funding costs and an improved mix of average interest-earning assets (growth in higher-yielding loans, reduction in lower-yielding securities). NIM expanded to 3.27%.
- Provision for Credit Losses: Turned into a benefit of $7 million compared to an expense of $18 million in the prior year, primarily due to lower reserves associated with commercial real estate (CRE) portfolio-specific risks.
- Expense Management: Noninterest expense rose 4% ($24 million), mainly due to higher incentive compensation accruals reflecting improved profitability, increased base salaries, and higher professional/legal services. This was partially offset by a decline in deposit insurance and regulatory expense.
- Asset Quality: Nonperforming assets decreased to $292 million (0.48% of total loans and OREO) from $307 million (0.51%) in the prior year quarter. Classified loans declined to 3.80% from 4.82%.
- Balance Sheet: Total loans grew 2% ($1.4 billion), driven by commercial and industrial and consumer home equity credit line portfolios. Total deposits grew 2% ($1.2 billion), with noninterest-bearing demand deposits increasing due to product migration.
Guidance, Outlook, and Risks
- Strategic Initiatives: The company entered into an agreement to acquire the agency lending business of Basis Multifamily Finance I, LLC, subject to regulatory approval, to expand permanent financing solutions for multifamily housing clients.
- Capital Actions: In May 2026, the Board announced a plan to repurchase up to $225 million of common shares for the remainder of 2026. During Q1 2026, the company repurchased 1.3 million shares for $77 million.
- Dividends: A quarterly common stock dividend of $0.45 per share was declared, payable May 21, 2026.
- Interest Rate Risk: The company remains asset-sensitive. Earnings at Risk (EaR) analysis indicates a 7.4% increase in net interest income for a +200 bps parallel rate shift and a 7.2% decrease for a -200 bps shift.
- Risk Factors: Key risks include credit quality in the CRE portfolio, changes in interest rates, regulatory changes (including Basel III Endgame proposals), cybersecurity threats, and macroeconomic conditions such as inflation and recession risks.
- Subsequent Event: The company sold all Class B-1 shares of Visa, Inc. subsequent to the balance sheet date, expecting to recognize a pre-tax gain of approximately $215 million in Q2 2026.
Investor Verification Checklist
- Credit Quality Trends: Verify the stability of the Commercial Real Estate (CRE) portfolio, specifically the reduction in classified loans and the impact of the negative provision on future reserve adequacy.
- Net Interest Margin Sustainability: Assess the durability of the NIM expansion given the declining interest rate environment and the mix shift toward loans versus securities.
- Expense Trajectory: Monitor the trend in noninterest expenses, particularly incentive compensation and technology spend, to ensure they do not outpace revenue growth in future quarters.
- Capital Deployment: Track the execution of the new $225 million share repurchase program and the impact of the pending Basis Multifamily Finance acquisition on capital ratios.
- Visa Gain Recognition: Confirm the timing and tax impact of the expected $215 million pre-tax gain from the Visa share sale in Q2 2026.