Zions Bancorporation NA Q1 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Manan Gosalia - Morgan Stanley - Analyst : Hi, good afternoon. Harris, I totally hear you on the opening limerick. It is fairly difficult to prognosticate here. But I was hoping you could give us some more color on what you're hearing on the ground from clients. What are you seeing from middle market and small business customers over the past few weeks in terms of sentiments?

Question: Manan Gosalia - Morgan Stanley - Analyst : I appreciate that. Maybe as a follow-up to that, in terms of your net interest income guide is slightly to moderately increasing. How much of that risk is baked in? And can you frame the risk around that NII guide? And how much is already locked in and how much do you need loan growth to pick up in order to achieve that?

Question: John Pancari - Evercore ISI - Analyst : Good afternoon. I wanted to see if you can give us a little bit more color on loan growth, what you're seeing in terms of demand. Are you seeing any weakening in the pipeline, any erosion in the pipeline just given the uncertainty that you discussed? Are you seeing any areas of strength at all? And I know you kind of just alluded to it, but what do you think brings back some of the appetite to draw down here?

Question: John Pancari - Evercore ISI - Analyst : Okay. All right, thank you. And then separately, actually, on credit, it's good to see stability in the classified assets after the increase for a few quarters in a row there. But we did see the 30 to 89 day pass-throughs increase pretty sharply. Can you give us just a little bit of an update what drove that? And what are you seeing on the credit front? Any signs of incremental weakening in C&I credit to take note in? And maybe discuss your confidence in the adequacy of the reserve here? Thanks.

Question: Bernard Von-Gizycki - Deutsche Bank - Analyst : Yeah. Hi, good afternoon. Just wanted to follow up. If the revenue environment comes in weaker than expected, are there any expenses that can be pulled back or investment slowed kind of rightsize the expense base to maintain that positive OpEx outlook?

Question: Bernard Von-Gizycki - Deutsche Bank - Analyst : I appreciate that. Maybe just a follow-up on the customer-related fee income. Obviously, the cap market seems to be the biggest swing on the outlook given the recent uncertainty versus last quarter. It seems to be maybe a kind of an outsized contributor. Just maybe on the other parts in customer fee income, can you just walk us through any expectations there? Anything to be mindful of, whether it's a little bit lower or better? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 21, 2025 / 9:30PM, ZION.OQ - Q1 2025 Zions Bancorporation NA Earnings Call

Question: Peter Winter - D.A. Davidson & Company - Analyst : Good afternoon. You guys in February, announced a $40 million share repurchase for the year. But I was just wondering, given the pressure in the stock prices, is there any thought of upsizing that buyback? And aside focus on organic growth, kind of what is the binding constraint not to be more aggressive with buybacks? Is the CET1 inclusive of AOCI?

Question: Peter Winter - D.A. Davidson & Company - Analyst : Okay. Thanks, Ryan. And then if I just ask also just with regards to the rolling 12-month guidance, not to get nitpicky, but can you just remind us what the percentage ranges would be in terms of slightly increasing, moderately increasing, et cetera, just fully realizing there's a lot of uncertainty, but just what those nuances you are?

Question: Ben Gerlinger - Citi - Analyst : Hey, guys. I appreciate your time. I apologize if this is a duplicate because I lost connection in there for a minute. But when you think about deposit pricing, overall, 4Q going into 1Q deposit pricing trends have been pretty strong or in your favor, I guess, you would say. Just curious if you can shed any more color on either March margin or any large pricing itself? Just trying to think about how we should think about 2Q starting off point?

Question: Ben Gerlinger - Citi - Analyst : Got you. Okay. That's helpful. And then from looking at deposit pricing trends in general, do you think you could lower further from here without cuts? Let's say the Fed is entirely on hold. Or is it more so dependent on the kind of action of the Fed itself? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 21, 2025 / 9:30PM, ZION.OQ - Q1 2025 Zions Bancorporation NA Earnings Call

Question: Ken Usdin - Autonomous Research - Analyst : Hey, thanks a lot guys. One follow-up on the liability side. You still have a bunch of FHLBs and it looks like -- I think you still have some brokered inside time and in the other borrowings. How much leeway and leverage do you still have also to reduce funding on the lower right side of the balance sheet, especially if loan growth doesn't pan out as hoped?

Question: Ken Usdin - Autonomous Research - Analyst : Okay. And follow-up on -- you talked about the managed declines in CRE and mortgage and the loan balance outlook. But I've noticed that those two categories have actually continued to grow. So can you just kind of walk us through what's going to change and when in terms of like, is it a retention thing? Or is it going to slow originations and those two (technical difficulty) REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 21, 2025 / 9:30PM, ZION.OQ - Q1 2025 Zions Bancorporation NA Earnings Call

Question: Anthony Elian - JPMorgan - Analyst : Hi, everyone. One on loan growth. Was any growth in the quarter you saw due to pull forward late in 1Q, particularly I noticed that period on balances were a few million -- a few hundred million dollars higher than the average number?

Question: Anthony Elian - JPMorgan - Analyst : Okay. And then my follow-up on credit quality. Could you talk more about any loan portfolios or specific borrowers you're watching now that may have outsized exposure to tariffs, supply chain? And maybe if you can size them up for us. Thank you.

Question: Chris McGratty - Keefe, Bruyette & Woods North America - Analyst : Great, thanks. Harris, your comments about the animal spirits reversing. I'm interested in your thoughts, is the damage done for the year, meaning the sentiment has turned so negative that businesses are kind of penciled down for the remainder? Or can this -- if we're having this conversation in three months, could this be significantly a better tone in terms of optimism?

Question: Chris McGratty - Keefe, Bruyette & Woods North America - Analyst : Okay. Thank you. And then I guess my follow-up is just more of a clarification on the operating leverage -- full-year operating leverage. I guess was there a recommitment to full-year operating leverage that I heard in your prepared remarks regardless of the revenue environment?

Question: Jon Arfstrom - RBC Capital Markets - Analyst : Thanks. Good afternoon, everyone. Just back on loans. We've talked about it a lot during the call, but do you expect to grow loans in the second quarter? Or is the evidence piling up to the point where you expect to pull back in balances?

Question: Jon Arfstrom - RBC Capital Markets - Analyst : Yeah, okay. That's quite helpful.

Question: Jon Arfstrom - RBC Capital Markets - Analyst : Okay. Yeah, that's helpful. We're just kind of myopically focused on the negative. And I just wanted to clarify that. Harris, have you seen anything in terms of the regulatory outlook or maybe changes sort of happen already that would benefit Zions? I'm thinking about category 4, maybe that could be eased. Just curious where your head is at on in terms of the regulatory outlook and what may have happened already.