Executive Summary

Zions delivered EPS $1.48, up 8% YoY but down QoQ, with core operating leverage strong; EPS was negatively impacted by elevated credit provision and a $0.06/share CVA loss . Versus S&P Global consensus, EPS beat ($1.48 vs $1.394*), while revenue missed ($812M* vs $841M*) — a mixed headline set. Values retrieved from S&P Global.
Net interest margin expanded 11 bps QoQ to 3.28% (seventh consecutive quarter of expansion); efficiency ratio improved to 59.6% as revenue growth outpaced expense growth .
Credit was the primary overhang: $50M charge-off and $10M specific reserve tied to two related C&I loans with apparent irregularities; management emphasized this as an isolated incident and initiated legal actions to pursue guarantors .
Deposits (ex-brokered) grew 1.7% QoQ at period end; brokered deposits declined; cost of deposits edged down to 1.67% and total funding costs fell 5 bps QoQ .
Outlook (3Q26 vs 3Q25): management guides to slightly-to-moderately increasing loans, moderately increasing NII and adjusted fee income, and moderately increasing adjusted OpEx with expected positive operating leverage; board declared a $0.45 common dividend (up from $0.43 in Q2) .

What Went Well and What Went Wrong

What Went Well

Net interest margin expanded to 3.28% (+11 bps QoQ; +25 bps YoY), supported by earning asset mix, fixed-rate asset repricing, and lower funding costs .
Operating efficiency improved: adjusted PPNR up 11% QoQ and 18% YoY; efficiency ratio improved to 59.6% from 62.2% in Q2 and 62.5% a year ago .
Deposit trends constructive: period-end customer deposits up $1.2B QoQ; brokered deposits down; total funding costs declined to 1.92% .

Management quotes:

“We’re pleased with the Company’s core earnings… adjusted pre-provision net revenue grew 18% over the prior year period… tangible book value per share grew 17%” .
“Net interest margin expanded by 11 basis points to 3.28%… The efficiency ratio improved to 59.6%” .
“Total funding costs declined by five basis points during the quarter to 1.92%” .

What Went Wrong

One-off credit event: $50M charge-off and $10M reserve on two related C&I loans, raising net charge-offs to 0.37% annualized (vs 0.07% in Q2 and 0.02% in 3Q24) .
Net CVA loss of $11M reduced EPS by $0.06/share; methodology update and market changes were cited as drivers .
Spot loan balances contracted $531M QoQ, driven by runoff/paydowns in certain categories (e.g., NDFIs, CRE multifamily/office) despite solid production, tempering near-term loan growth .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Net Interest Income ($MM)	$620	$648	$672
Noninterest Income ($MM)	$172	$190	$189
Combined Revenue (TE NII + Noninterest, $MM)	$804	$851	$872
Diluted EPS ($)	$1.37	$1.63	$1.48
Net Earnings to Common ($MM)	$204	$243	$221
Net Interest Margin (%)	3.03%	3.17%	3.28%
Efficiency Ratio (%)	62.5%	62.2%	59.6%
Net Charge-offs / Loans (Annualized, %)	0.02%	0.07%	0.37%

Results vs S&P Global consensus (definitions follow S&P; revenue reflects S&P’s measure):

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
EPS Estimate ($)	1.167*	1.180*	1.307*	1.394*
EPS Actual ($)	1.37	1.13	1.63	1.48
Revenue Estimate ($MM)	779*	795*	811*	841*
Revenue Actual ($MM)	779*	777*	839*	812*

Values retrieved from S&P Global.
Note: EPS beat in Q3 2025 (1.48 vs 1.394*), while revenue missed (812* vs 841*). Q2 showed EPS and revenue beats; Q1 had slight EPS miss and revenue miss. Values retrieved from S&P Global.

Segment breakdown – Customer-related noninterest income:

Category ($MM)	Q3 2024	Q2 2025	Q3 2025
Commercial account fees	46	46	47
Card fees	24	24	24
Retail & business banking fees	18	19	19
Loan-related fees & income	17	19	20
Capital markets fees & income	25	28	24
Wealth management fees	14	14	14
Other customer-related fees	14	14	15
Total customer-related noninterest income	158	164	163
Adjusted customer-related noninterest income (ex-CVA)	161	164	174

Key KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
CET1 Ratio (%)	10.7%	11.0%	11.3%
Average Loans ($B)	58.7	60.5	60.8
Total Deposits (Period-end, $B)	75.7	73.8	74.9
Cost of Deposits (%)	2.14%	1.68%	1.67%
NPAs / Loans + OREO (%)	0.62%	0.51%	0.54%
Classified Loans / Loans (%)	3.55%	4.43%	4.00%
Tangible Book Value / Share ($)	$33.12	$36.81	$38.64

Non-GAAP and adjustments:

Net CVA loss: $11M (negative $0.06/share); Adjusted fee income excludes CVA; adjusted PPNR up 11% QoQ, 18% YoY .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Loan balances (period-end)	3Q26 vs 3Q25	Not previously quantified	Slightly to Moderately Increasing	Maintained upward bias
Net Interest Income	3Q26 vs 3Q25	Not previously quantified	Moderately Increasing	Maintained upward bias
Adjusted customer-related noninterest income	3Q26 vs 3Q25	Not previously quantified	Moderately Increasing (capital markets outsized)	Maintained upward bias
Adjusted noninterest expense	3Q26 vs 3Q25	Not previously quantified	Moderately Increasing (tech, marketing, revenue investments); positive operating leverage expected	Maintained upward bias
Fed funds assumptions	Late-2025 into 2026	N/A	Two 25 bp cuts in Oct/Dec 2025; 25 bp cuts in Mar/Jul 2026	New assumptions
Dividend per common share	Q4 2025	$0.43 (Q2)	$0.45 (declared Oct 31, 2025)	Raised

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025 & Q1 2025)	Current Period (Q3 2025)	Trend
NIM trajectory	NIM up to 3.17% in Q2; YoY expansion; optimism for H2 growth	NIM 3.28%, seventh consecutive quarter of expansion; long-term “~3.50% over time” reiterated with pacing caveats	Improving; pacing moderates in lower-rate scenarios
Credit quality & NDFI	Q1: NPAs stable at 0.51%, NCOs 0.11%; cautious macro (tariffs)	One-off $50M charge-off; $10M reserve; management stresses isolation; NDFI ~3% of loans; diversified	Temporary spike; underlying benign ex-event
Deposits & funding	Q2 avg deposits flat; Q3 period-end deposits +$1.1B; brokered down; total funding cost down 5 bps	Migration to noninterest-bearing products across affiliates; stability in NIB mix; reclass accretive but modest	Stabilizing and favorable mix
Capital & buybacks	Q2: strengthening capital; more optimistic H2	CET1 11.3%; buybacks contemplated when total capital incl. AOCI aligns with peers (~10% “central tendency”); 12+ months away	Building capacity; cautious timing
CRE leasing & exposures	Q1 cautious macro/tariffs; Q2 optimistic but watchful	Longer lease-up (MF/industrial) but filling; classified CRE down; low nonaccruals; disciplined concentrations	Gradual improvement; disciplined
Macro/tariffs	Q1 flagged tariff risks	Demand more macro-driven than rate-driven; modest impact of lower rates; watch recession risks	Mixed; cautious
Technology/digital	Ongoing investments; modern architecture	Higher tech spend expected; positive operating leverage pursued	Investing for growth
M&A stance	N/A	Preference for small, density-enhancing deals; sensitive to dilution; no compulsion	Opportunistic, conservative

Management Commentary

Harris Simmons (CEO): “Diluted earnings per share was $1.48 compared to $1.63 in the prior period and $1.37 in the year-ago period… adjusted pre-provision net revenue… improved 11% QoQ and 18% YoY” .
On credit event: “We view this as an isolated situation… legal action has been initiated… excluding this loss, remaining net charge-offs were very benign” .
CFO Ryan Richards: “Total funding costs declined by five basis points… period-end deposit balances grew by $1.1 billion… NIM expanded for the seventh consecutive quarter to 3.28%” .
On long-term NIM: “~3.50% is ultimately where we expect to land… not suggesting this happens in 12 months” .
On deposit reclass: “It is a reclass… slightly accretive to funding costs… enthusiastic about market receptivity” .
On outlook: “Positive operating leverage expected as revenue growth outpaces noninterest expense growth” .

Q&A Highlights

NDFI exposure and credit review: Management emphasized the event’s isolation, third-party review underway, local decisioning with centralized oversight, NDFI ~3% of loans and diversified (equipment leasing, capital calls, etc.) .
NII guide and fixed-rate repricing: Expect 2–3 bps lift in earning asset yields embedded; remix from securities to loans; assumptions include rate cuts and conservative deposit beta/migration .
Capital/buybacks: Considered when capital (incl. AOCI) aligns with peers (~10%); likely 12+ months away based on current projections .
Deposit strategy: Migration to noninterest-bearing across affiliates; stable NIB mix; focus on net new clients via marketing and product initiatives .
CRE: Longer lease-up times but improving; classified balances declining via payoffs/upgrades; low nonaccruals and delinquencies maintained .

Estimates Context

EPS: Zions beat consensus in Q3 2025 ($1.48 vs $1.394*), continued YoY growth despite credit provision headwind. Values retrieved from S&P Global.
Revenue: Zions missed Q3 2025 revenue consensus ($812M* vs $841M*). Note: S&P’s revenue measure may differ from company’s combined TE NII + noninterest ($872M) . Values retrieved from S&P Global.
Revisions: Capital markets fees (ex-CVA) +25% YoY; adjusted fee income +6% QoQ suggests estimate models may need to reflect stronger fee trends ex-CVA .

Key Takeaways for Investors

Core trends positive: EPS beat, NIM expansion, and operating leverage improved despite a one-off credit hit; watch for continued NIM pacing and deposit cost declines .
Credit event likely a transitory overhang; management asserts isolation and initiated recovery; ex-event, underlying charge-offs were 4 bps annualized — risk appears contained .
Fee resilience ex-CVA: Adjusted customer-related fees +6% QoQ and +8% YoY; capital markets, loan syndications, and swaps are growth drivers .
Funding mix improving: Brokered down, customer deposits up, total funding costs down — supportive of NII into 2026 under management’s scenarios .
Capital build: CET1 11.3%; tangible book up 17% YoY; buybacks unlikely near term until capital (incl. AOCI) aligns with peers — expect capital return later rather than sooner .
Guidance signals: Loans/NII/fees moderately increasing with continued tech and marketing investments; positive operating leverage targeted .
Trading lens: Near-term volatility tied to litigation/recovery headlines and CRE/NDFI scrutiny; medium-term thesis rests on NIM trajectory, deposit mix stability, and fee growth ex-CVA .

Appendix: Additional Data Points

Dividends: Board declared common dividend $0.45 per share (payable Nov 20, record Nov 13) and preferred dividend (payable Dec 15) .

CRE portfolio summary (22% of total loans; $13.5B): granular, diversified; low nonaccruals and delinquencies; disciplined concentrations; office nonaccruals 3.6% with charges limited; classified CRE down $143M QoQ .

Rate sensitivity: Latent NII up 8.0% in flat rates; emergent (implied cuts) reduces by 6.6% vs latent; combined +1.4% modeled; parallel shocks -1.9% to +4.7% (12m) — not guidance .

Non-GAAP reconciliations: Efficiency ratio and adjusted PPNR schedules provided .

ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/ (ZION)·Q3 2025 Earnings Summary