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Zions Q1 Earnings Beat on Higher NII & Fee Income, Provision Benefit
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Key Takeaways
ZION's Q1 EPS of $1.56 beats estimates, rising 38% year over year on higher NII and fee income.
NII rose 6% and NIM expanded to 3.27%, driven by lower funding costs and asset mix shift.
Credit quality improved with lower charge-offs and a provision benefit, while expenses climbed 4.7%.
Zions Bancorporation (ZION - Free Report) reported first-quarter 2026 earnings of $1.56 per share, which beat the Zacks Consensus Estimate of $1.43. Moreover, the bottom line surged 38% from the year-ago quarter.
Results were primarily aided by higher net interest income (NII) and growth in fee-based income. Higher loan and deposit balances, along with a provision benefit, provided additional support. However, a rise in non-interest expenses was a headwind.
Net income attributable to its common shareholders (GAAP) was $232 million, up 37.3% year over year. We had projected the metric to be $205.6 million.
Zions’ Revenues & Expenses Rise
Net revenues (taxable-equivalent) were approximately $860 million, up 6.7% year over year. The top line missed the Zacks Consensus Estimate of $862 million.
NII was $662 million, up 6% from the prior-year quarter. The increase was mainly driven by lower funding costs and a favorable mix of earning assets. Net interest margin (NIM) expanded 17 basis points (bps) year over year to 3.27%. Our estimates for NII and NIM were $672.8 million and 3.32%, respectively.
Non-interest income was $187 million, up 9% year over year. The rise was driven by an increase in almost all the components except card fees. We had projected non-interest income to be $170.7 million.
Adjusted non-interest expenses were $558 million, up 4.7% year over year. Our estimate for the metric was $537.9 million. The adjusted efficiency ratio improved to 65.0% from 66.6% in the prior-year quarter. A decline in the efficiency ratio indicates an increase in profitability.
Zion’s Loans & Deposits Increase
As of March 31, 2026, net loans and leases held for investment were $60.6 billion, up marginally from the prior quarter. Total deposits were $76.9 billion, up 1.7% from the prior quarter. Our estimates for net loans and leases held for investment and total deposits were $61.1 billion and $76.3 billion, respectively.
ZION’s Credit Quality Improves
The ratio of non-performing assets to total loans and leases and other real estate owned declined to 0.48% from 0.51% in the year-ago quarter.
Net loan and lease charge-offs were $4 million, down significantly from $16 million in the prior-year quarter. In the reported quarter, the company recorded a $7 million benefit from provision for credit losses against a $18 million provision expense in the prior-year quarter.
Strong Capital & Profitability Ratios for Zions
As of March 31, 2026, the common equity tier 1 (CET1) capital ratio was 11.5%, up from 10.8% in the prior-year quarter. The Tier 1 risk-based capital ratio was 11.6% compared with 10.9% a year ago, while the Tier 1 leverage ratio improved to 9.1% from 8.4% reported at the end of the year-ago quarter.
Return on average assets was 1.05%, up from 0.77% in the year-ago quarter. Return on average tangible common equity was 15.5%, up from 13.4% in the prior-year quarter.
ZION’s Share Repurchase Update
During the quarter, the company repurchased 1.3 million shares for $77 million.
Our Take on ZION
Zions’ modest loan growth, improving NII, solid fee income growth and strengthening deposit base are encouraging. However, elevated expenses and significant exposure to commercial loans remain key concerns.
Zions Bancorporation, N.A. Price, Consensus and EPS Surprise
KeyCorp’s (KEY - Free Report) first-quarter 2026 earnings from continuing operations of 44 cents per share outpaced the Zacks Consensus Estimate of 41 cents. The bottom line reflected a 33.3% rise from the prior-year quarter.
KEY’s results primarily benefited from higher NII and non-interest income. Higher average loan balances, along with lower provisions, were other tailwinds. However, higher expenses hurt the results to some extent.
M&T Bank Corporation (MTB - Free Report) reported first-quarter 2026 net operating earnings per share of $4.18, which beat the Zacks Consensus Estimate of $4.02. The bottom line compared favorably with earnings of $3.38 per share in the year-ago quarter.
Results were aided by higher NII and a rise in non-interest income on a year-over-year basis, along with modest loan growth. However, a decline in deposits, higher provisions for credit losses, and elevated expenses acted as headwinds for MTB.
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Zions Q1 Earnings Beat on Higher NII & Fee Income, Provision Benefit
Key Takeaways
Zions Bancorporation (ZION - Free Report) reported first-quarter 2026 earnings of $1.56 per share, which beat the Zacks Consensus Estimate of $1.43. Moreover, the bottom line surged 38% from the year-ago quarter.
Results were primarily aided by higher net interest income (NII) and growth in fee-based income. Higher loan and deposit balances, along with a provision benefit, provided additional support. However, a rise in non-interest expenses was a headwind.
Net income attributable to its common shareholders (GAAP) was $232 million, up 37.3% year over year. We had projected the metric to be $205.6 million.
Zions’ Revenues & Expenses Rise
Net revenues (taxable-equivalent) were approximately $860 million, up 6.7% year over year. The top line missed the Zacks Consensus Estimate of $862 million.
NII was $662 million, up 6% from the prior-year quarter. The increase was mainly driven by lower funding costs and a favorable mix of earning assets. Net interest margin (NIM) expanded 17 basis points (bps) year over year to 3.27%. Our estimates for NII and NIM were $672.8 million and 3.32%, respectively.
Non-interest income was $187 million, up 9% year over year. The rise was driven by an increase in almost all the components except card fees. We had projected non-interest income to be $170.7 million.
Adjusted non-interest expenses were $558 million, up 4.7% year over year. Our estimate for the metric was $537.9 million.
The adjusted efficiency ratio improved to 65.0% from 66.6% in the prior-year quarter. A decline in the efficiency ratio indicates an increase in profitability.
Zion’s Loans & Deposits Increase
As of March 31, 2026, net loans and leases held for investment were $60.6 billion, up marginally from the prior quarter. Total deposits were $76.9 billion, up 1.7% from the prior quarter. Our estimates for net loans and leases held for investment and total deposits were $61.1 billion and $76.3 billion, respectively.
ZION’s Credit Quality Improves
The ratio of non-performing assets to total loans and leases and other real estate owned declined to 0.48% from 0.51% in the year-ago quarter.
Net loan and lease charge-offs were $4 million, down significantly from $16 million in the prior-year quarter. In the reported quarter, the company recorded a $7 million benefit from provision for credit losses against a $18 million provision expense in the prior-year quarter.
Strong Capital & Profitability Ratios for Zions
As of March 31, 2026, the common equity tier 1 (CET1) capital ratio was 11.5%, up from 10.8% in the prior-year quarter. The Tier 1 risk-based capital ratio was 11.6% compared with 10.9% a year ago, while the Tier 1 leverage ratio improved to 9.1% from 8.4% reported at the end of the year-ago quarter.
Return on average assets was 1.05%, up from 0.77% in the year-ago quarter. Return on average tangible common equity was 15.5%, up from 13.4% in the prior-year quarter.
ZION’s Share Repurchase Update
During the quarter, the company repurchased 1.3 million shares for $77 million.
Our Take on ZION
Zions’ modest loan growth, improving NII, solid fee income growth and strengthening deposit base are encouraging. However, elevated expenses and significant exposure to commercial loans remain key concerns.
Zions Bancorporation, N.A. Price, Consensus and EPS Surprise
Zions Bancorporation, N.A. price-consensus-eps-surprise-chart | Zions Bancorporation, N.A. Quote
Currently, Zions carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
KeyCorp’s (KEY - Free Report) first-quarter 2026 earnings from continuing operations of 44 cents per share outpaced the Zacks Consensus Estimate of 41 cents. The bottom line reflected a 33.3% rise from the prior-year quarter.
KEY’s results primarily benefited from higher NII and non-interest income. Higher average loan balances, along with lower provisions, were other tailwinds. However, higher expenses hurt the results to some extent.
M&T Bank Corporation (MTB - Free Report) reported first-quarter 2026 net operating earnings per share of $4.18, which beat the Zacks Consensus Estimate of $4.02. The bottom line compared favorably with earnings of $3.38 per share in the year-ago quarter.
Results were aided by higher NII and a rise in non-interest income on a year-over-year basis, along with modest loan growth. However, a decline in deposits, higher provisions for credit losses, and elevated expenses acted as headwinds for MTB.