Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Q1 2025 Earnings Presentation
39 slides from Zions Bancorporation N.a's earnings presentation, Apr 21, 2025
Slide 1: First Quarter 2025 Financial Review
ZIONS FIRST QUARTER 2025 Financial Review April 21, 2025
Slide 2: Forward-Looking Statements; Use of Non-GAAP Financial Measures
FORWARD-LOOKING STATEMENTS; USE OF NON-GAAP FINANCIAL MEASURES Forward Looking Information This presentation includes “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and assu
Slide 3: Financial Performance
FINANCIAL PERFORMANCE Net interest margin expanded 5 basis points compared to prior quarter and 16 basis points versus year-ago period Key Metrics 1Q25 4Q24 1Q24 • Net earnings to common of $169 million reflects a $31 million decline versus prior Net earnings to common $169 million $200 million $ 14
Slide 4: Diluted Earnings Per Share
DILUTED EARNINGS PER SHARE Earnings per share decreased $0.21 versus prior quarter; compared to the year-ago period, earnings improved by $0.17 per share Diluted Earnings per Share Notable Items1: $1.37 $1.34 1Q25: $1.28 $1.13 $0.96 • $(0.11) per share negative impact from revaluation of deferred ta
Slide 5: Pre-Provision Net Revenue (PPNR)
PRE-PROVISION NET REVENUE (“PPNR”) Adjusted PPNR increased 10% over prior-year period driven by improved funding costs and higher noninterest income PPNR1 Linked quarter (1Q25 vs. 4Q24) ($ millions) • Adjusted PPNR decreased 14%: • Stable net interest income $323 $312 • $302 Decreased customer-relat
Slide 6: Net Interest Income & Net Interest Margin
NET INTEREST INCOME & NET INTEREST MARGIN Margin expanded and net interest income was flat versus prior quarter notwithstanding two fewer days in the first quarter Net Interest Income Linked quarter (1Q25 vs. 4Q24) Net Interest Margin Net interest income decreased $3 million: • Interest income decre
Slide 7: Net Interest Margin
NET INTEREST MARGIN Repricing of interest-bearing deposits contributed to the expansion of the net interest margin over prior year and prior quarter Linked Quarter (1Q25 vs. 4Q24) Year-Over-Year (1Q25 vs. 1Q24) 0.31% 0.12% 3.10% 0.44% 3.10% 3.05% (0.10%) 2.94% (0.04%) (0.09%) (0.23%) (0.03%) (0.07%)
Slide 8: Noninterest Income and Revenue
NONINTEREST INCOME AND REVENUE Customer-related noninterest income increased 4% versus prior year period, largely from higher loan-related fees and improved capital markets fees Customer-Related Noninterest Income 1,3 Total Revenue 2,3 ($ millions) ($ millions) $176 $821 $820 $800 $798 $795 $792 $78
Slide 9: Noninterest Expense
NONINTEREST EXPENSE Noninterest expenses remain well-controlled with increases in the quarter largely related to seasonal compensation Noninterest Expense (NIE) • Adjusted noninterest expense increased $24 million linked quarter, driven by several categories: ($ millions) • Salary and benefits incre
Slide 10: Average Loans and Deposits
AVERAGE LOANS AND DEPOSITS Yields on loans decreased 8 basis points; total cost of deposits decreased 17 basis points Average Total Loans Average Total Deposits Yield on Total Loans Total Cost of Deposits Total interest-bearing deposits reflect a 66% cumulative beta ($ billions) ($ billions) $73.4 $
Slide 11: Deposit Balance and Borrowing Trends
DEPOSIT BALANCE AND BORROWING TRENDS Ending and average customer deposits decreased 0.4% and 1.2%, respectively, compared to prior quarter 1Q25 total funding costs decreased 11 basis points vs. 4Q24 • Ending and average customer deposits decreased $268 million and $863 million respectively, includin
Slide 12: Total Investment Securities & Money Market Investments
TOTAL INVESTMENT SECURITIES & MONEY MARKET INVESTMENTS The bank has strong on-balance sheet liquidity Total Investment Securities The investment securities portfolio is designed to be a storehouse of balance sheet liquidity and Money Market Investments (period-end balances) • Principal and prepaymen
Slide 13: Net Interest Income – Rate Sensitivity
NET INTEREST INCOME – RATE SENSITIVITY The rate path implied by the forward curve reflects modest asset sensitivity; net interest income is modeled to increase Interest Rate Impacts on Net Interest Income1 Net Interest Income Sensitivity 1Q26 vs. 1Q25 Reflects continued asset and CD repricing and as
Slide 14: Credit Quality
CREDIT QUALITY Classified loan balances stabilizing as expected while nonperforming asset and net charge-off ratios remain low Key Credit Metrics Credit Quality Ratios • Net charge-offs relative to average loans: Criticized / Loans NPAs / Loans + OREO Classified / Loans • 0.11% annualized in 1Q25 5.
Slide 15: Commercial Real Estate Summary ($13.6 Billion Balance)
COMMERCIAL REAL ESTATE SUMMARY ($13.6 BILLION BALANCE) The commercial real estate portfolio is granular and well diversified, 23% of total loans CRE Portfolio Composition Term CRE ($10.9B) As of March 31, 2025 • Weighted average LTVs (< 60%) Other, 14% • Maturity distribution over the next three yea
Slide 16: Commercial Real Estate Problem Loans in Focus
COMMERCIAL REAL ESTATE PROBLEM LOANS IN FOCUS The commercial real estate portfolio benefits from strong LTVs, guarantor support, low delinquencies, and diversification Change in CRE Problem Loans Levels • CRE classifieds increased $26 million during the quarter 12/31/24 to 3/31/2025 ($ millions) • D
Slide 17: Capital Strength
CAPITAL STRENGTH Loss-absorbing capital remains strong relative to our risk profile; low credit losses relative to capital levels as a percentage of risk-weighted assets Common Equity Tier 1 Capital Net Charge-offs and Allowance for Credit Losses annualized, as a percentage of risk-weighted assets a
Slide 18: Financial Outlook (1Q 2026E vs. 1Q 2025A)
FINANCIAL OUTLOOK (1Q 2026E VS . 1Q 2025A) Outlook provided as of April 21, 2025 These statements are based on management’s current expectations and assumptions regarding future events or determinations, all of which are subject to known and unknown risks, uncertainties, and other factors including,
Slide 19: Zions Bancorporation Drives Value for Its Stakeholders
ZIONS BANCORPORATION DRIVES VALUE FOR ITS STAKEHOLDERS We are determined to help build strong, successful communities, create economic opportunity, and to help our clients achieve greater financial strength through the relationships we develop and the services we provide. Distinctive Local Operating
Slide 20: Appendix
APPENDIX • Financial Results Summary • Accumulated Other Comprehensive Income (AOCI) • Balance Sheet Profitability • Loan Growth by Type • Allowance and Credit Metrics • Earning Asset Repricing • Interest Rate Swaps • Interest Rate Sensitivity – Parallel Shock Analysis • Loan Loss Severity (NCOs as
Slide 21: Financial Results Summary
FINANCIAL RESULTS SUMMARY Quarterly financial highlights Three Months Ended (Dollar amounts in millions, except per share data) March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024 Earnings Results: Diluted Earnings Per Share $ 1.13 $ 1.34 $ 1.37 $ 1.28 $ 0.96 Net Earning
Slide 22: Accumulated Other Comprehensive Income/Loss (AOCI)
ACCUMULATED OTHER COMPREHENSIVE INCOME/LOSS (AOCI) Projected AOCI is projected to improve by $520 million from 4Q24 to 4Q25 AOCI Loss Projection The loss in AOCI will decline as the underlying Actual Projection investments pay down and mature. Based on forward curve: as of 12/31/24 as of 3/31/25 Hed
Slide 23: Balance Sheet Profitability
BALANCE SHEET PROFITABILITY Profitability remains stable; first quarter decline in earnings partially attributed to seasonal compensation and revaluation of deferred tax assets Return on Assets Return on Tangible Common Equity 1 17.5% 17.4% 16.0% 13.7% 13.4% 0.95% 0.96% 0.91% 0.77% 0.70% 1Q24 2Q24 3
Slide 24: Loan Growth in Detail
LOAN GROWTH IN DETAIL Loan growth in 1-4 family mortgage, C&I, and CRE Term Linked Quarter Loan Balance Growth Total Loans: +0.9% 10% Compared to the prior quarter: 8% 6% 1-4 Family, 4% • Period-end loans increased $531 Growth Rate: Linked Quarter 1 CRE Term, 2% million, or 0.9% 4% Home Equity, 1% M
Slide 25: Allowance and Credit Metrics
ALLOWANCE AND CREDIT METRICS CECL methodology reflects reserve build ahead of realized deterioration of credit metrics • Through 2022 and 2023, the ACL increased, despite improving problem loan levels, due to forecasts of future credit quality deterioration, including $190 million of increase specif
Slide 26: Simulated Repricing Expectations: Earning Assets & Loans
SIMULATED REPRICING EXPECTATIONS: EARNING ASSETS & LOANS A substantial portion of earning assets reset within one year with additional resets in later periods Earning Assets: Rate Reset / Maturity Profile1 Loans: Rate Reset / Maturity Profile1 Earning Assets Loans 53% 53% After Hedging After Hedging
Slide 27: Interest Rate Swaps at March 31, 2025
INTEREST RATE SWAPS AT MARCH 31, 2025 Swaps are used to balance our interest rate sensitivity to income and value Interest rate sensitivity is managed in part with portfolio interest rate hedges1 • In the first quarter, we added $200 million of cash flow hedge swaps with an average fixed rate of 4.1
Slide 28: Interest Rate Sensitivity – Parallel Rate Shocks
INTEREST RATE SENSITIVITY – PARALLEL RATE SHOCKS Standard parallel rate shocks suggest asset sensitivity Simulated Net Interest Income Sensitivity 1 −200 bps −100 bps +100 bps +200 bps 9% 8% as of 12/31/2024 as of 3/31/2025 4% 5% (4%) (4%) (8%) (9%) 28 (1) 12-month forward simulated impact of an ins
Slide 29: Loan Loss Severity
LOAN LOSS SEVERITY When problems arise, Zions generally experiences less severe loan losses due to strong collateral and underwriting practices Annualized NCOs / Nonaccrual Loans Annualized NCOs / Nonaccrual Loans Five Year Average (2020Q1 – 2024Q4) Fifteen Year Average (2010Q1 – 2024Q4) >100% >100%
Slide 30: In-Depth Review: Commercial Real Estate
IN-DEPTH REVIEW: COMMERCIAL REAL ESTATE Limited tail loan-to-value risk in portfolio; controlled CRE growth Balance Trends 16.0 Maturities Construction Balances Term Balances Construction Balances Term Balances 14.0 Term % of CRE % of CRE WAVG LTV Term Construction 12.0 Multifamily 55% 28% 49% 10.0
Slide 31: Disciplined Commercial Real Estate Growth
DISCIPLINED COMMERCIAL REAL ESTATE GROWTH Commercial real estate loan growth lags peers due to continued exercise of concentration risk discipline Commercial Real Estate Zions has exercised caution in CRE Excluding Owner Occupied concentrations for more than a decade 350 and in underwriting standard
Slide 32: In-Depth Review: CRE Office ($1.8 Billion Balance)
IN-DEPTH REVIEW: CRE OFFICE ($1.8 BILLION BALANCE) CRE Office portfolio is 13% of total CRE exposure; 3% of total loans; charge-offs remain limited Balance Trends Maturities • Allowance for credit losses: 3.7% of balances / 22% of criticized balances Construction Balances Term Balances Construction
Slide 33: In-Depth Review: CRE Office ($1.8 Billion Balance)
IN-DEPTH REVIEW: CRE OFFICE ($1.8 BILLION BALANCE) Zions’ office collateral is diversified geographically, has limited exposure to CBD offices, and majority of building sizes < 200 thousand sq ft Office Collateral Summary Term CRE Office By State, CBD / Suburban ($MM's) • By State: UT 28%,CA 19%, WA
Slide 34: In-Depth Review: CRE Multifamily ($4.0 Billion Balance)
IN-DEPTH REVIEW: CRE MULTIFAMILY ($4.0 BILLION BALANCE) CRE multifamily portfolio is 30% of total CRE exposure; 7% of total loan exposure Balance Trends Maturities • Allowance for credit losses: 2.3% of total multifamily balances / 11% of Construction Balances Term Balances Construction Balances Ter
Slide 35: In-Depth Review: CRE Industrial ($2.9 Billion Balance)
IN-DEPTH REVIEW: CRE INDUSTRIAL ($2.9 BILLION BALANCE) CRE Industrial portfolio is 22% of total CRE exposure; 5% of total loan exposure • Allowance for credit losses: 2.2% of balances / 13% of criticized balances Balance Trends Maturities • 8% decrease in balances year-over-year via payoffs, loan re
Slide 36: Customer Satisfaction: Third in Middle Market Coalition Greenwich Best Bank Awards
CUSTOMER SATISFACTION: THIRD IN MIDDLE MARKET COALITION GREENWIC H BEST BANK AWARDS Zions compares favorably to global competitors (JP Morgan, Bank of America, Wells Fargo, US Bank) Coalition Greenwich Customer Satisfaction % Excellent Citations* Major Bank Middle Market Zions Highest Major Bank Zio
Slide 37: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES In millions, except per share amounts 1Q25 4Q24 3Q24 2Q24 1Q24 (a) Total noninterest expense $538 $509 $502 $509 $526 LESS adjustments: Severance costs 3 1 1 1 Other real estate expense (1) Amortization of core deposit and other intangibles 2 2 2 1 2 FDIC special assessme
Slide 38: Non-GAAP Financial Measures (Continued)
NON-GAAP FINANCIAL MEASURES (CONTINUED) In millions 1Q25 4Q24 3Q24 2Q24 1Q24 Return on Average Tangible Common Equity (Non-GAAP) Net earnings applicable to common $169 $200 $204 $190 $143 Adjustments, net of tax: Amortization of core deposit and other intangibles 1 1 1 1 1 (a) Net earnings applicabl
Slide 39: Zions Bancorporation
ZIONS BANCORPORATION zionsbancor poration.com
Zions Bancorporation, N.A. — Q1 2025 Earnings Presentation on 6ix