Zions Bancorporation third-quarter profit rises to $262 million from $221 million

Zions Bancorporation, N.A. (ZION) said Monday it earned $262 million, or $1.78 per diluted share, in the third quarter of 2026, up from $221 million, or $1.48 per share, a year earlier.

The results were disclosed in an 8-K regulatory filing that furnished the earnings release and a slide presentation for the conference call.

Here's how the company did:

• Net earnings applicable to common shareholders: $262 million vs. $221 million a year earlier
• Diluted earnings per share: $1.78 vs. $1.48 a year earlier
• Net interest income: $684 million vs. $672 million a year earlier
• Total noninterest income: $197 million vs. $189 million a year earlier

Earnings rose mainly because credit costs fell. The company recorded a benefit of $8 million for the provision for credit losses, compared with a $49 million expense a year earlier.

Net loan and lease charge-offs totaled $3 million, down from $56 million in the prior year quarter.

Chairman and CEO Harris H. Simmons said of the balance sheet: "Although an increased pace of loan payoffs, combined with a highly competitive market, produced flat loan growth compared to the second quarter, customer deposits grew nearly 10% annualized from second quarter levels."

Loans and leases were $62.5 billion at the end of the quarter, up 4% from a year earlier and flat from the second quarter. Total deposits were $77.9 billion, up 4%.

Customer deposits, which exclude brokered deposits, rose 5% to $74.5 billion.

The net interest margin was 3.23%, compared with 3.28% a year earlier. The yield on interest-earning assets was 4.91%, compared with 5.16%, while the cost of deposits declined to 1.59% from 1.67%.

The company said the rise in net interest income was primarily driven by lower funding costs and changes in the balance sheet mix.

Customer-related noninterest income rose 18% to $192 million. Capital markets fees and income increased $22 million, largely reflecting changes in net credit valuation adjustment, or CVA, income.

Excluding CVA changes, capital markets fees and income increased $1 million. The company recorded a net CVA gain on client-related interest rate swaps of $10 million, or $0.05 per share.

Net securities losses were $4 million, compared with gains of $269 million in the second quarter. The second quarter included a $215 million pre-tax gain on the sale of Visa shares.

Noninterest expense rose 5% to $553 million. Salaries and employee benefits increased $8 million, primarily due to higher incentive compensation accruals. Technology, telecom and information processing expense rose $6 million.

The efficiency ratio was 61.9%, compared with 59.6% a year earlier, and improved from 62.2% in the second quarter.

Nonperforming assets were $315 million, or 0.50% of loans and leases and other real estate owned, compared with $324 million, or 0.54%, a year earlier. Classified loans fell to $2.1 billion, or 3.40% of loans and leases, from $2.4 billion, or 4.00%.

The allowance for credit losses totaled $696 million, compared with $725 million a year earlier.

The estimated common equity tier 1 capital ratio was 11.8%, compared with 11.3%. Tangible book value per common share rose 13% to $43.50. Return on average tangible common equity was 16.2%, compared with 16.0%.

The common stock dividend was $0.48 per share, compared with $0.45 a year earlier. The company repurchased 1.1 million common shares for $75 million during the quarter and made no repurchases in the prior year period.

The company completed its acquisition of Basis Multifamily Finance I, LLC, a subsidiary of Basis Investment Group, at the end of July 2026. The filing said the deal added $229 million of goodwill and intangible assets.

Simmons said of the acquisition: "This multifamily finance platform becomes an important strategic advantage in serving our commercial real estate clients, particularly in the fast-growing western markets we serve."

The company provided an outlook for the third quarter of 2027 compared with the third quarter of 2026. It expects period-end loan growth of 2% to 4%, led by commercial loans, and net interest income growth of 8% to 12%.

It expects adjusted customer-related noninterest income to rise 6% to 9%, excluding CVA, and adjusted noninterest expense to rise 4% to 6%, with positive operating leverage.

Simmons added: "Short- and medium-term interest rates began to rise in the last month of the quarter, and we expect that our moderately asset-sensitive balance sheet should produce stronger net interest income in a higher rate environment, while we're seeing continued improvement in noninterest income that we expect will continue into next year."

The company had 8,996 full-time equivalent employees at the end of the quarter, down from 9,286 a year earlier.

The company scheduled a conference call for 5:30 p.m. Eastern Time on Monday to discuss the results.