Why Is Zions (ZION) Down 6.4% Since Last Earnings Report?

Core Viewpoint - Zions Bancorporation's recent earnings report shows a positive trend in adjusted earnings per share and net interest income, despite challenges in loan balances and rising expenses [3][5][8]. Financial Performance - Adjusted earnings per share for Q3 2025 were $1.54, exceeding the Zacks Consensus Estimate of $1.40, and reflecting a 12.4% increase year-over-year [3]. - Net revenues reached $861 million, up 8.7% year-over-year, surpassing the Zacks Consensus Estimate of $845.5 million [5]. - Net interest income (NII) was $672 million, an increase of 8.4%, attributed to lower funding costs and a favorable mix in interest-earning assets [5]. - Non-interest income rose 9.9% to $189 million, driven by increases in most components except capital markets fees [6]. Expenses and Efficiency - Adjusted non-interest expenses increased by 4.2% to $520 million, with an adjusted efficiency ratio of 59.6%, down from 62.5% in the prior year, indicating improved profitability [7]. - The company recorded net loan and lease charge-offs of $56 million, significantly up from $3 million in the prior-year quarter, with provisions for credit losses rising to $49 million [9]. Credit Quality and Capital Ratios - The ratio of non-performing assets to loans and leases decreased by 8 basis points year-over-year to 0.54% [9]. - As of September 30, 2025, the Tier 1 leverage ratio was 8.8%, and the common equity tier 1 capital ratio was 11.3%, both showing improvement from the previous year [10]. Outlook - Management anticipates a marginal year-over-year increase in period-end loan balances, driven by commercial loans, while expecting a decline in commercial real estate classified balances [12]. - NII is projected to see moderate growth, supported by earning asset remix and loan and deposit growth [13]. - Customer-related non-interest income is expected to rise moderately due to increased customer activity and new client acquisition [14]. - Adjusted non-interest expenses are forecasted to increase moderately, influenced by technology costs and marketing expenses [15]. Market Reaction and Estimates - Since the earnings release, there has been a 7.4% upward trend in consensus estimates for the stock [16]. - Zions has a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [18].