Zions Bancorporation (ZION) Q3 2026 Earnings Call: NII Growth Outlook
Source Tradingkey
Key Takeaways
- Zions Bancorporation reported Q3 2026 net earnings available to common shareholders of $262 million, or $1.78 per share, up 20% from $1.48 a year earlier.
- Taxable-equivalent net interest income rose 1% sequentially and 2% year over year to $684 million. Net interest margin fell 4 basis points quarter over quarter to 3.23% as deposit costs increased and excess liquidity moved into lower-yielding money market assets.
- Average loans grew at a 3.7% annualized rate from the prior quarter, while average customer deposits increased 8.8%. Strong deposit growth supported lower wholesale funding, including reduced brokered deposits and FHLB borrowings.
- Credit performance remained strong. Annualized net charge-offs were 2 basis points of average loans, while criticized and classified balances declined 8% and 12%, respectively.
- For Q3 2027, management expects net interest income to rise 8% to 12%, adjusted customer-related fee income to grow 6% to 9%, and adjusted noninterest expense to increase 4% to 6% from Q3 2026.
- Management said the outlook assumes three rate increases through June 2027 and deposit costs rising from 1.59% to approximately 2%.
Key Financial Data
| Metric | Q3 2026 | Change and context |
|---|---|---|
| Net earnings available to common | $262 million | EPS increased 20% year over year |
| Diluted EPS | $1.78 | Up from $1.48 in Q3 2025; up 2% from adjusted Q2 2026 EPS of $1.74 |
| Taxable-equivalent net interest income | $684 million | Up 1% quarter over quarter and 2% year over year |
| Net interest margin | 3.23% | Down 4 basis points sequentially and 5 basis points year over year |
| Customer-related noninterest income | $192 million | Versus $182 million in Q2 2026 and $163 million a year earlier |
| Adjusted customer-related noninterest income | $182 million | Up 5% year over year, excluding the net credit valuation adjustment |
| Adjusted noninterest expense | $549 million | Up 1% sequentially; includes $4 million related to the acquired multifamily agency platform |
| Adjusted pre-provision net revenue | $338 million | Up 2% sequentially and down 4% year over year |
| Average loan growth | 3.7% annualized | Led by commercial lending; average loans rose 2.7% year over year |
| Average customer deposit growth | 8.8% annualized | Average deposits increased $1.7 billion sequentially |
| Total deposit cost | 1.59% | Up 11 basis points sequentially and down 8 basis points year over year |
| Net charge-offs | 2 basis points | Annualized as a percentage of average loans |
| Nonperforming asset ratio | 0.50% | Up from 0.48% in the prior quarter |
| Allowance for credit losses | 1.10% | Covered 207% of nonaccrual loans |
| CET1 ratio | 11.8% | Stable sequentially |
| Tangible book value per share | — | Increased 13% year over year |
Business and Operating Performance
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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