Zions Bancorporation, National Association

Zions reported net earnings available to common of $452 million, or $3.05 per share. Excluding exceptional items, earnings per share was $1.74 versus $1.58 a year ago. Taxable-equivalent net interest income was $677 million, up $15 million or 2% from the prior quarter and up $29 million or 4% year over year. Adjusted customer-related noninterest income was $181 million versus $174 million in the prior quarter and up $17 million, or 10%, from a year ago. Adjusted noninterest expense was $546 million. The net interest margin was 3.27%, flat sequentially and up 10 basis points year over year. Average loans increased 4.7% annualized quarter over quarter and 2.3% year over year; average deposits increased $779 million sequentially. Net charge-offs were 6 basis points annualized, the nonperforming assets ratio was 48 basis points, and the allowance for credit losses ended at 1.13% with 227% coverage of nonaccrual loans. The CET1 ratio was 11.8%. For the second quarter of 2027, management said net interest income is expected to be moderately increasing, with the forward curve suggesting upside to upper single-digit growth if rate increases occur. Adjusted customer fee-related income is also expected to be moderately increasing, and adjusted noninterest expense is expected to be moderately increasing versus 2Q26. Full-year 2026 operating leverage is still expected in the 100 to 150 basis point range.

Harris Simmons framed the quarter as one of meaningful year-over-year improvement and continued progress on strategic priorities. He highlighted ongoing investment in capital markets, consumer, and small business banking, including the Business Beyond Account and the Gold Account, and said the firm had opened over 10,000 of those accounts so far this year. He also said the Basis multifamily lending acquisition should strengthen the capital markets franchise once it closes in the third quarter, while emphasizing that organic growth remains the main focus.

Ryan Richards said NII, fees, and expenses all showed constructive trends: taxable-equivalent NII was $677 million, adjusted customer-related noninterest income was $181 million, and adjusted noninterest expense was $546 million. He pointed to a stable 3.27% NIM, lower deposit costs at 1.48%, total funding cost at 1.69%, and strong liquidity behavior, including $514 million of investment-securities cash flows during the quarter and an ongoing reduction in wholesale funding needs. He also noted the CET1 ratio rose to 11.8% despite $75 million of buybacks and dividends, and said the bank expects continued net capital generation, with tangible book value per share up 22% year over year.

Analysts focused heavily on deposit competition, loan spreads, and how much funding cost pressure might emerge as loan growth continues. Management said the environment is competitive on both deposits and loans, but emphasized targeted deposit campaigns, better granular deposit acquisition, and the ability to reduce reliance on wholesale funding over time. They also repeatedly clarified NII guidance, saying the 2Q27 outlook embeds one rate hike and could exceed the guide if additional hikes occur, while stressing that the bank still sees room to grow before needing to reinvest all securities cash flows or materially increase wholesale funding. Questions also covered expense pressure from loan-related legal costs, capital markets durability, ACL levels, and capital returns; management said the legal cost issue was tied in part to Cantor Fund, the ACL is well reserved, and capital returns could gradually rise if the economy cooperates.