Zions Bancorporation NA Q3 2025 Earnings Call Transcript

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

Question: Manan Gosalia - Morgan Stanley - Analyst : I wanted to start on the announcement in the 8-K. I guess you noted that the charge this quarter is an isolated incident. Can you talk about what gives you conviction that this is isolated, maybe walk us through your internal review process since this came to light how many loans have you reviewed? Are there any lumpy exposures to real estate funds within your NDF book that you've come across? Any color there would be helpful.

Question: Manan Gosalia - Morgan Stanley - Analyst : Got it. Maybe if you can expand on that and take us through your NDFI exposure. As we look to the call report disclosure, I think that's about 4% of loans. It seems to be pretty spread out among subcategories. Are there any lumpier exposures or any high-risk categories there that you'd point out?

Question: Ken Usdin - Autonomous Research - Analyst : Just wanted to ask about on the guidance, you have kind of more moderate. I heard your premier comments, you're still talking about operating leverage looking out a year what's the gap that you think you're aiming for in terms of the magnitude of operating leverage that you can see being able to do as you look ahead?

Question: Ken Usdin - Autonomous Research - Analyst : My second question just from last quarter, you were talking about a 350 NIM over time, 328 this quarter. And then kind of commentary might have changed a little bit after you had said that. I just wanted to kind of ask you to come back on that commentary that you gave and helped us think about what the right zone is for your kind of long-term NIM thinking?

Question: Ken Usdin - Autonomous Research - Analyst : All right. So if not doable, but we'll see what the timing is. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 20, 2025 / 9:30PM, ZION.OQ - Q3 2025 Zions Bancorporation NA Earnings Call

Question: Benjamin Gerlinger - Citibank Cameroon SA - Analyst : So just kind of sticking with everyone's favorite slide of 26 of the latent merger and like the implication has come down little bit quarter. Obviously, some of that is your margin went up so you recognize it, which is good. The Fed fund is lower by 50 bps on the outlook. I think there's two

Question: Benjamin Gerlinger - Citibank Cameroon SA - Analyst : Got you. That's helpful. And then in terms of capital. There's been some M&A in kind of your footprint or footprint adjacent, you could say, when you look at the opportunity set in front of you and you now have a better capital footholds, if you were to do M&A, could you kind of target the potential size you might look at and maybe dilution impact that you might be willing to stretch to? If M&A is on the table at all at this point?

Question: Matthew Clark - Piper Jaffray Inc - Analyst : Just back to the 8-K. Can you just maybe step back and give us some more color on how things unfolded when maybe you first discovered that there was a problem and whether or not those two credits were adversely rated previously or not? And then just how you monitor collateral just in general, just with the collateral kind of moving around in this case?

Question: Benjamin Gerlinger - Citibank Cameroon SA - Analyst : Understood. Okay. And then just the other question for me just on the loan growth outlook. It looks like you slightly raised the loan growth guide. It looks like it's going to be predominantly driven by commercial, but there was some runoff in C&I. Can you maybe just speak to the runoff in C&I and maybe the related pipeline and how you expect you to kind of restore that growth? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 20, 2025 / 9:30PM, ZION.OQ - Q3 2025 Zions Bancorporation NA Earnings Call

Question: John Pancari - Evercore Inc - Analyst : On the credit front, I know you mentioned the third-party review here a couple of times. Can you elaborate there a little bit? What exactly is the third-party review looking at? How comprehensive is it -- and are your collateral assessments, are they purely done in-house? Or do you also outsource your collateral assessment and maybe how frequently is that done?

Question: John Pancari - Evercore Inc - Analyst : Okay. All right. And then also on credit. I know a little while after the GFC and as you collapse your charters and everything, I know you had I believe you had moved some of your credit decisioning more centralized. Is your credit decisioning still centralized? Or are there still components of the underwriting and monitoring that are being conducted at the individual banks?

Question: Peter Winter - DA Davidson & Co - Analyst : I wanted to follow up on the loans. And just wondering if you could talk about how loan demand has changed over the last 90 days and what you're seeing in terms of loan spreads?

Question: Peter Winter - DA Davidson & Co - Analyst : Got it. And if I could ask, If I think about this year, you ramped up investments really got more aggressive with marketing, hiring of bankers. You've rolled out some new products such as the consumer (inaudible) clearly seeing some good results. But would you expect expense growth to moderate next year? Or do you still plan to kind of heavily invest in various revenue initiatives and see expense growth somewhat elevated again next year.

Question: David Smith - Suntrust Robinson Humphrey Capital Markets - Analyst : Thank you. Getting back to the idea of the transition from modest loan growth shrinkage this past quarter to getting back to that low to mid-single-digit growth rate over the next year. Just talk about your current risk appetite today and whether the current situation with those two one-off borrowers has had any impact on it and how your overall risk appetite might evolve over the next few quarters as well?

Question: Bernard Von-Gizycki - Deutsche Bank AG - Analyst : Just on the 8-K that you released, I know there's a lot of questions on this, but in there, you noted you became aware of legal actions by several banks and other lenders I know you couldn't announce the borrower, but there were a handful of issues that appeared in the market before this. And I understand the limitations of what you can disclose. But today, credit seems solid outside of this. Why not put this in perspective for us at the time of the 8-K filing.

Question: Bernard Von-Gizycki - Deutsche Bank AG - Analyst : Okay. Understood. And then just separately, when we think about the outlook on fee income, it looks like it will be broad-based. I know the cap market piece is going to be outsized. But -- with regards to the other areas, like any particular areas that stand out outside the cap markets? Or any commentary or color you can add towards that?

Question: Anthony Elian - JPMorgan Chase & Co - Analyst : A follow-up on MDFIs more broadly. Harris, you've been in the industry for many years now, which I think gives you a unique perspective relative to other CEOs in the industry. Given the scrutiny by investors on banks' DFI portfolios, I'm wondering if, in your view, the concerns that investors have on this loan category are overblown or if their concerns are reasonable?

Question: Bernard Von-Gizycki - Deutsche Bank AG - Analyst : Appreciate that. And then my follow-up, if I look at the new slide 36 you added on NDFI, where are you paying the most attention to within these allocations? And which of these buckets, if any, would you say are of highest and lowest concern from a credit quality perspective. I know you mentioned capital call lines will be on the safer side, but where are you paying the most focus on?

Question: Timothy Coffey - Janney Montgomery Scott LLC - Analyst : Evening, everybody, thank you for the chance to ask a question. My question had to do with the commercial real estate portfolio and that segment of the portfolio where your construction on an existing building for property improvements, rehabilitation, et cetera. And so my question is, have you seen any improvement in the time to lease up once those projects are complete. Because if I remember correctly, a couple of quarters ago, some of those loans had met it to nonaccrual. And I'm just wondering if there's been an improvement in the lease-up time.

Question: Jon Arfstrom - RBC Capital Markets Inc - Analyst : Thanks for letting me late here. Derek, just a question for you. How do you want us to think about the reserve level from here? I think you're saying despite the drama of the past week, I'm sure the antenna is up, but just confirming you're saying you're not seeing anything else abnormal at this point on credit and confirming that. And then how are you thinking about the reserve level?

Question: Jon Arfstrom - RBC Capital Markets Inc - Analyst : Yes. Okay. Okay. I understand what you're saying. Harris, anything else onset on credit? I mean, obviously, your stock has been really volatile on it. You've talked a lot about it. But anything else on underwriting and credit that you haven't touched on that you'd like to touch on?