Zions' third-quarter profit rises 19% from a year earlier as credit losses fall to $3 million

Zions Bancorporation reported third-quarter 2026 net earnings of $262 million, or $1.78 per diluted share, against $221 million, or $1.48, a year earlier, as credit costs collapsed. The provision for credit losses swung to an $8 million benefit from $49 million of expense, and net charge-offs fell to $3 million from $56 million. Net earnings were 42% below the second quarter's $452 million, a period that carried a $215 million gain on the sale of Visa shares.

Zions filed the release as Exhibit 99.1 to a Form 8-K on October 19, 2026 and posted a supplemental slide deck before a call scheduled for 5:30 p.m. ET that day. Results are unaudited, and the capital ratios it prints are marked as estimates.

Credit losses shrink toward zero

The provision for credit losses swung to an $8 million benefit from $49 million of expense in the third quarter of 2025, and net charge-offs fell to $3 million from $56 million, or 0.02% of average loans annualized against 0.37%. Zions said the year-earlier figure included $50 million of charge-offs on revolving credit facilities to two related commercial borrowers. Nonperforming assets were $315 million, or 0.50% of loans and other real estate owned, down from $324 million and 0.54% a year earlier but up $17 million from June 30. Classified loans fell to $2.1 billion, or 3.40% of loans, from $2.4 billion and 4.00%. The allowance for credit losses thinned to $696 million, or 1.11% of loans, from 1.20%, on portfolio mix and lower commercial real estate reserves.

A Visa gain makes the second quarter the wrong yardstick

Sequentially, net earnings fell 42% from $452 million and diluted EPS from $3.05, a comparison the company itself adjusts. The second quarter carried $269 million of net securities gains, including a $215 million pre-tax gain on the sale of Visa Class B-1 shares worth $1.12 a share and a $37 million SBIC valuation gain worth $0.19. The third quarter's securities line was a separate $4 million net loss. Customer-related noninterest income, meanwhile, included a $10 million net credit valuation adjustment gain, largely inside capital markets fees, worth $0.05 a share. Excluding such items, adjusted pre-provision net revenue was $338 million, up 2% from $332 million in the second quarter and down 4% from $352 million a year earlier.

Deposits outrun loans and the margin narrows

Net interest income rose 2% to $684 million, but the net interest margin slipped to 3.23% from 3.28% as earning assets repriced lower. The cost of deposits improved to 1.59% from 1.67% year over year, yet rose from 1.48% in the second quarter, which Zions attributes partly to deposit mix and about three basis points of an accounting presentation change. Loans were $62.5 billion, up 4% from a year earlier and essentially unchanged from June 30; Simmons said "an increased pace of loan payoffs, combined with a highly competitive market, produced flat loan growth compared to the second quarter". Deposits reached $77.9 billion, up 4%, and customer deposits excluding brokered balances rose 5% to $74.5 billion, leaving the loan-to-deposit ratio at 80% from 81%. Short-term borrowings fell 76% from a year earlier to $843 million while long-term debt rose 64% to $2.4 billion after senior note issuance.

Buybacks restart while the efficiency ratio slips

Estimated CET1 capital was $8.3 billion, or 11.8% of risk-weighted assets, against 11.3% a year earlier, and tangible book value per common share rose 13% to $43.50. Zions repurchased 1.1 million shares for $75 million, having bought back none in the year-earlier quarter, and paid a $0.48 dividend against $0.45. The offset was cost: noninterest expense rose 5% from a year earlier to $553 million, or 6% on an adjusted basis to $549 million, on higher salaries, technology and professional fees. The efficiency ratio deteriorated to 61.9% from 59.6% a year ago, though it improved from 62.2% sequentially. The release does not size what remains under the buyback plan it cites.

A 2027 outlook and a call the same evening

The deck adds something the release does not: a numeric outlook for the third quarter of 2027 versus the third quarter of 2026, projecting net interest income growth of 8% to 12%, period-end loan growth of 2% to 4%, adjusted customer-related noninterest income growth of 6% to 9% and adjusted noninterest expense growth of 4% to 6%. Simmons tied the revenue side to rates, saying "we expect that our moderately asset-sensitive balance sheet should produce stronger net interest income in a higher rate environment". The release does not break out what the July 2026 Basis Multifamily Finance acquisition contributed; it added $229 million of goodwill and intangibles, lifting that balance to $1.31 billion from $1.09 billion. Management takes questions on a call at 5:30 p.m. ET on October 19, 2026.

The per-share gain came from credit rather than from revenue: adjusted pre-provision profit was below the year-earlier level while expenses grew faster than net interest income. Credit improvement is real, but the earnings base has not yet replaced what the margin and the cost line are taking out.