Business Context and Reporting Period
Company: Zions Bancorporation, National Association
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: June 30, 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 affiliate banks. The company focuses on commercial and small business banking, capital markets, commercial real estate lending, retail banking, and wealth management.
Key Financial Metrics
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Net Earnings (Common Shareholders) | $452 million | $243 million | +86% |
| Diluted EPS | $3.05 | $1.63 | +87% |
| Net Interest Income | $677 million | $648 million | +$29 million |
| Net Interest Margin | 3.27% | 3.17% | +10 bps |
| Noninterest Income | $460 million | $190 million | +$270 million |
| Noninterest Expense | $551 million | $527 million | +$24 million |
| Efficiency Ratio | 62.2% | 62.2% | 0% |
| Provision for Credit Losses | $3 million | ($1 million) | N/A |
| Total Assets | $89.0 billion | $88.7 billion | +$0.3 billion |
| Total Loans and Leases | $62.5 billion | $60.9 billion | +$1.6 billion |
| Total Deposits | $76.6 billion | $75.6 billion | +$1.0 billion |
| Shareholders' Equity | $7.7 billion | $7.2 billion | +$0.5 billion |
Material Changes vs. Prior Period
- Significant Gains in Noninterest Income: Noninterest income surged 142% year-over-year, driven primarily by $252 million in pre-tax net gains. This included a $215 million gain from the sale of Visa Class B-1 shares and $37 million in net unrealized gains from Small Business Investment Company (SBIC) investments.
- Net Interest Income Growth: Net interest income increased 4% due to lower funding costs and an improved mix of average interest-earning assets (growth in higher-yielding loans offset by a decline in lower-yielding securities).
- Expense Increases: Noninterest expense rose 5%, attributed to higher professional and legal services, increased salary and employee benefit costs (incentive compensation), and technology expenses. These were partially offset by a $13 million decline in deposit insurance and regulatory expense.
- Balance Sheet Shifts: Total loans grew 3% to $62.5 billion, driven by commercial and industrial and term commercial real estate portfolios. Total borrowed funds decreased 53% year-over-year, reflecting a significant reduction in short-term borrowings.
- Acquisition: On July 31, 2026 (subsequent to quarter-end), the company completed the acquisition of Basis Multifamily Finance I, LLC, expanding its multifamily lending capabilities.
Guidance, Outlook, and Risks
- Capital Actions: The company announced a plan in July 2026 to repurchase up to $75 million of common shares in the third quarter, part of a $300 million target for 2026. A quarterly common stock dividend of $0.48 per share was declared, payable in August 2026.
- Regulatory Capital: As of June 30, 2026, the company exceeded all Basel III capital adequacy requirements. The Common Equity Tier 1 (CET1) capital ratio improved to 11.8% from 11.0% in the prior year.
- Forward-Looking Risks: Management highlighted risks including changes in economic conditions, interest rates, and inflation; competition from fintechs and nonbank providers; geopolitical developments; and cybersecurity threats, including AI-enabled attacks.
- Legal Proceedings: The company is subject to two significant civil cases regarding alleged fraudulent conduct by a borrower, with trials scheduled for April 2027. Management believes current accruals are adequate but noted the inherent uncertainty of litigation outcomes.
- Interest Rate Risk: The company remains asset-sensitive. Earnings at Risk (EaR) analysis indicates a 7.2% increase in net interest income for a +200 bps parallel rate shift and a 7.1% decrease for a -200 bps shift.
Investor Verification Checklist
- Non-Recurring Gains: Verify the sustainability of earnings by excluding the $252 million in pre-tax securities gains (Visa and SBIC) which significantly inflated Q2 2026 EPS to $3.05.
- Commercial Real Estate (CRE) Exposure: Review the $14.1 billion CRE portfolio, specifically the $4.2 billion multifamily segment where 45% of loans mature within 12 months, and the $1.6 billion office segment.
- Nonperforming Assets (NPA): Monitor the NPA ratio of 0.48% and classified loans at 3.72% of total loans, noting the recent improvement in the term CRE portfolio.
- Deposit Composition: Assess the stability of the $76.6 billion deposit base, noting that 45% of deposits are uninsured and 34% are noninterest-bearing.
- Share Repurchase Program: Track the execution of the $300 million 2026 share repurchase authorization, with $152 million utilized in the first half of 2026.