Zions Bancorporation reports $262 million in third-quarter net earnings

Zions Bancorporation, N.A. reported net earnings of $262 million for the third quarter of 2026, a figure that translates to $1.78 in diluted earnings per share. This performance compares to net earnings of $221 million and diluted earnings per share of $1.48 for the same period in 2025, though it follows a stronger second quarter of 2026, which posted $452 million in net earnings and $3.05 in diluted earnings per share.

The bank's estimated common equity tier 1 capital ratio stood at 11.8%, an increase from 11.3% in the prior year. Return on average tangible common equity was reported at 16.2%. Tangible book value per common share reached $43.50, reflecting a 13% increase.

Net interest income totaled $684 million, up 2% from the prior year period. This increase was driven by lower funding costs and balance sheet mix changes, including growth in average loans and leases and money market investments. However, the net interest margin declined to 3.23% from 3.28% a year earlier. The yield on average interest-earning assets fell to 4.91% from 5.16%, primarily reflecting lower interest rates.

Harris H. Simmons, Chairman and CEO of Zions Bancorporation, attributed the higher earnings primarily to improved credit quality. Net loan charge-offs were $3 million in the third quarter, down from $56 million in the same period last year. Simmons noted that while loan growth was flat compared to the second quarter due to increased payoffs and a competitive market, customer deposits grew nearly 10% annualized from second-quarter levels.

Total deposits reached $77.9 billion, up 4% from the prior year. Customer deposits, excluding brokered deposits, totaled $74.5 billion, an increase of 5%. Brokered deposits fell 9% to $3.5 billion, while short-term borrowings decreased 76% to $843 million. Long-term debt rose 64% to $2.4 billion, driven by senior note issuances over the past year.

Loans and leases stood at $62.5 billion, up 4% from the prior year. The annualized ratio of net loan and lease charge-offs to average loans and leases was 0.02%, compared with 0.37% in the prior year period. The provision for credit losses was a benefit of $8 million, contrasting with an expense of $49 million a year earlier.

Nonperforming assets decreased to $315 million, or 0.50% of loans and leases and other real estate owned, from $324 million, or 0.54%. Classified loans declined to $2.1 billion, representing 3.40% of loans and leases, compared with $2.4 billion, or 4.00%, in the prior year period.

Pre-provision net revenue was $340 million, down 1% from the prior year. Customer-related noninterest income rose 18% to $192 million, while adjusted customer-related noninterest income increased 5% to $182 million. Noninterest expense increased 5% to $553 million; adjusted noninterest expense rose 6% to $549 million.

The bank completed the acquisition of Basis Multifamily Finance I, LLC, a subsidiary of Basis Investment Group, in July 2026. Simmons described this multifamily finance platform as a strategic advantage for serving commercial real estate clients, particularly in fast-growing western markets. The quarter also included a net credit valuation adjustment gain of $10 million, or $0.05 per share, on client-related interest rate swaps.

Simmons stated that short- and medium-term interest rates began to rise in the last month of the quarter. He expects the bank's moderately asset-sensitive balance sheet to produce stronger net interest income in a higher rate environment and anticipates continued improvement in noninterest income into next year.