ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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.
Sep 30, 2026 · Filed Nov 5, 2026
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 2026-06-30; filed 2026-08-06.
0000109380-26-000111
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0000109380-26-000127
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 318 previous paragraphs and 316 current paragraphs.
206 unchanged; 88 reworded; 21 added; 21 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 41 previous and 41 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 (21)
Current report
•Fraud, theft, or other misconduct by external parties or our employees, including the use of AI or other technologies to facilitate such activities;
Current report
Third Quarter 2026 Financial Performance
Current report
Our financial performance in the third quarter of 2026 reflected strong year-over-year earnings growth. Net earnings applicable to common shareholders increased to $262 million, or $1.78 per diluted share, from $221 million, or$1.48 per diluted share, in the third quarter of 2025. The increase was primarily driven by improved credit performance. Customer deposit growth exceeded loan growth year-over-year, enabling the reduction of higher-cost wholesale funding.
Current report
•Net interest income increased $12 million, or 2%, in the third quarter of 2026, compared with the prior year period, primarily reflecting increased earning assets. Net interest margin declined to 3.23% from 3.28%, as the impact of lower interest rates on earning asset yields more than offset the benefit of lower funding costs.
Current report
◦Average interest-earning assets increased $2.6 billion, or 3%, reflecting growth in average money market investments and loans and leases, partially offset by lower average investment securities. The increase in money market investments was driven by excess liquidity as deposit growth exceeded loan growth.
Current report
◦Average interest-bearing liabilities decreased $141 million, or less than 1%, as lower average borrowed funds were largely offset by growth in interest-bearing deposits and long-term debt. Average noninterest-bearing deposits increased $1.3 billion, or 5%, primarily reflecting the migration of a consumer interest-bearing product into a new noninterest-bearing offering.
Current report
•The provision for credit losses was an $8 million benefit, compared with a $49 million provision expense in the prior year period, which reflected credit losses on revolving credit facilities extended to two related commercial borrowers that financed commercial mortgage originations and purchases.
Current report
•Customer-related noninterest income increased $29 million, or 18%, reflecting broad-based growth across nearly all revenue streams. Capital markets fees and income increased primarily due to changes in net credit valuation adjustment (“CVA”), while wealth management fees increased due to growth in assets under management and personal trust fees, and retail and business banking fees increased primarily due to higher overdraft service fees.
Current report
•Noncustomer-related noninterest income decreased $21 million, or 81%, primarily due to lower net securities gains. Compared with the second quarter of 2026, noncustomer-related noninterest income declined $273 million, primarily reflecting the aforementioned pre-tax net gains recognized in the preceding quarter.
Current report
•Noninterest expense increased $26 million, or 5%, primarily reflecting higher salaries and employee benefits, professional and legal services, technology-related costs, and marketing and business development expenses. The increase also included costs associated with the acquisition and integration of the Basis Multifamily Finance agency lending platform. These increases were partially offset by lower deposit insurance and regulatory expense. The efficiency ratio was 61.9%, compared with 59.6% in the prior year quarter, and improved from 62.2% in the preceding quarter.
Current report
•Total loans and leases increased $2.2 billion, or 4%, largely driven by growth in commercial and industrial loans and term commercial real estate (“CRE”) loans, as well as consumer home equity lines.
Current report
◦Credit quality improved compared with the prior year period. Nonperforming assets declined to $315 million, or 0.50% of total loans and leases and other real estate owned, from $324 million, or 0.54%. Classified loans declined to $2.1 billion, or 3.40% of total loans and leases, from $2.4 billion, or 4.00%, in the prior year period, primarily reflecting payoffs of classified CRE exposures.
Current report
•Total deposits increased $3.1 billion, or 4%, largely reflecting the impact of deposit growth initiatives. Customer deposits, excluding brokered deposits, increased $3.4 billion, or 5%, and total borrowed funds decreased $1.8 billion, or 35%, primarily reflecting lower short-term borrowings.
Current report
Net interest income increased $12 million, or 2%, in the third quarter of 2026, compared with the prior year period. The increase was primarily driven by growth in average earning assets, including loans and money market investments. Net interest margin declined to 3.23% from 3.28% in the prior year period, as the impact of lower interest rates on earning asset yields more than offset the benefit of lower funding costs.
Current report
Compared with the preceding quarter, the cost of total deposits increased 11 bps, driven in part by a shift in deposit mix toward higher-cost interest-bearing deposits and an accounting presentation change that increased the cost of total deposits by approximately 3 bps.
Current report
Beginning in the third quarter of 2026, for purposes of the average balance and yield presentation, the related derivative collateral interest expense is included in interest-bearing deposits rather than other short-term borrowings, increasing the reported cost of deposits by approximately 3 bps for the three months ended September 30, 2026. The netting of qualifying derivative positions and related collateral had no impact on average balances or yields for the three and nine months ended September 30, 2025.
Current report
Customer-related noninterest income increased $29 million, or 18%, compared with the prior year period, reflecting broad-based growth across nearly all revenue streams. Capital markets fees and income increased $22 million, largely reflecting changes in net CVA. Excluding net CVA, capital markets fees and income increased $1 million compared with the prior year period, reflecting higher swap fee revenue. Wealth management fees increased $2 million, reflecting growth in portfolio management and personal trust fees, while retail and business banking fees also increased $2 million, primarily due to higher overdraft service fees.
Current report
Noncustomer-related noninterest income decreased $21 million, or 81%, compared with the prior year period, primarily due to a $15 million decline in net securities gains, reflecting lower valuation adjustments in our SBIC investment portfolio relative to the prior year quarter. Dividends and other income decreased $6 million, primarily due to a gain on the sale of bank-owned property and higher FHLB stock dividends in the prior year period.
Current report
At September 30, 2026 and December 31, 2025, customer deposits included approximately $6.6 billion and $6.8 billion, respectively, of reciprocal deposits that were not classified as brokered deposits under applicable FDIC regulations. These deposits represented approximately 8% and 9% of total deposits at the respective dates and provide customers with access to additional deposit insurance coverage while allowing them to maintain their banking relationships with us. At September 30, 2026, reciprocal deposits were well below our FDIC regulatory cap for exclusion from brokered deposit classification.
Current report
Asset sensitivity under the rising rate scenarios decreased during the first nine months of 2026, primarily due to increased hedging activity. Exposure to declining rates increased, primarily due to updated assumptions that deposit rates would decline more slowly as market interest rates fall.
Current report
Capital distributions, including share repurchases, are subject to applicable regulatory requirements and OCC oversight. Share repurchases may occur periodically in the open market or through privately negotiated transactions. For additional information regarding capital actions, see Note 8 of the Notes to Consolidated Financial Statements.
Removed paragraphs (21)
Previous report
•The occurrence of fraud, theft, or other forms of misconduct perpetrated by external parties, including customers and business partners, or by our own employees;
Previous report
Second Quarter 2026 Financial Performance
Previous report
Our financial performance in the second quarter of 2026 reflected meaningful year-over-year improvement in net earnings applicable to common shareholders, diluted earnings per share (“EPS”), and adjusted pre-provision net revenue (“PPNR”). Diluted EPS increased to $3.05 from $1.63 in the second quarter of 2025, primarily driven by continued growth in noninterest income, including two notable gains, as well as higher net interest income.
Previous report
In the prior year quarter, noninterest income included $9 million of net unrealized gains from SBIC investments, which contributed approximately $0.05 per diluted share (after-tax) and resulted in reported diluted EPS of $1.63. These favorable items were partially offset by higher noninterest expense. The efficiency ratio remained stable at 62.2%, unchanged from the prior year quarter, and improved from 65.0% in the preceding quarter.
Previous report
•Net interest income increased $29 million, or 4%, compared with the prior year period, primarily driven by lower funding costs. This growth also benefited from an improved mix of average interest-earning assets, reflecting growth in higher-yielding loans and a decline in lower-yielding investment securities. As a result, the net interest margin increased to 3.27%, up from 3.17% in the prior year period, and remained unchanged from the previous quarter.
Previous report
•The provision for credit losses was $3 million, compared with negative $1 million in the prior year period.
Previous report
•Customer-related noninterest income increased $18 million, or 11%, reflecting broad-based growth across multiple revenue streams. This increase was largely due to higher capital markets fees and income, as well as growth in loan-related fees and income and commercial account fees.
Previous report
•Noncustomer-related noninterest income increased $252 million, primarily driven by the aforementioned notable gains.
Previous report
•Noninterest expense increased $24 million, or 5%, primarily due to higher professional and legal services expense, increased salary and employee benefit costs reflecting higher incentive compensation, and increased technology, telecom, and information processing expenses. Additional increases in credit-related and occupancy and equipment costs were partially offset by a decline in deposit insurance and regulatory expense, reflecting a lower Federal Deposit Insurance Corporation (“FDIC”) special assessment estimate and higher prior-year costs.
Previous report
◦Nonperforming assets totaled $298 million, or 0.48% of total loans and leases and other real estate owned, compared with $313 million, or 0.51%. The decrease was primarily attributable to improvement in the term commercial real estate loan portfolio. Classified loans totaled $2.3 billion, or 3.72% of total loans and leases, compared with $2.7 billion, or 4.43%, in the prior year quarter.
Previous report
•Total deposits increased $2.8 billion, or 4%, compared with the prior year quarter, primarily driven by a $2.0 billion increase in interest-bearing deposits, largely reflecting the impact of focused deposit growth initiatives. Customer deposits, excluding brokered deposits, totaled $72.7 billion, compared with $69.9 billion.
Previous report
•Total borrowed funds decreased $3.6 billion, or 53%, compared with the prior year quarter, primarily reflecting a $4.6 billion reduction in short-term borrowings, driven by a decrease in short-term Federal Home Loan Bank (“FHLB”) advances. This decline was partially offset by increases in federal funds purchased, security repurchase agreements, and $1.0 billion of senior notes issued over the past year.
Previous report
Net interest income increased $29 million, or 4%, compared with the prior year period, primarily driven by lower funding costs. This growth was further supported by an improved mix of average interest-earning assets, reflecting growth in higher-yielding loans and a reduction in lower-yielding investment securities. As a result, the net interest margin increased to 3.27%, up from 3.17% in the prior year period, and was unchanged from the previous quarter.
Previous report
Average interest-earning assets increased $788 million, or 1%, compared with the prior year period. This was driven by a $1.4 billion increase in average loans and leases, partially offset by a $708 million decline in average investment securities.
Previous report
Average loans and leases increased $1.4 billion, or 2%, to $61.9 billion, primarily due to growth in average commercial loans.
Previous report
Average interest-bearing liabilities decreased $2.1 billion, or 4%, from the prior year quarter, reflecting lower average borrowed funds, partially offset by increases in average long-term debt and interest-bearing deposits.
Previous report
2 Derivative netting increased the calculated yield by approximately 66 bps for the three months ended June 30, 2026; there was no comparable impact in 2025. See discussion above for more information.
Previous report
2 Derivative netting increased the calculated yield by approximately 47 bps for the six months ended June 30, 2026; there was no comparable impact in 2025. See discussion above for more information.
Previous report
The following schedule illustrates the primary drivers of changes in the ACL compared with the prior year period:
Previous report
Noninterest expense increased $24 million, or 5%, compared with the prior year quarter. Professional and legal services expense increased $9 million, primarily reflecting higher outsourced services and technology consulting costs. Salaries and employee benefits expense increased $8 million, largely due to higher incentive compensation accruals aligned with improved profitability, as well as increased employee benefits costs.
Previous report
At June 30, 2026, customer deposits, excluding brokered deposits, totaled $72.7 billion, up from $71.8 billion at December 31, 2025. These balances included approximately $6.7 billion and $6.8 billion of reciprocal deposits, respectively.
Reworded paragraphs (88)
Previous wording
•Increased demand for and risks associated with the adoption and integration of emerging technologies and products, including tokenized deposits, stablecoins, blockchain, and artificial intelligence (“AI”);
Current wording
•Increased demand for, and risks associated with, the development, adoption, integration, and disruptive effects of emerging technologies and products, including tokenized deposits, stablecoins, digital assets, blockchain, and artificial intelligence (“AI”), which could adversely affect deposits, liquidity, competition, and customer demand;
Previous wording
•Our ability to develop, maintain, and secure resilient technology systems and effective controls to detect and respond to fraud, cybersecurity threats, data breaches, and other operational disruptions, including increasingly sophisticated AI-enabled attacks;
Current wording
•Our ability to develop, maintain, and secure resilient technology systems and effective controls to detect and respond to fraud, cybersecurity threats, data breaches, and other operational disruptions, including increasingly sophisticated AI-enabled attacks, vulnerabilities in existing cryptographic capabilities arising from quantum computing, and challenges associated with transitioning to post-quantum cryptography;
Previous wording
•Adverse developments affecting the banking industry that may negatively impact depositor, investor, or market confidence and public opinion; and
Current wording
•Adverse developments affecting the banking industry that may negatively impact depositor, investor, or market confidence, the regulatory environment, or public opinion; and
Previous wording
Noninterest income benefited from $252 million of pre-tax net gains, which contributed approximately $1.31 per diluted share (after-tax) and resulted in reported diluted EPS of $3.05. These gains included a $215 million gain from the sale of Visa Class B-1 shares and $37 million of net unrealized gains from Small Business Investment Company (“SBIC”) investments.
Current wording
Compared with the preceding quarter, net earnings decreased from $452 million, or $3.05 per diluted share, as second quarter results included $252 million of pre-tax net gains, primarily from sale of Visa Class B-1 shares and unrealized gains on Small Business Investment Company (“SBIC”) investments, net of associated success fee accruals.
Previous wording
◦Net loan and lease charge-offs totaled $9 million, or 0.06% of average loans and leases annualized, compared with $10 million, or 0.07%, in the prior year quarter.
Current wording
◦Net loan and lease charge-offs totaled $3 million, or 0.02% of average loans and leases annualized, compared with $56 million, or 0.37%, in the prior year quarter, including $50 million of charge-offs related to the credit losses discussed above.
Previous wording
On July 31, 2026, we completed our previously disclosed acquisition of Basis Multifamily Finance I, LLC, the agency lending platform and subsidiary of Basis Investment Group. The acquisition includes the platform’s experienced team, capabilities, and associated mortgage servicing rights. This transaction expands our product suite through participation in the Fannie Mae DUS® program and the Freddie Mac Optigo® Conventional and Small Balance Loan programs, enhancing our ability to meet the financing needs of multifamily owners, operators, and developers nationwide, and further strengthens our commercial real estate and capital markets businesses.
Current wording
On July 31, 2026, we completed the acquisition of Basis Multifamily Finance I, LLC, the agency lending platform and subsidiary of Basis Investment Group, including its agency lending team, operating capabilities, and related mortgage servicing rights. The acquisition complements our existing balance sheet and capital markets capabilities and broadens the financing solutions available to multifamily clients, including through the Fannie Mae DUS® and Freddie Mac Optigo® Conventional and Small Balance Loan programs. The transaction resulted in $229 million of additional goodwill and intangible assets, $10 million of mortgage servicing rights, and approximately $1 million of liabilities.
Previous wording
1 Includes interest income recoveries of less than $1 million and $2 million for the three months ended, and $1 million and $6 million for the six months ended June 30, 2026, and 2025, respectively.
Current wording
1 Includes interest income recoveries of $1 million and $2 million for the three months ended, and $2 million and $8 million for the nine months ended September 30, 2026, and 2025, respectively.
Previous wording
Net interest income accounted for 60% of net revenue (defined as the sum of net interest income and noninterest income) in the second quarter of 2026, compared with 77% in the second quarter of 2025. The decline primarily reflects the impact of previously noted pre-tax net gains.
Current wording
Net interest income accounted for 78% of net revenue (defined as the sum of net interest income and noninterest income) in both the third quarters of 2026 and 2025.
Previous wording
The yield on average interest-earning assets, net of hedging activity, declined 21 basis points (“bps”) in the second quarter of 2026, compared with the prior year period, reflecting the impact of lower interest rates. The net yield on average loans and leases decreased 25 bps, while the net yield on average investment securities declined 12 bps. Additionally, the yield on average money market investments decreased 65 bps, as the short-term nature of these assets resulted in quicker repricing in the declining interest rate environment.
Current wording
The yield on average interest-earning assets, net of hedging activity, declined 25 basis points (“bps”) in the third quarter of 2026, compared with the prior year period, reflecting the impact of lower interest rates. The net yield on average loans and leases declined 28 bps, while the net yield on average investment securities decreased 9 bps. Additionally, the yield on average money market investments decreased 76 bps, as these short-term assets repriced more quickly in the declining rate environment.
Previous wording
The total cost of deposits declined 20 bps, while the average rate paid on total deposits and interest-bearing liabilities decreased 28 bps during the second quarter of 2026, compared with the prior year period, reflecting the lower interest rate environment. Rates paid on interest-bearing deposits declined 27 bps, while rates paid on total borrowed funds increased 13 bps.
Current wording
The rate paid on total deposits and interest-bearing liabilities decreased 17 bps in the third quarter of 2026, compared with the prior year period, reflecting lower interest rates and reduced reliance on short-term borrowings. The cost of total deposits declined 8 bps, as the benefit of lower interest rates was partially offset by growth in higher-cost interest-bearing deposits. Rates paid on interest-bearing deposits declined 11 bps, while rates paid on borrowed funds increased 5 bps, primarily reflecting a shift in the mix of borrowed funds toward higher-cost long-term debt.
Previous wording
◦Average interest-earning assets increased $788 million, or 1%, compared with the prior year period. This was driven by a $1.4 billion increase in average loans and leases, partially offset by a $708 million decline in average investment securities.
Current wording
Average interest-earning assets increased $2.6 billion, or 3%, compared with the prior year period, driven by a $1.8 billion increase in average money market investments and a $1.7 billion increase in average loans and leases, partially offset by a $786 million decline in average investment securities. The increase in money market investments was driven by excess liquidity as deposit growth exceeded loan growth.
Previous wording
•Total loans and leases increased $1.7 billion, or 3%, resulting from growth in the commercial and industrial portfolio and the term commercial real estate portfolio.
Current wording
Average loans and leases increased $1.7 billion, or 3%, to $62.5 billion, primarily due to growth in average commercial and commercial real estate loans.
Previous wording
Average investment securities decreased $708 million, or 4%, to $17.7 billion, primarily due to principal reductions, net of reinvestments. The ongoing runoff of lower-yielding securities improved the earning asset mix and was a meaningful contributor to year-over-year net interest margin expansion.
Current wording
Average investment securities decreased $786 million, or 4%, to $17.4 billion, primarily due to principal reductions, net of reinvestments. The ongoing runoff of lower-yielding securities improved the earning asset mix and contributed to the year-over-year increase in net interest income.
Previous wording
◦Average interest-bearing liabilities declined $2.1 billion, or 4%, compared with the prior year period. This decline was primarily attributable to a $2.7 billion reduction in average borrowed funds, largely reflecting lower short-term borrowings. The decrease was partially offset by an increase in average long-term debt, resulting from senior note issuances over the past year, as well as a $571 million increase in average interest-bearing deposits.
Current wording
Average interest-bearing liabilities decreased $141 million, or less than 1%, compared with the prior year period. The decline was primarily attributable to a significant reduction in average borrowed funds, reflecting lower short-term Federal Home Loan Bank (“FHLB”) advances. This decrease was partially offset by an increase in average interest-bearing deposits and higher average long-term debt resulting from senior note issuances completed over the past year.
Previous wording
Average deposits increased $2.0 billion, or 3%, to $76.2 billion. Average noninterest-bearing deposits grew $1.4 billion, or 6%, primarily reflecting the migration of a consumer interest-bearing product into a new noninterest-bearing offering. As a result, noninterest-bearing deposits represented 34% of total deposits during the quarter, compared with 33% in the same prior year period. Average interest-bearing deposits increased $571 million, or 1%, largely driven by focused deposit growth initiatives.
Current wording
Average deposits increased $3.7 billion, or 5%, to $78.0 billion. Average noninterest-bearing deposits grew $1.3 billion, or 5%, primarily due to the migration of a consumer interest-bearing product into a new noninterest-bearing offering. Noninterest-bearing deposits represented 34% of total deposits during the quarter, consistent with the prior year period. Average interest-bearing deposits increased $2.4 billion, or 5%, largely driven by deposit growth initiatives.
Previous wording
Average borrowed funds decreased $2.7 billion, or 35%, to $5.1 billion, primarily due to a $3.7 billion, or 54%, reduction in average short-term borrowings. This decrease was partially offset by a $991 million, or 103%, increase in average long-term debt, reflecting the issuance of $500 million of 4.48% Fixed-to-Floating Senior Notes in February 2026 and $500 million of 4.70% Fixed-to-Floating Senior Notes in August 2025.
Current wording
Average borrowed funds decreased $2.6 billion, or 39%, to $4.0 billion, primarily due to a $3.7 billion, or 68%, reduction in average short-term borrowings. This decrease was partially offset by a $1.1 billion, or 88%, increase in average long-term debt, reflecting the issuance of fixed-to-floating senior notes in July 2026, February 2026, and August 2025.
Previous wording
Effective in the first quarter of 2026, we changed our accounting policy to present qualifying derivative assets and liabilities, along with the associated rights to reclaim or obligations to return cash collateral, on a net basis for all eligible arrangements rather than on a gross basis. The average balance of other short-term borrowings is presented net of derivative cash collateral received of $429 million and $327 million for the three and six months ended June 30, 2026, respectively, while the related interest expense is recorded on a gross basis. As a result, the calculated yield on this line item increased by approximately 66 bps and 47 bps for the three and six months ended June 30, 2026, respectively. There was no impact on average balances from such netting for the three and six months ended June 30, 2025.
Current wording
Effective in the first quarter of 2026, we changed our accounting policy to present qualifying derivative assets and liabilities, along with the associated rights to reclaim or obligations to return cash collateral, on a net basis for all eligible arrangements rather than on a gross basis.
Previous wording
The ACL was $707 million at June 30, 2026, compared with $732 million at June 30, 2025. The year-over-year decrease in the ACL primarily reflects changes in loan portfolio composition and lower reserves associated with commercial real estate (“CRE”) portfolio-specific risks, partially offset by more adverse economic forecasts and increased lending activity. The ratio of ACL to total loans and leases was 1.13% at June 30, 2026, compared with 1.20% at June 30, 2025.
Current wording
The ACL was $696 million at September 30, 2026, compared with $725 million at September 30, 2025. The year-over-year decrease in the ACL primarily reflects changes in loan portfolio composition and lower reserves associated with CRE portfolio-specific risks, partially offset by less favorable economic forecasts, adjustments to economic scenario weightings, and increased lending activity. The ratio of ACL to total loans and leases was 1.11% at September 30, 2026, compared with 1.20% at September 30, 2025.
Previous wording
Our ACL estimate is derived using econometric loss models that incorporate multiple economic scenarios, including optimistic, baseline, and stressed conditions. These scenarios are weighted to determine the overall credit loss estimate, and management may adjust the weightings based on its assessment of current economic conditions and reasonable and supportable forecasts. The previous schedule summarizes the key drivers of the year-over-year change in the ACL, reflecting the combined effect of economic forecasts, credit quality trends and portfolio-specific risks, and portfolio composition.
Current wording
The ACL estimate is derived using econometric loss models that incorporate multiple economic scenarios, including optimistic, baseline, and stressed conditions. These scenarios are weighted to determine the overall credit loss estimate, and management may adjust the weightings based on its assessment of current economic conditions and reasonable and supportable forecasts.
Previous wording
The second bar reflects the impact of changes in economic forecasts and current economic conditions, incorporating management’s judgment in determining the scenario weightings for the current period. These changes resulted in a $30 million increase in the ACL compared with the prior year, primarily driven by the increased weighting assigned to more adverse economic scenarios.
Current wording
The second bar reflects the impact of changes in economic forecasts and current economic conditions, incorporating management’s judgment in determining the scenario weightings for the current period. These changes resulted in a $35 million increase in the ACL compared with the prior year, primarily driven by the increased weighting assigned to more adverse economic scenarios.
Previous wording
The third bar captures changes in credit quality factors, including risk grade migration, portfolio-specific risks, and specific reserves on loans. Collectively, these factors contributed to a $20 million decrease in the ACL, largely driven by reduced CRE portfolio-specific risks.
Current wording
The third bar captures changes in credit quality factors, including risk grade migration, portfolio-specific risks, and specific reserves on loans. Collectively, these factors contributed to a $13 million decrease in the ACL, largely driven by reduced CRE portfolio-specific risks.
Previous wording
The fourth bar represents the effect of changes in the composition of the loan portfolio, including shifts in loan balances and mix, the aging of the portfolio, and other qualitative risk factors. These changes resulted in a $35 million decrease in the ACL, largely driven by changes in the loan portfolio mix, partially offset by $1.7 billion in period-end loan growth.
Current wording
The fourth bar represents the effect of changes in the composition of the loan portfolio, including shifts in loan balances and mix, the aging of the portfolio, and other qualitative risk factors. These changes resulted in a $51 million decrease in the ACL, largely driven by changes in the loan portfolio mix, partially offset by $2.2 billion in period-end loan growth.
Previous wording
The provision for credit losses, which includes both the provision for loan and lease losses and the provision for unfunded lending commitments, was $3 million in the second quarter of 2026, compared with negative $1 million in the second quarter of 2025. The provision for securities losses was less than $1 million during both the second quarters of 2026 and 2025.
Current wording
The provision for credit losses, which includes both the provision for loan and lease losses and the provision for unfunded lending commitments, resulted in a benefit of $8 million in the third quarter of 2026, compared with a provision expense of $49 million in the third quarter of 2025. The year-over-year decrease in provision for credit losses was due to credit losses recognized in the prior year quarter on revolving credit facilities extended to two related commercial borrowers that financed commercial mortgage originations and purchases. The provision for securities losses was less than $1 million during both the third quarters of 2026 and 2025.
Previous wording
Noninterest income accounted for 40% of total net revenue (defined as the sum of net interest income and noninterest income) in the second quarter of 2026, compared with 23% in the second quarter of 2025. Noninterest income increased $270 million, or 142%, from the prior year period, primarily driven by the previously discussed pre-tax net gains.
Current wording
Noninterest income accounted for 22% of total net revenue (defined as the sum of net interest income and noninterest income) in both the third quarters of 2026 and 2025. It increased $8 million, or 4%, for the three months ended September 30, and $294 million, or 53%, for the nine months ended September 30, 2026, relative to the same prior year period, primarily due to the pre-tax net gains recognized in the second quarter of 2026.
Previous wording
1 Net of credit valuation adjustment (“CVA”). For information on non-GAAP financial measures, see page 39.
Current wording
1 Net of CVA. For information on non-GAAP financial measures, see page 40.
Previous wording
Customer-related noninterest income increased $18 million, or 11%, compared with the prior year period, reflecting broad-based growth across nearly all revenue streams. Capital markets fees and income increased $8 million, largely attributable to higher real estate capital markets activity and increased investment banking advisory fees. Loan-related fees and income increased $3 million, supported by higher residential mortgage loan sales activity, while the $3 million increase in commercial account fees was mainly due to growth in account analysis fees.
Current wording
For the nine months ended September 30, 2026, customer-related noninterest income increased $61 million, or 13%, compared with the same prior year period. Excluding net CVA, capital markets fees and income increased $11 million, or 12%, reflecting growth in swap and loan syndication fees, partially offset by lower investment banking advisory fees. Loan-related fees and income increased $9 million, primarily reflecting higher residential mortgage loan sales activity. Commercial account fees increased $8 million, mainly due to growth in account analysis fees. Retail and business banking fees increased $6 million, reflecting the same drivers noted above, while other customer-related fees increased $3 million, primarily driven by growth in corporate trust fees.
Previous wording
Noncustomer-related noninterest income increased $252 million, compared with the prior year period, primarily driven by a $215 million gain on the sale of Class B-1 shares of Visa, Inc., as well as $44 million in unrealized gains within the SBIC investment portfolio. In the prior year period, we recognized an $11 million unrealized gain related to the successful completion of the initial public offering of one of our SBIC investments.
Current wording
For the nine months ended September 30, 2026, noncustomer-related noninterest income increased $233 million compared with the same prior year period. The increase was primarily attributable to a $237 million increase in net securities gains, largely reflecting significant pre-tax gains recognized in the second quarter of 2026 from the sale of Class B-1 shares of Visa, Inc., as well as unrealized gains within the SBIC investment portfolio.
Previous wording
Technology, telecom, and information processing expense increased $7 million, driven by higher application software, licensing, and maintenance costs. Credit-related expense rose $4 million, primarily due to increased loan-related legal costs, while occupancy and equipment expense increased $4 million, mainly reflecting higher rental and building maintenance costs. Other noninterest expense increased $2 million, largely due to a higher success fee accrual associated with SBIC investments and higher legal reserves in the prior year quarter, partially offset by reductions in other miscellaneous expenses.
Current wording
Noninterest expense increased $26 million, or 5%, compared with the prior year quarter. Salaries and employee benefits expense increased $8 million, primarily due to higher incentive compensation accruals driven by year-over-year improvement in performance metrics, as well as increased employee benefits costs. Professional and legal services expense increased $6 million, primarily reflecting higher costs for outsourced services. Technology, telecom, and information processing expense increased $6 million, driven by higher application software, licensing, and maintenance costs. Marketing and business development expense increased $3 million, primarily due to customer acquisition and deposit growth initiatives. Other noninterest expense increased $3 million, reflecting higher miscellaneous operating costs, partially offset by a lower success fee accrual associated with SBIC investments.
Previous wording
These increases were partially offset by a $13 million decline in deposit insurance and regulatory expense, driven by a $6 million decrease from an updated estimate of the FDIC special assessment, as well as higher FDIC assessment costs in the prior year quarter associated with the level of classified loans.
Current wording
These increases were partially offset by a $4 million decrease in deposit insurance and regulatory expense, primarily attributable to higher Federal Deposit Insurance Corporation (“FDIC”) assessment costs in the prior year quarter associated with the level of classified loans.
Previous wording
Adjusted noninterest expense increased $25 million, or 5%, primarily due to the same factors discussed above. The efficiency ratio remained stable at 62.2%, consistent with the prior year quarter, and improved from 65.0% in the preceding quarter. For more information regarding non-GAAP financial measures, see page 39.
Current wording
Adjusted noninterest expense increased $29 million, or 6%, primarily due to the same factors discussed above. The efficiency ratio was 61.9%, compared with 59.6%, and improved from 62.2% in the preceding quarter. For more information regarding non-GAAP financial measures, see page 40.
Previous wording
Total technology spend increased $6 million, or 5%, compared with the prior year quarter. The increase was primarily due to higher technology, telecom, and information processing expenses, reflecting previously noted increases in application software, licensing, and maintenance costs, as well as higher technology-related expense associated with expanded professional and outsourced technology services. These increases were partially offset by a decline in capitalized technology investments, primarily due to higher investment levels in the prior year.
Current wording
Total technology spend increased $7 million, or 5%, compared with the prior year quarter. The increase was primarily due to higher technology, telecom, and information processing expenses, reflecting previously noted increases in application software, licensing, and maintenance costs, as well as higher technology-related expense associated with expanded professional and outsourced technology services. These increases were partially offset by a decline in capitalized technology investments, primarily due to higher investment levels in the prior year.
Previous wording
The effective tax rate was 22.3% and 21.8% for the three months ended June 30, 2026 and 2025, respectively, and 21.8% and 24.9% for the six months ended June 30, 2026 and 2025, respectively. The year-over-year decrease in the six-month rate was primarily due to Utah tax legislation enacted in the first quarter of 2025, which required remeasurement of the net deferred tax asset (“DTA”) and resulted in additional tax expense in the prior year period.
Current wording
The effective tax rate was 21.7% and 22.1% for the three months ended September 30, 2026 and 2025, respectively, and 21.8% and 23.9% for the nine months ended September 30, 2026 and 2025, respectively. The year-over-year decrease in the nine-month rate was primarily due to Utah tax legislation enacted in the first quarter of 2025, which required remeasurement of the net deferred tax asset (“DTA”) and resulted in additional tax expense in the prior year period.
Previous wording
Investment securities are classified as either available-for-sale (“AFS”) or held-to-maturity (“HTM”), and are primarily used to provide balance sheet liquidity. The portfolio largely consists of securities that can be readily converted to cash or used to generate liquidity through secured borrowing agreements, without the need to sell the securities. Our investment securities portfolio also helps to balance the inherent interest rate mismatch between loans and deposits, thereby helping to preserve the economic value of shareholders’ equity. The estimated deposit duration at June 30, 2026 was assumed to be longer than the loan duration (including swaps). At June 30, 2026, the investment securities portfolio had an estimated duration of 3.6 years, compared with 3.8 years at December 31, 2025. The duration, which measures price sensitivity to changes in interest rates, declined modestly during the period, primarily reflecting the natural aging of the portfolio.
Current wording
Investment securities are classified as either available-for-sale (“AFS”) or held-to-maturity (“HTM”), and are primarily used to provide balance sheet liquidity. The portfolio largely consists of securities that can be readily converted to cash or used to generate liquidity through secured borrowing agreements, without the need to sell the securities. Our investment securities portfolio also helps to balance the inherent interest rate mismatch between loans and deposits, thereby helping to preserve the economic value of shareholders’ equity. The estimated deposit duration at September 30, 2026 was assumed to be longer than the loan duration (including swaps). At September 30, 2026, the investment securities portfolio had an estimated duration of 3.4 years, compared with 3.8 years at December 31, 2025. The duration, which measures price sensitivity to changes in interest rates, declined modestly during the period, primarily reflecting the natural aging of the portfolio.
Previous wording
The amortized cost of total investment securities decreased $317 million, or 2%, from December 31, 2025, primarily due to principal reductions, net of reinvestments. At both June 30, 2026 and December 31, 2025, approximately 6% of the portfolio consisted of floating-rate instruments. At June 30, 2026, we maintained active pay-fixed interest rate swaps with an aggregate notional amount of $4.6 billion that are designated as fair value hedges of fixed-rate AFS securities and effectively convert the fixed interest income on the hedged portion of the securities to a floating rate.
Current wording
The amortized cost of total investment securities decreased $603 million, or 3%, from December 31, 2025, primarily due to principal reductions, net of reinvestments. At both September 30, 2026 and December 31, 2025, approximately 6% of the portfolio consisted of floating-rate instruments. At September 30, 2026, we maintained active pay-fixed interest rate swaps with an aggregate notional amount of $4.5 billion that are designated as fair value hedges of fixed-rate AFS securities and effectively convert the fixed interest income on the hedged portion of the securities to a floating rate.
Previous wording
At June 30, 2026, the AFS investment securities portfolio included approximately $62 million in net premium, distributed across various security categories. Taxable-equivalent premium amortization for these investment securities totaled $11 million for the second quarter of 2026, compared with $12 million in the same prior year period.
Current wording
At September 30, 2026, the AFS investment securities portfolio included approximately $51 million in net premium, distributed across various security categories. Taxable-equivalent premium amortization for these investment securities totaled $10 million for the third quarter of 2026, compared with $12 million in the same prior year period.
Previous wording
For the first six months of 2026, loans and leases increased $1.6 billion, or 3%, to $62.5 billion at June 30, 2026, from $60.9 billion at December 31, 2025, primarily driven by growth in commercial and industrial and term commercial real estate loans. As a result, the ratio of loans and leases to total assets increased to 70% from 69% at December 31, 2025. Commercial and industrial loans remained the largest loan segment, representing 31% of total loans at June 30, 2026, compared with 30% at December 31, 2025.
Current wording
For the first nine months of 2026, loans and leases increased $1.6 billion, or 3%, to $62.5 billion at September 30, 2026, from $60.9 billion at December 31, 2025. The increase was primarily driven by growth in commercial and industrial loans and term commercial real estate loans. The ratio of loans and leases to total assets remained stable at 69%, consistent with December 31, 2025. Commercial and industrial loans remained the largest loan segment, representing 30% of total loans at September 30, 2026, consistent with December 31, 2025.
Previous wording
Other noninterest-bearing investments decreased $15 million, or 1%, during the first six months of 2026. The decrease was primarily driven by lower holdings of FHLB stock, reflecting a significant reduction in FHLB borrowings. To maintain borrowing capacity, we are required to hold FHLB stock equal to 4% to 5% of outstanding FHLB borrowings. This decrease was partially offset by growth in the SBIC investment portfolio, primarily resulting from valuation adjustments on related investments.
Current wording
Other noninterest-bearing investments decreased $7 million, or 1%, during the first nine months of 2026. The decrease was primarily driven by lower holdings of FHLB stock, reflecting a significant reduction in FHLB borrowings. To maintain borrowing capacity, we are required to hold FHLB stock equal to 4% to 5% of outstanding FHLB borrowings. This decrease was partially offset by growth in the SBIC investment portfolio, primarily resulting from valuation adjustments on related investments.
Previous wording
Total deposits increased $1.0 billion, or 1%, from December 31, 2025, reflecting growth in both interest-bearing and noninterest-bearing deposits. Growth in interest-bearing deposits was driven by focused deposit-gathering initiatives, while noninterest-bearing demand deposits increased due to continued growth in more granular depositor balances.
Current wording
Total deposits increased $2.3 billion, or 3%, from December 31, 2025, reflecting growth in both interest-bearing and noninterest-bearing deposits. Customer deposits, excluding brokered deposits, increased to $74.5 billion from $71.8 billion. The increase in customer deposits supported a reduction in higher-cost wholesale funding, including short-term borrowings, with excess liquidity used to increase money market investments. Growth in interest-bearing deposits was driven by focused deposit-gathering initiatives, while noninterest-bearing demand deposits increased primarily due to the migration of balances from a consumer interest-bearing product to a new noninterest-bearing offering.
Previous wording
At June 30, 2026, the estimated amount of uninsured deposits totaled $34.4 billion, or 45% of total deposits, unchanged from December 31, 2025. The loan-to-deposit ratio was 82% at June 30, 2026, compared with 81% at December 31, 2025. For additional information regarding liquidity, including the ratio of available liquidity to uninsured deposits, see “Liquidity Risk Management” on page 34.
Current wording
At September 30, 2026, the estimated amount of uninsured deposits totaled $35.7 billion, or 46% of total deposits, compared with 45% at December 31, 2025. The loan-to-deposit ratio was 80% at September 30, 2026, compared with 81% at December 31, 2025. For additional information regarding liquidity, including the ratio of available liquidity to uninsured deposits, see “Liquidity Risk Management” on page 35.
Previous wording
We are exposed to a broad range of risks, including credit risk, interest rate and market risk, liquidity risk, strategic and business risk, operational risk, technology risk, cybersecurity risk, capital/financial reporting risk, legal/compliance risk (including regulatory risk), and reputational risk. Oversight of these risks is conducted through various management committees, with the Enterprise Risk Management Committee serving as the primary coordinating body. To address these risks, we employ comprehensive risk management practices designed to promote prudent risk-taking and effective oversight. Risk management is embedded in our operations and functions as a critical driver of overall performance, closely aligned with our key strategic objectives. For a more comprehensive discussion of these risks, see “Risk Factors” in our 2025 Form 10-K.
Current wording
We are exposed to a broad range of risks, including credit risk, interest rate and market risk, liquidity risk, strategic and business risk, operational risk, technology risk, cybersecurity risk, capital/financial reporting risk, legal/compliance risk (including regulatory risk), and reputational risk. Oversight of these risks is conducted through various management and board committees, with the Enterprise Risk Management Committee serving as the primary coordinating body. To address these risks, we employ comprehensive risk management practices designed to promote prudent risk-taking and effective oversight. Risk management is embedded in our operations and functions as a critical driver of overall performance, closely aligned with our key strategic objectives. For a more comprehensive discussion of these risks, see “Risk Factors” in our 2025 Form 10-K.
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Current report — wording carried from elsewhere
The following schedule summarizes the primary drivers of the year-over-year change in the ACL, including changes in economic forecasts and scenario weightings, credit quality trends and portfolio-specific risks, and loan portfolio composition:
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
The following schedule presents NDFI credit quality metrics:
Previous report — wording carried elsewhere
For a more comprehensive discussion of our capital risk management, see “Capital Management” in our 2025 Form 10-K.
Previous report — wording carried elsewhere
1 Excluding $252 million of pre-tax net gains ($199 million after tax), return on average common equity and return on average tangible common equity for the three months ended June 30, 2026 would have been approximately 14.0%, and 16.6%, respectively.