Zions: 3 Key Takeaways for Long-Term Investors

On its third-quarter 2026 earnings call, held on Oct. 19, 2026, Zions (NASDAQ:ZION) reported net earnings of $262 million, supported by customer deposit growth and low credit losses. For long-term investors, the regional lender's strategy hinges on expanding fee-generating capital market capabilities while navigating interest rate shifts to rebuild net interest income, the profit earned from loan interest after paying deposit costs.

Three takeaways from management's presentation highlight where the business is heading.

1. Multifamily Agency Acquisition Creates Rare Licensing Advantage

Zions purchased the multifamily agency platform from Basis Investment Group, adding commercial real estate financing capabilities. The deal grants direct access to government-backed housing programs, allowing Zions to process and service commercial loans in-house rather than outsourcing fee income.

According to Harris Simmons, Chairman and Chief Executive Officer, "With this acquisition, we are now 1 of only 4 banks in the country that combines direct access to both Fannie Mae designated underwriter servicer and Freddie Mac's Optigo programs, together with originations to third-party CMBS conduit platforms."

2. Asset Sensitivity Positions Bank for Net Interest Income Expansion

An asset-sensitive balance sheet yields higher returns when interest rates rise, as loans reprice faster than funding liabilities. Management projects that three expected Federal Reserve rate hikes will expand net interest income over the coming year.

"For the third quarter of 2027, we anticipate net interest income to increase by approximately 8% to 12%," said Ryan Richards, Executive Vice President and Chief Financial Officer.

3. Core Deposit Focus Drives Down High-Cost Wholesale Funding

Total customer deposits expanded at an 8.8% annualized rate, giving Zions the liquidity required to pay off short-term borrowings from the Federal Home Loan Bank, a government-sponsored liquidity provider. Gathering sticky, low-cost customer balances reduces reliance on volatile brokered certificates of deposit and stabilizes structural funding costs.

It's not just about deposit growth, it's about the quality of the deposits, the cost of the deposits, the stickiness of the deposits.
-- Harris Simmons, Chairman and Chief Executive Officer

Looking Ahead

Higher benchmark interest rates and expanding capital market fee streams provide tailwinds, while management concentrates on pricing discipline across customer deposits. Deepening regional client relationships through products like Wealth Select, an advisory service for accounts between $100,000 and $1 million, provides long-term balance sheet stability.

"We anticipate broad-based growth across our fee businesses, led by continued momentum in capital markets," said Ryan Richards, Executive Vice President and Chief Financial Officer.

Strategic focus remains centered on controlling operational expenses and replacing high-cost wholesale debt with core customer balances as loan demand shifts toward commercial lending.

We will continue to manage expenses prudently while investing to support growth.
-- Ryan Richards, Executive Vice President and Chief Financial Officer

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