ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/
For the period ended Mar 31, 2025. Filed May 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
ZION$64.76-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000109380-24-000134
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000109380-25-000084
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 288 previous paragraphs and 310 current paragraphs.
132 unchanged; 120 reworded; 49 added; 34 removed; 2 previous and 9 current paragraphs rearranged.
Tables are not compared: 43 previous and 45 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (49)
Current report
•Political developments, such as transitions in administration, shifts in congressional control and influence, and policy changes, can significantly impact government operations and effectiveness. These effects may include disruptions in and disbursement of government funding, protracted litigation, increased risk of government shutdowns, and potential downgrades in United States (“U.S.”) credit ratings;
Current report
•Judicial, regulatory and administrative inquiries, investigations, examinations or proceedings and the outcomes thereof that create uncertainty for, or are adverse to us or, the banking industry;
Current report
•Changes in our credit ratings;
Current report
First Quarter 2025 Financial Performance
Current report
Our financial performance in the first quarter of 2025, relative to the prior year period, reflected growth in net earnings, diluted earnings per share (“EPS”), and adjusted pre-provision net revenue. Diluted EPS was $1.13, compared with $0.96 in the first quarter of 2024, as higher net interest income and noninterest income were partially offset by increased noninterest expense, and a higher provision for credit losses.
Current report
EPS was negatively impacted $0.11 per share by an increase of $16 million in income tax expense due to a required revaluation of our deferred tax assets resulting from newly enacted Utah state tax legislation during the quarter. Approximately $14 million of this additional expense is related to investment securities with unrealized losses in accumulated other comprehensive income (“AOCI”) and is expected to accrete back into income over the life of the respective securities. Additionally, this legislation is expected to reduce Utah tax expense related to investment securities and trading income in future periods.
Current report
•Net interest income increased $38 million, or 6%, compared with the prior year period, primarily as a result of lower funding costs and a favorable mix change in average interest-earning assets. The net interest margin improved to 3.10%, compared with 2.94%.
Current report
◦Average interest-earning assets increased $1.4 billion, or 2%, primarily driven by growth in average loans, leases, and money market investments, partially offset by a decline in average securities.
Current report
◦Average interest-bearing liabilities increased $2.3 billion, or 4%, primarily due to an increase in average interest-bearing deposits, which was partially offset by a decrease in average borrowed funds.
Current report
◦Total loans and deposits at March 31, 2025 included approximately $420 million of consumer and commercial loan balances and $630 million of deposit balances, respectively, which were acquired from the purchase of four FirstBank Coachella Valley, California branches in late March 2025.
Current report
•Customer-related noninterest income increased $6 million, or 4%, primarily due to higher loan-related fees and income, as well as improved capital markets fees and income. Noncustomer-related noninterest income increased $9 million, mainly due to an increase in net securities gains, largely attributable to valuation adjustments in our Small Business Investment Company (“SBIC”) investment portfolio and a valuation loss associated with one of our equity investments in the prior year period.
Current report
•Noninterest expense increased $12 million, or 2%, primarily due to increases in salaries and employee benefits expense; technology, telecom, and information processing expense; and other noninterest expense. These increases were partially offset by a decrease in deposit insurance and regulatory expense, primarily due to a $13 million Federal Deposit Insurance Corporation (“FDIC”) special assessment accrual during the prior year quarter.
Current report
The following chart presents the changes in yields on average interest-earning assets:
Current report
The yield on average interest-earning assets decreased 17 basis points (“bps”) in the first quarter of 2025, compared with the prior year period. This decline reflects a lower interest rate environment, partially offset by a favorable asset mix change, as average loans and leases and average money market investments increased, while average investment securities decreased. The yield on average loans and leases decreased 22 bps, the yield on average money market investments decreased 115 bps, and the yield on average securities decreased 9 bps in the first quarter of 2025.
Current report
The following chart presents the changes in rates paid on average interest-bearing liabilities:
Current report
The total cost of deposits decreased 30 bps, and the rate paid on total deposits and interest-bearing liabilities decreased 33 bps during the first quarter of 2025, compared with the prior year period. This decline also reflects a lower interest rate environment, partially offset by an adverse mix change from noninterest-bearing to interest-bearing products. The rate paid on total borrowed funds decreased 41 bps.
Current report
Average interest-bearing liabilities increased $2.3 billion, or 4%, from the prior year quarter. This growth was largely driven by an increase in average interest-bearing deposits, partially offset by decreases in average noninterest-bearing deposits and average borrowed funds.
Current report
Average deposits increased $1.5 billion, or 2%, to $74.9 billion. Average interest-bearing deposits increased $2.9 billion, or 6%, primarily due to customer deposit growth. Average noninterest-bearing deposits decreased $1.4 billion, or 5%, and represented 32% of total deposits during the first quarter of 2025, compared with 35% during the same prior year period.
Current report
Average borrowed funds, primarily consisting of secured borrowings, decreased $570 million, or 8%, to $6.7 billion. This decrease was primarily due to a reduction in security repurchase agreements and FRB short-term advances, partially offset by an increase in long-term debt. The increase in long-term debt was due to the issuance of $500 million of 6.82% Fixed-to-Floating Subordinated Notes, partially offset by the redemption of $88 million of 6.95% Fixed-to-Floating Subordinated Notes during the fourth quarter of 2024.
Current report
1 Effective for the first quarter of 2025, capital markets fees and income includes fair value and nonhedge derivative income (loss) of less than $1 million and $1 million for the three months ended March 31, 2025 and 2024, respectively. These amounts were previously disclosed under noncustomer-related noninterest income. No other income statement line items or ratios were affected by these changes and reclassifications. Prior period amounts have been reclassified for comparative purposes.
Current report
Customer-related noninterest income increased $6 million, or 4%, compared with the prior year period. This growth was largely driven by higher loan-related fees and income, as well as improved capital markets fees and income, primarily due to increased investment banking advisory fees.
Current report
Noncustomer-related noninterest income increased $9 million, compared with the prior year period, primarily due to an $8 million increase in net securities gains. This increase was largely attributable to valuation adjustments in our SBIC investment portfolio, and a $4 million valuation loss associated with one of our equity investments in the prior year period.
Current report
Noninterest expense increased $12 million, or 2%, compared with the prior year quarter. Salaries and employee benefits expense increased $11 million, primarily due to higher incentive compensation, benefits, and severance expenses. Technology, telecom, and information processing expense increased $8 million, mainly due to higher application software, license, and maintenance expenses. Other noninterest expense increased $6 million, partly due to a $3 million impairment of certain long-lived assets. These increases were partially offset by a $12 million decrease in deposit insurance and regulatory expense, primarily due to a $13 million accrual associated with an updated FDIC special assessment estimate during the prior year quarter.
Current report
We invest in technology initiatives designed to improve our products and services, increase our operational efficiency, and enable us to remain competitive. We report these investments as technology spend, which includes the following:
Current report
Total technology spend increased $6 million, or 5%, relative to the prior year quarter, primarily due to the aforementioned increase in technology, telecom, and information processing expense driven by higher application software, license, and maintenance costs, partially offset by a decrease in certain capitalized technology investments.
Current report
The effective tax rate was 28.9% and 24.6% for the three months ended March 31, 2025 and 2024, respectively. This year-over-year increase was primarily attributable to new Utah state tax legislation enacted in the first quarter of 2025 related to our investment securities and trading assets. This legislation required a revaluation of our net deferred tax asset, which primarily arises from unrealized losses in AOCI on certain securities. Consequently, this resulted in $16 million of additional tax expense for the quarter, or a $0.11 per share negative impact. Approximately $14 million of this additional expense is related to investment securities with unrealized losses in AOCI and is expected to accrete back into income over the life of the respective securities. Additionally, this legislation is expected to reduce Utah tax expense related to investment securities and trading income in future periods.
Current report
Preferred stock dividends totaled $1 million and $10 million for the first quarters of 2025 and 2024, respectively. The decrease was due to the redemption of the outstanding shares of our Series G, I, and J preferred stock in the fourth quarter of 2024.
Current report
At March 31, 2025, total loans and leases included approximately $420 million of consumer and commercial loan balances acquired from the purchase of four FirstBank Coachella Valley, California branches during the first quarter of 2025.
Current report
At March 31, 2025, total deposits included approximately $630 million of deposit balances acquired from the purchase of four FirstBank Coachella Valley, California branches during the first quarter of 2025.
Current report
The following schedule presents the composition of our U.S. government agency guaranteed loans:
Current report
The following schedule presents the geographic distribution of our commercial lending portfolio, with geographies based on the location of the primary borrower:
Current report
The following schedule presents the geographic distribution of our commercial real estate lending portfolio, based on the location of the primary collateral.
Current report
Industrial CRE
Current report
At March 31, 2025 and December 31, 2024, our industrial CRE loan portfolio totaled $2.9 billion and $3.0 billion, respectively, representing 22% of the total CRE loan portfolio for both periods. Approximately 34% of the industrial CRE loan portfolio is scheduled to mature within the next 12 months. We believe that substantially all of these borrowers will be able to refinance at maturity through the Bank or other lenders, due to the cash flows from the properties, acceptable LTVs, equity levels, and guarantor support.
Current report
The following schedule presents the composition of our industrial CRE loan portfolio and other related credit quality metrics:
Current report
INDUSTRIAL CRE LOAN PORTFOLIO
Current report
The following schedules present our industrial CRE loan portfolio, categorized by collateral location for the periods presented:
Current report
INDUSTRIAL CRE LOAN PORTFOLIO BY COLLATERAL LOCATION
Current report
1 Other included $31 million of industrial loans with collateral located in Virginia at both March 31, 2025 and December 31, 2024.
Current report
Classified loans totaled $2.9 billion and remained relatively stable when compared with December 31, 2024. Approximately 58% of our classified loans are in the CRE loan portfolio. The loss content of our CRE loan portfolio continues to be mitigated by strong underwriting, supported by significant borrower equity and guarantor support, resulting in relatively stable CRE nonperforming assets and low net loan charge-offs.
Showing the first 40 of 49 passages. Open the source sections for the rest.
Removed paragraphs (34)
Previous report
•Protracted congressional negotiations and political stalemates regarding government funding and other issues, including those that increase the possibility of government shutdowns, downgrades in United States (“U.S.”) credit ratings, or other economic disruptions; and
Previous report
Third Quarter 2024 Financial Performance
Previous report
Our financial results in the third quarter of 2024 reflected continued improvement in our net interest margin (“NIM”), low net charge-offs, growth in customer deposits and loans, a record quarter for capital markets fee income, and deterioration in certain credit quality metrics. Diluted earnings per share (“EPS”) was $1.37, compared with $1.13 in the third quarter of 2023, as higher net interest income and a lower provision for credit losses were partially offset by lower noninterest income.
Previous report
•Net interest income increased $35 million, or 6%, relative to the prior year period, as higher earning asset yields were partially offset by higher funding costs. Net interest income was also impacted by growth in average interest-earning assets. The net interest margin was 3.03%, compared with 2.93%.
Previous report
◦Average interest-bearing liabilities increased $4.3 billion, or 8%, driven by increases in average interest-bearing deposits and average borrowed funds.
Previous report
•Customer-related noninterest income increased $4 million, or 3%, driven largely by increases in capital markets fees and commercial account fees, partially offset by a decline in loan-related fees and income. Decreases in noncustomer-related noninterest income were primarily due to credit valuation adjustments on client-related interest rate swaps, and a decline in dividends on Federal Home Loan Bank (“FHLB”) stock.
Previous report
•Noninterest expense increased $6 million, or 1%. Salaries and employee benefits expense increased primarily due to a decline in capitalized salaries related to reduced software development activities, and technology, telecom, and information processing expense increased primarily due to higher application software, license, and maintenance expenses. These increases were partially offset by decreases in other expenses, including professional and legal services and occupancy and equipment expenses.
Previous report
The yield on average interest-earning assets was 5.35% in the third quarter of 2024, an increase of 33 basis points (“bps”), reflecting higher interest rates and a favorable mix change to higher yielding assets, as average securities decreased, and average loans and average money market investments increased. The yield on average loans and leases increased 31 bps to 6.15%, and the yield on average securities increased 13 bps to 2.86% in the third quarter of 2024.
Previous report
The rate paid on total deposits and interest-bearing liabilities was 2.36%, compared with 2.10% in the prior year quarter, and the cost of total deposits was 2.14%, compared with 1.92%, reflecting the higher interest rate environment and reduced noninterest-bearing deposits.
Previous report
Average interest-earning assets increased $2.2 billion, or 3% from the prior year quarter, as growth of $2.3 billion in average money market investments and $1.7 billion in average loans and leases, was partially offset by a decline of $1.8 billion in average securities. The decrease in average securities was primarily due to principal reductions.
Previous report
Average interest-bearing liabilities increased $4.3 billion, or 8%, from the prior year quarter, driven by increases of $2.5 billion in average interest-bearing deposits, primarily due to customer deposit growth, and $1.8 billion in average borrowed funds, primarily due to increased short-term borrowings.
Previous report
For the nine months ended September 30, 2024, net interest income decreased $52 million, or 3%, relative to the same prior year period, as higher funding costs more than offset higher earning asset yields.
Previous report
The following charts further illustrate the changes in average interest-earning assets and average interest-bearing liabilities:
Previous report
Average deposits decreased $0.7 billion, or 1%, to $75.0 billion at an average cost of 2.14%, from $75.7 billion at an average cost of 1.92% in the third quarter of 2023. Average noninterest-bearing deposits decreased $3.2 billion, or 11%, relative to the prior year quarter, and were relatively flat compared with the ending balance at June 30, 2024, reflecting stabilization during the current quarter. Average noninterest-bearing deposits decreased to 33% of total deposits, compared with 37% during the same prior year period.
Previous report
Average borrowed funds, consisting primarily of secured borrowings, increased $1.8 billion, or 39%, to $6.3 billion, primarily due to increased short-term borrowings, including advances under the Bank Term Funding Program (“BTFP”).
Previous report
Customer-related noninterest income increased $4 million, or 3%, compared with the prior year period. Capital markets fees increased $10 million, largely due to increased swap fees, loan syndication fees, and expanded real estate capital markets activity, and commercial account fees increased $3 million. These increases were partially offset by a $6 million decrease in loan-related fees and income, primarily due to higher gains on loan sales in the prior year period and a decline in loan servicing income resulting from the sale of associated mortgage servicing rights in the third quarter of 2023.
Previous report
Noncustomer-related noninterest income decreased $12 million from the prior year quarter. Fair value and nonhedge derivative income decreased $10 million, primarily due to credit valuation adjustments on client-related interest rate swaps, and dividends and other income decreased $7 million, primarily due to a decline in dividends on FHLB stock. These decreases were partially offset by an increase of $5 million in net securities gains, largely due to valuation adjustments in our Small Business Investment Company (“SBIC”) investment portfolio.
Previous report
Total noninterest expense increased $6 million, or 1%, relative to the prior year quarter. Salaries and employee benefits expense increased $6 million, or 2%, primarily due to a decline in capitalized salaries related to reduced software development activities, as well as higher benefits accruals, and an additional business day during the current quarter. Technology, telecom, and information processing expense increased $4 million, or 6%, primarily due to increases in application software, license, and maintenance expenses. These increases were partially offset by decreases in other expenses including professional and legal services associated with reduced technology-related consulting services and occupancy and equipment expenses.
Previous report
For the nine months ended September 30, 2024, noninterest expense increased $21 million, or 1%, relative to the same prior year period. Technology, telecom, and information processing expense increased $19 million, or 11%, primarily due to increases in software amortization expenses associated with the replacement of substantially all of our in-scope core loan and deposit banking systems. Deposit insurance and regulatory expense increased $14 million, or 23%, driven largely by a $13 million accrual associated with an updated special assessment estimate by the Federal Deposit Insurance Corporation (“FDIC”) during the first quarter of 2024. These increases were partially offset by a decrease of $8 million, or 1%, in salaries and employee benefits expense, primarily due to higher severance expense and incentive compensation accruals in the prior year period.
Previous report
Consistent with our strategic objectives, we invest in technologies that will make us more efficient and enable us to remain competitive. We generally consider these investments as technology spend, which represents expenditures associated with technology-related investments, operations, systems, and infrastructure, and includes current period expenses presented on the consolidated statement of income, as well as capitalized investments, net of related amortization and depreciation, presented on the consolidated balance sheet. Technology spend is reported as a combination of the following:
Previous report
Total technology spend decreased $6 million, or 5%, relative to the prior year quarter, as the aforementioned increase in technology, telecom, and information processing expense and an increase in other technology-related expense was more than offset by a decrease in certain technology investments, as the final phase of our multi-year project to replace substantially all of our in-scope core loan and deposit banking systems was completed in July 2024.
Previous report
Preferred stock dividends totaled $10 million and $7 million for the third quarter of 2024 and 2023, respectively. The increase was primarily due to changes in the timing and rates of dividend payments for certain series of preferred stock.
Previous report
September 30, 2024, approximately 70% of our commercial lending portfolio was variable rate, and approximately 10% of these variable-rate loans were swapped with our customers to a fixed rate.
Previous report
The following schedule presents the geography distribution of our commercial lending portfolio. For commercial loans, geographies are based on the location of the primary borrower.
Previous report
1 For the first nine months of 2024, multifamily CRE classified loan balances significantly increased. See the “Classified Loans” section below on page 29 for more information about changes in these related balances.
Previous report
Classified loans totaled $2.1 billion, or 3.55%, of total loans and leases, at September 30, 2024, compared with $825 million, or 1.43%, at December 31, 2023. The increase was primarily in the multifamily CRE loan portfolio, largely due to a change in approach to risk grading that places more emphasis on current cash flow, which is the primary source of repayment, and less emphasis on the adequacy of collateral values and the strength of guarantors and sponsors. The increase in classified loans was also attributable to weaker performance, particularly for 2021 and 2022 construction loan vintages, as borrowers missed projections due to lower-than-anticipated leasing, rent concessions, elevated costs, and higher interest rates. Our CRE loan portfolio continues to benefit from strong underwriting, supported by high borrower equity and guarantor support.
Previous report
During recent quarters, the qualitative portion of the ACL has increased primarily due to (1) economic uncertainty, which caused us to increase the weights on recessionary economic forecasts, and (2) portfolio-specific risks, which caused us to use stressed economic forecasts for certain portfolios, particularly CRE.
Previous report
The effective duration of the deposits increases as market rates decline due to the inability to reprice as deposits approach their floor.
Previous report
The EaR analysis focuses on parallel rate shocks across the term structure of benchmark interest rates. In a non-parallel rate scenario, where short-term rates decline 200 bps, but long-term rates are unchanged, the EaR is comparable to the parallel rate scenario of similar rate shock.
Previous report
If interest rates were to follow the rate path implied by the forward curve at September 30, 2024, modeled net interest income would increase in the third quarter of 2025 by an additional 1.4%, when compared to the third quarter of 2024. For a -100 bps and +100 bps parallel interest rate shock to the implied forward rate path, the cumulative net interest income sensitivity would be between (0.8)% and 3.1%, respectively.
Previous report
We have pledged collateral to the FRB’s primary credit facility (or discount window) and to the BTFP, which provide additional contingent funding sources outside the normal operating hours of the FHLB and the General Collateral Funding (“GCF”) program. The BTFP offered loans of up to one year in length to eligible depository institutions pledging U.S. Treasuries, agency debt and government mortgage-backed securities, and other qualifying assets as collateral. The availability of advances under the program ended in mid-March 2024.
Previous report
Recent Regulatory Developments
Previous report
During the third quarter of 2023, federal bank regulators issued a proposal to implement the Basel Committee on Banking Supervision’s finalization of the post-crisis bank regulatory capital reforms. The proposal, commonly referred to as the “Basel III Endgame,” would significantly revise the capital requirements applicable to large banking organizations, defined as those with total assets of $100 billion or more, and would potentially impact our current and future capital planning, including share repurchase activity. At September 30, 2024, we had $87.0 billion in total assets and do not currently qualify as a large banking organization. We continue to evaluate the potential impact of the proposal, as we expect it is more likely than not we would become subject to this proposal in the future, were it to be finalized in its current form.
Previous report
1 Excluding both the $9 million gain on sale of our Enterprise Retirement Solutions business and the $4 million gain on sale of a bank-owned property (recorded in dividends and other income), the efficiency ratio for the three months ended June 30, 2024 would have been 65.6%.
Reworded paragraphs (120)
Previous wording
Forward-looking statements are not guarantees, nor should they be relied upon as representing management’s views as of any subsequent date. Actual results and outcomes may differ materially from those presented. Although the following list is not comprehensive, important factors that may cause material differences include:
Current wording
Forward-looking statements are not guarantees and should not be relied upon as representing management’s views as of any subsequent date. Actual results and outcomes may differ materially from those presented. Although the following list is not comprehensive, key factors that may cause material differences include:
Previous wording
•The quality and composition of our loan and securities portfolios and the quality and composition of our deposits;
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•The quality and composition of our loan and investment securities portfolios and the quality and composition of our deposits;
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•Changes in general industry, political, and economic conditions, including elevated inflation, economic slowdown or recession, or other economic challenges; changes in interest and reference rates, which could adversely affect our revenue and expenses, the value of assets and liabilities, and the availability and cost of capital and liquidity; deterioration in economic conditions that may result in increased loan and lease losses;
Current wording
•Changes in general industry, political, and economic conditions, including elevated inflation, economic slowdown or recession, or other economic challenges; imposition of announced or future tariffs (including retaliatory tariffs) and resulting market volatility and uncertainty, including the effects on supply chains, operations, consumer confidence, and financial performance of us and our customers; changes in interest and reference rates, which could adversely affect our revenues and expenses, the value of assets and liabilities, and the availability and cost of capital and liquidity; and deterioration in economic conditions that may result in increased loan and lease losses;
Previous wording
•The effects of newly enacted and proposed regulations affecting us and the banking industry, as well as changes and uncertainties in applicable laws, and fiscal, monetary, regulatory, trade, and tax policies, and actions taken by governments, agencies, central banks, and similar organizations, including those that result in decreases in revenue; increases in bank fees, insurance assessments, and capital standards; and other regulatory requirements;
Current wording
•Actions taken by governments, agencies, central banks, and similar organizations, including those that result in decreases in revenue, increases in regulatory fees, insurance assessments, and capital standards; and other regulatory requirements;
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•Competitive pressures and other factors that may affect aspects of our business, such as pricing and demand for our products and services, and our ability to recruit and retain talent;
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•Our ability to innovate and otherwise address competitive pressures and other factors that may affect aspects of our business, such as pricing, relevance of, and demand for, our products and services, and our ability to recruit and retain talent;
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•The impact of technological advancements, digital commerce, artificial intelligence, and other innovations affecting the banking industry;
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•The potential for both positive and disruptive impacts of technological advancements, such as digital currencies and commerce, blockchain, artificial intelligence, quantum and cloud computing, and other innovations affecting us and the banking industry;
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•Our ability to complete projects and initiatives and execute on our strategic plans, manage our risks, control compensation and other expenses, and achieve our business objectives;
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•Our ability to complete projects and initiatives and execute our strategic plans, manage our risks, control compensation and other expenses, and achieve our business objectives;
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•Our ability to develop and maintain technology, information security systems, and controls designed to guard against fraud, cybersecurity, and privacy risks;
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•Our ability to develop and maintain technology, information security systems, and controls designed to guard against fraud, cybersecurity, and privacy risks and related incidents;
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•The effects of wars and geopolitical conflicts, such as the ongoing war between Russia and Ukraine, the war in the Middle East, and other local, national, or international disasters, crises, or conflicts that may occur in the future.
Current wording
•The effects of wars, domestic and international trade policies and disputes, geopolitical conflicts, and other local, national, or international disasters, crises, or conflicts that may occur in the future;
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•Natural disasters, pandemics, catastrophic events, and other emergencies and incidents, and their impact on our and our customers’ operations, business, and communities, including the increasing difficulty in, and the expense of, obtaining property, auto, business, and other insurance products;
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•Natural disasters, pandemics, wildfires, catastrophic events, and other emergencies and incidents, and their impact on our and our customers’ operations, business, and communities, including the increasing difficulty in, and the expense of, obtaining property, auto, business, and other insurance products;
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•Governmental and social responses to environmental, social, and governance issues, including those with respect to climate change;
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•Governmental and social responses to environmental, social, and governance issues, including those with respect to climate change and diversity;
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•The impact of bank closures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks;
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•The impact of bank closures or adverse developments at other banks on general public, customer, and investor sentiment regarding the stability and liquidity of banks; and
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Factors that could cause our actual results, performance or achievements, industry trends, or regulatory outcomes to differ materially from those expressed or implied in the forward-looking statements are discussed in our 2023 Form 10-K and subsequent filings with the Securities and Exchange Commission (“SEC”), and are available on our website (www.zionsbancorporation.com) and from the SEC (www.sec.gov).
Current wording
Factors that could cause our actual results, performance, achievements, industry trends, or regulatory outcomes to differ materially from those expressed or implied in the forward-looking statements are discussed in our 2024 Form 10-K and subsequent filings with the Securities and Exchange Commission (“SEC”). These documents are available on our website (www.zionsbancorporation.com) and from the SEC (www.sec.gov).
Previous wording
We caution against the undue reliance on forward-looking statements, which reflect our views only as of the date they are made. Except to the extent required by law, we specifically disclaim any obligation to update any factors or to publicly announce the revisions to any forward-looking statements to reflect future events or developments.
Current wording
We caution against placing undue reliance on forward-looking statements, as they reflect our views only as of the date they are issued. Except as required by law, we specifically disclaim any obligation to update any factors or publicly announce revisions to forward-looking statements to reflect future events or developments.
Previous wording
Comparisons noted below are calculated for the current quarter compared with the same prior year period unless otherwise specified. Reasons for changes in the current year-to-date period compared with the same prior year period are generally consistent with the quarter-to-date comparisons unless otherwise specified. Growth rates of 100% or more are considered not meaningful (“NM”) as they generally reflect a low starting point.
Current wording
Comparisons noted below are calculated for the current quarter versus the same prior year period, unless otherwise specified. Growth rates of 100% or more are considered not meaningful (“NM”) as they typically reflect a low starting point.
Previous wording
◦Total loans and leases increased $2.0 billion, or 3%, primarily due to growth in the consumer 1-4 family residential mortgage and commercial and industrial loan portfolios.
Current wording
◦Total loans and leases increased $1.8 billion, or 3%, primarily driven by growth in the consumer 1-4 family residential mortgage and commercial and industrial loan portfolios.
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◦Total deposits increased $319 million, as an increase in interest-bearing deposits was partially offset by a decrease in noninterest-bearing demand deposits. Customer deposits (excluding brokered deposits) increased $1.7 billion, or 2%, to $70.5 billion, compared with $68.8 billion.
Current wording
◦Total deposits increased $1.5 billion, or 2%, primarily due to an increase in interest-bearing deposits, partially offset by a decrease in noninterest-bearing deposits. Customer deposits (excluding brokered deposits) totaled $70.9 billion, compared with $69.9 billion.
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•The provision for credit losses was $13 million, compared with $41 million in the prior year period.
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•The provision for credit losses was $18 million, compared with $13 million in the prior year period.
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•Net loan and lease charge-offs totaled $3 million, or 0.02%, of average loans and leases, compared with $14 million, or 0.10%, in the prior year quarter. The ratio of allowance for credit losses (“ACL”) to total loans and leases was 1.25%, compared with 1.30%.
Current wording
•Net loan and lease charge-offs totaled $16 million, or 0.11% of average loans and leases annualized, compared with $6 million, or 0.04%, in the prior year quarter. The ratio of allowance for credit losses (“ACL”) to total loans and leases was 1.24%, compared with 1.27%.
Previous wording
•Nonperforming assets totaled $368 million, or 0.62%, of total loans and leases and other real estate owned, compared with $219 million, or 0.38%. The increase was primarily due to a small number of loans in the commercial and industrial and term commercial real estate (“CRE”) portfolios.
Current wording
•Nonperforming assets totaled $307 million, or 0.51% of total loans and leases and other real estate owned, compared with $254 million, or 0.44%. The increase was primarily in the term commercial real estate (“CRE”), consumer 1-4 family residential, and commercial and industrial portfolios.
Previous wording
•Classified loans totaled $2.1 billion, or 3.55%, of total loans and leases, compared with $769 million, or 1.35%. The increase was primarily in the multifamily CRE loan portfolio, largely due to a change in approach to risk grading that places more emphasis on current cash flow, which is the primary source of repayment, and less emphasis on the adequacy of collateral values and the strength of guarantors and sponsors. The increase in classified loans was also attributable to weaker performance, particularly for 2021 and 2022 construction loan vintages, as borrowers missed projections due to lower-than-anticipated leasing, rent concessions, elevated costs, and higher interest rates.
Current wording
•Classified loans totaled $2.9 billion, or 4.82% of total loans and leases, compared with $966 million, or 1.66%, in the prior year quarter, and remained relatively stable compared with $2.9 billion, or 4.83%, in the prior quarter. The year-over-year increase was primarily in the multifamily and industrial CRE loan portfolios, largely due to an increased emphasis in risk grading on current cash flows, and less emphasis on the adequacy of collateral values and the strength of guarantors and sponsors. Weaker performance in the 2021, 2022, and 2023 construction loan vintages also contributed to the increase, as borrowers missed projections due to longer-than-anticipated lease-up periods, rent concessions, elevated costs, and higher interest rates.
Previous wording
•Total borrowed funds, consisting primarily of secured borrowings, decreased $1.4 billion, or 29%, from the prior year quarter, primarily due to a decrease in security repurchase agreements.
Current wording
•Total borrowed funds, primarily consisting of secured borrowings, decreased $1.0 billion, or 18%, from the prior year quarter, primarily due to a reduction in security repurchase agreements and Federal Reserve Board (“FRB”) short-term advances, partially offset by an increase in long-term debt.
Previous wording
1 Includes interest income recoveries of $1 million for both the three months ended, and $5 million for both the nine months ended September 30, 2024, and 2023, respectively.
Current wording
1 Includes interest income recoveries of $4 million and $2 million for the three months ended March 31, 2025, and 2024, respectively.
Previous wording
Net interest income accounted for approximately 78% and 76% of our net revenue (net interest income plus noninterest income) during the third quarter of 2024 and 2023, respectively, and increased $35 million, or 6%, relative to the prior year quarter, as the repricing of interest-earning assets outpaced the increase in funding costs. Net interest income was also impacted by growth in average interest-earning assets. The NIM was 3.03%, compared with 2.93%.
Current wording
Net interest income represented 78% and 79% of our net revenue (net interest income plus noninterest income) during the first quarters of 2025 and 2024, respectively. It increased $38 million, or 6%, relative to the prior year quarter, as the decrease in funding costs outpaced the repricing of interest-earning assets. The net interest margin improved to 3.10%, compared with 2.94%.
Previous wording
◦Average interest-earning assets increased $2.2 billion, or 3%, as growth in average money market investments and average loans and leases, was partially offset by a decline in average securities.
Current wording
Average interest-earning assets increased $1.4 billion, or 2% from the prior year quarter, as growth in average loans and leases and average money market investments was partially offset by a decline in average securities.
Previous wording
Average loans and leases increased $1.7 billion, or 3%, to $58.7 billion, primarily due to growth in average consumer and commercial real estate loans. Average securities decreased $1.8 billion, or 9%, to $19.4 billion, primarily due to principal reductions.
Current wording
Average loans and leases increased $1.7 billion, or 3%, to $59.6 billion, primarily due to growth in average consumer and commercial loans. Average securities decreased $1.7 billion, or 8%, to $18.7 billion, primarily due to principal reductions.
Previous wording
The allowance for credit losses (“ACL”) is the combination of both the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”). The ALLL represents the estimated current expected credit losses related to the loan and lease portfolio as of the balance sheet date. The RULC represents the estimated reserve for current expected credit losses associated with off-balance sheet commitments. Changes in the ALLL and RULC, net of charge-offs and recoveries, are recorded as the provision for loan and lease losses and the provision for unfunded lending commitments, respectively, on the consolidated statement of income. The ACL for debt securities is estimated separately from loans and is included in “Investment securities” on the consolidated balance sheet.
Current wording
The allowance for credit losses (“ACL”) comprises both the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”). The ALLL represents the estimated current expected credit losses related to the loan and lease portfolio as of the balance sheet date. The RULC represents the estimated reserve for current expected credit losses associated with off-balance sheet commitments. Changes in the ALLL and RULC, net of charge-offs and recoveries, are recorded as the provision for loan and lease losses and the provision for unfunded lending commitments, respectively, on the consolidated statement of income. The ACL for debt securities is estimated separately from loans and is included in “Investment securities” on the consolidated balance sheet.
Previous wording
The ACL was $736 million at September 30, 2024, and was relatively flat compared with $738 million at September 30, 2023. The slight decrease in the ACL primarily reflects improvements in economic forecasts and declines in unfunded lending commitments related to construction lending, partially offset by increases associated with declines in credit quality, incremental reserves associated with portfolio-specific risks including CRE, average loan growth of $1.7 billion, and changes in our loan portfolio composition. The ratio of ACL to total loans and leases was 1.25% at September 30, 2024, compared with 1.30% at September 30, 2023.
Current wording
The ACL was $743 million at March 31, 2025, compared with $736 million at March 31, 2024. The increase in the ACL primarily reflects credit quality deterioration and loan growth, partially offset by lower reserves associated with portfolio-specific risks, including commercial real estate, improvements in economic forecasts, and changes in loan portfolio composition. The ratio of ACL to total loans and leases was 1.24% at March 31, 2025, compared with 1.27% at March 31, 2024.
Previous wording
The provision for credit losses, which is the combination of both the provision for loan and lease losses and the provision for unfunded lending commitments, was $13 million, compared with $41 million in the third quarter of 2023. The provision for securities losses was less than $1 million during both the third quarter of 2024 and 2023.
Current wording
The provision for credit losses, which includes both the provision for loan and lease losses and the provision for unfunded lending commitments, was $18 million in the first quarter of 2025, compared with $13 million in the first quarter of 2024. The provision for securities losses was less than $1 million during both the first quarters of 2025 and 2024.
Previous wording
The bar chart above illustrates the broad categories of change in the ACL from the prior year period. To estimate current expected losses, we use econometric loss models that include multiple economic scenarios that reflect optimistic, baseline, and stressed economic conditions. The results derived using these economic scenarios are weighted to produce the credit loss estimate. Management may adjust the weights to reflect their assessment of current conditions and reasonable and supportable forecasts. The second bar represents changes in these economic forecasts and current economic conditions, including management's judgment of the weighting of the economic forecasts during the current quarter. These changes contributed to a $199 million decrease in the ACL from the prior year quarter.
Current wording
The bar chart above illustrates the broad categories of changes in the ACL from the prior year period. To estimate current expected losses, we use econometric loss models that incorporate multiple economic scenarios, reflecting optimistic, baseline, and stressed economic conditions. The results derived from these scenarios are weighted to produce the credit loss estimate. Management may adjust the weights to reflect their assessment of current conditions and reasonable and supportable forecasts.
Previous wording
The third bar represents changes in credit quality factors and includes risk grade migration, portfolio-specific risks, and specific reserves against loans, which, when combined, contributed to a $163 million increase in the ACL, driven largely by declines in credit quality and an increased focus on certain portfolio-specific risks, including commercial real estate.
Current wording
The third bar represents changes in credit quality factors, and includes risk grade migration, portfolio-specific risks, and specific reserves against loans. Combined, these factors contributed to a $2 million decrease in the ACL, driven largely by a reduced emphasis on certain portfolio-specific risks, including CRE, partially offset by credit quality deterioration.
Previous wording
The fourth bar represents changes in our loan portfolio composition, including changes in loan balances and mix, the aging of the portfolio, and other qualitative risk factors; all of which contributed to a $34 million increase in the ACL.
Current wording
The fourth bar represents changes in our loan portfolio composition, including changes in loan balances and mix, the aging of the portfolio, and other qualitative risk factors. The effects of $1.8 billion in period-ending loan growth, partially offset by changes in mix of the loan portfolio, resulted in a net $34 million increase in the ACL.
Previous wording
Noninterest income accounted for approximately 22% and 24% of our net revenue (net interest income plus noninterest income) during the third quarter of 2024 and 2023, respectively, and decreased $8 million, or 4%, relative to the prior year quarter. The following schedule presents a comparison of the major components of noninterest income:
Current wording
Noninterest income represented 22% and 21% of our net revenue (net interest income plus noninterest income) during the first quarter of 2025 and 2024, respectively, and increased $15 million, or 10%, relative to the prior year quarter. The following schedule presents a comparison of the major components of noninterest income:
Previous wording
Adjusted noninterest expense increased $6 million, or 1%. The efficiency ratio was 62.5%, compared with 64.4%, due to an increase in adjusted taxable-equivalent revenue. For information on non-GAAP financial measures, see page 38.
Current wording
Adjusted noninterest expense increased $22 million, or 4%. The efficiency ratio was 66.6%, compared with 67.9%, as the increase in adjusted taxable-equivalent revenue outpaced the increase in adjusted noninterest expense. For more information on non-GAAP financial measures, see page 40.
Previous wording
•Technology, telecom, and information processing expense — includes expenses related to application software, licensing, and maintenance; related amortization; telecommunications; and data processing;
Current wording
•Technology, telecom, and information processing expense — includes current period expenses presented on the consolidated statement of income related to application software licensing and maintenance, telecommunications, and data processing, less related amortization and depreciation of capitalized technology investments;
Previous wording
•Technology investments — includes capitalized technology infrastructure equipment, hardware, and purchased or internally developed software, less related amortization or depreciation.
Current wording
•Technology investments — includes capitalized technology infrastructure equipment, hardware, and software (both purchased and internally developed).
Previous wording
The effective tax rate was 22.7% and 23.2% for the three months ended September 30, 2024 and 2023, respectively. See Note 12 of the Notes to Consolidated Financial Statements for more information about the factors that impacted the income tax rates, as well as information about deferred income tax assets and liabilities.
Current wording
For more information about the factors that impacted the income tax rates, as well as details on deferred income tax assets and liabilities, see Note 12 of the Notes to Consolidated Financial Statements.
Previous wording
Interest-earning assets have associated interest rates or yields, and generally consist of loans and leases, securities, and money market investments. We strive to maintain a high level of interest-earning assets relative to total assets. For more information regarding the average balances, associated revenue generated, and the respective yields of our interest-earning assets, see the Consolidated Average Balance Sheet on page 10.
Current wording
Interest-earning assets, which include loans and leases, investment securities, and money market investments, have associated interest rates or yields. We strive to maintain a high level of interest-earning assets relative to total assets. For more information regarding the average balances, associated revenue generated, and the respective yields of our interest-earning assets, see the Average Balance Sheet on page 11.
Previous wording
We invest in securities to actively manage liquidity and interest rate risk and to generate interest income. We primarily own securities that can readily provide us cash and liquidity through secured borrowing agreements without the need to sell the securities. Our fixed-rate securities portfolio helps balance the inherent interest rate mismatch between loans and deposits and protects the economic value of shareholders’ equity. At both September 30, 2024 and December 31, 2023, the estimated duration of our investment securities portfolio, which measures price sensitivity to interest rate changes, was 3.6 percent.
Current wording
We invest in securities to manage liquidity and interest rate risk, and to generate interest income. Our portfolio primarily consists of securities that can readily provide cash and liquidity through secured borrowing agreements, without the need to sell the securities. Our fixed-rate securities portfolio helps balance the inherent interest rate mismatch between loans and deposits, and protects the economic value of shareholders’ equity. At March 31, 2025, the estimated duration of our investment securities portfolio, which measures price sensitivity to interest rate changes, was 4.0 years, compared with 3.4 years at December 31, 2024, primarily due to updated prepayment assumptions related to certain securities.
Previous wording
For information about our borrowing capacity associated with our investment securities portfolio and how we manage our liquidity risk, refer to the “Liquidity Risk Management” section on page 34. See also Note 3 and Note 5 of the Notes to Consolidated Financial Statements for more information on fair value measurements and the accounting for our investment securities portfolio.
Current wording
For information about our borrowing capacity associated with the investment securities portfolio and how we manage our liquidity risk, refer to the “Liquidity Risk Management” section on page 36. Additionally, refer to Note 3 and Note 5 of the Notes to Consolidated Financial Statements for more information on fair value measurements and the accounting for our investment securities portfolio.
Showing the first 40 of 120 pairs. Open the source sections for the rest.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
•The effects of newly enacted and proposed regulations affecting us and the banking industry, as well as changes and uncertainties in the interpretation, enforcement, and applicability of laws and fiscal, monetary, regulatory, trade, and tax policies;
Current report — wording carried from elsewhere
The second bar represents changes in these economic forecasts and current economic conditions, including management’s judgment on the weighting of the economic forecasts during the current quarter. These changes contributed to a $25 million decrease in the ACL from the prior year quarter.
Current report — wording carried from elsewhere
The following schedule presents the composition of our loan and lease portfolio:
Current report — wording carried from elsewhere
Credit risk is the possibility of loss from the failure of a borrower, guarantor, or another obligor to fully perform under the terms of a credit-related contract. Credit risk arises primarily from our lending activities and off-balance sheet credit instruments.
Current report — wording carried from elsewhere
The following schedule presents the composition of our multifamily CRE loan portfolio and other related credit quality metrics:
Current report — wording carried from elsewhere
The following schedule presents the composition of our office CRE loan portfolio and other related credit quality metrics:
Current report — wording carried from elsewhere
Observed changes in deposit behavior have been incorporated into our deposit models used for managing interest rate risk. These changes give more weight to the recently observed behavior and have increased both the deposit beta for interest-bearing products and the percentage of noninterest-bearing deposits assumed to migrate to interest-bearing products. Changes to models are independently reviewed by our Model Risk Management function.
Current report — wording carried from elsewhere
We regularly use interest rate swaps, investments in fixed-rate securities, and funding strategies to manage our interest rate risk. These strategies collectively have muted the expected sensitivity of net interest income to changes in interest rates. Asset sensitivity measures depend on the assumptions we use for deposit runoff and repricing behavior, and our models are particularly sensitive to these assumptions.
Current report — wording carried from elsewhere
The following schedule presents our capital amounts, capital ratios, and other selected performance ratios:
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
1 Taxable-equivalent rates used where applicable.
Previous report — wording carried elsewhere
2 Net of unamortized purchase premiums, discounts, and deferred loan fees and costs.