Zions Bancorporation, N.A. (ZION) Earnings & Analysis

Latest quarter

Zions reported adjusted earnings per share of $1.78 for Q3 FY2026, above the $1.64 consensus. On the basis used by the consensus, the bank reported revenue of $893.0 million, just above the $892.9 million estimate.

Zions’ headline revenue was $1.2 billion, compared with $1.3 billion a year earlier. Diluted earnings per share rose to $1.78 from $1.48 in Q3 FY2025.

The bank’s gross margin was 70.9%, compared with 68.7% a year earlier, while its operating margin rose to 27.0% from 22.7%. For the preceding quarter, Q2 FY2026, Zions recorded free cash flow of $389.0 million, compared with −$93.0 million in Q2 FY2025.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

On Zions’ July second-quarter call, CFO Ryan Richards described competition for both loans and deposits. He said some targeted deposit campaigns were approaching wholesale rates and that the bank was seeing loan spread compression. Richards said earning-asset yields had nevertheless remained stable from the prior quarter, helped in part by terminated cash-flow swaps and the shift in the composition of earning assets.

Richards said the net interest margin was stable at 3.27% in the second quarter, up 10 basis points from a year earlier, primarily because of lower funding costs for deposits and borrowings. He said average loans grew 4.7% annualized during the quarter, primarily in commercial and industrial lending, while average deposits increased $779 million from the prior quarter, driven by interest-bearing balances.

Asked about deposit competition, Richards said the bank’s success depended on its deposit campaigns and relationships. He expected interest-bearing deposits to continue growing faster than non-interest-bearing deposits in the near term, but did not provide a specific deposit growth figure.

President and COO Scott McLean said fee-income growth had broadened beyond capital markets. He said treasury management accounted for about 30% of fee income and had grown year over year; loan-related businesses and wealth management also contributed to the broader growth he described.

CEO Harris Simmons said Zions was investing in consumer and small-business banking. He said the bank had opened over 10,000 Gold and Business Beyond accounts that year, and expected those initiatives to contribute over time.

Simmons also discussed the agreement to acquire Basis Investment Group’s multifamily lending business, servicing rights and supporting team. At the time, he expected the transaction to close in the third quarter and said its financial benefits would build gradually as the platform was integrated and production grew.

Guidance

In its October results release, Zions said it expects noninterest income to continue improving into FY2027. The company also said its moderately asset-sensitive balance sheet should produce higher net interest income in a higher-rate environment.