A month has gone by since the last earnings report for Zions (ZION Quick QuoteZION - Free Report) . Shares have added about 0.8% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Zions due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Zions' Q4 Earnings Beat Estimates on NII & Fee Income Growth

Zions’ fourth-quarter 2025 adjusted earnings per share of $1.75, which beat the Zacks Consensus Estimate of $1.57. Moreover, the bottom line surged 30.5% from the year-ago quarter.

Results were primarily aided by higher NII and non-interest income. Growth in loan and deposit balances further supported performance. However, a rise in non-interest expenses remained a headwind.

Results in the reported quarter excluded the positive impact of 6 cents per share from net unrealized gains on Small Business Investment Company (“SBIC”) investments (net of success fee accrual) and 5 cents per share from the FDIC special assessment accrual reversal. After considering these, net income attributable to its common shareholders (GAAP) was $262 million, up 31% year over year.

For full-year 2025, earnings of $6.01 per share beat the Zacks Consensus Estimate of $5.93. Moreover, the bottom line rose 21.4% from the year-ago period. We had projected earnings of $5.80 per share. Net income attributable to common shareholders was $895 million, up from $737 million a year ago.

Revenues & Expenses Rise

Net revenues (tax equivalent) were $902 million, up 8.4% year over year. Further, the top line beat the Zacks Consensus Estimate of $864.4 million.

For 2025, Net revenues (tax equivalent) were $3.43 billion, up 8.1% year over year. The top line beat the Zacks Consensus Estimate of $3.38 billion. We had projected the metric to be $3.32 billion.

NII was $683 million, up 8.9% from the prior-year quarter. The increase was mainly attributed to lower funding costs alongside a favorable mix in average interest-earning assets, reflecting growth in higher-yielding loans and a decline in lower-yielding money market investments and securities. Likewise, NIM expanded 26 basis points (bps) year over year to 3.31%. Our estimates for NII and NIM were $643.2 million and 3.17%, respectively.

Non-interest income was $208 million, up 7.8% year over year. The increase was driven by higher retail and business banking fees and other customer-related fees, partially offset by lower loan-related fees and income and capital market fees. We had projected non-interest income to be $185.8 million.

Adjusted non-interest expenses rose 7.6% year over year to $548 million. Our estimate for the metric was $542.6 million.

The adjusted efficiency ratio was 62.3%, relatively flat compared with 62.0% in the prior-year quarter. 

As of Dec. 31, 2025, net loans and leases held for investment were $60.2 billion, up 1% from the prior quarter. Total deposits were $75.6 billion, up 1% from the prior quarter. Our estimates for net loans and leases held for investment and total deposits were $60.6 billion and $78.4 billion, respectively.

Credit Quality: A Mixed Bag

The ratio of non-performing assets to loans and leases, as well as other real estate owned, was 0.52%, which expanded 2 bps from the prior-year quarter.

Net loan and lease charge-offs were $7 million in the reported quarter, significantly down from $36 million in the year-ago quarter. Provision for credit losses was $6 million compared with $41 million in the prior-year quarter.

Profitability & Capital Ratios

As of Dec. 31, 2025, the common equity tier 1 capital ratio was 11.5%, up from 10.9% in the prior-year quarter. The Tier 1 risk-based capital ratio was 11.6% compared with 11% a year ago, while the Tier 1 leverage ratio improved to 9% from 8.3% reported at the end of the year-ago quarter.

Return on average assets was 1.16% in the fourth quarter, up from 0.96% in the year-ago quarter. Return on average tangible common equity was 17.9%, up from 16% a year ago.

2026 Outlook

Period-end loan balances are expected to increase moderately on a year-over-year basis. The growth will be driven by an increase in commercial loans (mainly commercial & industrial (C&I) and owner-occupied) and commercial real estate loans, while consumer loans are expected to be relatively stable. Further, management expects commercial real estate classified balances to continue to decline due to payoffs and upgrades.

NII is expected to witness a moderate year-over-year increase, primarily driven by earning asset remix, loan and deposit growth, and fixed-rate asset repricing. The company assumes two 25 bp interest rate cut this year.

Customer-related adjusted non-interest income is anticipated to rise moderately from the prior year, driven by increased customer activity and new client acquisition, with capital markets contributing in an outsized way, as well as higher loan-related fees.

Adjusted non-interest expenses are projected to witness a moderate increase year over year. Technology costs, increased marketing expense and continued investments in revenue-generating businesses are expected to put pressure on non-interest expenses.

Management expects to have positive operating leverage.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in estimates revision.

VGM Scores

Currently, Zions has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Zions has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Zions belongs to the Zacks Banks - West industry. Another stock from the same industry, WaFd (WAFD Quick QuoteWAFD - Free Report) , has gained 1.5% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

WaFd reported revenues of $191.37 million in the last reported quarter, representing a year-over-year change of +11.8%. EPS of $0.75 for the same period compares with $0.62 a year ago.

For the current quarter, WaFd is expected to post earnings of $0.75 per share, indicating a change of +15.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.5% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for WaFd. Also, the stock has a VGM Score of D.