Summary of the Conference Call Company and Industry Overview - The conference call involved Zion, a bank focused on serving small and medium-sized businesses across various states in the U.S. [4][10] - The discussion highlighted the impact of tariffs and economic uncertainty on customer sentiment, particularly among small and medium-sized enterprises (SMEs) [4][5]. Key Points and Arguments Customer Sentiment and Economic Environment - Customer sentiment remains uncertain due to ongoing tariff threats, affecting approximately 65% to 70% of Zion's revenue from SMEs [4][5]. - SMEs are likely to increase inventory and shift supply chains back to the U.S. as a precaution against tariffs, which could positively influence loan growth [6][8]. - Large companies are hesitant to commit to long-term capital investments due to economic volatility and uncertainty [7][8]. Loan Growth and Business Strategy - Zion's loan growth is currently moderate, with a focus on commercial lending, which constitutes about 50% of the loan portfolio [16][17]. - The bank aims to increase its Small Business Administration (SBA) lending, targeting 1,500 loans this year, up from 700, with a goal of reaching 3,000 loans in the next 12 to 18 months [18][19][20]. - The bank's strategy includes deepening relationships with existing customers, as 70% of small businesses do not currently borrow from banks [23][25]. Competition and Market Position - Zion faces competition from both regional and large banks, as well as private credit providers. However, the bank is confident in its ability to compete based on strong customer relationships and service [33][36][40]. - The bank's competitive advantage lies in its relationship management, which is supported by high customer satisfaction scores from Greenwich Research [46][47]. Deposit and Interest Income Management - Zion has experienced five consecutive quarters of net interest margin (NIM) expansion, attributed to a strong deposit franchise and effective management of deposit costs [50][51]. - The bank's cost of deposits is among the lowest in the industry, with a significant portion being non-interest-bearing deposits [51][52]. - The bank anticipates further reductions in deposit costs as time deposits roll over and stabilize [55][56]. Fee Income and Growth Opportunities - Zion's fee income is diversified, with treasury management services contributing about 30% of total fees. The bank expects moderate growth in this area [61][62]. - The capital markets business has shown significant growth, with revenues increasing from $70 million to $107 million, indicating strong potential for future revenue generation [64][66]. Credit Quality and Risk Management - Zion has maintained a low net charge-off ratio of about 10 basis points, significantly better than many peers, due to strong underwriting practices [68][69]. - The bank's commercial real estate (CRE) portfolio has shown resilience, with negligible losses despite rising classified loans [71][73]. Capital Management - Zion is focused on maintaining a strong Common Equity Tier 1 (CET1) ratio, with transparency regarding the impact of accumulated other comprehensive income (AOCI) on capital [75][76]. - The bank is well-positioned to meet regulatory requirements and maintain capital buffers [77][79]. Additional Important Insights - The bank's modernization efforts, including a core transformation project, have allowed bankers to focus more on client relationships rather than internal systems [28][30]. - Zion's proactive marketing strategy aims to enhance its small business initiatives and overall fee income growth [32][66]. This summary encapsulates the key insights and strategic directions discussed during the conference call, providing a comprehensive overview of Zion's current position and future outlook in the banking industry.

Core Viewpoint - Zions Bancorporation's shares have experienced volatility similar to the broader banking industry but have largely recovered from significant losses incurred earlier in the year [1]. Group 1: Company Performance - The company has shown resilience in its stock performance, recovering from heavy losses following market fluctuations [1]. Group 2: Investment Strategy - A long-term, buy-and-hold investment approach is favored, particularly for stocks that can consistently deliver high-quality earnings, often found in the dividend and income sectors [1].

Group 1 - Zions Bancorporation's shares have increased by 9% over the past year, aligning with market performance, but have significantly declined from their peak levels [1] - Regional banks were among the biggest beneficiaries following President Trump's policies [1] Group 2 - The article emphasizes the importance of macro views and stock-specific turnaround stories for achieving outsized returns with a favorable risk/reward profile [1]

Company Overview - Zions Bancorporation, N.A. is a leading financial services company with approximately $89 billion in total assets as of December 31, 2024 [2] - The company reported annual net revenue of $3.1 billion in 2024 [2] - Zions operates in 11 western states under local management teams and distinct brands, including Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming [2] Industry Position - Zions Bancorporation is recognized for its excellence in small- and middle-market banking, consistently receiving national and state-wide customer survey awards [2] - The company is also a leader in public finance advisory services and Small Business Administration lending [2] - Zions is included in the S&P MidCap 400 and NASDAQ Financial 100 indices, highlighting its significant presence in the financial sector [2] Upcoming Events - Scott McLean, President and COO of Zions Bancorporation, will present at the Morgan Stanley US Financials Conference on June 10th at 12:15 pm Eastern [1] - An audio webcast of the session will be available on the Zions Bancorporation website, with a replay accessible after the event [1]

Financial Performance - Net earnings applicable to common shareholders increased, with diluted EPS rising to $1.13 from $0.96 in the first quarter of 2024, reflecting a growth of approximately 18%[19]. - Net income for the period rose to $170 million in Q1 2025, up from $153 million in Q1 2024, marking an increase of 11.1%[186]. - Basic earnings per common share increased to $1.13 for Q1 2025, compared to $0.96 for Q1 2024, representing an increase of 17.7%[185]. - Comprehensive income for the period was $300 million in Q1 2025, compared to $236 million in Q1 2024, reflecting a growth of 27.1%[186]. - Net cash provided by operating activities decreased to $179 million in Q1 2025 from $261 million in Q1 2024, a decline of 31.4%[188]. Revenue and Income Sources - Net interest income grew by $38 million, or 6%, compared to the prior year, driven by lower funding costs and a favorable mix in average interest-earning assets[20]. - Customer-related noninterest income increased by $6 million, or 4%, driven by higher loan-related fees and improved capital markets income[23]. - Noninterest income increased to $171 million for the three months ended March 31, 2025, compared to $156 million in the same period of 2024, an increase of 9.6%[185]. - Noninterest expense increased by $12 million, or 2%, mainly due to higher salaries and technology expenses[23]. Loan and Deposit Growth - Total loans and leases increased by $1.8 billion, or 3%, primarily due to growth in the consumer 1-4 family residential mortgage and commercial and industrial loan portfolios[20]. - Total deposits rose by $1.5 billion, or 2%, with customer deposits (excluding brokered deposits) totaling $70.9 billion, compared to $69.9 billion[20]. - Average loans and leases increased by $1.7 billion, or 3%, to $59.6 billion, primarily due to growth in consumer and commercial loans[35]. - Average deposits increased by $1.5 billion, or 2%, to $74.9 billion, with interest-bearing deposits rising by $2.9 billion, or 6%[39]. Credit Quality and Loss Provisions - The provision for credit losses was $18 million, an increase from $13 million in the prior year period, reflecting a cautious approach to potential credit risks[20]. - Nonperforming assets totaled $307 million, or 0.51% of total loans and leases, up from $254 million, or 0.44% in the prior year[23]. - The allowance for credit losses (ACL) was $743 million, with a ratio of ACL to total loans and leases at 1.24%, down from 1.27% a year earlier[47]. - Classified loans totaled $2.9 billion, or 4.82% of total loans and leases, up from $966 million, or 1.66% in the prior year[23]. Capital and Equity - Total shareholders' equity increased by $203 million, or 3%, to $6.3 billion at March 31, 2025, compared to $6.1 billion at December 31, 2024[166]. - Common equity tier 1 capital increased by 7% to $7.4 billion compared to $6.9 billion in the prior year period[175]. - The common equity tier 1 capital ratio improved to 10.8%, up from 10.4%[175]. - Tangible book value per common share rose to $34.95, compared to $29.34 in the previous year[181]. Efficiency and Cost Management - The efficiency ratio improved, indicating better cost management relative to revenue generation[19]. - Adjusted noninterest expense increased by $22 million, or 4%, with an efficiency ratio of 66.6%, down from 67.9%[61]. - The efficiency ratio for the three months ended March 31, 2025, was 66.6%, compared to 62.0% in the previous quarter[183]. Investment and Securities - The amortized cost of total investment securities decreased by $216 million, or 1%, from December 31, 2024, primarily due to principal reductions[70]. - The carrying value of held-to-maturity investment securities was $9,481 million with an estimated fair value of $9,400 million as of March 31, 2025[204]. - Total assets measured at fair value as of March 31, 2025, amounted to $10,593 million, with $1,123 million classified as Level 1[198]. Tax and Regulatory Compliance - An increase of $16 million in income tax expense negatively impacted EPS by $0.11 per share due to a revaluation of deferred tax assets from newly enacted Utah state tax legislation[20]. - The effective tax rate rose to 28.9% for Q1 2025, up from 24.6% in Q1 2024, largely due to new Utah state tax legislation[64]. - The company exceeded all capital adequacy requirements under the Basel III capital rules as of March 31, 2025[173]. Market and Economic Conditions - The company continues to manage interest rate risk through strategies such as interest rate swaps and investments in fixed-rate securities, adapting to changes in customer deposit behavior due to the higher interest rate environment[136][139]. - Earnings at Risk (EaR) for a +200 bps parallel shift in rates is estimated at 7.6% as of March 31, 2025, compared to 8.7% for December 31, 2024[144]. - Economic Value of Equity (EVE) is projected to decrease by 5.9% under a +200 bps parallel shift in rates as of March 31, 2025[144].

Financial Data and Key Metrics Changes - The company reported a 15% increase in net income and a 14% increase in earnings per share for FY 2024 [20] - Revenue remained relatively flat, with expenses increasing by about 2%, leading to a 3% decline in adjusted pre-provision net revenue [20] - Return on assets improved from 77 basis points in the prior year to 88 basis points in FY 2024 [20] - The efficiency ratio increased due to flat revenue and higher expenses, while charge-offs and credit quality remained strong at 10 basis points, significantly better than the industry average [21] Business Line Data and Key Metrics Changes - The bank's deposit franchise showed strong performance, with average non-interest bearing deposits as a percentage of total deposits higher than the top quartile in the industry [21] - Credit quality remained robust, with net loan losses staying very low, better than the top quartile [22] - The commercial real estate portfolio grew at a disciplined rate, with loss rates close to zero over the past five years [24] Market Data and Key Metrics Changes - The bank's capital position is about the median of its peer group, expected to strengthen as depreciation in the securities portfolio accretes back into capital over time [26] - The bank has consistently ranked among the best in customer relationships, receiving numerous awards since 2009 [27] Company Strategy and Development Direction - The company focuses on serving local communities and maintaining strong credit quality, with a particular emphasis on middle-market businesses [19] - The management is closely monitoring the economic environment, especially regarding tariffs and potential recession impacts, while aiming to support customers through challenging times [28] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the year ahead despite concerns regarding the economy and potential impacts from tariffs [28] - The company aims to maintain its strong credit culture to weather any economic challenges that may arise [23] Other Important Information - The bank's performance in FY 2024 reflected a recovery from the previous year's challenges, including the impact of bank failures on funding costs and net interest margins [20] - The bank's management structure is locally oriented, enhancing its ability to serve community needs effectively [19] Q&A Session Summary Question: What is the outlook for the commercial real estate portfolio? - Management noted that while there are concerns in the commercial real estate sector, particularly in office and multifamily segments, they do not anticipate material losses from their portfolio, which has been managed conservatively [24] Question: How does the bank plan to address potential economic downturns? - The bank intends to stay close to its customers and provide support during challenging times, leveraging its strong credit culture to navigate uncertainties [28] Question: What are the results of the recent shareholder votes? - All director nominees received over 97% approval, the appointment of Ernst and Young as auditors was approved by approximately 98%, and the executive compensation resolution received about 95% approval [30][31]

Core Viewpoint - Vectra Bank Colorado has promoted Symone Massey to Market President in Durango, highlighting her extensive experience and commitment to local business growth [1][2]. Company Overview - Vectra Bank Colorado has assets totaling $4 billion and is part of the Zions Bancorporation family, serving small to middle-market and corporate clients across 34 locations in Colorado and one in Farmington, New Mexico [5]. Leadership Experience - Symone Massey has over 25 years of experience in business lending and commercial banking, previously serving as a top-performing Business Banker in Grand Junction [2]. - She has a proven track record in building high-performing teams, driving market growth, and fostering a client-focused culture [2]. Community Engagement - Massey aims to connect with the local business community in Durango, focusing on building lasting partnerships that positively impact the region [3]. - She has actively participated in various nonprofit and civic organizations, promoting initiatives that strengthen local economies [4].

Core Viewpoint - Vectra Bank Colorado announces the retirement of President and CEO Bruce Alexander after 25 years, highlighting his significant contributions to the bank's growth and community involvement [1][4]. Company Overview - Vectra Bank Colorado has grown from $1 billion in assets to $4 billion under Bruce Alexander's leadership, demonstrating exceptional growth and resilience through various economic challenges [1][5]. - The bank operates 34 locations in Colorado and one in Farmington, New Mexico, focusing on small, middle-market, and corporate business clients [5]. Leadership Transition - Bruce Alexander will assist part-time during the transition to ensure a smooth handover to his successor, with Zions Bancorporation initiating the search for a new CEO [3][4]. - Alexander's legacy is expected to continue influencing the bank's direction and community engagement [4]. Community Involvement - Throughout his career, Alexander has been actively involved in community service and economic development, serving on various boards and commissions [2].

Core Viewpoint - Zions Bancorporation reported strong first-quarter 2025 adjusted earnings per share (EPS) of $1.24, exceeding expectations and showing a significant year-over-year increase of 29.2% [1] Financial Performance - The increase in earnings was primarily driven by higher net interest income (NII) and non-interest income, alongside an increase in loans [2] - Net revenues (tax equivalent) reached $795 million, a 7.1% increase year-over-year, although it fell short of the Zacks Consensus Estimate of $808.3 million [4] - NII was reported at $624 million, up 6.5%, attributed to lower funding costs and a favorable mix in average interest-earning assets, with a net interest margin (NIM) expanding by 16 basis points to 3.10% [4] - Non-interest income rose by 9.6% to $171 million, surpassing projections [5] - Adjusted non-interest expenses increased by 4.3% to $533 million, slightly below estimates, with an adjusted efficiency ratio of 66.6%, indicating improved profitability [5] Loan and Deposit Trends - As of March 31, 2025, net loans and leases held for investment were $59.2 billion, reflecting a 1% increase from the previous quarter, while total deposits decreased marginally to $76 billion [6] Credit Quality - The ratio of non-performing assets to loans and leases increased by 7 basis points year-over-year to 0.51%, with net loan and lease charge-offs rising to $16 million from $6 million in the prior-year quarter [7] - Provision for credit losses was $18 million, marking a 38.5% increase from the year-ago quarter [7] Capital and Profitability Ratios - The Tier 1 leverage ratio remained stable at 8.4%, while the common equity tier 1 capital ratio improved to 10.8% from 10.4% year-over-year [8] - The tier 1 risk-based capital ratio decreased to 10.9% from 11% in the prior-year quarter [8] - Return on average assets increased to 0.77% from 0.70%, while return on average tangible common equity slightly decreased to 13.4% from 13.7% [9] Future Outlook - The company’s rising loan demand and improving fee income, along with higher interest rates, are positive indicators for future performance, although increasing operating expenses and high funding costs present challenges [11]

Financial Data and Key Metrics Changes - Net earnings for Q1 2025 were $169 million or $1.13 per share, representing an 18% improvement year-over-year [14] - Net interest margin increased for the fifth consecutive quarter to 3.10%, up from 3.05% in the previous quarter [15] - Adjusted pre-provision net revenue (PPNR) was $267 million, a 10% increase from $242 million a year ago [16] - Efficiency ratio improved compared to last year, though it was seasonally higher [17] - Average loans grew modestly by 0.5% on a linked-quarter basis [18] Business Line Data and Key Metrics Changes - Customer-related income was $158 million, a decrease of 10% linked-quarter but a 4% increase year-over-year [27] - Adjusted non-interest expenses increased by $24 million to $533 million, largely due to seasonality [30] - Average loans increased by 3% compared to the year-ago period [33] - Total average deposits declined by 1.9% due to seasonal outflows [34] Market Data and Key Metrics Changes - Non-interest-bearing deposits remained stable at 33% of total deposits [17] - The average cost of interest-bearing deposits decreased by 26 basis points compared to the previous quarter [15] - The cost of deposits declined by 17 basis points to 1.76% [35] Company Strategy and Development Direction - The company aims to build an AI-enabled culture and is focused on managing risk and uncertainty while improving customer experiences [11][12] - The acquisition of four branches in California added approximately $630 million in deposits and $420 million in loans, enhancing market share in Southern California [13] - The company is committed to maintaining positive operating leverage and improved efficiency as revenue growth outpaces expense pressures [51] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about economic uncertainty affecting loan growth and business decisions [9][60] - The outlook for loan growth is expected to be stable to slightly increasing, with commercial loans leading growth while mortgages and commercial real estate may decline [33] - Management noted that the current economic environment is challenging for forecasting, particularly regarding trade policies and tariffs [50][64] Other Important Information - The common equity Tier 1 ratio was 10.8%, indicating a strong capital position [49] - The company expects to see some stabilization in credit quality, with manageable realized losses [44] Q&A Session Summary Question: Client sentiment in the middle market and small business sector - Management noted that businesses are grappling with uncertainty regarding trade policies, which is affecting their willingness to invest and build inventories [56][60] Question: Guidance on net interest income and loan growth - Management indicated that a reasonable amount of net interest income guidance is baked in, but loan growth may be tepid due to uncertainty [62][64] Question: Loan growth demand and pipeline erosion - Management observed slower demand in commercial and industrial loans due to uncertainty, while commercial real estate activity is increasing [69] Question: Expense management in a weaker revenue environment - Management confirmed that they are focused on managing expenses and have already reduced headcount by about 3% [83] Question: Customer-related fee income expectations - Management expects customer-related fee income to stabilize, with treasury management being a significant contributor [91][96] Question: Share repurchase plans and capital management - Management stated that they are considering capital management strategies, including share repurchases, while maintaining a focus on organic growth [100][102] Question: Deposit pricing trends and future expectations - Management indicated that there is still room to lower deposit pricing, depending on market conditions and Fed actions [112] Question: Monitoring specific loan portfolios for tariff exposure - Management is closely watching sectors like trucking and transportation for potential impacts from tariffs [130]