Zions Bancorporation (NasdaqGS:ZION) Conference Transcript

Summary of Zions Bancorporation Conference Call (December 09, 2025) Company Overview - Company: Zions Bancorporation (NasdaqGS: ZION) - Industry: Banking Key Points and Arguments Financial Performance - Zions Bancorporation reported strong top-line growth driven by margin expansion and increased fee income while controlling expenses [2][4] - The bank's credit performance remains among the best in the industry despite some noise in Q3 regarding credit [2][4] Economic Environment - The CEO expressed optimism about the bank's positioning in the current economic environment, noting that business owners have adapted to changes such as tariffs and government shutdowns [5][6] - General sentiment among clients is reasonably upbeat, with consistent economic activity across small and large businesses [7] Loan and Deposit Growth - Loan growth is expected to improve slightly to moderately, particularly in commercial loans, with a record year in SBA 7(a) loans [10][11] - Deposit growth is viewed as variable, with a focus on stabilizing the demand deposit base [16][17] Commercial Real Estate (CRE) - The bank has strategically reduced its exposure to commercial real estate from about 33% to 22% of the portfolio, aiming for measured growth in this asset class [13][14] - The CEO believes that the current strategy has led to better credit quality and lower realized losses [14] Net Interest Margin and Funding Costs - The net interest margin has expanded for seven consecutive quarters, increasing by nearly 40 basis points [15] - The bank is working to improve its funding costs and deposit costs relative to peers, aiming to regain a competitive advantage [18][19] Growth Initiatives - Zions is focusing on growth in capital markets, wealth management, and payments, with expectations for significant growth in these areas by 2026 [24][25] - The bank plans to introduce new deposit-based products for small businesses, enhancing its offerings [27] Technology and Investment - The bank has made significant investments in technology and systems, including a core loan deposit system overhaul, which is expected to facilitate faster growth [32][33] - Future investments will focus on marketing and hiring skilled producers to drive growth [33][34] Operating Leverage and Capital Allocation - Positive operating leverage is anticipated to continue, with expectations of over 100 basis points in the coming year [36] - The bank aims to build capital to ensure stability during economic downturns, with a focus on thoughtful capital allocation [39][40] Regulatory Environment - The CEO noted a shift in regulatory attitudes under the new administration, which may ease some previous constraints on banking operations [50][51] Market Positioning - Zions Bancorporation emphasizes its unique focus on small and mid-sized businesses, supported by a strong deposit franchise and relationships with clients [56] Additional Important Insights - The bank's charge-offs in Q3 were low at four basis points annualized, indicating strong credit management [48] - The CEO is open to discussing medium-term financial targets in the future, reflecting a shift towards more structured goal-setting [52][54] This summary encapsulates the key insights from the conference call, highlighting Zions Bancorporation's financial performance, strategic initiatives, and outlook for the future.