~~0000109380us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2023-01-012023-06-30~~0000109380zions:ProductsAndServicesWealthManagementFeesMemberzions:VectraBankColoradoSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended ~~June 30, 2023~~March 31, 2024 OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________

COMMISSION FILE NUMBER 001-12307

ZIONS BANCORPORATION, NATIONAL ASSOCIATION

(Exact name of registrant as specified in its charter)


United States of America			87-0189025
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
One South Main
Salt Lake City, Utah			84133-1109
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (801) 844-8208

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbols	Name of Each Exchange on Which Registered
Common Stock, par value $0.001	ZION	The NASDAQ Stock Market LLC
Depositary Shares each representing a 1/40th ownership interest in a share of:
Series A Floating-Rate Non-Cumulative Perpetual Preferred Stock	ZIONP	The NASDAQ Stock Market LLC
Series G Fixed/Floating-Rate Non-Cumulative Perpetual Preferred Stock	ZIONO	The NASDAQ Stock Market LLC
6.95% Fixed-to-Floating Rate Subordinated Notes due September 15, 2028	ZIONL	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ☐ Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Number of common shares outstanding at ~~July 31, 2023 148,145,133~~April 30, 2024 147,654,732 shares

ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

GLOSSARY OF ACRONYMS AND ABBREVIATIONS


ACL	Allowance for Credit Losses	~~IPO~~HECL	~~Initial Public Offering~~Home Equity Credit Line
AFS	Available-for-Sale	~~LIBOR~~HTM	~~London Interbank Offered Rate~~Held-to-Maturity
ALLL	Allowance for Loan and Lease Losses	~~LIHTC~~IPO	~~Low-income Housing Tax Credit~~Initial Public Offering
Amegy	Amegy Bank, a division of Zions Bancorporation, National Association	~~Municipalities~~LIHTC	~~State and Local Governments~~Low-income Housing Tax Credit
AOCI	Accumulated Other Comprehensive Income or Loss	Municipalities	State and Local Governments
ASC	Accounting Standards Codification	NAICS	North American Industry Classification System
~~ASC~~ASU	Accounting Standards ~~Codification~~Update	NASDAQ	National Association of Securities Dealers Automated Quotations
~~ASU~~BOLI	~~Accounting Standards Update~~Bank-Owned Life Insurance	NBAZ	National Bank of Arizona, a division of Zions Bancorporation, National Association
~~BOLI~~bps	~~Bank-Owned Life Insurance~~Basis Points	NIM	Net Interest Margin
~~bps~~	~~Basis Points~~	NM	~~Not Meaningful~~
BTFP	Bank Term Funding Program	~~NSB~~NM	~~Nevada State Bank, a division of Zions Bancorporation, National Association~~Not Meaningful
CB&T	California Bank & Trust, a division of Zions Bancorporation, National Association	NSB	Nevada State Bank, a division of Zions Bancorporation, National Association
CLTV	Combined Loan-to-Value Ratio	OCC	Office of the Comptroller of the Currency
~~CECL~~CODM	~~Current Expected Credit Loss~~Chief Operating Decision Maker	OCI	Other Comprehensive Income or Loss
~~CLTV~~CRE	~~Combined Loan-to-Value Ratio~~Commercial Real Estate	OREO	Other Real Estate Owned
~~CRE~~DTA	~~Commercial Real Estate~~Deferred Tax Asset	PAM	Proportional Amortization Method
~~CVA~~DTL	~~Credit Valuation Adjustment~~Deferred Tax Liability	PEI	Private Equity Investment
~~DTA~~EaR	~~Deferred Tax Asset~~Earnings at Risk	PPNR	Pre-provision Net Revenue
~~DTL~~	~~Deferred Tax Liability~~	~~PPP~~	~~Paycheck Protection Program~~
~~EaR~~EPS	Earnings ~~at Risk~~per Share	ROU	Right-of-Use
~~EPS~~EVE	~~Earnings per Share~~Economic Value of Equity	RULC	Reserve for Unfunded Lending Commitments
~~EVE~~FASB	~~Economic Value of Equity~~Financial Accounting Standards Board	S&P	Standard & Poor's
~~FASB~~FDIC	~~Financial Accounting Standards Board~~Federal Deposit Insurance Corporation	SBA	U.S. Small Business Administration
~~FDIC~~FHLB	Federal ~~Deposit Insurance Corporation~~Home Loan Bank	SBIC	Small Business Investment Company
~~FHLB~~	~~Federal Home Loan Bank~~	~~SEC~~	~~Securities and Exchange Commission~~
FICO	Fair Isaac Corporation	~~SOFR~~	~~Secured Overnight Financing Rate~~
~~FRB~~	~~Federal Reserve Board~~	TCBW	The Commerce Bank of Washington, a division of Zions Bancorporation, National Association
~~FTP~~FRB	~~Funds Transfer Pricing~~	~~TDR~~	~~Troubled Debt Restructuring~~
~~GAAP~~	~~Generally Accepted Accounting Principles~~Federal Reserve Board	U.S.	United States
~~GCF~~FTP	~~General Collateral Funding~~Funds Transfer Pricing	Vectra	Vectra Bank Colorado, a division of Zions Bancorporation, National Association
~~HECL~~GAAP	~~Home Equity Credit Line~~Generally Accepted Accounting Principles	Zions Bank	Zions Bank, a division of Zions Bancorporation, National Association
~~HTM~~GCF	~~Held-to-Maturity~~General Collateral Funding

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING INFORMATION

This quarterly report includes “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and assumptions regarding future events or determinations, all of which are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, performance or achievements, industry trends, and results or regulatory outcomes to differ materially from those expressed or implied. Forward-looking statements include, among others:

•Statements with respect to the beliefs, plans, objectives, goals, targets, commitments, designs, guidelines, expectations, anticipations, and future financial condition, results of operations and performance of Zions Bancorporation, National Association and its subsidiaries (collectively “Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”); and

•Statements preceded or followed by, or that include the words “may,” “might,” “can,” “continue,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “forecasts,” “expect,” “intend,” “target,” “commit,” “design,” “plan,” “projects,” “will,” and the negative thereof and similar words and expressions.

Forward-looking statements are not guarantees, nor should they be relied upon as representing management’s views as of any subsequent date. Actual results and outcomes may differ materially from those presented. Although the following list is not comprehensive, important factors that may cause material differences include:

•The quality and composition of our loan and securities portfolios and the quality and composition of our deposits;

•Changes in general industry, political and economic conditions, including ~~continued~~ elevated inflation, economic slowdown or recession, or other economic ~~disruptions;~~challenges; changes in interest and reference rates, which could adversely affect our revenue and expenses, the value of assets and ~~obligations,~~liabilities, and the availability and cost of capital and liquidity; deterioration in economic conditions that may result in increased loan and leases losses;

•~~Securities~~The effects of newly enacted and ~~capital markets behavior, including volatility~~proposed regulations affecting us and ~~changes in market liquidity and our ability to raise capital;~~

•The impact of bank failures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; adverse media and other expressions of negative public opinion whether directed at us, other banks, the banking industry, ~~generally, or otherwise~~as well as changes and uncertainties in applicable laws, and fiscal, monetary, regulatory, trade, and tax policies, and actions taken by governments, agencies, central banks, and similar organizations, including those that ~~may adversely affect our reputation~~result in decreases in revenue; increases in capital standards; and ~~that of the banking industry;~~

•~~The possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings;~~

•~~Our ability to recruit~~increases in insurance assessments and ~~retain talent, including increased competition for qualified candidates as a result of expanded remote-work opportunities and increased compensation~~other bank expenses;

•Competitive pressures and other factors that may affect aspects of our business, such as pricing and demand for our products and services, ~~including the~~and our ability to recruit and retain talent;

•The impact of technological advancements, digital commerce, artificial intelligence, and ~~artificial intelligence;~~other innovations affecting the banking industry;

•Our ability to complete projects and initiatives and execute on our strategic plans, manage our risks, control compensation and other expenses, and achieve our business objectives;

•Our ability to develop and maintain technology, information security systems and controls designed to guard against fraud, cybersecurity, and privacy risks;

•Our ability to provide adequate oversight of our suppliers or prevent inadequate performance by third parties upon whom we rely for the delivery of various products and services;

•~~Our ability to develop~~Natural disasters, pandemics, catastrophic events and ~~maintain technology, information security systems~~other emergencies and ~~controls designed to guard against fraud, cybersecurity,~~incidents and ~~privacy risks;~~their impact on our and our customer’s operations and business and communities, including the increasing difficulty in, and the expense of, obtaining adequate insurance at reasonable prices;

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

•Changes and uncertainties in applicable laws, and fiscal, monetary, regulatory, trade, and tax policies, and actions taken by governments, agencies, central banks, and similar organizations, including increases in bank fees, insurance assessments, capital standards, and other regulatory requirements;

•~~The effects of pandemics and other health emergencies that may affect our business, employees, customers, and communities;~~

•~~The effects of wars and geopolitical conflicts, and other local, national, or international disasters, crises, or conflicts that may occur in the future;~~

•~~Natural disasters that may impact our and our customer's operations and business; and~~

•Governmental and social responses to environmental, social, and governance issues, including those with respect to climate ~~change.~~change;

•Securities and capital markets behavior, including volatility and changes in market liquidity and our ability to raise capital;

•The possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and shareholders’ equity, but not on our regulatory capital;

•The impact of bank closures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks;

•Adverse news and other expressions of negative public opinion whether directed at us, other banks, the banking industry, or otherwise that may adversely affect our reputation and that of the banking industry generally;

•Protracted congressional negotiations and political stalemates regarding government funding and other issues, including those that increase the possibility of government shutdowns, downgrades in United States (“U.S.”) credit ratings, or other economic disruptions; and

•The effects of wars and geopolitical conflicts, such as the ongoing war between Russia and Ukraine, the war in the Middle East, and other local, national, or international disasters, crises, or conflicts that may occur in the future.

We caution against the undue reliance on forward-looking statements, which reflect our views only as of the date they are made. Except to the extent required by law, we specifically disclaim any obligation to update any factors or to publicly announce the revisions to any forward-looking statements to reflect future events or developments.

~~RECENT DEVELOPMENTS~~

Beginning in the first quarter of 2023 and continuing into the second quarter, the banking industry, particularly regional banks, experienced weakness in bank valuations and a significant withdrawal of predominately uninsured deposits. As a result, several regional banks were closed and placed into receivership with the Federal Deposit Insurance Corporation (“FDIC”). The root causes of the bank closures generally related to weaknesses in liquidity risk, interest rate risk, and capital management.

~~During the second quarter of 2023, we managed the associated risks through the following actions:~~

•~~Generated deposit growth through a combination of competitive interest rates and expanded utilization of reciprocal and brokered deposit programs;~~

•~~Increased total available liquidity sources, which far exceed our level of uninsured deposits;~~

•Actively managed our interest rate and market risk exposures through a rebalancing of our accounting hedges for both fixed-rate available-for-sale (“AFS”) securities and variable-rate commercial loans; and

•~~Further strengthened our regulatory capital position through increased retained earnings.~~

RESULTS OF OPERATIONS

Comparisons noted below are calculated for the current quarter compared with the same ~~prior-year~~prior year period unless otherwise specified. Growth rates of 100% or more are considered not meaningful (“NM”) as they generally reflect a low starting point.

~~Executive Summary~~First Quarter 2024 Financial Performance

Our financial results in the second quarter of 2023 reflected solid sequential customer deposit growth and continued strong credit quality. Diluted earnings per share (“EPS”) was $1.11, compared with $1.29 in the second quarter of 2022, as an increase in noninterest income was offset by higher noninterest expense and provision for credit losses.

Net Earnings Applicable to Common Shareholders
(in millions)

Diluted EPS

Adjusted PPNR
(in millions)

Efficiency Ratio

Net interest income remained relatively stable at $591 million, compared with the prior year quarter, as higher earning asset yields were offset by an increase in interest paid on deposits and short-term borrowings. Net interest income was also impacted by a reduction in interest-earning assets and a significant increase in interest-bearing liabilities. The net interest margin (“NIM”) was 2.92%, compared with 2.87%.

~~The provision for credit losses was $46 million, compared with a $41 million provision in the prior year period, reflecting deterioration in economic forecasts.~~

Total customer-related noninterest income increased $8 million, or 5%, compared with the prior year period. The increase was driven primarily by improved commercial account activity, including treasury management fees, as well as loan syndication, swaps, and other capital markets income. Total noninterest income increased $17 million, or 10%, primarily due to a $13 million gain on the sale of a bank-owned property.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

~~Total~~Executive Summary

Our financial results in the first quarter of 2024 reflected low net charge-offs, reduced net interest income, loan growth, and sequential improvement of the net interest margin (“NIM”). Diluted earnings per share (“EPS”) was $0.96, compared with $1.33 in the first quarter of 2023, as lower revenue and slightly higher noninterest expense ~~increased $44~~was partially offset by a lower provision for credit losses.

•Net interest income decreased $93 million, or 9%14%, relative to the prior year period, as higher funding costs more than offset higher earning asset yields. The net interest margin was 2.94%, compared with 3.33%, and was up from 2.91% in the fourth quarter ~~driven largely~~of 2023. Net interest income was also impacted by reduced interest-earning assets and an increase in salaries and benefits expense of $17 million, or 6%, primarily due to $13 million in severance expense during the current quarter. Our efficiency ratio was 62.5%, compared with 60.7%, as growth in adjusted noninterest expense outpaced growth in adjusted taxable-equivalent revenue.interest-bearing liabilities.

◦Average interest-earning assets decreased ~~$1.5~~$2.2 billion, or 2%3%, ~~from the prior year quarter,~~ driven by declines ~~of $4.5 billion and $2.0 billion~~ in average securities and average money market investments, ~~respectively, and~~ partially offset by an increase ~~of $4.9 billion~~ in average loans and leases. Average interest-bearing liabilities increased $11.2 billion, or 27%, from the prior year quarter, driven by increases of $7.5 billion and $3.7 billion in average short-term borrowings and average federal funds purchased and security repurchase agreements, respectively.

◦Total loans and leases increased ~~$4.5~~$1.8 billion, or 9%3%, primarily due to ~~$56.9 billion. The increase was primarily~~growth in the consumer 1-4 family residential mortgage ~~commercial~~ and ~~industrial,~~ commercial real estate ~~term,~~(“CRE”) multi-family and ~~consumer~~industrial construction loan portfolios. ~~Nonperforming assets decreased $37~~

◦Average interest-bearing liabilities increased $6.0 billion, or 12%, driven by an increase in average interest-bearing deposits, partially offset by a decline in average borrowed funds.

◦Total deposits increased $5.0 billion, or 7%, as an increase in interest-bearing deposits was partially offset by a decrease in noninterest-bearing demand deposits. Customer deposits (excluding brokered deposits) totaled $69.9 billion, compared with $63.8 billion at March 31, 2023, and included approximately $7.5 billion of reciprocal deposits at March 31, 2024.

•The provision for credit losses was $13 million, compared with $45 million in the prior year period.

•Customer-related noninterest income remained flat at $151 million, as an increase in capital markets fees was offset by a decrease in loan-related fees and income. Decreases in noncustomer-related noninterest income were due largely to higher mark-to-market valuation adjustments related to servicing rights in the prior year quarter, a decrease in dividends on Federal Home Loan Bank (“FHLB”) stock, and a valuation loss associated with one of our equity investments in the current period.

•Noninterest expense increased $14 million, or ~~18%~~3%, driven largely by an increase in deposit insurance and ~~classified loans decreased $241~~regulatory expense, which included a $13 million ~~or 24%.~~ accrual associated with an updated special assessment estimate by the Federal Deposit Insurance Corporation (“FDIC”) during the quarter. This increase was partially offset by a decrease in salaries and employee benefits expense, primarily due to a decline in incentive compensation accruals.

•Net loan and lease charge-offs totaled ~~$13~~$6 million, or 0.04% of average loans, compared with ~~$9 million,~~zero net charge-offs in the prior year quarter. Classified loans increased $54 million, or 6%. Nonperforming assets increased to $254 million, or 0.44%, compared with $173 million, or 0.31%, of loans and leases, primarily due to a small number of loans in the commercial and industrial and term commercial real estate portfolios.

•Total ~~deposits~~borrowed funds, consisting primarily of secured borrowings, decreased ~~$4.7~~$7.3 billion, or 6%57%, from the prior year quarter, ~~mainly~~ due largely to ~~decreases~~an increase in ~~larger-balance~~interest-bearing deposits and ~~more rate-sensitive deposits during the first quarter of 2023. Total deposits increased $5.1 billion, or 7%, from March 31, 2023, due to increases of $3.1 billion and $2.0 billion~~a decrease in brokered and customer deposits, respectively. At June 30, 2023, total customer deposits included approximately $3.4 billion from reciprocal placement products. Borrowed funds, consisting primarily of secured borrowings from the Federal Home Loan Bank (“FHLB”), increased $4.4 billion from the prior year quarter in response to loan growth and the decline in noninterest-bearing deposits.

~~Second Quarter 2023 Financial Performance~~

Net Earnings Applicable to Common Shareholders
(in millions)interest-earning assets.

~~Diluted EPS~~

Adjusted PPNR
(in millions)

~~Efficiency Ratio~~

Net earnings applicable to common shareholders decreased from the second quarter of 2022, primarily due to an increase in noninterest expense, driven largely by severance and higher FDIC insurance costs. This increase was partially offset by growth in noninterest income. The decrease from the first quarter of 2023 reflected a decrease in interest-earning assets, an increase in interest-bearing liabilities, and an increase in associated funding costs.

~~Diluted earnings per share declined from the second quarter of 2022 primarily as a result of decreased net earnings applicable to common shareholders.~~

Adjusted pre-provision net revenue (“PPNR”) decreased from the second quarter of 2022, primarily due to higher adjusted noninterest expense, which was driven largely by higher FDIC insurance costs. This increase was largely offset by higher adjusted taxable-equivalent revenue.

~~The efficiency ratio increased from the prior year quarter, as growth in adjusted noninterest expense exceeded growth in adjusted taxable-equivalent revenue.~~

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Net Interest Income and Net Interest Margin

NET INTEREST INCOME AND NET INTEREST MARGIN


		Three Months Ended June 30,						Amount change			Percent change				Six Months Ended June 30,						Amount change			Percent change
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)	(Dollar amounts in millions)	2023			2022					Amount change					Percent change			2023					2022				Amount change			Percent change

Interest and fees on loans 1	Interest and fees on loans 1	$	791		$	468		$	323				69	%				$	1,517		$	905		$	612			68	%

Interest and fees on loans 1

Interest and fees on loans 1
Interest on money market investments
Interest on money market investments
Interest on money market investments	Interest on money market investments	48			12			36			NM				105			18			87			NM
Interest on securities	Interest on securities	138			128			10			8				275			240			35			15
Interest on securities
Interest on securities
Total interest income
Total interest income
Total interest income	Total interest income	977			608			369			61				1,897			1,163			734			63
Interest on deposits	Interest on deposits	220			7			213			NM				302			13			289			NM
Interest on deposits
Interest on deposits
Interest on short- and long-term borrowings
Interest on short- and long-term borrowings
Interest on short- and long-term borrowings	Interest on short- and long-term borrowings	166			8			158			NM				325			13			312			NM
Total interest expense	Total interest expense	386			15			371			NM				627			26			601			NM
Total interest expense
Total interest expense
Net interest income
Net interest income
Net interest income	Net interest income	$	591		$	593		$	(2)		—	%			$	1,270		$	1,137		$	133		12		%

Average interest-earning assets	Average interest-earning assets	$	82,500		$	84,041		$	(1,541)		(2)	%			$	83,161		$	85,061		$	(1,900)		(2)		%

Average interest-earning assets

Average interest-earning assets
Average interest-bearing liabilities	Average interest-bearing liabilities	$	52,453		$	41,234		$	11,219		27	%			$	50,742		$	41,683		$	9,059		22		%
								bps													bps
Average interest-bearing liabilities
Average interest-bearing liabilities
								bps
								bps
								bps
Yield on interest-earning assets 2
Yield on interest-earning assets 2
Yield on interest-earning assets 2	Yield on interest-earning assets 2	4.81		%	2.94		%	187							4.65		%	2.80		%	185
Rate paid on total deposits and interest-bearing liabilities 2	Rate paid on total deposits and interest-bearing liabilities 2	1.88		%	0.07		%	181							1.54		%	0.06		%	148
Rate paid on total deposits and interest-bearing liabilities 2
Rate paid on total deposits and interest-bearing liabilities 2
Cost of total deposits 2
Cost of total deposits 2
Cost of total deposits 2	Cost of total deposits 2	1.27		%	0.03		%	124							0.87		%	0.03		%	84
Net interest margin 2	Net interest margin 2	2.92		%	2.87		%	5							3.13		%	2.73		%	40
Net interest margin 2
Net interest margin 2

1 Includes interest income recoveries of $2 million ~~and $4 million~~ for both the three months ended March 31, 2024, and ~~$4 million and $6 million for the six months ended June 30, 2023, and 2022, respectively.~~2023.

2 ~~Rates are calculated using amounts in thousands; taxable-equivalent~~Taxable-equivalent rates ~~are~~ used where applicable.

Net interest income accounted for approximately ~~76%~~79% of our net revenue (net interest income plus noninterest income) for the current quarter and ~~remained relatively stable compared with~~decreased $93 million, or 14%, relative to the prior year quarter, as higher funding costs more than offset higher earning asset yields were offset by an increase in interest paid on deposits and short-term borrowings. Net interest income was also impacted by a reduction in interest-earning assets and a significant increase in interest-bearing liabilities.

Average interest-earning assets decreased $1.5 billion, or 2%, from the prior year quarter, driven by declines of $4.5 billion and $2.0 billion in average securities and average money market investments, respectively, and was partially offset by an increase of $4.9 billion in average loans and leases. The decline in average securities was primarily due to payments and maturities.

Average interest-bearing liabilities increased $11.2 billion, or 27%, from the prior year quarter, driven by increases of $7.5 billion and $3.7 billion in average short-term borrowings and average federal funds purchased and security repurchase agreements, respectively. The increase in borrowed funds helped to balance loan growth and the decline in noninterest-bearing deposits.

yields. The NIM was ~~2.92%~~2.94%, compared with ~~2.87%.~~ 3.33%, and was up from 2.91% in the fourth quarter of 2023.

The yield on average interest-earning assets was ~~4.81%~~5.25% in the ~~second~~first quarter of ~~2023,~~2024, an increase of ~~187~~76 basis points (“bps”), reflecting higher interest rates and a favorable mix change ~~from money market investments~~ to ~~loans.~~higher-yielding assets. The yield on average loans and leases increased ~~198 basis points~~76 bps to ~~5.65%~~6.06%, and the yield on average securities increased ~~59 basis points~~38 bps to ~~2.56%. The yield on average securities benefited from a decrease~~2.84% in the ~~market value~~first quarter of ~~AFS securities due to rising interest rates.~~ 2024.

The rate paid on ~~average~~total deposits and interest-bearing liabilities ~~increased to 2.95%~~was 2.34%, compared with ~~0.14%~~1.17% in the prior year quarter, and the cost of total deposits was 2.06%, compared with 0.47%, also reflecting the higher interest rate environment ~~competitive pricing,~~as well as reduced noninterest-bearing deposits.

Net interest income was also impacted by reduced interest-earning assets and an increase in interest-bearing liabilities. Average interest-earning assets decreased $2.2 billion, or 3%, from the prior year quarter, driven by declines of $2.5 billion and $1.5 billion in average securities and average money market investments, respectively. The decrease in average securities was primarily due to principal reductions. These decreases were partially offset by an increase of $1.8 billion in average loans and leases.

Average interest-bearing liabilities increased $6.0 billion, or 12%, from the prior year quarter, driven by an increase of $12.0 billion in average interest-bearing deposits, as customers moved from noninterest-bearing to interest-bearing products in response to the higher interest rate environment. This increase was partially offset by a decrease of $6.0 billion in average borrowed funds.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

The following charts further illustrate the changes in average interest-earning assets and average interest-bearing liabilities:

Average loans and leases increased ~~$4.9~~$1.8 billion, or 9%3%, to ~~$56.7~~$57.9 billion, ~~mainly~~primarily due to growth in average consumer and commercial real estate loans. ~~The yield on total loans increased 198 basis points to 5.65%, reflecting the higher interest rate environment.~~

Average securities decreased ~~$4.5~~$2.5 billion, or ~~17%~~11%, to ~~$22.0~~$20.4 billion, primarily due to ~~approximately $3.6 billion in~~available-for-sale (“AFS”) securities principal reductions. During the fourth quarter of 2022, we transferred approximately $10.7 billion fair value ($13.1 billion amortized cost) of mortgage-backed AFS securities to the held-to-maturity (“HTM”) category to reflect our intent for these securities.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

Average deposits ~~decreased $11.2~~increased $3.2 billion, or ~~14%~~5%, to ~~$69.7~~$73.4 billionat an average cost of 2.06%, from $70.2 billion at an average cost of ~~1.27%, from $80.9 billion at an average cost of 0.03%~~0.47% in the ~~second~~first quarter of ~~2022.~~2023. Average noninterest-bearing deposits as a percentage of total deposits ~~were 43%~~decreased to 35%, compared with ~~51%~~49% during the same prior year period.

The ~~decrease~~loan-to-deposit ratio was 78%, compared with 81% in average deposits was driven by a decline in average noninterest-bearing deposits as interest rates increased. In recent years, particularly during the COVID-19 pandemic, we experienced a significant influx of deposits, which was impacted by considerable fiscal and monetary policy decisions. During the prior year with the withdrawal of stimulus by the federal government, our deposits began to decline to more normalized levels. This trend accelerated with prominent bank failures during the first quarter of 2023 and abated during the second quarter of 2023, with period-end deposits increasing meaningfully from March 31, 2023 to June 30, 2023. Total deposits have remained above pre-pandemic (December 31, 2019) levels during 2023.quarter.

Average borrowed funds, consisting primarily of secured borrowings, ~~from the FHLB, increased $11.2~~decreased $6.0 billion, ~~from the prior year quarter~~or 45%, to $7.2 billion, due largely to an increase in ~~response to loan growth~~interest-bearing deposits and ~~the decline~~a decrease in ~~noninterest-bearing deposits.~~interest-earning assets.

For more information on our ~~investments~~investment securities portfolio and borrowed funds and how we manage liquidity risk, refer to the “Investment Securities Portfolio” section on page 1615 and the “Liquidity Risk Management” section on page 31. For further discussion of the effects of market rates on net interest income and how we manage interest rate risk, refer to the “Interest Rate and Market Risk Management” section on page ~~27.~~28.

The following schedule summarizes the average balances, the amount of interest earned or paid, and the applicable yields for interest-earning assets and the costs of interest-bearing ~~liabilities.~~liabilities:

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES


(Unaudited)	(Unaudited)	Three Months Ended June 30, 2023						Three Months Ended June 30, 2022						(Unaudited)		Three Months Ended March 31, 2024																	Three Months Ended March 31, 2023
(Dollar amounts in millions)	(Dollar amounts in millions)	Average balance		Amount of interest 1		Average yield/rate 1		Average balance		Amount of interest 1		Average yield/rate 1		(Dollar amounts in millions)		Average balance						Interest								Yield/ Rate 1							Average balance					Interest				Yield/ Rate 1
ASSETS	ASSETS
Money market investments:	Money market investments:
Money market investments:
Money market investments:
Interest-bearing deposits
Interest-bearing deposits
Interest-bearing deposits	Interest-bearing deposits	$	2,899	$	37	5.08	%	$	3,113	$	5	0.66	%	$	1,447			$		$	20			5.71					5.71		%					$	2,724		$		$	31	4.72			4.72	%
Federal funds sold and securities purchased under agreements to resell	Federal funds sold and securities purchased under agreements to resell	784		11		5.65		2,542		7		1.13
Total money market investments	Total money market investments	3,683		48		5.20		5,655		12		0.87
Securities:	Securities:
Held-to-maturity	Held-to-maturity	10,833		60		2.24		485		4		2.96
Available-for-sale 2		11,180		80		2.85		25,722		123		1.91
Held-to-maturity
Held-to-maturity
Available-for-sale
Trading	Trading	52		1		4.78		357		4		5.07
Total securities	Total securities	22,065		141		2.56		26,564		131		1.97
Loans held for sale	Loans held for sale	73		1		7.08		38		—		0.72
Loans and leases
Loans and leases: 2
Commercial
Commercial
Commercial	Commercial	30,650		417		5.46		28,952		275		3.81
Commercial real estate	Commercial real estate	12,933		225		6.97		12,098		112		3.69
Consumer	Consumer	13,096		156		4.80		10,734		87		3.24
Total loans and leases	Total loans and leases	56,679		798		5.65		51,784		474		3.67
Total interest-earning assets	Total interest-earning assets	82,500		988		4.81		84,041		617		2.94
Cash and due from banks	Cash and due from banks	653						617
Allowance for credit losses on loans and debt securities	Allowance for credit losses on loans and debt securities	(619)						(480)
Allowance for credit losses on loans and debt securities
Allowance for credit losses on loans and debt securities
Goodwill and intangibles
Goodwill and intangibles
Goodwill and intangibles	Goodwill and intangibles	1,063						1,015
Other assets	Other assets	5,524						4,712
Other assets
Other assets
Total assets
Total assets
Total assets	Total assets	$	89,121					$	89,905
LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:	Interest-bearing deposits:
Interest-bearing deposits:
Interest-bearing deposits:
Savings and money market
Savings and money market
Savings and money market	Savings and money market	$	30,325	$	113	1.49	%	$	38,325	$	6	0.06	%	$	38,044			$		$	259			2.73					2.73		%					$	32,859		$		$	62	0.77			0.77	%
Time	Time	9,494		107		4.55		1,488		1		0.24

Total interest-bearing deposits	Total interest-bearing deposits	39,819		220		2.22		39,813		7		0.07
Total interest-bearing deposits
Total interest-bearing deposits
Borrowed funds:	Borrowed funds:
Federal funds and security repurchase agreements
Federal funds and security repurchase agreements
Federal funds and security repurchase agreements	Federal funds and security repurchase agreements	4,423		57		5.11		737		1		0.70
Other short-term borrowings	Other short-term borrowings	7,575		100		5.28		6		—		—
Long-term debt	Long-term debt	636		9		5.97		678		7		3.79
Total borrowed funds	Total borrowed funds	12,634		166		5.26		1,421		8		2.17
Total interest-bearing liabilities	Total interest-bearing liabilities	52,453		386		2.95		41,234		15		0.14
Noninterest-bearing demand deposits	Noninterest-bearing demand deposits	29,830						41,074
Other liabilities	Other liabilities	1,580						1,575
Other liabilities
Other liabilities
Total liabilities
Total liabilities
Total liabilities	Total liabilities	83,863						83,883
Shareholders’ equity:	Shareholders’ equity:
Shareholders’ equity:
Shareholders’ equity:
Preferred equity
Preferred equity
Preferred equity	Preferred equity	440						440
Common equity	Common equity	4,818						5,582
Common equity
Common equity
Total shareholders’ equity
Total shareholders’ equity
Total shareholders’ equity	Total shareholders’ equity	5,258						6,022
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	89,121					$	89,905
Total liabilities and shareholders’ equity
Total liabilities and shareholders’ equity
Spread on average interest-bearing funds
Spread on average interest-bearing funds
Spread on average interest-bearing funds	Spread on average interest-bearing funds					1.86	%					2.80	%																					1.83	%																2.50	%
Net impact of noninterest-bearing sources of funds	Net impact of noninterest-bearing sources of funds					1.06	%					0.07	%	Net impact of noninterest-bearing sources of funds																					1.11	%																0.83	%
Net interest margin	Net interest margin			$	602	2.92	%			$	602	2.87	%	Net interest margin											$	596		2.94						2.94	%									$	688		3.33			3.33	%
Memo: total cost of deposits	Memo: total cost of deposits					1.27	%					0.03	%	Memo: total cost of deposits																					2.06	%																0.47	%
Memo: total deposits and interest-bearing liabilities	Memo: total deposits and interest-bearing liabilities	$	82,283	386		1.88	%	$	82,308	15		0.07	%	Memo: total deposits and interest-bearing liabilities		$	80,580		468				468				2.34					2.34		%				$	83,375	241			241	1.17				1.17	%

1 ~~Rates are calculated using amounts in thousands and a tax rate of 21% for the periods presented.~~Taxable-equivalent rates used where applicable.

2 Net of unamortized purchase premiums, discounts, and deferred loan fees and costs.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

Six Months Ended
June 30, 2023 Six Months Ended
June 30, 2022
(Dollar amounts in millions) Average
balance
Amount of
interest 1
Average
yield/rate 1
Average
balance
Amount of
interest 1
Average
yield/rate 1
ASSETS
Money market investments:
Interest-bearing deposits $ 2,771 $ 68 4.98 % $ 4,914 $ 8 0.34 %
Federal funds sold and securities purchased under agreements to resell 1,428 37 5.19 2,422 10 0.84
Total money market investments 4,199 105 5.05 7,336 18 0.50
Securities:
Held-to-maturity 10,928 122 2.26 462 7 3.04
Available-for-sale 2
11,500 156 2.73 25,485 229 1.81
Trading 78 1 2.14 370 9 4.91
Total securities 22,506 279 2.50 26,317 245 1.88
Loans held for sale 39 1 6.67 48 — 1.44
Loans and leases
Commercial 30,664 798 5.25 28,725 535 3.76
Commercial real estate 12,904 434 6.78 12,134 213 3.53
Consumer 12,849 300 4.71 10,501 169 3.24
Total loans and leases 56,417 1,532 5.48 51,360 917 3.60
Total interest-earning assets 83,161 1,917 4.65 85,061 1,180 2.80
Cash and due from banks 598 621
Allowance for credit losses on loans and debt securities (597) (497)
Goodwill and intangibles 1,064 1,015
Other assets 5,574 4,463
Total assets $ 89,800 $ 90,663
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
Savings and money market $ 31,585 $ 175 1.12 % $ 38,726 $ 11 0.05 %
Time 6,232 127 4.11 1,538 2 0.25
Total interest-bearing deposits 37,817 302 1.61 40,264 13 0.06
Borrowed funds:
Federal funds and security repurchase agreements 5,015 121 4.85 661 1 0.43
Other short-term borrowings 7,266 184 5.09 8 — —
Long-term debt 644 20 6.42 750 12 3.17
Total borrowed funds 12,925 325 5.07 1,419 13 1.88
Total interest-bearing liabilities 50,742 627 2.49 41,683 26 0.12
Noninterest-bearing demand deposits 32,084 40,980
Other liabilities 1,817 1,422
Total liabilities 84,643 84,085
Shareholders’ equity:
Preferred equity 440 440
Common equity 4,717 6,138
Total shareholders’ equity 5,157 6,578
Total liabilities and shareholders’ equity $ 89,800 $ 90,663
Spread on average interest-bearing funds 2.16 % 2.68 %
Net impact of noninterest-bearing sources of funds 0.97 % 0.05 %
Net interest margin $ 1,290 3.13 % $ 1,154 2.73 %
Memo: total cost of deposits 0.87 % 0.03 %
Memo: total deposits and interest-bearing liabilities $ 82,826 627 1.54 % $ 82,663 26 0.06 %

1 ~~Rates are calculated using amounts in thousands and a tax rate of 21% for the periods presented.~~

2 ~~Net of unamortized purchase premiums, discounts, and deferred loan fees and costs.~~

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~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

Provision for Credit Losses

The allowance for credit losses (“ACL”) is the combination of both the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”). The ALLL represents the estimated current expected credit losses related to the loan and lease portfolio as of the balance sheet date. The RULC represents the estimated reserve for current expected credit losses associated with off-balance sheet commitments. Changes in the ALLL and RULC, net of charge-offs and recoveries, are recorded as the provision for loan and lease losses and the provision for unfunded lending commitments, respectively, inon the ~~income statement.~~consolidated statement of income. The ACL for debt securities is estimated separately from loans and is ~~recorded~~included in ~~investment securities~~“Investment securities” on the consolidated balance sheet.

The provision for credit losses, which is the combination of both the provision for loan and lease losses and the provision for unfunded lending commitments, was ~~$46~~$13 million, compared with ~~$41~~$45 million in the ~~second~~first quarter of ~~2022.~~ 2023.

The ACL was ~~$711~~$736 million at ~~June 30, 2023,~~March 31, 2024, compared with ~~$546~~$678 million at ~~June 30, 2022.~~March 31, 2023. The increase in the ACL ~~was~~ primarily ~~due to~~reflects incremental reserves associated with portfolio-specific risks including commercial real estate and modest deterioration in credit quality, partially offset by improvements in economic forecasts. The ratio of ACL to total loans and leases was ~~1.25%~~1.27% and ~~1.04%~~1.20% at ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively. The provision for securities losses was less than $1 million during both the ~~second~~first quarter of ~~2023~~2024 and ~~2022.~~

2023.

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The bar chart above illustrates the broad categories of change in the ACL from the prior year period. To estimate current expected losses, we use econometric loss models that include multiple economic scenarios that reflect optimistic, baseline, and stressed economic conditions. The results derived using these economic scenarios are weighted to produce the credit loss estimate. Management may adjust the weights to reflect their assessment of current conditions and reasonable and supportable forecasts. The second bar represents changes in these economic forecasts and current economic conditions, ~~which increased~~including management's judgment of the weighting of the economic forecasts. These changes contributed to a $90 million decrease in the ACL ~~by $149 million~~ from the prior year quarter.

The third bar represents changes in credit quality factors and includes risk-grade migration, portfolio-specific risks, and specific reserves against loans, which, when combined, ~~increased~~contributed to a $193 million increase in the ACL, driven largely by $3 million, reflecting relatively stable credit quality. Nonperforming assets decreased $37 million, or 18%, and classified loans decreased $241 million, or 24%. Net loan and lease charge-offs totaled $13 million, or 0.09% annualized of average loans, compared with net charge-offs of $9 million, or 0.07% annualized of average loans in the prior year quarter.an increased focus on certain portfolio-specific risks, including commercial real estate.

The fourth bar represents changes in our loan portfolio ~~changes, driven primarily by loan growth, as well as~~composition, including changes in ~~portfolio mix,~~loan balances, the aging of the portfolio, and other qualitative risk factors; all of which ~~resulted in~~contributed to a ~~$13~~$45 million ~~increase~~decrease in the ACL.

See “Credit Risk Management” on page 20 and Note 6 in our ~~2022~~2023 Form 10-K for more information on how we determine the appropriate level of the ALLL and the RULC.

Noninterest Income

Noninterest income represents revenue earned from products and services that generally have no associated interest rate or yield and is classified as either customer-related or noncustomer-related. Customer-related noninterest income excludes items such as securities gains and losses, dividends, insurance-related income, and mark-to-market adjustments on certain derivatives.

Total noninterest income ~~increased $17~~decreased $4 million, or ~~10%~~3%, relative to the prior year. Noninterest income accounted for approximately ~~24%~~21% and ~~22%~~19% of our net revenue (net interest income plus noninterest income) during the ~~second~~first quarter of ~~2023~~2024 and ~~2022,~~2023, respectively. The following schedule presents a comparison of the major components of noninterest ~~income.~~

~~NONINTEREST INCOME~~

Three Months Ended
June 30, Amount
change Percent
change Six Months Ended
June 30, Amount
change Percent
change
(Dollar amounts in millions) 2023 2022 2023 2022
Commercial account fees $ 45 $ 37 $ 8 22 % $ 88 $ 78 $ 10 13 %
Card fees 25 25 — — 49 50 (1) (2)
Retail and business banking fees 16 20 (4) (20) 32 40 (8) (20)
Loan-related fees and income 19 21 (2) (10) 40 43 (3) (7)
Capital markets fees 27 21 6 29 44 36 8 22
Wealth management fees 14 13 1 8 29 27 2 7
Other customer-related fees 16 17 (1) (6) 31 31 — —
Customer-related noninterest income 162 154 8 5 313 305 8 3
Fair value and nonhedge derivative income 1 10 (9) (90) (2) 16 (18) NM
Dividends and other income (loss) 26 7 19 NM 37 9 28 NM
Securities gains (losses), net — 1 (1) NM 1 (16) 17 NM
Noncustomer-related noninterest income 27 18 9 50 36 9 27 NM
Total noninterest income $ 189 $ 172 $ 17 10 % $ 349 $ 314 $ 35 11 %

~~Customer-related Noninterest Income~~

Total customer-related noninterest income increased $8 million, or 5%, compared with the prior year period. The increase was driven primarily by improved commercial account activity, including treasury management fees, as well as loan syndication, swaps, and other capital markets income. Retail and business banking fees decreased largely as a result of a change in our overdraft and non-sufficient funds practices effected during the third quarter of 2022.income:

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NONINTEREST INCOME


	Three Months Ended March 31,				Amount change		Percent change
(Dollar amounts in millions)	2024		2023

Commercial account fees	$	44	$	43	$	1	2	%
Card fees	23		24		(1)		(4)
Retail and business banking fees	16		16		—		—
Loan-related fees and income	15		21		(6)		(29)
Capital markets fees	24		17		7		41
Wealth management fees	15		15		—		—
Other customer-related fees	14		15		(1)		(7)
Customer-related noninterest income	151		151		—		—

Fair value and nonhedge derivative income	1		(3)		4		NM
Dividends and other income (loss)	6		11		(5)		(45)
Securities gains (losses), net	(2)		1		(3)		NM
Noncustomer-related noninterest income	5		9		(4)		(44)
Total noninterest income	$	156	$	160	$	(4)	(3)	%

Customer-related Noninterest Income

Customer-related noninterest income remained flat at $151 million. An increase in capital markets fees, driven largely by improved real estate capital markets and securities underwriting activity, was offset by a decrease in loan-related fees and income, primarily due to higher gains on loan sales in the prior year period and a decline in loan servicing income resulting from the sale of associated mortgage servicing rights in the third quarter of 2023.

Noncustomer-related Noninterest Income

~~Total noncustomer-related~~Noncustomer-related noninterest income ~~increased $9~~decreased $4 million from the prior year quarter. Dividends and other income ~~increased $19~~decreased $5 million, primarily due to higher mark-to-market valuation adjustments related to servicing rights in the prior year quarter and a ~~$13 million gain on the sale of a bank-owned property, as well as an increase~~decrease in dividends on FHLB stock. Net securities gains decreased $3 million, due to a $4 million valuation loss associated with one of our equity investments in the current period. These ~~increases~~decreases were offset by a $9$4 million ~~decrease~~increase in fair value and nonhedge derivative income, primarily due to ~~a $10 million~~ credit valuation ~~adjustment (“CVA”) gain in the prior year period.~~adjustments on client-related interest rate swaps.

Noninterest Expense

The following schedule presents a comparison of the major components of noninterest ~~expense.~~expense:

NONINTEREST EXPENSE


		Three Months Ended June 30,				Amount change		Percent change			Six Months Ended June 30,						Amount change			Percent change
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)	(Dollar amounts in millions)	2023		2022						Amount change			Percent change			2023			2022				Amount change			Percent change

Salaries and employee benefits	Salaries and employee benefits	$	324	$	307	$	17	6	%					$	663		$	619		$	44			7	%

Salaries and employee benefits

Salaries and employee benefits
Technology, telecom, and information processing
Technology, telecom, and information processing
Technology, telecom, and information processing	Technology, telecom, and information processing	58		53		5		9			113			105			8			8
Occupancy and equipment, net	Occupancy and equipment, net	40		36		4		11			80			74			6			8
Occupancy and equipment, net
Occupancy and equipment, net
Professional and legal services
Professional and legal services
Professional and legal services	Professional and legal services	16		14		2		14			29			28			1			4
Marketing and business development	Marketing and business development	13		9		4		44			25			17			8			47
Marketing and business development
Marketing and business development
Deposit insurance and regulatory expense
Deposit insurance and regulatory expense
Deposit insurance and regulatory expense	Deposit insurance and regulatory expense	22		13		9		69			40			23			17			74
Credit-related expense	Credit-related expense	7		7		—		—			13			14			(1)			(7)
Other real estate expense, net		—		—		—		NM			—			1			(1)			NM
Credit-related expense
Credit-related expense

Other

Other

Other	Other	28		25		3		12			57			47			10			21
Total noninterest expense	Total noninterest expense	$	508	$	464	$	44	9	%		$	1,020		$	928		$	92		10		%
Adjusted noninterest expense 1		$	494	$	463	$	31	7	%		$	1,003		$	927		$	76		8		%
Total noninterest expense
Total noninterest expense
Adjusted noninterest expense (non-GAAP)
Adjusted noninterest expense (non-GAAP)
Adjusted noninterest expense (non-GAAP)

1 Table of Contents~~For information on non-GAAP financial measures, see “Non-GAAP Financial Measures” on page 35.~~

ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

Total noninterest expense increased ~~$44~~$14 million, or 9%3%, relative to the prior year quarter. ~~Salaries and benefits expense increased $17 million, or 6%, primarily due to $13 million in severance expense during the current quarter, reflecting our commitment to manage expenses.~~

Deposit insurance and regulatory expense increased $9$16 million, ~~or 69%,~~ driven largely by a $13 million accrual associated with an ~~increased FDIC insurance base rate beginning in 2023 and changes in balance sheet composition. In May 2023,~~updated special assessment estimate by the FDIC ~~issued a Notice of Proposed Rulemaking,~~during the current quarter, which would implement a special assessment to recover the cost associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank. Using an assessment base equalwas related to the estimated amount of uninsured deposits at December 31, 2022, the FDIC proposed to collect the special assessment at an annual rate of approximately 12.5 bps over eight quarterly periods, beginning the first quarter of 2024. As proposed, we estimate the total impact of the special assessment on our deposit insurance and regulatory expense would be approximately $80 million. At June 30, 2023, we had not accrued for any portion of this estimated amount. The ultimate impact and timing of expense recognition will depend on the final rule, which is not expected until latebank closures in early 2023.

Technology, telecom, and information processing expense increased $5$7 million, or 9%13%, primarily due to increases in software amortization expenses associated with the replacement of our core loan and deposit banking systems, as well as other related application software, license, and maintenance expenses. Salaries and ~~related amortization expenses.~~employee benefits expense decreased $8 million, or 2%, primarily due to a decline in incentive compensation accruals.

Adjusted noninterest expense remained relatively flat at $511 million. The efficiency ratio was ~~62.5%~~67.9%, compared with ~~60.7%~~59.9%, ~~as growth in adjusted noninterest expense outpaced growth~~primarily due to a decline in adjusted taxable-equivalent revenue. For information on non-GAAP financial measures, see page 35.

Technology Spend

~~Technology~~Consistent with our strategic objectives, we invest in technologies that will make us more efficient and enable us to remain competitive. We generally consider these investments as technology spend, which represents expenditures associated with technology-related investments, operations, systems, and infrastructure, and includes current period expenses ~~reported~~presented on ~~our~~the consolidated statement of income, ~~and~~as well as capitalized investments, net of related amortization and depreciation, ~~reported~~presented on ~~our~~the consolidated balance sheet. Technology spend is reported as a combination of the following:

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~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

•Technology, telecom, and information processing expense — includes expenses related to application software licensing and maintenance, related amortization, telecommunications, and data processing;

•Other technology-related expense — includes related noncapitalized salaries and employee benefits, occupancy and equipment, and professional and legal services; and

•Technology investments — includes capitalized technology infrastructure equipment, hardware, and purchased or internally developed software, less related amortization or depreciation.

The following schedule presents the composition of our technology spend:

TECHNOLOGY SPEND


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)
		Three Months Ended June 30,				Amount change				Percent change				Six Months Ended June 30,								Amount change				Percent change
(In millions)		2023		2022								2023				2022
Technology, telecom, and information processing expense

Technology, telecom, and information processing expense

Technology, telecom, and information processing expense	Technology, telecom, and information processing expense	$	58	$	53			$	5			9	%			$	113			$	105			$	8			8	%
Other technology-related expense	Other technology-related expense	56		51		5				10				110				100				10				10
Other technology-related expense
Other technology-related expense
Technology investments
Technology investments
Technology investments	Technology investments	23		22		1				5				49				44				5				11
Less: related amortization and depreciation	Less: related amortization and depreciation	(16)		(13)		(3)				23				(30)				(27)				(3)				11
Less: related amortization and depreciation
Less: related amortization and depreciation
Total technology spend	Total technology spend	$	121	$	113	$	8			7	%			$	242			$	222			$	20			9	%
Total technology spend
Total technology spend

Total technology spend ~~increased $8~~decreased $4 million, or 3%, relative to the prior year quarter, ~~largely due to technology-related compensation,~~as the aforementioned increase in technology, telecom, and information processing expense was offset by a decrease in certain technology investments, as the replacement of our core loan and deposit banking systems nears completion in ~~application resiliency, and increases in application software and maintenance expense.~~2024.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

Income Taxes

The following schedule summarizes the income tax expense and effective tax rates for the periods ~~presented.~~presented:

INCOME TAXES


		Three Months Ended June 30,						Six Months Ended June 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)	(Dollar amounts in millions)	2023			2022			2023			2022

Income before income taxes	Income before income taxes	$	226		$	260		$	508		$	515

Income before income taxes

Income before income taxes
Income tax expense
Income tax expense
Income tax expense	Income tax expense	51			57			129			109
Effective tax rate	Effective tax rate	22.6		%	21.9		%	25.4		%	21.2		%
Effective tax rate
Effective tax rate

The effective tax rate was ~~22.6%~~24.6% and ~~21.9%~~27.7% for the three months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively. The higher effective tax rate in the prior year period was the result of a change in a discrete item that affected the reserve for uncertain tax positions. See Note 12 of the Notes to Consolidated Financial Statements for more information about the factors that impacted the income tax rates, as well as information about deferred income tax assets and ~~liabilities, and valuation allowances.~~liabilities.

Preferred Stock Dividends

Preferred stock dividends totaled $9$10 million and $8$6 million for the ~~second~~first quarter of 2024 and 2023, respectively. The increase was primarily due to changes in the timing and ~~2022, respectively.~~rates of dividend payments for certain series of preferred stock.

BALANCE SHEET ANALYSIS

Interest-Earning Assets

Interest-earning assets have associated interest rates or yields, and generally consist of loans and leases, securities, and money market ~~investments, securities, loans, and leases.~~investments. We strive to maintain a high level of interest-earning assets relative to total assets. For more information regarding the average balances, associated revenue generated, and the respective yields of our interest-earning assets, see the Consolidated Average Balance Sheet on page 10.

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~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

Investment Securities Portfolio

We invest in securities to actively manage liquidity and interest rate risk and to generate interest income. We primarily own securities that can readily provide us ~~with~~ cash and liquidity through secured borrowing agreements without the need to sell the securities. ~~We also manage the duration extension risk of our investment securities portfolio. At June 30, 2023, the estimated duration of our~~Our fixed-rate securities portfolio decreased to 3.7 years, compared with 4.1 years at December 31, 2022, and 3.9 years at June 30, 2022, primarily due to the addition of certain portfolio layer method fair value hedges. See Note 7 for more information on these fair value hedges. This duration helps ~~to manage~~balance the inherent interest rate mismatch between loans and deposits ~~as fixed-rate term investments facilitate the balancing of asset~~ and ~~liability durations, as well as protect~~protects the economic value of ~~shareholders'~~shareholders’ equity. At March 31, 2024, the estimated duration, which measures price sensitivity to interest rate changes, of our securities portfolio was 3.6 percent, unchanged from December 31, 2023.

For information about our borrowing capacity associated with the investment securities portfolio and how we manage our liquidity risk, refer to the “Liquidity Risk Management” section on page 31. See also Note 3 and Note 5 of the Notes to Consolidated Financial Statements for more information on fair value measurements and the accounting for our investment securities portfolio.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

The following schedule presents the major components of our investment securities ~~portfolio.~~portfolio:

INVESTMENT SECURITIES PORTFOLIO
June 30, 2023 December 31, 2022
(In millions) Par Value Amortized
cost Fair
value Par Value Amortized
cost Fair
value
Held-to-maturity
U.S. Government agencies and corporations:
Agency securities $ 96 $ 96 $ 90 $ 100 $ 100 $ 93
Agency guaranteed mortgage-backed securities 1
12,456 10,289 10,335 12,921 10,621 10,772
Municipal securities 368 368 343 404 405 374
Total held-to-maturity 12,920 10,753 10,768 13,425 11,126 11,239
Available-for-sale
U.S. Treasury securities 565 565 475 555 557 393
U.S. Government agencies and corporations:
Agency securities 724 717 677 790 782 736
Agency guaranteed mortgage-backed securities 8,913 8,991 7,647 9,566 9,652 8,367
Small Business Administration loan-backed securities 604 646 619 691 740 712
Municipal securities 1,350 1,480 1,391 1,571 1,732 1,634
Other debt securities 25 25 23 75 75 73
Total available-for-sale 12,181 12,424 10,832 13,248 13,538 11,915
Total HTM and AFS investment securities $ 25,101 $ 23,177 $ 21,600 $ 26,673 $ 24,664 $ 23,154


	March 31, 2024						December 31, 2023
(In millions)	Par Value		Amortized cost		Fair value		Par Value		Amortized cost		Fair value
Held-to-maturity
U.S. Government agencies and corporations:
Agency securities	$	92	$	92	$	85	$	93	$	93	$	87
Agency guaranteed mortgage-backed securities	11,748		9,776		9,696		11,966		9,935		10,041
Municipal securities	341		341		324		354		354		338
Total held-to-maturity	12,181		10,209		10,105		12,413		10,382		10,466
Available-for-sale
U.S. Treasury securities	585		584		481		585		585		492
U.S. Government agencies and corporations:
Agency securities	634		629		596		669		663		630
Agency guaranteed mortgage-backed securities	8,267		8,335		7,053		8,460		8,530		7,291
Small Business Administration loan-backed securities	509		543		518		535		571		546
Municipal securities	1,228		1,336		1,259		1,269		1,385		1,318
Other debt securities	25		25		24		25		25		23
Total available-for-sale	11,248		11,452		9,931		11,543		11,759		10,300


Total HTM and AFS investment securities	$	23,429	$	21,661	$	20,036	$	23,956	$	22,141	$	20,766

1 During the fourth quarter of 2022, we transferred approximately $10.7 billion fair value ($13.1 billion amortized cost) of mortgage-backed AFS securities to the HTM category. The transfer of these securities from AFS to HTM at fair value resulted in a discount to the amortized cost basis of the HTM securities equivalent to the $2.4 billion ($1.8 billion after tax) of unrealized losses in AOCI attributable to these securities. The amortization of the unrealized losses will offset the effect of the accretion of the discount created by the transfer. At June 30, 2023, the unamortized discount on the HTM securities totaled approximately $2.2 billion ($1.7 billion after tax).

The amortized cost of total ~~HTM~~held-to-maturity (“HTM”) and AFS investment securities decreased ~~$1.5 billion,~~$480 million, or 6%2%, from December 31, ~~2022, primarily due to payments and maturities.~~2023. Approximately 8% and 7%of the total HTM and AFS investment securities were floating-rate instruments at ~~both June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. Additionally, at ~~June 30, 2023,~~March 31, 2024, we have $3.6 billion of pay-fixed swaps ~~held~~designated as fair value hedges against fixed-rate AFS securities that effectively convert the fixed interest income to a floating rate on the hedged portion of the securities.

At ~~June 30, 2023, the AFS investment securities portfolio included approximately $243 million of net premium that was distributed across the various security categories. Total~~March 31, 2024, total taxable-equivalent premium amortization for ~~these~~our investment securities was ~~$22~~$17 million for the ~~second~~first quarter of ~~2023,~~2024, compared with ~~$27~~$26 million for the same prior year period.

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~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

In addition to HTM and AFS securities, we also have a trading securities portfolio, ~~that~~comprised of municipal securities, which totaled ~~$32~~$59 million at ~~June 30, 2023,~~March 31, 2024, compared with ~~$465~~$48 million at December 31, 2022. The prior year-end amount included $395 million of money market mutual sweep accounts. Beginning in the first quarter of 2023, related sweep balances were presented in “Money market investments” on the consolidated balance sheet.2023.

Refer to the “Interest Rate Risk Management” section on page ~~27,~~28, the “Capital Management” section on page 33, and Note 5 of the Notes to Consolidated Financial Statements for more discussion regarding our investment securities portfolio, swaps, and related unrealized gains and losses.

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Municipal Investments and Extensions of Credit

We support our communities by providing products and services to state and local governments (“municipalities”), including deposit services, loans, and investment banking services. We also invest in securities issued by municipalities. Our municipal lending products generally include loans in which the debt service is repaid from general funds or pledged revenues of the municipal entity, or to private commercial entities or 501(c)(3) not-for-profit entities utilizing a pass-through municipal entity to achieve favorable tax treatment.

The following schedule summarizes our total investments and extensions of credit to municipalities:

MUNICIPAL INVESTMENTS AND EXTENSIONS OF CREDIT


(In millions)	(In millions)	June 30, 2023		December 31, 2022		(In millions)	March 31, 2024	December 31, 2023

Loans and leases
Loans and leases
Loans and leases	Loans and leases	$	4,354	$	4,361
Held-to-maturity securities	Held-to-maturity securities	368		405
Available-for-sale securities	Available-for-sale securities	1,391		1,634

Trading securities	Trading securities	32		71
Trading securities
Trading securities
Unfunded lending commitments	Unfunded lending commitments	361		406
Total	Total	$	6,506	$	6,877

Our municipal loans and securities are primarily associated with municipalities located within our geographic footprint. The municipal loan and lease portfolio is primarily secured by general obligations of municipal entities. Other types of collateral also include real estate, revenue pledges, or equipment. At ~~June 30, 2023,~~March 31, 2024, we had no municipal loans on nonaccrual.

Municipal securities are internally graded, similar to loans, using risk-grading systems which vary based on the size and type of credit risk exposure. The internal risk grades assigned to our municipal securities follow our definitions of Pass, Special Mention, and Substandard, which are consistent with published definitions of regulatory risk classifications. At ~~June 30, 2023,~~March 31, 2024, all municipal securities were graded as Pass. See Notes 5 and 6 of the Notes to Consolidated Financial Statements for additional information about the credit quality of these municipal loans and securities.

Loan and Lease Portfolio

We provide a wide range of lending products to commercial customers, generally small- and medium-sized businesses. We also provide various retail lending products and services to consumers and small businesses. The following schedule presents the composition of our loan and lease ~~portfolio.~~portfolio:

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

LOAN AND LEASE PORTFOLIO


		June 30, 2023				December 31, 2022
	March 31, 2024																		March 31, 2024								December 31, 2023
(Dollar amounts in millions)	(Dollar amounts in millions)	Amount		% of total loans		Amount		% of total loans		(Dollar amounts in millions)		Amount					% of total loans					Amount						% of total loans
Commercial:	Commercial:
Commercial and industrial
Commercial and industrial
Commercial and industrial	Commercial and industrial	$	16,622	29.2	%	$	16,377	29.4	%	$	16,519			28.4		28.4		%			$	16,684			28.9			28.9	%
Leasing	Leasing	388		0.7		386		0.7
Owner-occupied	Owner-occupied	9,328		16.4		9,371		16.8
Municipal	Municipal	4,354		7.6		4,361		7.8
Total commercial	Total commercial	30,692		53.9		30,495		54.8
Commercial real estate:	Commercial real estate:
Construction and land development	Construction and land development	2,498		4.4		2,513		4.5
Construction and land development
Construction and land development
Term	Term	10,406		18.3		10,226		18.4
Total commercial real estate	Total commercial real estate	12,904		22.7		12,739		22.9
Consumer:	Consumer:
Home equity credit line
Home equity credit line
Home equity credit line	Home equity credit line	3,291		5.8		3,377		6.1
1-4 family residential	1-4 family residential	7,980		14.0		7,286		13.1
Construction and other consumer real estate	Construction and other consumer real estate	1,434		2.5		1,161		2.1
Bankcard and other revolving plans	Bankcard and other revolving plans	466		0.8		471		0.8
Other	Other	150		0.3		124		0.2
Total consumer	Total consumer	13,321		23.4		12,419		22.3
Total loans and leases	Total loans and leases	$	56,917	100.0	%	$	55,653	100.0	%	Total loans and leases		$	58,109		100.0			100.0		%			$	57,779		100.0			100.0	%

At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the ratio of loans and leases to total assets was ~~65%~~67% and ~~62%~~66%, respectively. The largest loan category was commercial and industrial loans, which constituted 28% and 29%of our total loan portfolio ~~at both time~~for the same respective periods.

During the first ~~six~~three months of ~~2023,~~2024, the loan and lease portfolio increased ~~$1.3 billion,~~$330 million, or 2%1%, to ~~$56.9~~$58.1 billion at ~~June 30, 2023, primarily due to~~March 31, 2024. Loan growth ~~of $0.7 billion~~was driven largely by increases in consumer 1-4 family residential mortgage ~~loans, driven mainly from an increased demand for adjustable-rate mortgages.~~and term commercial real estate loans.

Other Noninterest-Bearing Investments

Other noninterest-bearing investments are equity investments that are held primarily for capital appreciation, dividends, or for certain regulatory requirements. The following schedule summarizes our related ~~investments.~~investments:

OTHER NONINTEREST-BEARING INVESTMENTS


(Dollar amounts in millions)	(Dollar amounts in millions)	June 30, 2023		December 31, 2022		Amount change		Percent change		(Dollar amounts in millions)		March 31, 2024						December 31, 2023						Amount change					Percent change

Bank-owned life insurance
Bank-owned life insurance
Bank-owned life insurance	Bank-owned life insurance	$	549	$	546	$	3	1	%	$	555			$		$	553			$		$	2			—		—		%
Federal Home Loan Bank stock	Federal Home Loan Bank stock	111		294		(183)		(62)
Federal Reserve stock	Federal Reserve stock	65		68		(3)		(4)
Farmer Mac stock	Farmer Mac stock	21		19		2		11
SBIC investments	SBIC investments	177		172		5		3
Other	Other	33		31		2		6
Total other noninterest-bearing investments	Total other noninterest-bearing investments	$	956	$	1,130	$	(174)	(15)	%	Total other noninterest-bearing investments		$	922		$			$	950		$			$	(28)		(3)			(3)	%

~~Total other~~Other noninterest-bearing investments decreased ~~$174~~$28 million, or ~~15%~~3%, during the first ~~six~~three months of ~~2023,~~2024, primarily due to a ~~$183~~$34 million decrease in FHLB stock. We are required to invest approximately 4% of our FHLB borrowings in FHLB stock to maintain our borrowing capacity. The decrease in period-end FHLB activity stock was driven largely by ~~declines in FHLB borrowings during the second quarter of 2023 in response to~~ an increase in ~~total deposits.~~interest-bearing deposits and a decrease in interest-earning assets.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

Visa Class B Shares

In 2007, we received 460,153 non-transferable Class B shares of Visa, Inc. in connection with a restructuring and public offering by Visa U.S.A. These shares are carried at no cost on our consolidated balance sheet. In January 2024, Visa’s previously announced exchange offer proposal was approved by common stockholders, which resulted, among other actions, in a redenomination of all Visa Class B common shares to Class B-1 common shares. In April 2024, Visa commenced its exchange offer allowing Class B-1 shareholders the option to exchange up to 50% of their Class B-1 shares for shares that would be convertible into freely transferable Visa Class A common shares following a temporary restriction period. We did not participate in the exchange offer, which expired on May 3, 2024, in view of contingent obligations associated with certain make-whole provisions required as a condition of the exchange.

Premises, Equipment, and Software

We are in the final phase of a three-phase project to replace our core loan and deposit banking systems. This final phase includes the replacement of our deposit banking systems through multiple affiliate bank conversions. The first and second conversions ~~the first of which was~~were successfully completed in May 2023 and April 2024, respectively. We anticipate completing the ~~second quarter~~migration of ~~2023. We expect to complete~~substantially all of the remaining ~~affiliate bank conversions in~~accounts by late summer 2024.

The following schedule summarizes the capitalized costs associated with our core system replacement project, which are depreciated using a useful life of ten ~~years.~~years:

CAPITALIZED COSTS ASSOCIATED WITH THE CORE SYSTEM REPLACEMENT PROJECT

June 30, 2023

March 31, 2024

(In millions)

Phase 1

Phase 2

Phase 3

Total

(In millions)

Phase 1

Phase 2

Phase 3

Total

Total amount of capitalized costs, less accumulated depreciation

221

296

Total amount of capitalized costs, less accumulated depreciation

Deposits

Deposits are our primary funding source. In recent years, particularly during the COVID-19 pandemic, we experienced a significant influx of deposits, which was impacted by considerable fiscal and monetary policy decisions. During the prior year, with the withdrawal of stimulus by the federal government, our deposits began to decline to more normalized levels. This trend accelerated with prominent bank failures during the first quarter of 2023 and abated during the second quarter of 2023, with period-end deposits increasing meaningfully from March 31, 2023 to June 30, 2023. Total deposits have remained above pre-pandemic (December 31, 2019) levels during 2023.

The following schedule presents the composition of our deposit ~~portfolio.~~portfolio:

DEPOSIT PORTFOLIO


		June 30, 2023					March 31, 2023					December 31, 2022					December 31, 2019
		March 31, 2024
		March 31, 2024
		March 31, 2024
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)	(Dollar amounts in millions)	Amount			% of total deposits		Amount			% of total deposits		Amount			% of total deposits		Amount			% of total deposits
Deposits by type	Deposits by type
Deposits by type
Deposits by type
Noninterest-bearing demand
Noninterest-bearing demand
Noninterest-bearing demand	Noninterest-bearing demand	$	28,670		38.6	%	$	30,974		44.8	%	$	35,777		49.9	%	$	23,576		41.3	%
Interest-bearing:	Interest-bearing:
Interest-bearing:
Interest-bearing:
Savings and money market
Savings and money market
Savings and money market	Savings and money market	33,303			44.8		30,826			44.5		33,474			46.7		28,249			49.5
Time	Time	3,897			5.2		2,024			2.9		1,484			2.1		2,451			4.3
Time
Time
Brokered
Brokered
Brokered	Brokered	8,453			11.4		5,384			7.8		917			1.3		2,809			4.9
Total deposits	Total deposits	$	74,323		100.0	%	$	69,208		100.0	%	$	71,652		100.0	%	$	57,085		100.0	%
Total deposits
Total deposits
Deposit-related metrics
Deposit-related metrics
Deposit-related metrics	Deposit-related metrics
Estimated amount of insured deposits	Estimated amount of insured deposits	$	43,911		59	%	$	37,846		55	%	$	34,018		47	%	$	28,802		50	%
Estimated amount of insured deposits
Estimated amount of insured deposits
Estimated amount of uninsured deposits
Estimated amount of uninsured deposits
Estimated amount of uninsured deposits	Estimated amount of uninsured deposits	$	30,412		41	%	$	31,362		45	%	$	37,634		53	%	$	28,283		50	%
Estimated amount of collateralized deposits 1	Estimated amount of collateralized deposits 1	$	2,679		3.6	%	$	2,708		3.9	%	$	2,861		4.0	%	$	1,928		3.4	%
Estimated amount of collateralized deposits 1
Estimated amount of collateralized deposits 1
Loan-to-deposit ratio	Loan-to-deposit ratio	77		%			81		%			78		%			85		%
Loan-to-deposit ratio
Loan-to-deposit ratio

1 Includes both insured and uninsured deposits.

Total deposits decreased $724 million, or 1%, from December 31, 2023. At March 31, 2024 and December 31, 2023, customer deposits (excluding brokered deposits) were $69.9 billion and $70.5 billion, and included approximately $7.5 billion and $6.8 billion, respectively, of reciprocal deposits.

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~~Total deposits increased $5.1 billion, or 7%, from~~At March 31, 2023, and $2.7 billion, or 4%, from December 31, 2022. These increases were primarily due to significant growth in brokered and customer deposits, and partially offset by a decline in noninterest-bearing deposits as interest rates have risen. At June 30, 2023, total customer deposits included approximately $3.4 billion from reciprocal placement products where we distributed our customers’ deposits in a placement network to increase their FDIC insurance and in return we received a matching amount of deposits from other network banks.

~~At June 30, 2023,~~2024, the estimated total amount of uninsured deposits was ~~$30.4~~$32.0 billion, or ~~41%~~43%, of total deposits, compared with ~~$31.4~~$33.2 billion, or ~~45%~~44%, ~~and $37.6 billion, or 53%, of total deposits~~ at ~~March~~December 31, 2023, ~~and December 31, 2022,~~ respectively. Our loan-to-deposit ratio was ~~77%~~78%, compared with ~~81% and 78%~~77% for the same respective time periods.

See “Liquidity Risk Management” on page 31 for additional information on liquidity, ~~and borrowed funds.~~including the ratio of available liquidity to uninsured deposits.

RISK MANAGEMENT

Risk management is an integral part of our operations and is a key determinant of our overall performance. We employ various strategies to prudently manage the risks to which our operations are exposed, including credit risk, market and interest rate risk, liquidity risk, strategic and business risk, operational risk, technology risk, cybersecurity risk, capital/financial reporting risk, legal/compliance risk (including regulatory risk), and reputational risk. These risks are overseen by various management committees including the Enterprise Risk Management Committee. For a more comprehensive discussion of these risks, see “Risk Factors” in our ~~2022~~2023 Form 10-K.

Credit Risk Management

Credit risk is the possibility of loss from the failure of a borrower, guarantor, or another obligor to fully perform under the terms of a credit-related contract. Credit risk arises primarily from our lending activities, as well as from off-balance sheet credit instruments. Credit policies, credit risk management, and credit examination functions inform and support the oversight of credit risk. Our credit policies emphasize strong underwriting standards and early detection of potential problem credits in order to develop and implement action plans on a timely basis to mitigate potential losses. These formal credit policies and procedures provide us with a framework for consistent underwriting and a basis for sound credit decisions at the local banking affiliate level.

Our ~~overall credit risk management strategy includes diversification of our loan portfolio. Our~~ business activity is conducted primarily within the geographic footprint of our banking affiliates. We strive to avoid the risk of undue concentrations of credit in any particular industry, collateral type, location, or with any individual customer or counterparty. ~~We have actively managed the credit risk in our commercial real estate (“CRE”) portfolio for more than a decade, having reduced CRE loans to 23% of total loans, compared with 33% in late 2008.~~ For a more comprehensive discussion of our credit risk management, see “Credit Risk Management” in our ~~2022~~2023 Form 10-K.

U.S. Government Agency Guaranteed Loans

We participate in various guaranteed lending programs sponsored by ~~United States (“~~U.S.”) government agencies, such as the Small Business Administration (“SBA”), Federal Housing Authority, U.S. Department of Veterans Affairs, Export-Import Bank of the U.S., and the U.S. Department of Agriculture. At ~~June 30, 2023, $593~~March 31, 2024, $540 million of related loans were guaranteed, primarily by the ~~SBA, and included $125 million of Paycheck Protection Program (“PPP”) loans.~~SBA. The following schedule presents the composition of U.S. government agency guaranteed ~~loans.~~loans:

U.S. GOVERNMENT AGENCY GUARANTEED LOANS


(Dollar amounts in millions)	(Dollar amounts in millions)	June 30, 2023		Percent guaranteed		December 31, 2022		Percent guaranteed		(Dollar amounts in millions)	March 31, 2024			Percent guaranteed				December 31, 2023				Percent guaranteed

Commercial	Commercial	$	703	81	%	$	753	83	%
Commercial
Commercial											$	654		79		%		$	664			80	%
Commercial real estate	Commercial real estate	24		79		21		76
Consumer	Consumer	5		100		5		100
Total loans	Total loans	$	732	81	%	$	779	83	%	Total loans	$	683	79		79		%		$	692	80		80	%

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Commercial Lending

The following schedule provides information regarding lending exposures to certain industries in our commercial lending ~~portfolio.~~portfolio:

COMMERCIAL LENDING BY INDUSTRY GROUP 1


		June 30, 2023				December 31, 2022
	March 31, 2024															March 31, 2024						December 31, 2023
(Dollar amounts in millions)	(Dollar amounts in millions)	Amount		Percent		Amount		Percent		(Dollar amounts in millions)	Amount			Percent				Amount					Percent

Real estate, rental, and leasing		$	2,923	9.5	%	$	2,802	9.2	%
Retail trade	Retail trade	2,842		9.3		2,751		9.0
Retail trade
Retail trade											$	3,002		9.9		%		$	2,995				9.8	%
Real estate, rental and leasing
Finance and insurance	Finance and insurance	2,634		8.6		2,992		9.8
Healthcare and social assistance	Healthcare and social assistance	2,495		8.1		2,373		7.8
Public Administration	Public Administration	2,376		7.7		2,366		7.8
Manufacturing	Manufacturing	2,319		7.5		2,387		7.8
Wholesale trade	Wholesale trade	1,918		6.3		1,880		6.2
Transportation and warehousing
Utilities 2	Utilities 2	1,590		5.2		1,418		4.6
Transportation and warehousing		1,501		4.9		1,464		4.8
Mining, quarrying, and oil and gas extraction		1,326		4.3		1,349		4.4
Educational services	Educational services	1,286		4.2		1,302		4.3
Construction	Construction	1,276		4.2		1,355		4.4
Hospitality and food services	Hospitality and food services	1,186		3.9		1,238		4.1
Mining, quarrying, and oil and gas extraction
Professional, scientific, and technical services
Other Services (except Public Administration)	Other Services (except Public Administration)	1,066		3.5		1,041		3.4
Professional, scientific, and technical services		1,032		3.3		995		3.3
Other 3	Other 3	2,922		9.5		2,782		9.1
Total	Total	$	30,692	100.0	%	$	30,495	100.0	%	Total	$	30,479	100.0		100.0		%		$	30,588	100.0			100.0	%

1 Industry groups are determined by North American Industry Classification System (“NAICS”) codes.

2 Includes primarily utilities, power, and renewable energy.

3 No other industry group exceeds ~~3.1%~~3.3%.

Commercial Real Estate Loans

At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, our CRE loan portfolio totaled ~~$12.9~~$13.6 billion and ~~$12.7~~$13.4 billion, respectively, representing ~~approximately~~ 23% of the total loan portfolio for both periods. The majority of our CRE loans are secured by real estate primarily located within our geographic footprint. The following schedule presents the geographic distribution of our CRE loan portfolio based on the location of the primary ~~collateral.~~collateral:

COMMERCIAL REAL ESTATE LENDING BY COLLATERAL LOCATION


		June 30, 2023				December 31, 2022
	March 31, 2024																		March 31, 2024								December 31, 2023
(Dollar amounts in millions)	(Dollar amounts in millions)	Amount		Percent		Amount		Percent		(Dollar amounts in millions)		Amount					Percent					Amount						Percent

Arizona
Arizona
Arizona	Arizona	$	1,656	13	%	$	1,521	12	%	$	1,727			12.7		12.7		%			$	1,726			12.9			12.9	%
California	California	3,772		29		3,805		30
Colorado	Colorado	639		5		637		5
Nevada	Nevada	1,030		8		910		7
Texas	Texas	2,211		17		2,139		17
Utah/Idaho	Utah/Idaho	2,202		17		2,397		19
Washington/Oregon	Washington/Oregon	912		7		899		7
Other	Other	482		4		431		3
Total CRE	Total CRE	$	12,904	100	%	$	12,739	100	%	Total CRE		$	13,578		100.0			100.0		%			$	13,371		100.0			100.0	%

~~Approximately 23%~~

Table of ~~the total CRE loan portfolio is scheduled to mature in the next 12 months.~~ Contents

ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

Term CRE loans generally mature within a three- to seven-year period and consist of full, partial, and non-recourse guarantee structures. Typical term CRE loan structures include annually tested operating covenants that require loan rebalancing based on minimum debt service coverage, debt yield, or loan-to-value tests. Construction and land development loans generally mature in 18 to 36 months and contain full or partial recourse guarantee structures with

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one- to five-year extension options or roll-to-perm options that often result in term ~~debt.~~loans. At ~~June 30, 2023,~~March 31, 2024, approximately 85% of our CRE loan portfolio was variable-rate, and approximately ~~20%~~21% of these variable-rate loans were swapped to a fixed rate.

Underwriting on commercial properties is primarily based on the economic viability of the project with significant consideration given to the creditworthiness and experience of the sponsor. We generally require that the owner’s equity be ~~injected~~included prior to any advances. Re-margining requirements (required equity infusions upon a decline in value or cash flow of the collateral) are often included in the loan agreement along with guarantees of the sponsor. For a more comprehensive discussion of CRE loans and our underwriting, see ~~the~~ “Commercial Real Estate Loans” ~~section~~ in our ~~2022~~2023 Form 10-K.

The following schedule ~~provides information regarding lending exposures to certain collateral types in~~presents our CRE loan ~~portfolio.~~portfolio by collateral type:

COMMERCIAL REAL ESTATE LENDING BY COLLATERAL TYPE


		June 30, 2023				December 31, 2022
	March 31, 2024																		March 31, 2024								December 31, 2023
(Dollar amounts in millions)	(Dollar amounts in millions)	Amount		Percent		Amount		Percent		(Dollar amounts in millions)		Amount					Percent					Amount						Percent
Commercial property	Commercial property
Multi-family
Multi-family
Multi-family	Multi-family	$	3,324	25.7	%	$	3,068	24.1	%	$	3,854			28.4		28.4		%			$	3,709			27.7			27.7	%
Industrial	Industrial	2,828		21.9		2,509		19.7
Office	Office	2,157		16.7		2,281		17.9
Retail	Retail	1,447		11.2		1,529		12.0
Hospitality	Hospitality	695		5.4		695		5.4
Land	Land	247		1.9		276		2.2
Other 1	Other 1	1,673		13.0		1,728		13.5
Residential property 2	Residential property 2
Single family	Single family	289		2.3		340		2.7
Single family
Single family
Land	Land	73		0.6		75		0.6
Condo/Townhome	Condo/Townhome	28		0.2		13		0.1
Other 1	Other 1	143		1.1		225		1.8
Total	Total	$	12,904	100.0	%	$	12,739	100.0	%	Total		$	13,578		100.0			100.0		%			$	13,371		100.0			100.0	%

1 Included in the total amount of the “Other” ~~category~~commercial and residential categories was approximately ~~$246~~$216 million and ~~$301~~$202 million of unsecured loans at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively.

2 Residential property ~~collateral type~~ consists primarily of loans provided to commercial homebuilders for land, lot, and single-family housing developments.

~~Our~~As previously described, our CRE portfolio is diversified across geography and collateral type, with the largest concentration in multi-family. We provide additional analysis of our multi-family and office CRE ~~portfolio~~portfolios below in view of increased investor interest in ~~that~~those collateral ~~type~~types in recent periods.

~~Office CRE loan portfolio~~

At June 30, 2023 and December 31, 2022, our office CRE loan portfolio totaled $2.2 billion and $2.3 billion, representing 17% and 18% of the total CRE loan portfolio, respectively. The following schedule presents the composition of our office CRE loan portfolio and other related credit quality metrics.

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Multi-family

At March 31, 2024 and December 31, 2023, our multi-family loan portfolio totaled $3.9 billion and $3.7 billion, representing 28% of the total CRE loan portfolio for both periods. Approximately 36% of the multi-family CRE loan portfolio is scheduled to mature in the next 12 months. The following schedule presents the composition of our multi-family CRE loan portfolio and other related credit quality metrics:

MULTI-FAMILY CRE LOAN PORTFOLIO


(Dollar amounts in millions)	March 31, 2024			December 31, 2023
Multi-family CRE
Construction and land development	$	953		$	902
Term	2,901			2,807
Total multi-family CRE	$	3,854		$	3,709
Credit quality metrics
Criticized loan ratio	10.1		%	6.1		%
Classified loan ratio	0.8		%	0.5		%
Nonaccrual loan ratio	—		%	—		%
Delinquency ratio	—		%	—		%
Net charge-offs, annualized	—		%	—		%
Ratio of allowance for credit losses to multi-family CRE loans, at period end	2.28		%	1.70		%

The following schedules present our multi-family CRE loan portfolio by collateral location for the periods presented:

MULTI-FAMILY CRE LOAN PORTFOLIO BY COLLATERAL LOCATION


(Dollar amounts in millions)	March 31, 2024
	Collateral Location
Loan type	Arizona			California			Colorado			Nevada			Texas			Utah/ Idaho			Wash-ington			Other 1			Total
Multi-family CRE
Construction and land development	$	138		$	167		$	65		$	62		$	352		$	49		$	120		$	—		$	953
Term	280			995			89			193			671			360			251			62			2,901
Total Multi-family CRE	$	418		$	1,162		$	154		$	255		$	1,023		$	409		$	371		$	62		$	3,854
% of total	10.8		%	30.2		%	4.0		%	6.6		%	26.6		%	10.6		%	9.6		%	1.6		%	100.0		%


(Dollar amounts in millions)	December 31, 2023
	Collateral Location
Loan type	Arizona			California			Colorado			Nevada			Texas			Utah/ Idaho			Wash-ington			Other 1			Total
Multi-family CRE
Construction and land development	$	118		$	183		$	46		$	40		$	359		$	44		$	112		$	—		$	902
Term	322			994			90			188			578			345			228			62			2,807
Total Multi-family CRE	$	440		$	1,177		$	136		$	228		$	937		$	389		$	340		$	62		$	3,709
% of total	11.9		%	31.7		%	3.7		%	6.1		%	25.3		%	10.4		%	9.2		%	1.7		%	100.0		%

1 Other included $55 million of multi-family loans with collateral located in New Mexico at both March 31, 2024 and December 31, 2023.

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Office CRE loan portfolio

At March 31, 2024 and December 31, 2023, our office CRE loan portfolio totaled $1.9 billion and $2.0 billion, representing 14% and 15% of the total CRE loan portfolio, respectively. Approximately 32% of the office CRE loan portfolio is scheduled to mature in the next 12 months. The following schedule presents the composition of our office CRE loan portfolio and other related credit quality metrics:

OFFICE CRE LOAN PORTFOLIO


(Dollar amounts in millions)	(Dollar amounts in millions)	June 30, 2023			December 31, 2022			(Dollar amounts in millions)	March 31, 2024		December 31, 2023
Office CRE	Office CRE
Construction and land development
Construction and land development
Construction and land development	Construction and land development	$	193		$	208
Term	Term	1,964			2,073
Total office CRE	Total office CRE	$	2,157		$	2,281
Credit quality metrics	Credit quality metrics
Criticized loan ratio	Criticized loan ratio	6.4		%	7.2		%
Criticized loan ratio
Criticized loan ratio									11.0	%	11.9	%
Classified loan ratio	Classified loan ratio	4.8		%	5.8		%	Classified loan ratio	7.6	%	8.9	%
Nonaccrual loan ratio	Nonaccrual loan ratio	—		%	—		%	Nonaccrual loan ratio	1.4	%	2.4	%
Delinquency ratio	Delinquency ratio	—		%	1.5		%	Delinquency ratio	2.1	%	2.3	%
Net charge-offs, annualized	Net charge-offs, annualized	—		%	—		%	Net charge-offs, annualized	(0.1)	%	0.2	%
Allowance for credit losses		$	38		$	31

Ratio of allowance for credit losses to office CRE loans, at period end	Ratio of allowance for credit losses to office CRE loans, at period end	1.76		%	1.36		%
Ratio of allowance for credit losses to office CRE loans, at period end
Ratio of allowance for credit losses to office CRE loans, at period end									4.01	%	3.80	%

The following schedules present our office CRE loan portfolio by collateral location for the periods ~~presented.~~presented:

OFFICE CRE LOAN PORTFOLIO BY COLLATERAL LOCATION
(Dollar amounts in millions) June 30, 2023
Collateral Location
Loan type Arizona California Colorado Nevada Texas Utah/
Idaho Wash-ington
Other 1
Total
Office CRE
Construction and land development $ — $ 87 $ — $ 1 $ 7 $ 34 $ 64 $ — $ 193
Term 289 449 93 93 182 587 240 31 1,964
Total Office CRE $ 289 $ 536 $ 93 $ 94 $ 189 $ 621 $ 304 $ 31 $ 2,157
% of total 13.4 % 24.9 % 4.3 % 4.4 % 8.8 % 28.8 % 14.0 % 1.4 % 100.0 %


(Dollar amounts in millions)	(Dollar amounts in millions)	December 31, 2022																											(Dollar amounts in millions)	March 31, 2024
		Collateral Location
Loan type	Loan type	Arizona			California			Colorado			Nevada			Texas			Utah/ Idaho			Wash-ington			Other 1			Total
Loan type
Loan type																														Arizona		California		Colorado		Nevada		Texas		Utah/ Idaho		Wash-ington		Other 1		Total
Office CRE	Office CRE
Construction and land development
Construction and land development
Construction and land development	Construction and land development	$	8		$	79		$	—		$	2		$	—		$	18		$	101		$	—		$	208
Term	Term	295			525			97			99			217			613			195			32			2,073
Total Office CRE	Total Office CRE	$	303		$	604		$	97		$	101		$	217		$	631		$	296		$	32		$	2,281
% of total	% of total	13.1		%	27.0		%	4.3		%	4.3		%	9.6		%	26.8		%	13.5		%	1.4		%	100.0		%	% of total	14.3	%	21.5	%	4.7	%	4.6	%	11.1	%	26.5	%	15.8	%	1.5	%	100.0	%


(Dollar amounts in millions)	December 31, 2023
	Collateral Location
Loan type	Arizona			California			Colorado			Nevada			Texas			Utah/ Idaho			Wash-ington			Other 1			Total
Office CRE
Construction and land development	$	—		$	64		$	—		$	2		$	22		$	29		$	74		$	—		$	191
Term	281			412			92			86			179			488			226			29			1,793
Total Office CRE	$	281		$	476		$	92		$	88		$	201		$	517		$	300		$	29		$	1,984
% of total	14.2		%	24.0		%	4.6		%	4.4		%	10.1		%	26.1		%	15.1		%	1.5		%	100.0		%

1 No other geography ~~exceeds $18~~exceeded $17 million at both ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023.

Consumer Loans

We originate first-lien residential home mortgages considered to be of prime quality. We generally hold variable-rate loans in our portfolio and sell “conforming” fixed-rate loans to third parties, including Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, for which we make representations and warranties that the loans meet certain underwriting and collateral documentation standards.

Our 1-4 family residential mortgage loan portfolio increased $694 million, or 10%, to $8.0 billion at June 30, 2023, compared with $7.3 billion at December 31, 2022, primarily due to an increased demand for adjustable-rate mortgages, which we have retained as part of our overall interest rate risk management strategy.

We also originate home equity credit lines (“HECLs”). At June 30, 2023 and December 31, 2022, our HECL portfolio totaled $3.3 billion and $3.4 billion, respectively. Approximately 41% and 44% of our HECLs are secured by first liens for the same time periods.

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We also originate home equity credit lines (“HECLs”). At ~~June 30,~~both March 31, 2024 and December 31, 2023, our HECL portfolio totaled $3.4 billion. Approximately 38% and 39% of our HECLs are secured by first liens for the same respective time periods.

At March 31, 2024, loans representing less than 1% of the outstanding balance in the HECL portfolio were estimated to have combined loan-to-value (“CLTV”) ratios above 100%. An estimated CLTV ratio is the ratio of our loan plus any prior lien amounts divided by the estimated current collateral value. At origination, underwriting standards for the HECL portfolio generally include a maximum 80% CLTV with a Fair Isaac Corporation (“FICO”) credit score greater than 700.

Approximately ~~90%~~91% of our HECL portfolio is still in the draw period, and about 19% of those loans are scheduled to begin amortizing within the next five years. We believe the risk of loss and borrower default in the event of a loan becoming fully amortizing and the effect of significant interest rate changes is ~~minimal.~~low, given the rate shock analysis performed at origination. The ratio of HECL net charge-offs (recoveries) for the trailing twelve months to average balances at ~~June 30, 2023~~both March 31, 2024 and December 31, ~~2022~~2023, was ~~(0.03)% for both periods.~~0.05%. See Note 6 of the Notes to Consolidated Financial Statements for additional information on the credit quality of the HECL portfolio.

Nonperforming Assets

Nonperforming assets include nonaccrual loans and other real estate owned (“OREO”) or foreclosed properties. The following schedule presents our nonperforming ~~assets.~~assets:

NONPERFORMING ASSETS


(Dollar amounts in millions)	(Dollar amounts in millions)	June 30, 2023			December 31, 2022
(Dollar amounts in millions)
(Dollar amounts in millions)									March 31, 2024		December 31, 2023

Nonaccrual loans 1
Nonaccrual loans 1
Nonaccrual loans 1	Nonaccrual loans 1	$	162		$	149
Other real estate owned 2	Other real estate owned 2	2			—
Total nonperforming assets	Total nonperforming assets	$	164		$	149
Ratio of nonperforming assets to net loans and leases1 and other real estate owned 2	Ratio of nonperforming assets to net loans and leases1 and other real estate owned 2	0.29		%	0.27		%	Ratio of nonperforming assets to net loans and leases1 and other real estate owned 2	0.44	%	0.39	%
Accruing loans past due 90 days or more	Accruing loans past due 90 days or more	$	7		$	6
Ratio of accruing loans past due 90 days or more to loans and leases 1	Ratio of accruing loans past due 90 days or more to loans and leases 1	0.01		%	0.01		%	Ratio of accruing loans past due 90 days or more to loans and leases 1	0.01	%	0.01	%
Nonaccrual loans1 and accruing loans past due 90 days or more	Nonaccrual loans1 and accruing loans past due 90 days or more	$	169		$	155
Ratio of nonperforming assets1 and accruing loans past due 90 days or more to loans and leases1 and other real estate owned 2	Ratio of nonperforming assets1 and accruing loans past due 90 days or more to loans and leases1 and other real estate owned 2	0.30		%	0.28		%	Ratio of nonperforming assets1 and accruing loans past due 90 days or more to loans and leases1 and other real estate owned 2	0.44	%	0.40	%

Nonaccrual loans1 current as to principal and interest payments	Nonaccrual loans1 current as to principal and interest payments	70.4		%	57.7		%
Nonaccrual loans1 current as to principal and interest payments
Nonaccrual loans1 current as to principal and interest payments									56.0	%	48.8	%

1 Includes loans held for sale.

2 Does not include banking premises held for sale.

Nonperforming assets as a percentage of loans and leases and OREO increased to ~~0.29%~~0.44% at ~~June 30, 2023,~~March 31, 2024, compared with ~~0.27%~~0.39% at December 31, ~~2022.~~2023. Total nonaccrual loans at ~~June 30, 2023~~March 31, 2024 increased to ~~$162~~$248 million from ~~$149~~$222 million at December 31, ~~2022,~~2023, primarily due to ~~increases~~a small number of loans in the commercial and industrial and ~~owner-occupied nonaccrual loans.~~term commercial real estate portfolios. See Note 6 of the Notes to Consolidated Financial Statements for more information on nonaccrual loans.

Loan Modifications

Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral position. Loan modifications may also occur when the borrower experiences financial difficulty and needs temporary or permanent relief from the original contractual terms of the loan.

~~On January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2022-02,~~ ~~Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings~~ For the first three months of 2024 and ~~Vintage Disclosures,~~ which eliminated the recognition and measurement of troubled debt restructurings (“TDRs”) and their related disclosures. ASU 2022-02 requires enhanced disclosures for loan modifications to borrowers experiencing financial difficulty. At June 30, 2023, loans that have been modified to accommodate a borrower experiencing financial difficulties totaled ~~$148 million.~~$123 million, and $97 million, respectively.

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If a modified loan is on nonaccrual and performs for at least six months according to the modified terms, and an analysis of the customer’s financial condition indicates that we are reasonably assured of repayment of the modified

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principal and interest, the loan may be returned to accrual status. The borrower’s payment performance prior to and following the modification is taken into account to determine whether a loan should be returned to accrual status.

ACCRUING AND NONACCRUING MODIFIED LOANS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY


~~(In millions)~~	June 30, 2023

~~Modified loans – accruing~~	$	~~137~~
~~Modified loans – nonaccruing~~	11
~~Total~~	$	~~148~~


	Three Months Ended March 31,
(In millions)	2024		2023

Modified loans – accruing	$	116	$	96
Modified loans – nonaccruing	7		1
Total	$	123	$	97

For additional information regarding loan modifications to borrowers experiencing financial difficulty, ~~including information related to TDRs prior to our adoption of ASU 2022-02,~~ see Note 6 of the Notes to Consolidated Financial Statements.

Allowance for Credit Losses

The ACL includes the ALLL and the RULC. The ACL represents our estimate of current expected credit losses

related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date. To determine

the adequacy of the allowance, our loan and lease portfolio is segmented based on loan type.

The RULC is a reserve for potential losses associated with off-balance sheet commitments ~~remained stable during the first six months of 2023. The reserve~~and is ~~separately recorded~~included in “Other

liabilities” on the consolidated balance ~~sheet in “Other liabilities,” and any~~sheet. Any related increases or decreases in the reserve are ~~recorded~~included in

“Provision for unfunded lending commitments” on the consolidated ~~income~~ statement ~~in “Provision for unfunded lending commitments.”~~

~~The following schedule presents the changes in and allocation~~ of ~~the ACL.~~income.

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~~SUMMARY OF~~The following schedule presents the changes in and allocation of the ACL:

CHANGES IN THE ALLOWANCE FOR CREDIT ~~LOSS EXPERIENCE~~
(Dollar amounts in millions) Six Months Ended
June 30, 2023 Twelve Months Ended
December 31, 2022 Six Months Ended
June 30, 2022
Loans and leases outstanding $ 56,917 $ 55,653 $ 52,370
Average loans and leases outstanding:
Commercial 30,664 29,225 28,725
Commercial real estate 12,904 12,251 12,134
Consumer 12,849 11,122 10,501
Total average loans and leases outstanding $ 56,417 $ 52,598 $ 51,360
Allowance for loan and lease losses:
Balance at beginning of period 1
$ 572 $ 513 $ 513
Provision for loan losses 92 101 10
Charge-offs:
Commercial 23 72 28
Commercial real estate — — —
Consumer 6 10 7
Total 29 82 35
Recoveries:
Commercial 12 32 15
Commercial real estate — — —
Consumer 4 11 5
Total 16 43 20
Net loan and lease charge-offs 13 39 15
Balance at end of period $ 651 $ 575 $ 508
Reserve for unfunded lending commitments:
Balance at beginning of period $ 61 $ 40 $ 40
Provision for unfunded lending commitments (1) 21 (2)
Balance at end of period $ 60 $ 61 $ 38
Total allowance for credit losses:
Allowance for loan and lease losses $ 651 $ 575 $ 508
Reserve for unfunded lending commitments 60 61 38
Total allowance for credit losses $ 711 $ 636 $ 546
Ratio of allowance for credit losses to net loans and leases, at period end 1.25 % 1.14 % 1.04 %
Ratio of allowance for credit losses to nonaccrual loans, at period end 439 % 427 % 280 %
Ratio of allowance for credit losses to nonaccrual loans and accruing loans past due 90 days or more, at period end 421 % 410 % 272 %
Ratio of total net charge-offs to average loans and leases 2
0.05 % 0.07 % 0.06 %
Ratio of commercial net charge-offs to average commercial loans 2
0.07 % 0.14 % 0.09 %
Ratio of commercial real estate net charge-offs to average commercial real estate loans 2
— % — % — %
Ratio of consumer net charge-offs to average consumer loans 2
0.03 % (0.01) % 0.04 %
LOSSES


(Dollar amounts in millions)	Three Months Ended March 31, 2024			Twelve Months Ended December 31, 2023			Three Months Ended March 31, 2023

Loans and leases outstanding	$	58,109		$	57,779		$	56,331
Average loans and leases outstanding:
Commercial	30,482			30,519			30,678
Commercial real estate	13,504			13,023			12,876
Consumer	13,921			13,198			12,599
Total average loans and leases outstanding	$	57,907		$	56,740		$	56,153
Allowance for loan and lease losses:
Balance at beginning of period	$	684		$	572		$	572
Provision for loan losses	21			148			46
Charge-offs:
Commercial	10			45			3
Commercial real estate	—			3			—
Consumer	4			14			4
Total	14			62			7
Recoveries:
Commercial	6			20			6
Commercial real estate	1			—			—
Consumer	1			6			1
Total	8			26			7
Net loan and lease charge-offs	6			36			—
Balance at end of period	$	699		$	684		$	618
Reserve for unfunded lending commitments:
Balance at beginning of period	$	45		$	61		$	61
Provision for unfunded lending commitments	(8)			(16)			(1)
Balance at end of period	$	37		$	45		$	60
Total allowance for credit losses:
Allowance for loan and lease losses	$	699		$	684		$	618
Reserve for unfunded lending commitments	37			45			60
Total allowance for credit losses	$	736		$	729		$	678

Ratio of allowance for credit losses to net loans and leases, at period end	1.27		%	1.26		%	1.20		%
Ratio of allowance for credit losses to nonaccrual loans, at period end	297		%	328		%	396		%
Ratio of allowance for credit losses to nonaccrual loans and accruing loans past due 90 days or more, at period end	293		%	324		%	392		%
Ratio of total net charge-offs to average loans and leases 1	0.04		%	0.06		%	—		%
Ratio of commercial net charge-offs to average commercial loans 1	0.05		%	0.08		%	(0.04)		%
Ratio of commercial real estate net charge-offs to average commercial real estate loans 1	(0.03)		%	0.02		%	—		%
Ratio of consumer net charge-offs to average consumer loans 1	0.09		%	0.06		%	0.10		%

1The beginning balance for the six months ended June 30, 2023 for the allowance for loan losses does not agree to the ending balance at December 31, 2022 because of the adoption of the new accounting standard related to loan modifications to borrowers experiencing financial difficulties.

2 Ratios are annualized for the periods presented except for the period representing the full twelve months.

~~The~~During the first three months of 2024, the total ACL increased to ~~$711~~$736 million from ~~$636 million, during~~$729 million. The increase in the ~~first six months of 2023,~~ACL primarily ~~due to~~reflects incremental reserves associated with portfolio-specific risks including commercial real estate and modest deterioration in credit quality, partially offset by improvements in economic forecasts. See Note 6 of the Notes to Consolidated Financial Statements for additional information related to the ACL and credit trends experienced in each portfolio segment.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

Interest Rate and Market Risk Management

Interest rate and market risk is the ~~potential for reduced net interest income~~risk of losses to current or future earnings and ~~other rate-sensitive income resulting~~capital from adverse changes in the level of interest rates. Market risk is the potential for loss arising from adverse changes in the fair value of fixed-income securities, equity securities, other earning assets, and derivative financial instruments as a result of changes in interest rates orand other ~~factors.~~market conditions. Because we engage in transactions involving various financial products, we are exposed to ~~both~~ interest rate ~~risk~~ and market risk. For a more comprehensive discussion of our interest rate and market risk management, see ~~the~~ “Interest Rate and Market Risk Management” ~~section~~ in our ~~2022~~2023 Form 10-K.

~~Interest Rate Risk~~

We strive to position the Bank for interest rate changes and manage the balance sheet sensitivity to reduce the volatility of both net interest income and economic value of ~~equity.~~ equity (“EVE”). With a higher interest rate environment, customer deposit behavior has deviated from the trends observed during the relatively low interest rate period over the prior 15 years. As a result, customers have been more inclined to (1) move deposits to nonbanking products, such as money market mutual funds, that offer higher interest rates, and (2) reduce their balances in noninterest-bearing accounts. These recently observed changes in deposit behavior have been incorporated into our deposit models used in managing interest rate risk, giving more weight to the recently observed behavior, and increased both the deposit beta for interest-bearing products and the percentage of noninterest-bearing deposits assumed to migrate to interest-bearing products. Changes to models are independently reviewed by our Model Risk Management function. Management believes our deposit models are more likely to reflect future behavior of deposits, and therefore we manage our interest rate risk exposure on that basis.

We generally have granular deposit ~~funding. Much~~funding, and much of this funding has an ~~indeterminate~~indeterminable life with no maturity, and can be withdrawn at any time. Because most deposits come from household and business accounts, their duration is generally longer than the duration of our loan portfolio. As such, we ~~are naturally~~have historically been “asset-sensitive” — meaning that our assets are expected to reprice faster or more significantly than our liabilities. ~~In previous interest rate environments, we have added (1)~~We regularly use interest rate swaps, ~~to synthetically increase the duration of the loan portfolio, (2) longer-duration~~investment in fixed-rate securities, and ~~(3) longer-duration loans~~funding strategies to ~~reduce~~manage our interest rate risk. These strategies collectively have muted the ~~asset~~expected sensitivity ~~to a level where an increase in interest rates~~ of ~~100 bps would continue to result in a positive change in~~ net interest income ~~and a decline~~to changes in interest ~~rates would be more muted. Additionally, we have pay-fixed interest rate swaps to adjust the duration of the investment securities portfolio.~~

rates. Asset sensitivity measures depend upon the assumptions we use for deposit runoff and repricing behavior. As interest rates rise, we expect some customers to move balances from demand deposits to interest-bearing accounts such as money market, savings, or certificates of deposit. Our models are particularly sensitive to the assumption about the rate of such migration.

We also assume a correlation, referred to as a “deposit beta,” with respect to interest-bearing deposits, wherein the rates paid to customers change at a different pace when compared with changes in average benchmark interest rates. Generally, certificates of deposit are assumed to have a high correlation, while interest-bearing checking accounts are assumed to have a lower correlation.

With the recent prominent bank failures during the first half of 2023, customer deposit behavior deviated from modeled behaviors, with the latter being informed using data reflecting an extended period of relatively low interest rates. As such, in addition to our historical-based assumptions, we have included adjusted deposit assumptions into our interest risk rate management, which increase the deposit beta for interest-bearing products and increase the percentage of non-interest bearing deposits that migrate to interest-bearing products.

The following schedule presents deposit duration assumptions ~~using both historical-based deposit behavior as well as the adjusted assumptions~~ discussed ~~previously.~~previously:

DEPOSIT ASSUMPTIONS


			June 30, 2023				December 31, 2022
			Historical-based assumptions		Adjusted assumptions		Historical-based assumptions
		March 31, 2024										March 31, 2024			December 31, 2023
Product	Product		Effective duration (unchanged)	Effective duration (+200 bps)	Effective duration (unchanged)	Effective duration (+200 bps)	Effective duration (unchanged)	Effective duration (+200 bps)	Product	Effective duration (unchanged)	Effective duration (+200 bps)		Effective duration (unchanged)	Effective duration (+200 bps)

Demand deposits	Demand deposits		3.9%	3.7%	2.9%	2.7%	3.6%	3.5%
Demand deposits
Demand deposits										3.1%	2.9%		3.5%	3.2%
Money market	Money market		2.2%	2.1%	1.5%	1.3%	2.3%	2.0%	Money market	1.4%	1.2%		1.5%	1.4%
Savings and interest-bearing checking	Savings and interest-bearing checking		2.9%	2.6%	2.0%	1.6%	3.1%	2.8%	Savings and interest-bearing checking	2.0%	1.7%		2.2%	1.9%

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~~As more rate-sensitive deposits have runoff, the~~The effective duration of the deposits under the historical-based assumptions has lengthened due to the remaining deposits that are assumed to be less rate sensitive. Conversely, the effective duration of the deposits under the adjusted assumptions has shortened considerably due to faster deposit repricing.

As noted previously, we utilize derivatives to manage interest rate risk. The following schedule presents derivatives that are designated in qualifying hedging relationships at ~~June 30, 2023.~~March 31, 2024. Included are the average outstanding derivative notional amounts for each period presented and the weighted average fixed-rate paid or received for each category of cash flow and fair value hedge. ~~Fair value hedges of assets include $2.5 billion in notional of hedges of AFS securities designated under the portfolio layer method that were added during the second quarter of 2023.~~ See Note 7 of the Notes to Consolidated Financial Statements for additional information regarding the impact of these hedging relationships on interest income and expense.

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DERIVATIVES DESIGNATED IN QUALIFYING HEDGING RELATIONSHIPS
2023 2024 2025 3Q25 - 2Q26 3Q26 - 2Q27
(Dollar amounts in millions) Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter
Cash flow hedges
Cash flow hedges of assets 1,2
Average outstanding notional $ 2,550 $ 2,250 $ 1,817 $ 1,483 $ 1,050 $ 550 $ 350 $ 350 $ 221 $ 100
Weighted-average fixed-rate received 2.37 % 2.24 % 2.05 % 1.96 % 1.82 % 1.96 % 2.34 % 2.34 % 1.94 % 1.65 %
Cash flow hedges of liabilities 3
Average outstanding notional $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ — $ —
Weighted-average fixed-rate paid 3.67 % 3.67 % 3.67 % 3.67 % 3.67 % 3.67 % 3.67 % 3.67 % — % — %
2023 4
2024 2025 2026 2027 2028 2029 2030 2031 2032
Fair value hedges
Fair value hedges of assets 4
Average outstanding notional $ 3,172 $ 3,444 $ 3,558 $ 3,562 $ 3,558 $ 1,928 $ 1,049 $ 1,044 $ 1,037 $ 1,001
Weighted-average fixed-rate paid 3.16 % 3.06 % 3.03 % 3.02 % 3.03 % 2.28 % 1.84 % 1.83 % 1.83 % 1.83 %
Fair value hedges of liabilities 5
Average outstanding notional $ — $ — $ — $ — $ — $ — $ — $ — $ — $ —
Weighted-average fixed-rate received — % — % — % — % — % — % — % — % — % — %


	2024									2025												2026			2Q26 - 1Q27			2Q27 - 1Q28
(Dollar amounts in millions)	Second Quarter			Third Quarter			Fourth Quarter			First Quarter			Second Quarter			Third Quarter			Fourth Quarter			First Quarter
Cash flow hedges
Cash flow hedges of assets 1
Average outstanding notional	$	683		$	350		$	350		$	350		$	350		$	350		$	300		$	133		$	100		$	—
Weighted-average fixed-rate received	2.55		%	2.34		%	2.34		%	2.34		%	2.34		%	2.34		%	2.13		%	1.67		%	1.65		%	—		%
Cash flow hedges of liabilities 2
Average outstanding notional	$	500		$	500		$	500		$	500		$	500		$	—		$	—		$	—		$	—		$	—
Weighted-average fixed-rate paid	3.67		%	3.67		%	3.67		%	3.67		%	3.67		%	—		%	—		%	—		%	—		%	—		%
	2024			2025			2026			2027			2028			2029			2030			2031			2032			2033
Fair value hedges
Fair value hedges of assets 3
Average outstanding notional	$	4,469		$	4,558		$	4,562		$	4,558		$	2,428		$	1,049		$	1,044		$	1,037		$	1,001		$	973
Weighted-average fixed-rate paid	3.23		%	3.21		%	3.21		%	3.21		%	2.47		%	1.84		%	1.83		%	1.83		%	1.83		%	1.82		%

1 Cash flow hedges of assets consist of receive-fixed swaps hedging pools of floating-rate loans.

2 ~~Cash~~ The longest dated cash flow ~~hedges of assets fully~~hedge matures in February 2027. Amounts for 2027 have not been prorated to reflect this hedge maturing during the period.

32 Cash flow hedges of liabilities ~~fully~~consists of a pay-fixed swap hedging rolling FHLB advances. This swap matures in May of 2025.

43 Fair value asset hedges ~~of assets~~ consist of pay-fixed ~~interest rate swaps hedging AFS fixed-rate securities.~~

5~~Fair value hedges of debt consist of receive-fixed~~ swaps hedging fixed-rate ~~debt. The sole fair value hedge~~AFS securities and fixed-rate commercial loans, as further discussed in Note 7 of ~~debt was~~the Notes to Consolidated Financial Statements. Increasing notional amounts in 2025 are due to forward starting swaps.

At March 31, 2024, we had $173 million of net losses deferred in accumulated other comprehensive income (loss) (“AOCI”) related to terminated ~~during~~cash flow hedges. Amounts deferred in AOCI from terminated cash flow hedges will be amortized into interest income on a straight-line basis through the ~~second quarter~~original maturity dates of ~~2023.~~the hedges as long as the hedged forecasted transactions continue to be expected to occur. For more information on amounts deferred in AOCI related to terminated cash flow hedges, see “Interest Rate and Market Risk Management” in our 2023 Form 10-K.

Earnings at Risk (EaR) and Economic Value of Equity (EVE)

Incorporating ~~the historical-based and adjusted~~our deposit assumptions and the impact of derivatives in qualifying hedging relationships previously discussed, the following schedule presents earnings at risk (“EaR”), or the percentage change in 12-month forward-looking net interest income, and our estimated percentage change in ~~economic value of equity (“EVE”).~~EVE. Both EaR and EVE are based on a static balance sheet size under parallel interest rate changes ranging from -100 bps to +300 bps. These measures highlight the sensitivity to changes in interest rates across various scenarios; the outcomes are not intended to be forecasts of expected net interest income.

INCOME SIMULATION – CHANGE IN NET INTEREST INCOME AND CHANGE IN ECONOMIC VALUE OF EQUITY


	March 31, 2024										December 31, 2023
	Parallel shift in rates (in bps) 1										Parallel shift in rates (in bps) 1
Repricing scenario	-100		0		+100		+200		+300		-100		0		+100		+200		+300
Earnings at Risk (EaR)	(3.3)	%	—	%	3.7	%	7.4	%	11.2	%	(2.5)	%	—	%	2.4	%	4.9	%	7.4	%
Economic Value of Equity (EVE)	4.8	%	—	%	(2.6)	%	(5.5)	%	(8.0)	%	2.8	%	—	%	(1.4)	%	(3.3)	%	(5.2)	%

1 Assumes rates cannot go below zero in the negative rate shift.

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~~INCOME SIMULATION – CHANGE IN NET INTEREST INCOME AND CHANGE IN ECONOMIC VALUE OF EQUITY~~

June 30, 2023 December 31, 2022
Parallel shift in rates (in bps)1
Parallel shift in rates (in bps)1
Repricing scenario -100 0 +100 +200 +300 -100 0 +100 +200 +300
Historical-based assumptions:
Earnings at Risk
(EaR)
(5.8) % — % 5.9 % 11.8 % 17.7 % (2.4) % — % 2.4 % 4.8 % 7.1 %
Economic Value of Equity
(EVE)
(0.1) % — % 1.9 % 3.5 % 4.8 % 2.0 % — % (1.1) % (2.3) % (3.7) %
Adjusted assumptions:
Earnings at Risk
(EaR)
(1.3) % — % 1.4 % 2.9 % 4.4 %
Economic Value of Equity
(EVE)
4.8 % — % (4.1) % (8.6) % (12.9) %

1 ~~Assumes rates cannot go below zero in the negative rate shift.~~

~~Under the historical-based assumptions, the~~The asset sensitivity, as measured by EaR, increased during the ~~second~~first quarter of ~~2023,~~2024, primarily due to an increase in pay-fixed interest rate swap notional, partially offset by deposit migration from low beta products (e.g., checking accounts) to high beta ~~products.~~products (e.g., money market accounts) and a shift from short- to long-term fixed-rate borrowings. Under ~~the adjusted~~our current deposit assumptions, ~~asset sensitivity decreased significantly due to faster deposit repricing.~~

interest rate risk remains within policy limits. For interest-bearing deposits with ~~indeterminate~~indeterminable maturities, the weighted average modeled beta is ~~32% under~~53%.

Prepayment assumptions are an important factor in how we manage interest rate risk. Certain assets in our portfolio, such as 1-4 family residential mortgages and mortgage-backed securities, can be prepaid at any time by the ~~historical-based assumptions,~~borrower, which may significantly affect our expected cash flows. At March 31, 2024, lifetime prepayment speeds on loans and ~~55% under the adjusted assumptions.~~mortgage-backed securities were estimated to be 8.7% and 6.1%, respectively.

The EaR analysis focuses on parallel rate shocks across the term structure of benchmark interest rates. In a non-parallel rate scenario where ~~the overnight rate increases 200 bps,~~shorter-term rates increase slightly, but the ten-year rate increases ~~only 30~~by 200 bps, the increase in EaR ~~is modeled under the historical-based assumptions to~~would be approximately ~~two-thirds of~~50 percent larger than the change associated with the parallel +200 bps rate change.

EaR has inherent limitations in describing expected changes in net interest income in rapidly changing interest rate environments due to a lag in asset and liability repricing behavior. As such, we expect net interest income to change due to “latent” and “emergent” interest rate sensitivity. Unlike EaR, which measures net interest income over 12 months, latent and emergent interest rate sensitivity explains changes in current quarter net interest income, compared with expected net interest income in the same quarter one year forward.

Latent interest rate sensitivity refers to future changes in net interest income based upon past rate movements that have yet to be fully recognized in revenue but will be recognized over the near term. We expect latent sensitivity to ~~reduce~~increase net interest income by ~~approximately 4%~~0.8% in the ~~second~~first quarter of ~~2024,~~2025, compared with the ~~second~~first quarter of ~~2023.~~2024.

Emergent interest rate sensitivity refers to future changes in net interest income based upon future interest rate movements and is measured from the latent level of net interest income. If interest rates rise consistent with the forward curve at ~~June 30, 2023,~~March 31, 2024, we expect emergent sensitivity to increase net interest income by ~~approximately 1%~~1.0% from the latent sensitivity level, for a cumulative ~~3% reduction~~1.8% increase in net interest income. For a +100 bps and -100 bps parallel interest rate shock to the implied forward rate path, the cumulative net interest income sensitivity would be 2.8% and -0.5%, respectively.

Our focus on business banking also plays a significant role in determining the nature of our asset-liability management posture. At ~~June 30, 2023, $25.8~~March 31, 2024, $26.6 billion of our commercial lending and CRE loan balances were scheduled to reprice in the next six months. For these variable-rate loans, we have executed ~~$2.9 billion~~$850 million of cash flow hedges by receiving fixed rates on interest rate swaps. At ~~June 30, 2023,~~March 31, 2024, we also had ~~$3.6~~$3.7 billion of variable-rate consumer loans scheduled to reprice in the next six months. The impact on asset sensitivity from commercial or consumer loans with floors has become insignificant as rates have risen. See Notes 3 and 7 of the Notes to Consolidated Financial Statements for additional information regarding derivative instruments.

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~~LIBOR Transition~~

London Interbank Offered Rate (“LIBOR”) has been phased out globally, and banks were required to migrate to alternative reference rates by June 30, 2023. We implemented processes, procedures, and systems to mitigate contract risk. New originations, and any modifications or renewals of LIBOR-based contracts, contained fallback language to facilitate transition to an alternative reference rate. Additionally, under the Adjustable Interest Rate (LIBOR) Act of 2022, the Federal Reserve Board (“FRB”) identified benchmark replacement rates for LIBOR contracts lacking fallback provisions with a clearly defined or practical replacement benchmark rate. At June 30, 2023, we have remediated substantially all our LIBOR exposure through fallback language, replacement indices, or reliance upon the provisions under the LIBOR Act.

~~Market Risk –~~ Fixed Income

We are exposed to market risk through changes in fair value. This includes market risk for trading securities and for interest rate swaps used to hedge interest rate risk. We underwrite municipal and corporate securities. We also trade municipal, agency, and treasury securities. This underwriting and trading activity exposes us to a risk of loss arising from adverse changes in the prices of these fixed-income securities.

Changes in the fair value of AFS securities and in interest rate swaps that qualify as cash flow hedges are included in ~~accumulated other comprehensive income (loss) (“AOCI”)~~AOCI for each financial reporting period. During the ~~second~~first quarter of ~~2023,~~2024, the ~~$32~~$12 million after-tax ~~increase~~improvement in AOCI ~~loss~~ related to investment securities was ~~driven largely by declines in the fair value of the AFS securities~~ primarily due to ~~changes in benchmark interest rates.~~paydowns on the AFS securities. For more discussion regarding investment securities and AOCI, see the “Capital Management” section on page 33. See also Note 5 of the Notes to Consolidated Financial Statements for further information regarding the accounting for investment securities.

Our noninterest-bearing deposits are more valuable in a rising interest rate environment, creating meaningful economic value that is not fully reflected on our balance sheet since deposits and related intangible assets are not recorded at fair value for accounting purposes.

~~Market Risk –~~ 30

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Equity Investments

Through our equity investment activities, we own equity securities that are publicly traded. In addition, we own equity securities in governmental entities and companies, e.g., ~~FRB~~Federal Reserve (“FRB”) and the FHLB, that are not publicly traded. Equity investments may be accounted for at cost less impairment and adjusted for observable price changes, fair value, the equity method, or proportional or full consolidation methods of accounting, depending on our ownership position and degree of influence over the investees’ business. Regardless of the accounting method, the values of our investments are subject to fluctuation. Because the fair value of these securities may fall below the cost at which we acquired them, we are exposed to the possibility of loss. Equity investments in private and public companies are evaluated, monitored, and approved by members of management in our Equity Investments Committee and Securities Valuation Committee.

We hold both direct and indirect investments in predominantly pre-public companies, primarily through various Small Business Investment Company (“SBIC”) venture capital funds as a strategy to provide beneficial financing, growth, and expansion opportunities to diverse businesses generally in communities within our geographic footprint. Our equity exposure to these investments was approximately ~~$177~~$196 million and ~~$172~~$190 million at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. On occasion, some of the companies within our SBIC investment may issue an initial public offering (“IPO”). In this case, the fund is generally subject to a lockout period before ~~liquidating~~we can liquidate the investment, which can introduce additional market risk. See Note 3 of the Notes to Consolidated Financial Statements for additional information regarding the valuation of our SBIC investments.

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Liquidity Risk Management

Liquidity refers to our ability to meet our cash, contractual, and collateral obligations, and to manage both expected and unexpected cash flows without adversely impacting our operations or financial strength. We manage our liquidity to provide funds for our customers’ credit needs, our anticipated financial and contractual obligations, and other corporate activities. Sources of liquidity primarily include deposits, borrowings, equity, and ~~unencumbered~~paydowns of assets, such as loans and investment securities. Our investment securities are primarily held as a source of contingent liquidity. We ~~primarily~~generally own securities that can readily provide us with cash and liquidity through secured borrowing agreements with securities pledged as collateral.

We maintain and regularly test a contingency funding plan to identify sources and uses of liquidity. ~~Additionally, we have a~~Our Board-approved liquidity policy ~~that~~ requires us to monitor and maintain adequate liquidity, diversify funding positions, and anticipate future funding needs. In accordance with this policy, we monitor our liquidity positions by conducting various stress tests and evaluating certain liquid asset measurements, such as a 30-day liquidity coverage ratio.

We perform regular liquidity stress tests and assess our portfolio of highly liquid assets (sufficient to cover 30-day funding needs under stress scenarios). These stress tests include projections of funding maturities, uses of funds, and assumptions of deposit runoff. ~~These~~The assumptions consider the size of deposit account, operational nature of deposits, type of depositor, and concentrations of funding sources including large depositors and aggregate levels of uncollateralized deposits exceeding insured levels. Concentrated funding sources are given large runoff factors up to 100% in projecting stressed funding needs. Our liquidity stress testing considers multiple timeframes ranging from overnight to 12 months. Our liquidity policy requires us to maintain sufficient on-balance sheet liquidity in the form of FRB reserve balance and other highly liquid assets to meet stressed outflow assumptions.

We have a dedicated funding desk that monitors real-time inflows and outflows of our FRB account, and we have tools, including ready access to repo markets and FHLB advances, to manage intraday liquidity. FHLB borrowings are “open-term,” allowing us the ability to retain or return funds based on our liquidity needs. We pledge a large portion of our highly liquid investment securities portfolio through the General Collateral Funding (“GCF”) repo program. Through this program, high-quality collateral is pledged, and program participants exchange funds anonymously, which allows for near instant access to funding during market hours.

Additionally, we have pledged collateral to the FRB’s primary credit facility (or discount window) and to the Bank Term Funding Program (“BTFP”), which provide additional contingent funding sources outside the normal operating hours of the FHLB and the GCF program. The BTFP ~~offers~~offered loans of up to one year in length to eligible

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depository institutions pledging U.S. Treasuries, agency debt and government mortgage-backed securities, and other qualifying assets as collateral. ~~Unlike other funding sources, borrowing capacity~~The availability of advances under the program ended in mid-March 2024. At March 31, 2024, our outstanding borrowings under the BTFP ~~is based~~were $3.0 billion, with $1.5 billion maturing on ~~the par value, not the fair value, of collateral. Advances can~~December 31, 2024, and another $1.5 billion maturing on January 15, 2025. These advances may be ~~requested under the program through mid-March 2024.~~

prepaid at any time without penalty. For more information on our liquidity risk management practices, see “Liquidity Risk Management” in our ~~2022~~2023 Form 10-K.

For the first ~~six~~three months of ~~2023,~~2024, the primary sources of cash came from a decrease in investment securities, ~~a decrease~~an increase in ~~money market investments,~~short-term borrowings, and net cash provided by operating activities. Uses of cash during the same period primarily included ~~primarily~~ a decrease in ~~short-term borrowings,~~deposits, an increase in loans and leases, and ~~dividends paid on common and preferred stock.~~an increase in money market investments. Cash payments for interest reflected in operating expenses were ~~$546~~$491 million and ~~$31~~$224 million for the first ~~six~~three months of ~~2023~~2024 and ~~2022,~~2023, respectively.

The FHLB and FRB have been, and continue to be, a significant source of back-up liquidity and funding. We are a member of the FHLB of Des Moines, which allows member banks to borrow against eligible loans and securities to satisfy liquidity and funding requirements. We are required to invest in FHLB and FRB stock to maintain our borrowing capacity. At ~~June 30, 2023,~~March 31, 2024, our total investment in FHLB and FRB stock was ~~$111~~$45 million and $65 million, respectively, compared with ~~$294~~$79 million and ~~$68~~$65 million at December 31, ~~2022.~~

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2023.

At ~~June 30, 2023,~~March 31, 2024, loans with a carrying value of ~~$24.5~~$22.9 billion and ~~$15.3~~$15.8 billion, compared with ~~$23.7~~$24.8 billion and ~~$3.9~~$11.5 billion at December 31, ~~2022,~~2023, were pledged at the FHLB and FRB, respectively, as collateral for current and potential borrowings.

At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, investment securities with a carrying value of ~~$21.1~~$19.8 billion and ~~$13.5~~$20.5 billion, respectively, were pledged as collateral for potential borrowings. For the same time periods, these ~~pledges~~pledged securities included ~~$9.9~~$9.2 billion and ~~$8.3~~$9.5 billion for available use through the GCF repo program, ~~$7.1~~$5.4 billion and ~~$1.0~~$5.5 billion to the FRB, and ~~$4.1~~$5.1 billion and ~~$4.2~~$5.5 billion to secure collateralized public and trust deposits, advances, and for other purposes.

A large portion of these pledged assets are unencumbered, but are pledged to provide immediate access to contingency sources of funds. The following schedule presents our total available liquidity including unused collateralized borrowing ~~capacity.~~capacity:

AVAILABLE LIQUIDITY


	March 31, 2024																												March 31, 2024						December 31, 2023
(Dollar amounts in billions)																								(Dollar amounts in billions)	FHLB	FRB 1	GCF	BTFP		Total	FHLB			FRB 1		GCF	BTFP	Total

		June 30, 2023											December 31, 2022
(In billions)		FHLB		FRB		GCF		BTFP		Total			FHLB		FRB		GCF		BTFP		Total

Total borrowing capacity

Total borrowing capacity

Total borrowing capacity	Total borrowing capacity	$	17.1	$	13.6	$	10.0	$	7.1	$	47.8		$	16.6	$	4.0	$	8.4	$	—	$	29.0
Borrowings outstanding	Borrowings outstanding	2.6		—		2.0		—		4.6			7.2		—		2.7		—		9.9
Remaining capacity, at period end	Remaining capacity, at period end	$	14.5	$	13.6	$	8.0	$	7.1	$	43.2		$	9.4	$	4.0	$	5.7	$	—	$	19.1

Cash and due from banks	Cash and due from banks									0.7											0.7
Interest-bearing deposits 1										1.5											1.3
Cash and due from banks
Cash and due from banks
Interest-bearing deposits 2
Total available liquidity	Total available liquidity									$	45.4										$	21.1
Ratio of available liquidity to uninsured deposits	Ratio of available liquidity to uninsured deposits									149		%									56		%	Ratio of available liquidity to uninsured deposits								130	%						122	%

1 Represents borrowing capacity and borrowings outstanding at the Federal Reserve Bank discount window.

2Represents funds deposited by the Bank primarily at the Federal Reserve Bank.

At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, our total available liquidity was ~~$45.4~~$41.6 billion, compared with ~~$21.1~~$40.6 billion, respectively. At ~~June 30, 2023,~~March 31, 2024, we had sources of liquidity ~~which~~that exceeded our uninsured deposits without the need to sell any investment securities.

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Credit Ratings

General financial market and economic conditions ~~also~~ impact our access to, and cost of, external financing. Access to funding markets is also directly affected by the credit ratings we receive from various rating agencies. The ratings not only influence the costs associated with borrowings, but can also influence the sources of the borrowings. All of the credit rating agencies rate our debt at an investment-grade level. During the second quarter of 2023, as a result of broader uncertainty in the banking industry, Standard & Poor's (“S&P”) changed their outlook on our long-term deposit and issuer ratings to “Negative” from “Stable.” Additionally, Moody's downgraded our long-term issuer rating to Baa2 from Baa1, our short-term debt rating to P2 from P1, and changed their outlook on our long-term deposit and issuer ratings to “Stable” from “Ratings under review.”

The following schedule presents our ~~current~~ credit ~~ratings.~~ratings:

CREDIT RATINGS

as of ~~July 31, 2023:~~April 30, 2024:

Rating agency

Outlook

Long-term issuer/senior
debt rating

Subordinated debt rating

Short-term debt rating

Kroll

~~Positive~~Stable

A-

BBB+

S&P

Negative

BBB+

BBB

Fitch

Stable

BBB+

BBB

F1F2

Moody's

Stable

Baa2

We may, from time to time, issue additional preferred stock, senior or subordinated notes, or other forms of capital or debt instruments, depending on our capital, funding, asset-liability management, or other needs as market

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~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

conditions warrant. These additional issuances may be subject to required regulatory approvals. We believe that our sources of available liquidity are adequate to meet all reasonably foreseeable short- and intermediate-term demands.

Capital Management

A strong capital position is vital to the achievement of our key corporate objectives, our continued profitability, and to promoting depositor and investor confidence. We seek to (1) maintain sufficient capital to support the current needs and growth of our businesses, consistent with our assessment of their potential to create value for shareholders, and (2) fulfill responsibilities to depositors and bondholders while managing capital distributions to shareholders through dividends and repurchases of common stock.

We utilize stress testing as an important mechanism to inform our decisions on the appropriate level of capital, based upon actual and hypothetically stressed economic conditions, ~~which are comparable in severity to~~including the ~~scenarios published by the FRB.~~FRB’s supervisory severely adverse scenario. The timing and amount of capital actions are subject to various factors, including our financial performance, business needs, prevailing and anticipated economic conditions, and the results of our internal stress testing, as well as Board and Office of the Comptroller of the Currency (“OCC”) approval. Shares may be repurchased occasionally in the open market or through privately negotiated transactions. For a more comprehensive discussion of our capital risk management, see “Capital Management” in our ~~2022~~2023 Form 10-K.

SHAREHOLDERS' EQUITY


(Dollar amounts in millions)	(Dollar amounts in millions)	June 30, 2023		December 31, 2022		Amount change		Percent change		(Dollar amounts in millions)		March 31, 2024						December 31, 2023						Amount change					Percent change
Shareholders’ equity:	Shareholders’ equity:
Preferred stock
Preferred stock
Preferred stock	Preferred stock	$	440	$	440	$	—	—	%	$	440			$		$	440			$		$	—			—		—		%
Common stock and additional paid-in capital	Common stock and additional paid-in capital	1,722		1,754		(32)		(2)
Retained earnings	Retained earnings	6,051		5,811		240		4
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(2,930)		(3,112)		182		6
Total shareholders' equity	Total shareholders' equity	$	5,283	$	4,893	$	390	8	%	Total shareholders' equity		$	5,829		$			$	5,691		$			$	138		2			2	%

Total shareholders’ equity increased ~~$390~~$138 million, or 8%2%, to ~~$5.3~~$5.8 billion at ~~June 30, 2023,~~March 31, 2024, compared with ~~$4.9~~$5.7 billion at December 31, ~~2022.~~2023. Common stock and additional paid-in capital decreased ~~$32~~$26 million, primarily due to common stock ~~repurchases~~repurchases. In February 2024, the Board approved a plan to repurchase up to $35 million of common shares outstanding during the year 2024. During the first quarter of ~~2023. As the macroeconomic environment remained uncertain,~~2024, we ~~did not repurchase~~repurchased 0.9 million common shares ~~during the second quarter~~outstanding for $35 million.

Table of ~~2023, nor do we expect to repurchase common shares during the third quarter of 2023.~~Contents

ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

The AOCI balance was a ~~$2.9~~loss of $2.6 billion ~~loss~~ at ~~June 30, 2023,~~March 31, 2024, and ~~for~~primarily reflects the ~~first six months of 2023, reflected (1) a $9 million~~ decline in the fair value of fixed-rate ~~AFS~~investment securities as a result of higher interest rates, ~~offset~~and includes $2.0 billion ($1.5 billion after tax) of unrealized losses on the securities previously transferred from AFS to HTM. During the first quarter of 2024, AOCI improved $83 million, driven largely by ~~a $103~~$46 million ~~increase~~ in unrealized loss amortization ~~of the discount on~~associated with the securities transferred from AFS to HTM, ~~during the fourth quarter of 2022,~~ and ~~(2) an $88~~$12 million ~~increase~~primarily related to paydowns on AFS securities. AOCI was also positively impacted by a $25 million change in ~~unrealized holding gains and other adjustments associated with~~net deferred losses related to derivative ~~instruments.~~instruments used for risk management purposes. Absent any sales or credit impairment of the AFS securities, the unrealized losses will not be recognized in earnings. We do not intend to sell any securities with unrealized losses. Although changes in AOCI are reflected in shareholders’ equity, they are excluded from regulatory capital, and therefore do not impact our regulatory ratios.

For more discussion on our investment securities portfolio and related unrealized gains and losses, see Note 5 of the Notes to Consolidated Financial Statements.

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~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

CAPITAL DISTRIBUTIONS


		Three Months Ended June 30,				Six Months Ended June 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(In millions, except share data)
(In millions, except share data)
(In millions, except share data)	(In millions, except share data)	2023		2022		2023		2022
Capital distributions:	Capital distributions:
Capital distributions:
Capital distributions:
Preferred dividends paid
Preferred dividends paid
Preferred dividends paid	Preferred dividends paid	$	9	$	8	$	15	$	16

Total capital distributed to preferred shareholders	Total capital distributed to preferred shareholders	9		8		15		16

Total capital distributed to preferred shareholders

Total capital distributed to preferred shareholders
Common dividends paid
Common dividends paid
Common dividends paid	Common dividends paid	61		58		122		116
Bank common stock repurchased 1	Bank common stock repurchased 1	—		50		50		101
Bank common stock repurchased 1
Bank common stock repurchased 1
Total capital distributed to common shareholders
Total capital distributed to common shareholders
Total capital distributed to common shareholders	Total capital distributed to common shareholders	61		108		172		217
Total capital distributed to preferred and common shareholders	Total capital distributed to preferred and common shareholders	$	70	$	116	$	187	$	233
Total capital distributed to preferred and common shareholders
Total capital distributed to preferred and common shareholders
Weighted average diluted common shares outstanding (in thousands)
Weighted average diluted common shares outstanding (in thousands)
Weighted average diluted common shares outstanding (in thousands)	Weighted average diluted common shares outstanding (in thousands)	147,696		150,838		147,865		151,264
Common shares outstanding, at period end (in thousands)	Common shares outstanding, at period end (in thousands)	148,144		150,471		148,144		150,471
Common shares outstanding, at period end (in thousands)
Common shares outstanding, at period end (in thousands)

1 Includes amounts related to the common shares acquired from our publicly announced plans and those acquired in connection with our stock compensation plan. Shares were acquired from employees to pay for their payroll taxes and stock option exercise cost upon the exercise of stock options.

Pursuant to the OCC’s “Earnings Limitation Rule,” our dividend payments are restricted to an amount equal to the sum of the total of (1) our net income for that year, and (2) retained earnings for the preceding two years, unless the OCC approves the declaration and payment of dividends in excess of such amount. ~~At June 30, 2023,~~As of April 1, 2024, we had ~~$1.7~~$1.1 billion of retained net profits available for distribution.

During the ~~second~~first quarter of ~~2023,~~2024, we paid dividends on preferred stock of $9$10 million and dividends on common stock of $61 million, or $0.41 per share. In ~~July 2023,~~April 2024, the Board declared a regular quarterly dividend of $0.41 per common share, payable on ~~August 24, 2023~~May 23, 2024 to shareholders of record on ~~August 17, 2023.~~May 16, 2024. See Note 9 of the Notes to Consolidated Financial Statements for additional information about our capital management actions.

Basel III

We are subject to Basel III capital requirements that include certain minimum regulatory capital ratios. At ~~June 30, 2023,~~March 31, 2024, we exceeded all capital adequacy requirements under the Basel III capital rules. Based on our internal stress testing and other assessments of capital adequacy, we believe we hold capital sufficiently in excess of internal and regulatory requirements for well-capitalized banks. See ~~the~~ “Supervision and Regulation” ~~section~~ and Note 15 of our ~~2022~~2023 Form 10-K for more information about our compliance with the Basel III capital requirements. The following schedule presents our capital amounts, capital ratios, and other selected performance ~~ratios.~~ratios:

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

CAPITAL AMOUNTS AND RATIOS


(Dollar amounts in millions)	(Dollar amounts in millions)	June 30, 2023			December 31, 2022			June 30, 2022			(Dollar amounts in millions)	March 31, 2024		December 31, 2023		March 31, 2023
Basel III risk-based capital amounts:	Basel III risk-based capital amounts:
Common equity tier 1 capital
Common equity tier 1 capital
Common equity tier 1 capital	Common equity tier 1 capital	$	6,692		$	6,481		$	6,257
Tier 1 risk-based	Tier 1 risk-based	7,131			6,921			6,697
Total risk-based	Total risk-based	8,378			8,077			7,784
Risk-weighted assets	Risk-weighted assets	66,917			66,111			63,424
Basel III risk-based capital ratios:	Basel III risk-based capital ratios:
Common equity tier 1 capital ratio	Common equity tier 1 capital ratio	10.0		%	9.8		%	9.9		%
Common equity tier 1 capital ratio
Common equity tier 1 capital ratio												10.4	%	10.3	%	9.9	%
Tier 1 risk-based ratio	Tier 1 risk-based ratio	10.7			10.5			10.6
Total risk-based ratio	Total risk-based ratio	12.5			12.2			12.3
Tier 1 leverage ratio	Tier 1 leverage ratio	8.0			7.7			7.4
Other ratios:	Other ratios:
Average equity to average assets (three months ended)	Average equity to average assets (three months ended)	5.9		%	5.4		%	6.7		%
Average equity to average assets (three months ended)
Average equity to average assets (three months ended)												6.5	%	6.2	%	5.6	%
Return on average common equity (three months ended)	Return on average common equity (three months ended)	13.8			25.4			14.0
Return on average tangible common equity (three months ended) 1	Return on average tangible common equity (three months ended) 1	10.0			16.9			12.5
Tangible equity ratio 1	Tangible equity ratio 1	8.0			7.6			7.6
Tangible common equity ratio 1	Tangible common equity ratio 1	7.5			7.1			7.1

1 See “~~Non-GAAP~~“Non-GAAP Financial ~~Measures~~”Measures” on page 35 for more information regarding these ratios.

During the third quarter of 2023, federal bank regulators issued a proposal to implement the Basel Committee on Banking Supervision’s finalization of the post-crisis bank regulatory capital reforms. The proposal, commonly referred to as the “Basel III Endgame,” would significantly revise the capital requirements applicable to large banking organizations, defined as those with total assets of $100 billion or more, and would potentially impact our current and future capital planning, including share repurchase activity. At March 31, 2024, we had $87.1 billion in total assets and do not currently qualify as a large banking organization. We continue to evaluate the potential impact of the proposal, as we expect it is more likely than not we would become subject to this proposal in the future, were it to be finalized in its current form.

Federal bank regulators also issued proposals that would (1) expand a long-term debt requirement to all banks with total assets of $100 billion or more, and (2) revise requirements for resolution planning. For more information about these regulatory proposals and their potential impact, see “Recent Regulatory Developments” in the Supervision and Regulation section of our 2023 Form 10-K.

NON-GAAP FINANCIAL MEASURES

This Form 10-Q presents non-GAAP financial measures, in addition to ~~GAAP~~generally accepted accounting principles (“GAAP”) financial measures. The adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are presented in the following schedules. We consider these adjustments to be relevant to ongoing operating results and provide a meaningful basis for period-to-period comparisons. We use these non-GAAP financial measures to assess our performance and financial position. We believe that presenting these non-GAAP financial measures ~~permits~~allows investors to assess our performance on the same basis as that applied by our management and the financial services industry.

Non-GAAP financial measures have inherent limitations and are not necessarily comparable to similar financial measures that may be presented by other financial services companies. Although non-GAAP financial measures are frequently used by stakeholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

Tangible Common Equity and Related Measures

Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets and their related ~~amortization and AOCI. We excluded the effect of AOCI to align with its impact on certain incentive compensation plans that utilize return on tangible common equity as a performance metric.~~amortization. We believe these non-GAAP measures provide useful information about our use of shareholders’ equity and provide a basis for evaluating the performance of a business more consistently, whether acquired or developed internally.

RETURN ON AVERAGE TANGIBLE COMMON EQUITY (NON-GAAP)


		Three Months Ended
(Dollar amounts in millions)		March 31, 2024			December 31, 2023			March 31, 2023

Net earnings applicable to common shareholders (GAAP)		$	143		$	116		$	198
Adjustment, net of tax:
Amortization of core deposit and other intangibles		1			1			1
Net earnings applicable to common shareholders, net of tax	(a)	$	144		$	117		$	199
Average common equity (GAAP)		$	5,289		$	4,980		$	4,614
Average goodwill and intangibles		(1,058)			(1,060)			(1,064)

Average tangible common equity (non-GAAP)	(b)	$	4,231		$	3,920		$	3,550
Number of days in quarter	(c)	91			92			90
Number of days in year	(d)	366			365			365
Return on average tangible common equity (non-GAAP) 1	(a/b/c)*d	13.7		%	11.8		%	22.7		%

1 Excluding the effect of AOCI from average tangible common equity would result in associated returns of 8.4%, 6.7%, and 12.3% for the periods presented, respectively.

TANGIBLE EQUITY RATIO, TANGIBLE COMMON EQUITY RATIO, AND TANGIBLE BOOK VALUE PER COMMON SHARE (ALL NON-GAAP MEASURES)


(Dollar amounts in millions, except per share amounts)		March 31, 2024			December 31, 2023			March 31, 2023

Total shareholders’ equity (GAAP)		$	5,829		$	5,691		$	5,184
Goodwill and intangibles		(1,057)			(1,059)			(1,063)

Tangible equity (non-GAAP)	(a)	4,772			4,632			4,121
Preferred stock		(440)			(440)			(440)
Tangible common equity (non-GAAP)	(b)	$	4,332		$	4,192		$	3,681
Total assets (GAAP)		$	87,060		$	87,203		$	88,573
Goodwill and intangibles		(1,057)			(1,059)			(1,063)

Tangible assets (non-GAAP)	(c)	$	86,003		$	86,144		$	87,510
Common shares outstanding (in thousands)	(d)	147,653			148,153			148,100
Tangible equity ratio (non-GAAP)	(a/c)	5.5		%	5.4		%	4.7		%
Tangible common equity ratio (non-GAAP)	(b/c)	5.0		%	4.9		%	4.2		%
Tangible book value per common share (non-GAAP)	(b/d)	$	29.34		$	28.30		$	24.85

3536

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~~RETURN ON AVERAGE TANGIBLE COMMON EQUITY (NON-GAAP)~~
Three Months Ended
(Dollar amounts in millions) June 30,
2023 March 31,
2023 June 30,
2022
Net earnings applicable to common shareholders (GAAP) (a) $ 166 $ 198 $ 195
Adjustment, net of tax:
Amortization of core deposit and other intangibles 1 1 —
Net earnings applicable to common shareholders, net of tax (a) $ 167 $ 199 $ 195
Average common equity (GAAP) $ 4,818 $ 4,614 $ 5,582
Average goodwill and intangibles (1,063) (1,064) (1,015)
Average accumulated other comprehensive loss (income) 2,931 3,030 1,702
Average tangible common equity (non-GAAP) (b) $ 6,686 $ 6,580 $ 6,269
Number of days in quarter (c) 91 90 91
Number of days in year (d) 365 365 365
Return on average tangible common equity (non-GAAP) (a/b/c)*d 10.0 % 12.3 % 12.5 %

~~TANGIBLE EQUITY RATIO, TANGIBLE COMMON EQUITY RATIO, AND TANGIBLE BOOK VALUE PER COMMON SHARE (ALL NON-GAAP MEASURES)~~
(Dollar amounts in millions, except per share amounts) June 30,
2023 March 31,
2023 June 30,
2022
Total shareholders’ equity (GAAP) $ 5,283 $ 5,184 $ 5,632
Goodwill and intangibles (1,062) (1,063) (1,015)
Accumulated other comprehensive loss (income) 2,930 2,920 2,100
Tangible equity (non-GAAP) (a) 7,151 7,041 6,717
Preferred stock (440) (440) (440)
Tangible common equity (non-GAAP) (b) $ 6,711 $ 6,601 $ 6,277
Total assets (GAAP) $ 87,230 $ 88,573 $ 87,784
Goodwill and intangibles (1,062) (1,063) (1,015)
Accumulated other comprehensive loss (income) 2,930 2,920 2,100
Tangible assets (non-GAAP) (c) $ 89,098 $ 90,430 $ 88,869
Common shares outstanding (in thousands) (d) 148,144 148,100 150,471
Tangible equity ratio (non-GAAP) (a/c) 8.0 % 7.8 % 7.6 %
Tangible common equity ratio (non-GAAP) (b/c) 7.5 % 7.3 % 7.1 %
Tangible book value per common share (non-GAAP) (b/d) $ 45.30 $ 44.57 $ 41.72

Efficiency Ratio and Adjusted Pre-Provision Net Revenue

The efficiency ratio is a measure of operating expense relative to revenue. We believe the efficiency ratio provides useful information regarding the cost of generating revenue. We make adjustments to exclude certain items that are not generally expected to recur frequently, as identified in the subsequent schedule, which we believe allows for more consistent comparability across periods. Adjusted noninterest expense provides a measure as to how we are managing our expenses. Adjusted pre-provision net revenue (“PPNR”) enables management and others to assess our ability to generate capital. Taxable-equivalent net interest income allows us to assess the comparability of revenue arising from both taxable and tax-exempt sources.

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EFFICIENCY RATIO (NON-GAAP) AND ADJUSTED PRE-PROVISION NET REVENUE (NON-GAAP)

Three Months Ended Six Months Ended Year Ended
(Dollar amounts in millions) June 30,
2023 March 31,
2023 June 30,
2022 June 30,
2023 June 30,
2022 December 31,
2022
Noninterest expense (GAAP) (a) $ 508 $ 512 $ 464 $ 1,020 $ 928 $ 1,878
Adjustments:
Severance costs 13 1 1 14 1 1
Other real estate expense, net — — — — 1 1
Amortization of core deposit and other intangibles 1 2 — 3 — 1
SBIC investment success fee accrual 1
— — — — (1) (1)
Total adjustments (b) 14 3 1 17 1 2
Adjusted noninterest expense (non-GAAP) (a-b)=(c) $ 494 $ 509 $ 463 $ 1,003 $ 927 $ 1,876
Net interest income (GAAP) (d) $ 591 $ 679 $ 593 $ 1,270 $ 1,137 $ 2,520
Fully taxable-equivalent adjustments (e) 11 9 9 20 17 37
Taxable-equivalent net interest income (non-GAAP) (d+e)=f 602 688 602 1,290 1,154 2,557
Noninterest income (GAAP) g 189 160 172 349 314 632
Combined income (non-GAAP) (f+g)=(h) 791 848 774 1,639 1,468 3,189
Adjustments:
Fair value and nonhedge derivative gains 1 (3) 10 (2) 16 16
Securities gains (losses), net 1
— 1 1 1 (16) (15)
Total adjustments 2
(i) 1 (2) 11 (1) — 1
Adjusted taxable-equivalent revenue (non-GAAP) (h-i)=(j) $ 790 $ 850 $ 763 $ 1,640 $ 1,468 $ 3,188
Pre-provision net revenue (non-GAAP) (h)-(a) $ 283 $ 336 $ 310 $ 619 $ 540 $ 1,311
Adjusted PPNR (non-GAAP) (j)-(c) 296 341 300 637 541 1,312
Efficiency ratio (non-GAAP) (c/j) 62.5 % 59.9 % 60.7 % 61.2 % 63.1 % 58.8 %

1 ~~The success fee accrual is associated with the gains and losses from our SBIC investments, which are excluded from the efficiency ratio through securities gains (losses), net.~~

2 Excluding the $13 million gain on sale of bank-owned premises recorded in dividends and other income, the efficiency ratio for the three months and six months ended June 30, 2023 would have been 63.6% and 61.6%, respectively.


		Three Months Ended									Year Ended
(Dollar amounts in millions)		March 31, 2024			December 31, 2023			March 31, 2023				December 31, 2023

Noninterest expense (GAAP)	(a)	$	526		$	581		$	512			$	2,097
Adjustments:
Severance costs		—			—			1				14


Amortization of core deposit and other intangibles		2			2			2				6
Restructuring costs		—			—			—				1


FDIC special assessment		13			90			—				90
Total adjustments	(b)	15			92			3				111
Adjusted noninterest expense (non-GAAP)	(c)=(a-b)	$	511		$	489		$	509			$	1,986
Net interest income (GAAP)	(d)	$	586		$	583		$	679			$	2,438
Fully taxable-equivalent adjustments	(e)	10			10			9				41
Taxable-equivalent net interest income (non-GAAP)	(f)=(d+e)	596			593			688				2,479
Noninterest income (GAAP)	g	156			148			160				677
Combined income (non-GAAP)	(h)=(f+g)	752			741			848				3,156
Adjustments:
Fair value and nonhedge derivative gains		1			(9)			(3)				(4)
Securities gains (losses), net		(2)			(1)			1				4
Total adjustments	(i)	(1)			(10)			(2)				—
Adjusted taxable-equivalent revenue (non-GAAP)	(j)=(h-i)	$	753		$	751		$	850			$	3,156
Pre-provision net revenue (non-GAAP)	(h)-(a)	$	226		$	160		$	336			$	1,059
Adjusted PPNR (non-GAAP)	(j)-(c)	242			262			341				1,170
Efficiency ratio (non-GAAP)	(c/j)	67.9		%	65.1		%	59.9		%		62.9		%

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

ITEM 1. FINANCIAL STATEMENTS (Unaudited)

CONSOLIDATED BALANCE SHEETS
(In millions, shares in thousands) June 30,
2023 December 31,
2022
(Unaudited)
ASSETS
Cash and due from banks $ 701 $ 657
Money market investments:
Interest-bearing deposits 1,531 1,340
Federal funds sold and securities purchased under agreements to resell 781 2,426
Investment securities:
Held-to-maturity, at amortized cost (fair value: $10,768 and $11,239) 10,753 11,126
Available-for-sale, at fair value 10,832 11,915
Trading, at fair value 32 465
Total investment securities 21,617 23,506
Loans held for sale 36 8
Loans and leases, net of unearned income and fees 56,917 55,653
Less allowance for loan and lease losses 651 575
Loans held for investment, net of allowance 56,266 55,078
Other noninterest-bearing investments 956 1,130
Premises, equipment and software, net 1,414 1,408
Goodwill and intangibles 1,062 1,065
Other real estate owned 3 3
Other assets 2,863 2,924
Total assets $ 87,230 $ 89,545
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand $ 28,670 $ 35,777
Interest-bearing:
Savings and money market 33,394 33,566
Time 12,259 2,309
Total deposits 74,323 71,652
Federal funds and other short-term borrowings 5,513 10,417
Long-term debt 538 651
Reserve for unfunded lending commitments 60 61
Other liabilities 1,513 1,871
Total liabilities 81,947 84,652
Shareholders’ equity:
Preferred stock, without par value; authorized 4,400 shares 440 440
Common stock ($0.001 par value; authorized 350,000 shares; issued and outstanding 148,144 and 148,664 shares) and additional paid-in capital 1,722 1,754
Retained earnings 6,051 5,811
Accumulated other comprehensive income (loss) (2,930) (3,112)
Total shareholders’ equity 5,283 4,893
Total liabilities and shareholders’ equity $ 87,230 $ 89,545


(In millions, shares in thousands)	March 31, 2024		December 31, 2023
	(Unaudited)
ASSETS
Cash and due from banks	$	709	$	716
Money market investments:
Interest-bearing deposits	1,688		1,488
Federal funds sold and securities purchased under agreements to resell	894		937
Investment securities:
Held-to-maturity, at amortized cost (fair value: $10,105 and $10,466)	10,209		10,382
Available-for-sale, at fair value	9,931		10,300
Trading, at fair value	59		48

Total investment securities	20,199		20,730
Loans held for sale	12		53
Loans and leases, net of unearned income and fees	58,109		57,779
Less allowance for loan and lease losses	699		684
Loans held for investment, net of allowance	57,410		57,095
Other noninterest-bearing investments	922		950
Premises, equipment and software, net	1,396		1,400
Goodwill and intangibles	1,057		1,059
Other real estate owned	6		6
Other assets	2,767		2,769
Total assets	$	87,060	$	87,203
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	25,137	$	26,244
Interest-bearing:
Savings and money market	38,879		38,721
Time	10,221		9,996

Total deposits	74,237		74,961
Federal funds and other short-term borrowings	4,895		4,379
Long-term debt	544		542
Reserve for unfunded lending commitments	37		45
Other liabilities	1,518		1,585
Total liabilities	81,231		81,512
Shareholders’ equity:
Preferred stock, without par value; authorized 4,400 shares	440		440
Common stock ($0.001 par value; authorized 350,000 shares; issued and outstanding 147,653 and 148,153 shares) and additional paid-in capital	1,705		1,731
Retained earnings	6,293		6,212
Accumulated other comprehensive income (loss)	(2,609)		(2,692)


Total shareholders’ equity	5,829		5,691
Total liabilities and shareholders’ equity	$	87,060	$	87,203

See accompanying notes to consolidated financial statements.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)	(Unaudited)	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited)
(Unaudited)
(In millions, except shares and per share amounts)
(In millions, except shares and per share amounts)
(In millions, except shares and per share amounts)	(In millions, except shares and per share amounts)	2023		2022		2023		2022
Interest income:	Interest income:
Interest income:
Interest income:
Interest and fees on loans
Interest and fees on loans
Interest and fees on loans	Interest and fees on loans	$	791	$	468	$	1,517	$	905
Interest on money market investments	Interest on money market investments	48		12		105		18
Interest on money market investments
Interest on money market investments
Interest on securities
Interest on securities
Interest on securities	Interest on securities	138		128		275		240
Total interest income	Total interest income	977		608		1,897		1,163
Total interest income
Total interest income
Interest expense:
Interest expense:
Interest expense:	Interest expense:
Interest on deposits	Interest on deposits	220		7		302		13
Interest on deposits
Interest on deposits
Interest on short- and long-term borrowings
Interest on short- and long-term borrowings
Interest on short- and long-term borrowings	Interest on short- and long-term borrowings	166		8		325		13
Total interest expense	Total interest expense	386		15		627		26
Total interest expense
Total interest expense
Net interest income
Net interest income
Net interest income	Net interest income	591		593		1,270		1,137
Provision for credit losses:	Provision for credit losses:
Provision for credit losses:
Provision for credit losses:
Provision for loan and lease losses	Provision for loan and lease losses	46		39		92		10
Provision for loan and lease losses
Provision for loan and lease losses
Provision for unfunded lending commitments
Provision for unfunded lending commitments
Provision for unfunded lending commitments	Provision for unfunded lending commitments	—		2		(1)		(2)

Total provision for credit losses	Total provision for credit losses	46		41		91		8

Total provision for credit losses

Total provision for credit losses
Net interest income after provision for credit losses
Net interest income after provision for credit losses
Net interest income after provision for credit losses	Net interest income after provision for credit losses	545		552		1,179		1,129
Noninterest income:	Noninterest income:
Noninterest income:
Noninterest income:
Commercial account fees
Commercial account fees
Commercial account fees	Commercial account fees	45		37		88		78
Card fees	Card fees	25		25		49		50
Card fees
Card fees
Retail and business banking fees
Retail and business banking fees
Retail and business banking fees	Retail and business banking fees	16		20		32		40
Loan-related fees and income	Loan-related fees and income	19		21		40		43
Loan-related fees and income
Loan-related fees and income
Capital markets fees
Capital markets fees
Capital markets fees	Capital markets fees	27		21		44		36
Wealth management fees	Wealth management fees	14		13		29		27
Wealth management fees
Wealth management fees
Other customer-related fees
Other customer-related fees
Other customer-related fees	Other customer-related fees	16		17		31		31
Customer-related noninterest income	Customer-related noninterest income	162		154		313		305
Customer-related noninterest income
Customer-related noninterest income
Fair value and nonhedge derivative income
Fair value and nonhedge derivative income
Fair value and nonhedge derivative income	Fair value and nonhedge derivative income	1		10		(2)		16
Dividends and other income (loss)	Dividends and other income (loss)	26		7		37		9
Dividends and other income (loss)
Dividends and other income (loss)
Securities gains (losses), net
Securities gains (losses), net
Securities gains (losses), net	Securities gains (losses), net	—		1		1		(16)
Total noninterest income	Total noninterest income	189		172		349		314
Total noninterest income
Total noninterest income
Noninterest expense:
Noninterest expense:
Noninterest expense:	Noninterest expense:
Salaries and employee benefits	Salaries and employee benefits	324		307		663		619
Salaries and employee benefits
Salaries and employee benefits
Technology, telecom, and information processing
Technology, telecom, and information processing
Technology, telecom, and information processing	Technology, telecom, and information processing	58		53		113		105
Occupancy and equipment, net	Occupancy and equipment, net	40		36		80		74
Occupancy and equipment, net
Occupancy and equipment, net
Professional and legal services
Professional and legal services
Professional and legal services	Professional and legal services	16		14		29		28
Marketing and business development	Marketing and business development	13		9		25		17
Marketing and business development
Marketing and business development
Deposit insurance and regulatory expense
Deposit insurance and regulatory expense
Deposit insurance and regulatory expense	Deposit insurance and regulatory expense	22		13		40		23
Credit-related expense	Credit-related expense	7		7		13		14
Other real estate expense, net		—		—		—		1
Credit-related expense
Credit-related expense

Other

Other

Other	Other	28		25		57		47
Total noninterest expense	Total noninterest expense	508		464		1,020		928
Total noninterest expense
Total noninterest expense
Income before income taxes
Income before income taxes
Income before income taxes	Income before income taxes	226		260		508		515
Income taxes	Income taxes	51		57		129		109
Income taxes
Income taxes
Net income
Net income
Net income	Net income	175		203		379		406

Preferred stock dividends	Preferred stock dividends	(9)		(8)		(15)		(16)

Preferred stock dividends

Preferred stock dividends

Net earnings applicable to common shareholders

Net earnings applicable to common shareholders

Net earnings applicable to common shareholders	Net earnings applicable to common shareholders	$	166	$	195	$	364	$	390
Weighted average common shares outstanding during the period:	Weighted average common shares outstanding during the period:
Weighted average common shares outstanding during the period:
Weighted average common shares outstanding during the period:
Basic shares (in thousands)
Basic shares (in thousands)
Basic shares (in thousands)	Basic shares (in thousands)	147,692		150,635		147,852		150,958
Diluted shares (in thousands)	Diluted shares (in thousands)	147,696		150,838		147,865		151,264
Diluted shares (in thousands)
Diluted shares (in thousands)
Net earnings per common share:
Net earnings per common share:
Net earnings per common share:	Net earnings per common share:
Basic	Basic	$	1.11	$	1.29	$	2.44	$	2.56
Basic
Basic
Diluted	Diluted	1.11		1.29		2.44		2.56
Diluted
Diluted

See accompanying notes to consolidated financial statements.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~

(Unaudited)

Three Months Ended
June 30, Six Months Ended
June 30,
(In millions) 2023 2022 2023 2022
Net income for the period $ 175 $ 203 $ 379 $ 406
Other comprehensive income (loss), net of tax:
Net unrealized holding gains (losses) on investment securities 1
(32) (698) 94 (1,820)
Net unrealized losses on other noninterest-bearing investments — (1) — (1)
Net unrealized holding gains (losses) on derivative instruments (8) (50) 21 (184)
Reclassification adjustment for decrease (increase) in interest income recognized in earnings on derivative instruments 30 (5) 67 (15)
Total other comprehensive income (loss), net of tax (10) (754) 182 (2,020)
Comprehensive income (loss) $ 165 $ (551) $ 561 $ (1,614)


	Three Months Ended March 31,
(In millions)	2024		2023

Net income for the period	$	153	$	204
Other comprehensive income, net of tax:
Net unrealized holding gains on investment securities	12		77
Unrealized loss amortization associated with the securities transferred from AFS to HTM	46		49






Net unrealized holding gains (losses) on derivative instruments	(1)		29
Reclassification adjustment for decrease in interest income recognized in earnings on derivative instruments	26		37

Other comprehensive income, net of tax	83		192
Comprehensive income	$	236	$	396

See accompanying notes to consolidated financial statements.

1 For the three and six months ended June 30, 2023, the amounts include $86 million and $9 million related to the decline in the fair value of fixed-rate AFS securities as a result of higher interest rates, offset by $54 million and $103 million in amortization of the discount on the securities transferred from AFS to HTM during the fourth quarter of 2022, respectively.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)


(In millions, except shares and per share amounts)	(In millions, except shares and per share amounts)	Preferred stock		Common stock			Accumulated paid-in capital				Retained earnings		Accumulated other comprehensive income (loss)						Total shareholders’ equity
				Shares (in thousands)	Amount

Balance at March 31, 2023		$	440	148,100	$	—			$	1,715			$	5,949			$	(2,920)				$	5,184
Net income for the period											175								175
Other comprehensive loss, net of tax															(10)				(10)
(In millions, except shares and per share amounts)																					(In millions, except shares and per share amounts)			Preferred stock	Common stock shares (in thousands)	Accumulated paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Total shareholders’ equity

Balance at December 31, 2023

Balance at December 31, 2023

Balance at December 31, 2023
Net income for the period
Other comprehensive income, net of tax

Bank common stock repurchased
Bank common stock repurchased
Bank common stock repurchased

Net activity under employee plans and related tax benefits
Net activity under employee plans and related tax benefits
Net activity under employee plans and related tax benefits	Net activity under employee plans and related tax benefits			44			7												7
Dividends on preferred stock	Dividends on preferred stock										(9)								(9)
Dividends on common stock, $0.41 per share	Dividends on common stock, $0.41 per share										(61)								(61)
Change in deferred compensation	Change in deferred compensation										(3)								(3)
Balance at June 30, 2023		$	440	148,144	$	—	$	1,722			$	6,051			$	(2,930)			$	5,283
Balance at March 31, 2024

Balance at March 31, 2022		$	440	151,348	$	—	$	1,889			$	5,311			$	(1,346)			$	6,294
Balance at December 31, 2022
Balance at December 31, 2022
Balance at December 31, 2022
Net income for the period	Net income for the period										203								203
Other comprehensive loss, net of tax															(754)				(754)

Other comprehensive income, net of tax
Cumulative effect adjustment, due to adoption of ASU 2022-02, net of tax
Bank common stock repurchased	Bank common stock repurchased			(936)			(50)												(50)

Net activity under employee plans and related tax benefits	Net activity under employee plans and related tax benefits			59			6												6
Net activity under employee plans and related tax benefits
Net activity under employee plans and related tax benefits
Dividends on preferred stock	Dividends on preferred stock										(8)								(8)
Dividends on common stock, $0.38 per share											(58)								(58)
Dividends on common stock, $0.41 per share
Change in deferred compensation	Change in deferred compensation										(1)								(1)
Balance at June 30, 2022		$	440	150,471	$	—	$	1,845			$	5,447			$	(2,100)			$	5,632
Balance at March 31, 2023

See accompanying notes to consolidated financial statements.

~~Table of Contents~~

~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

(In millions, except shares
and per share amounts) Preferred
stock Common stock Accumulated paid-in capital Retained earnings Accumulated other
comprehensive income (loss) Total
shareholders’ equity
Shares
(in thousands)
Amount
Balance at December 31, 2022 $ 440 148,664 $ — $ 1,754 $ 5,811 $ (3,112) $ 4,893
Net income for the period 379 379
Other comprehensive income, net of tax 182 182
Cumulative effect adjustment, due to adoption of ASU 2022-02, net of tax
2 2
Bank common stock repurchased (953) (50) (50)
Net activity under employee plans and related tax benefits 433 18 18
Dividends on preferred stock (15) (15)
Dividends on common stock, $0.82 per share (122) (122)
Change in deferred compensation (4) (4)
Balance at June 30, 2023 $ 440 148,144 $ — $ 1,722 $ 6,051 $ (2,930) $ 5,283
Balance at December 31, 2021 $ 440 151,625 $ — $ 1,928 $ 5,175 $ (80) $ 7,463
Net income for the period 406 406
Other comprehensive loss, net of tax (2,020) (2,020)
Bank common stock repurchased (1,714) (101) (101)
Net activity under employee plans and related tax benefits 560 18 18
Dividends on preferred stock (16) (16)
Dividends on common stock, $0.76 per share (116) (116)
Change in deferred compensation (2) (2)
Balance at June 30, 2022 $ 440 150,471 $ — $ 1,845 $ 5,447 $ (2,100) $ 5,632

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(In millions)

(In millions)	(In millions)	Six Months Ended June 30,			(In millions)				Three Months Ended March 31,
			2023					2022		2024	2023
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the period	Net income for the period		$	379		$	406
Net income for the period
Net income for the period
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses

Provision for credit losses

Provision for credit losses	Provision for credit losses		91			8
Depreciation and amortization	Depreciation and amortization		72			45
Share-based compensation	Share-based compensation		24			22
Deferred income tax expense (benefit)			(13)			29
Net decrease in trading securities			433			67
Net decrease (increase) in loans held for sale			(25)			42
Deferred income tax expense
Net decrease (increase) in trading securities
Net decrease in loans held for sale
Change in other liabilities	Change in other liabilities		(363)			389
Change in other assets	Change in other assets		164			(205)
Other, net	Other, net		57			1
Net cash provided by operating activities	Net cash provided by operating activities		819			804
CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in money market investments			1,454			8,895
Net decrease (increase) in money market investments
Net decrease (increase) in money market investments
Net decrease (increase) in money market investments
Proceeds from maturities and paydowns of investment securities held-to-maturity	Proceeds from maturities and paydowns of investment securities held-to-maturity		526			48
Purchases of investment securities held-to-maturity	Purchases of investment securities held-to-maturity		(21)			(220)
Proceeds from sales, maturities, and paydowns of investment securities available-for-sale	Proceeds from sales, maturities, and paydowns of investment securities available-for-sale		1,328			1,915
Purchases of investment securities available-for-sale	Purchases of investment securities available-for-sale		(301)			(5,773)
Net change in loans and leases	Net change in loans and leases		(1,311)			(1,476)
Purchases and sales of other noninterest-bearing investments	Purchases and sales of other noninterest-bearing investments		176			(1)
Purchases of premises and equipment	Purchases of premises and equipment		(53)			(102)

Other, net	Other, net		(18)			11
Other, net
Other, net
Net cash provided by investing activities	Net cash provided by investing activities		1,780			3,297
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits			2,671			(3,728)
Net decrease in deposits
Net decrease in deposits
Net decrease in deposits
Net change in short-term borrowed funds	Net change in short-term borrowed funds		(4,904)			115

Redemption of long-term debt			(128)			(290)

Proceeds from the issuance of common stock

Proceeds from the issuance of common stock

Proceeds from the issuance of common stock	Proceeds from the issuance of common stock		2			8
Dividends paid on common and preferred stock	Dividends paid on common and preferred stock		(138)			(130)
Bank common stock repurchased	Bank common stock repurchased		(50)			(101)
Other, net	Other, net		(8)			(11)
Net cash used in financing activities	Net cash used in financing activities		(2,555)			(4,137)
Net increase (decrease) in cash and due from banks			44			(36)
Net decrease in cash and due from banks
Cash and due from banks at beginning of period	Cash and due from banks at beginning of period		657			595
Cash and due from banks at end of period	Cash and due from banks at end of period		$	701		$	559
Cash paid for interest	Cash paid for interest		$	546		$	31
Net cash paid for income taxes	Net cash paid for income taxes		231			4
Noncash activities:	Noncash activities:

Loans held for investment reclassified to loans held for sale, net	Loans held for investment reclassified to loans held for sale, net		49			61

Loans held for investment reclassified to loans held for sale, net

Loans held for investment reclassified to loans held for sale, net

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~June 30, 2023~~March 31, 2024

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Zions Bancorporation, National Association and its majority-owned subsidiaries (collectively “Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”) have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. References to GAAP, including standards promulgated by the Financial Accounting Standards Board (“FASB”), are made according to sections of the Accounting Standards Codification (“ASC”).

The results of operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023 ~~and 2022~~ are not necessarily indicative of the results that may be expected in future periods. In preparing the consolidated financial statements, we are required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying ~~notes.~~Notes. Actual results could differ from those estimates. For further information, refer to the consolidated financial statements and accompanying footnotes included in our ~~2022~~2023 Form 10-K.

We evaluated events that occurred between ~~June 30, 2023~~March 31, 2024 and the date the accompanying financial statements were issued, and determined that there were no material events that would require adjustments to our consolidated financial statements or significant disclosure in the accompanying Notes. As referenced in Note 7 of the Notes to Consolidated Financial Statements, we entered into additional pay-fixed swaps with an aggregate notional amount of $1 billion that were designated as fair value hedges of a defined portfolio of fixed-rate commercial loans in July 2023.

Zions Bancorporation, N.A. is a commercial bank headquartered in Salt Lake City, Utah. We provide a wide range of banking products and related services in 11 Western and Southwestern states through seven separately managed bank divisions, which we refer to as “affiliates,” or “affiliate banks,” each with its own local branding and management team. These include Zions Bank, in Utah, Idaho, and Wyoming; California Bank & Trust (“CB&T”); Amegy Bank (“Amegy”), in Texas; National Bank of Arizona (“NBAZ”); Nevada State Bank (“NSB”); Vectra Bank Colorado (“Vectra”), in Colorado and New Mexico; and The Commerce Bank of Washington (“TCBW”) which operates under that name in Washington and under the name The Commerce Bank of Oregon in Oregon.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

2. RECENT ACCOUNTING PRONOUNCEMENTS

Standard

Description

~~Date of adoption~~Effective date

Effect on the financial statements or other significant matters

Standards not yet adopted by the Bank as of March 31, 2024

ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

This Accounting Standards Update (“ASU”) expands operating segment disclosures and requires all segment disclosures to be reported in both annual and interim periods. The new standard requires disclosure of the following:

•Significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) for reportable segments;

•The title and position of the CODM as well as how the CODM uses the reported measure(s) of profit and loss to assess segment performance; and

•“Other segment items” by reportable segment and a description of its composition.

Annual periods beginning January 1, 2024; Interim periods beginning January 1, 2025

The overall effect of this standard is not expected to have a material impact on our financial statements.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures

This ASU expands tax disclosures to provide more information to better assess how an entity’s operations, related tax risks, and tax planning affect its tax rate and prospects for future cash flows. The enhancements in this ASU require that an entity disaggregate income taxes paid and income (or loss) from continuing operations before tax expense (or benefit), and income tax expense (or benefit) from continuing operations.

The new standard requires disclosure of specific categories in the rate reconciliation and provides additional information for reconciling items that meet a quantitative threshold.

January 1, 2025

The overall effect of this standard is not expected to have a material impact on our financial statements.

Standards adopted by the Bank during the first quarter of 2024

ASU 2022-03,

Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

This ASU clarifies that contractual restrictions prohibiting the sale of an equity security are not considered part of the unit of account of the equity security, and therefore, are not considered in measuring fair value. The amendments clarify that an entity cannot recognize and measure a contractual sale restriction as a separate unit of account. The amendments in this ASU also require additional qualitative and quantitative disclosures for equity securities subject to contractual sale restrictions.

January 1, 2024

We adopted the new standard on January 1, 2024. The adoption of this standard did not have a material effect on our financial statements.

ASU 2023-02,

Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)

This ~~Accounting Standards Update (“ASU”)~~ASU expands the optional use of the proportional amortization method (“PAM”), previously limited to investments in low-income housing tax credit (“LIHTC”) structures, to any eligible equity investments made primarily for the purpose of receiving income tax credit and other tax benefits when certain criteria are met. PAM results in the cost of the investment being amortized in proportion to the income tax credits and other income tax benefits received, with the amortization of the investment and the income tax credits being presented net in the income statement as a component of income tax expense (benefit).

This ASU allows for an accounting policy election to apply PAM on a tax-credit-program-by-tax-credit-program basis. The ASU also includes additional disclosure requirements about equity investments accounted for using PAM.

~~The new standard is effective for calendar year-end public companies beginning~~

January 1, 2024 ~~with early adoption permitted.~~

~~Periods beginning after December 15, 2023~~

We ~~do not currently have any additional equity investments that are eligible for PAM under~~adopted the ~~provisions of this ASU. We will continue to evaluate its use for new investments. The overall effect of the guidance is not expected to have a material impact on our financial statements.~~

~~We do not plan to early adopt this new standard.~~

~~ASU 2022-03,~~

~~Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions~~

~~The~~ new standard ~~is effective for calendar year-end public companies beginning January 1, 2024, with early adoption permitted.~~

~~Periods beginning after December 15, 2023~~

The requirements of this ASU are consistent with our current treatment of equity securities subject to contractual sale restrictions and are not expected to impact the fair value measurements of these securities.

We are evaluating supplementary disclosure requirements and additional data needed to meet these requirements. The overall effect of this standard is not expected to have a material impact on our financial statements.

~~We do not plan to early adopt this new standard.~~

~~Standards adopted by the Bank~~

~~ASU 2022-02,~~

~~Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures~~

This ASU eliminated the recognition and measurement requirements for troubled debt restructurings (“TDRs”) for creditors that have adopted ASC 326 (“CECL”), eliminated certain TDR disclosures, and required enhanced disclosures about loan modifications for borrowers experiencing financial difficulty.

The new standard also required public companies to present current period gross charge-offs (on a current year-to-date basis for interim-period disclosures) by year of origination in their vintage disclosures.

~~Periods beginning after December 15, 2022~~

~~We adopted this ASU on a modified retrospective basis~~ on January 1, ~~2023. It~~2024. The adoption of this standard did not have a material ~~impact~~effect on our financial statements.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

3. FAIR VALUE

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For more information about our valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 3 of our ~~2022~~2023 Form 10-K.

Fair Value Hierarchy

The following schedule presents assets and liabilities measured at fair value on a recurring basis:


(In millions)	(In millions)	June 30, 2023								(In millions)	March 31, 2024
		Level 1		Level 2		Level 3		Total			Level 1	Level 2	Level 3	Total
ASSETS	ASSETS
Available-for-sale securities:	Available-for-sale securities:
Available-for-sale securities:
Available-for-sale securities:
U.S. Treasury, agencies, and corporations
U.S. Treasury, agencies, and corporations
U.S. Treasury, agencies, and corporations	U.S. Treasury, agencies, and corporations	$	475	$	8,943	$	—	$	9,418
Municipal securities	Municipal securities			1,391				1,391

Other debt securities
Other debt securities
Other debt securities	Other debt securities			23				23
Total available-for-sale	Total available-for-sale	475		10,357		—		10,832
Trading securities	Trading securities			32				32
Other noninterest-bearing investments:	Other noninterest-bearing investments:
Bank-owned life insurance	Bank-owned life insurance			549				549
Bank-owned life insurance
Bank-owned life insurance
Private equity investments 1	Private equity investments 1	3				84		87
Other assets:	Other assets:
Agriculture loan servicing and interest-only strips						17		17
Loans held for sale				20				20
Agriculture loan servicing
Agriculture loan servicing
Agriculture loan servicing

Deferred compensation plan assets
Deferred compensation plan assets
Deferred compensation plan assets	Deferred compensation plan assets	114						114
Derivatives	Derivatives			491				491
Total assets	Total assets	$	592	$	11,449	$	101	$	12,142
LIABILITIES	LIABILITIES
Securities sold, not yet purchased	Securities sold, not yet purchased	$	347	$	—	$	—	$	347
Securities sold, not yet purchased
Securities sold, not yet purchased
Other liabilities:	Other liabilities:
Derivatives	Derivatives			409				409
Derivatives
Derivatives
Total liabilities	Total liabilities	$	347	$	409	$	—	$	756

1 The Level 1 private equity investments (“PEIs”) relate to the portion of our Small Business Investment Company (“SBIC”) investments that are publicly traded.

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(In millions)	(In millions)	December 31, 2022								(In millions)	December 31, 2023
		Level 1		Level 2		Level 3		Total			Level 1	Level 2	Level 3	Total
ASSETS	ASSETS
Available-for-sale securities:	Available-for-sale securities:
Available-for-sale securities:
Available-for-sale securities:
U.S. Treasury, agencies, and corporations
U.S. Treasury, agencies, and corporations
U.S. Treasury, agencies, and corporations	U.S. Treasury, agencies, and corporations	$	393	$	9,815	$	—	$	10,208
Municipal securities	Municipal securities			1,634				1,634

Other debt securities	Other debt securities			73				73
Other debt securities
Other debt securities

Total available-for-sale
Total available-for-sale
Total available-for-sale	Total available-for-sale	393		11,522		—		11,915
Trading securities	Trading securities	395		70				465
Other noninterest-bearing investments:	Other noninterest-bearing investments:
Bank-owned life insurance	Bank-owned life insurance			546				546
Bank-owned life insurance
Bank-owned life insurance
Private equity investments 1	Private equity investments 1	4				81		85
Other assets:	Other assets:
Agriculture loan servicing and interest-only strips						14		14
Agriculture loan servicing
Agriculture loan servicing
Agriculture loan servicing
Loans held for sale
Deferred compensation plan assets	Deferred compensation plan assets	114						114
Derivatives	Derivatives			386				386
Total assets	Total assets	$	906	$	12,524	$	95	$	13,525
LIABILITIES	LIABILITIES
Securities sold, not yet purchased	Securities sold, not yet purchased	$	187	$	—	$	—	$	187
Securities sold, not yet purchased
Securities sold, not yet purchased
Other liabilities:	Other liabilities:
Derivatives	Derivatives			451				451
Derivatives
Derivatives
Total liabilities	Total liabilities	$	187	$	451	$	—	$	638

1 The Level 1 PEIs relate to the portion of our SBIC investments that are publicly traded.

Level 3 Valuations

Our Level 3 financial instruments include PEIs and agriculture loan ~~servicing, and interest-only strips.~~servicing. For additional information regarding our Level 3 financial instruments, including the methods and significant assumptions used to estimate their fair value, see Note 3 of our ~~2022~~2023 Form 10-K.

~~Rollforward~~

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Roll-forward of Level 3 Fair Value Measurements

The following schedule presents a ~~rollforward~~roll-forward of assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs:


		Level 3 Instruments
		Three Months Ended								Six Months Ended
		June 30, 2023				June 30, 2022					June 30, 2023	June 30, 2022
		Level 3 Instruments
		Level 3 Instruments
		Level 3 Instruments
	Three Months Ended
		March 31, 2024
		March 31, 2024
		March 31, 2024
(In millions)
(In millions)
(In millions)	(In millions)	Private equity investments		Ag loan servicing & interest-only strips		Private equity investments		Ag loan servicing & interest-only strips				Private equity investments		Ag loan servicing & interest-only strips		Private equity investments		Ag loan servicing & interest-only strips

Balance at beginning of period	Balance at beginning of period	$	82	$	18	$	74	$	12			$	81	$	14	$	66	$	12
Unrealized securities gains (losses), net		(3)		—		—		—				(3)		—		5		—

Balance at beginning of period

Balance at beginning of period

Other noninterest income (expense)

Other noninterest income (expense)

Other noninterest income (expense)	Other noninterest income (expense)	—		(1)		—		—				—		3		—		—
Purchases	Purchases	5		—		3		—				6		—		9		—
Purchases
Purchases
Cost of investments sold
Cost of investments sold
Cost of investments sold	Cost of investments sold	—		—		—		—				—		—		(3)		—

Transfers out 1		—		—		—		—				—		—		—		—
Transfers out

Transfers out

Transfers out
Balance at end of period	Balance at end of period	$	84	$	17	$	77	$	12			$	84	$	17	$	77	$	12
Balance at end of period
Balance at end of period

1 ~~Represents the transfer of SBIC investments out of Level 3 and into Level 1 because they are publicly traded.~~

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The ~~rollforward~~roll-forward of Level 3 instruments includes the following realized gains and losses recognized in ~~securities~~“Securities gains (losses), net” on the consolidated statement of income for the periods presented:


(In millions)	Three Months Ended				~~Six Months Ended~~
	~~June 30,~~March 31, 2024		March 31, 2023		~~June 30, 2022~~		~~June 30, 2023~~	~~June 30, 2022~~


Securities gains (losses), net	$	—2	$	—	$	—		$	~~(2)~~

Nonrecurring Fair Value Measurements

Certain assets and liabilities may be measured at fair value on a nonrecurring basis, including impaired loans that have been measured based on the fair value of the underlying collateral, other real estate owned (“OREO”), and equity investments without readily determinable fair values. Nonrecurring fair value adjustments generally include changes in value resulting from observable price changes for equity investments without readily determinable fair values, write-downs of individual assets, or the application of lower of cost or fair value accounting. At ~~June 30, 2023,~~March 31, 2024, we had ~~$10~~$2 million of collateral-dependent loans classified in Level 2, and we recognized $4less than $1 million of losses from fair value changes related to these loans. ~~At December 31, 2022, we had an insignificant amount of assets or liabilities that had fair value changes measured on a nonrecurring basis.~~ For additional information regarding ~~the measurement of~~assets and liabilities measured at fair value ~~for impaired loans, collateral-dependent loans, and OREO,~~on a nonrecurring basis, see Note 3 of our ~~2022~~2023 Form 10-K.

Fair Value of Certain Financial Instruments

The following schedule presents the carrying values and estimated fair values of certain financial instruments:




		June 30, 2023					December 31, 2022
(In millions)	(In millions)	Carrying value		Fair value		Level	Carrying value		Fair value		Level
(In millions)
(In millions)
Financial assets:
Financial assets:
Financial assets:	Financial assets:
Held-to-maturity investment securities	Held-to-maturity investment securities	$	10,753	$	10,768	2	$	11,126	$	11,239	2
Held-to-maturity investment securities
Held-to-maturity investment securities
Loans and leases (including loans held for sale), net of allowance
Loans and leases (including loans held for sale), net of allowance
Loans and leases (including loans held for sale), net of allowance	Loans and leases (including loans held for sale), net of allowance	56,302		53,885		3	55,086		53,093		3
Financial liabilities:	Financial liabilities:
Financial liabilities:
Financial liabilities:
Time deposits
Time deposits
Time deposits	Time deposits	12,259		12,187		2	2,309		2,269		2

Long-term debt	Long-term debt	538		460		2	651		635		2

Long-term debt

Long-term debt

The ~~previous~~preceding schedule does not include certain financial instruments that are recorded at fair value on a recurring basis, as well as certain financial assets and liabilities for which the carrying value approximates fair value. For additional information regarding the financial instruments within the scope of this disclosure, and the methods and significant assumptions used to estimate their fair value, see Note 3 of our ~~2022~~2023 Form 10-K.

~~Fair Value Option for Certain Loans Held for Sale~~

During the second quarter of 2023, we elected the fair value option for certain commercial real estate loans that are intended for sale or securitization and are hedged with derivative instruments. Electing the fair value option reduces the accounting volatility that would otherwise result from the asymmetry created by accounting for the loans held for sale at the lower of cost or fair value and the derivatives at fair value without the complexity of applying hedge accounting. These loans are presented in “Loans held for sale” on the consolidated balance sheet, and associated gains and losses are presented in “Capital markets fees” on the consolidated statement of income. These commercial real estate loans measured at fair value are generally classified in Level 2 in the fair value hierarchy because their pricing is based on observable market inputs. At June 30, 2023, we had $19.8 million of loans measured at fair value ($20.0 million par value). For the second quarter of 2023, we recognized approximately $2 million of net gains from fair value changes of loans carried at fair value and the associated derivatives.

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4. OFFSETTING ASSETS AND LIABILITIES

The following schedules present gross and net information for selected financial instruments on the balance ~~sheet.~~sheet:


			June 30, 2023
										Gross amounts not offset in the balance sheet
		March 31, 2024																			March 31, 2024
									Gross amounts not offset on the balance sheet
(In millions)
(In millions)
(In millions)	(In millions)		Gross amounts recognized		Gross amounts offset in the balance sheet		Net amounts presented in the balance sheet			Financial instruments		Cash collateral received/pledged		Net amount		Gross amounts recognized	Gross amounts offset on the balance sheet	Net amounts presented on the balance sheet	Financial instruments	Cash collateral received/pledged		Net amount
Assets:	Assets:
Federal funds sold and securities purchased under agreements to resell
Federal funds sold and securities purchased under agreements to resell
Federal funds sold and securities purchased under agreements to resell	Federal funds sold and securities purchased under agreements to resell		$	868	$	(87)	$	781		$	—	$	—	$	781
Derivatives (included in other assets)	Derivatives (included in other assets)		491		—		491			(9)		(470)		12
Total assets	Total assets		$	1,359	$	(87)	$	1,272		$	(9)	$	(470)	$	793
Liabilities:	Liabilities:
Federal funds and other short-term borrowings	Federal funds and other short-term borrowings		$	5,600	$	(87)	$	5,513		$	—	$	—	$	5,513
Federal funds and other short-term borrowings
Federal funds and other short-term borrowings
Derivatives (included in other liabilities)	Derivatives (included in other liabilities)		409		—		409			(9)		(1)		399
Total liabilities	Total liabilities		$	6,009	$	(87)	$	5,922		$	(9)	$	(1)	$	5,912


			December 31, 2022
										Gross amounts not offset in the balance sheet
		December 31, 2023																			December 31, 2023
									Gross amounts not offset on the balance sheet
(In millions)
(In millions)
(In millions)	(In millions)		Gross amounts recognized		Gross amounts offset in the balance sheet		Net amounts presented in the balance sheet			Financial instruments		Cash collateral received/pledged		Net amount		Gross amounts recognized	Gross amounts offset on the balance sheet	Net amounts presented on the balance sheet	Financial instruments	Cash collateral received/pledged		Net amount
Assets:	Assets:
Federal funds sold and securities purchased under agreements to resell
Federal funds sold and securities purchased under agreements to resell
Federal funds sold and securities purchased under agreements to resell	Federal funds sold and securities purchased under agreements to resell		$	2,451	$	(25)	$	2,426		$	—	$	—	$	2,426
Derivatives (included in other assets)	Derivatives (included in other assets)		386		—		386			(10)		(367)		9
Total assets	Total assets		$	2,837	$	(25)	$	2,812		$	(10)	$	(367)	$	2,435
Liabilities:	Liabilities:
Federal funds and other short-term borrowings	Federal funds and other short-term borrowings		$	10,442	$	(25)	$	10,417		$	—	$	—	$	10,417
Federal funds and other short-term borrowings
Federal funds and other short-term borrowings
Derivatives (included in other liabilities)	Derivatives (included in other liabilities)		451		—		451			(10)		—		441
Total liabilities	Total liabilities		$	10,893	$	(25)	$	10,868		$	(10)	$	—	$	10,858

Security repurchase and reverse repurchase agreements are offset, when applicable, inon the balance sheet according to master netting agreements. Security repurchase agreements are included ~~with~~in “Federal funds and other short-term ~~borrowings.”~~borrowings” on the consolidated balance sheet. Derivative instruments may be offset under their master netting agreements; however, for accounting purposes, we present these items on a gross basis inon our balance sheet. See Note 7 for further information regarding derivative instruments.

5. INVESTMENTS

Investment Securities

Investment securities are classified as held-to-maturity (“HTM”), available-for-sale (“AFS”), or trading. HTM securities, which management has the intent and ability to hold until maturity, are ~~measured~~carried at amortized cost. The amortized cost amounts represent the original cost of the investments, adjusted for related amortization or accretion of any purchase premiums or discounts, and for any impairment losses, including credit-related impairment. AFS securities are carried at fair value, and changes in fair value (unrealized gains and losses) are reported as net increases or decreases to accumulated other comprehensive income (“AOCI”), net of related taxes. Trading securities are carried at fair value with gains and losses recognized in current period earnings.

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The carrying values of our securities do not include accrued interest receivables of $58 million and $65 million at March 31, 2024 and December 31, 2023, respectively. These receivables are included in “Other assets” on the consolidated balance sheet.

When a security is transferred from AFS to HTM, the difference between its amortized cost basis and fair value at the date of transfer is amortized as a yield adjustment through interest income, and the fair value at the date of transfer results in either a premium or discount to the amortized cost basis of the HTM securities. The amortization of ~~the~~ unrealized gains or losses reported in ~~accumulated other comprehensive income (“AOCI”)~~AOCI will offset the effect of the ~~accretion~~amortization of the premium or discount in interest income that is created by the transfer. The discount associated with securities previously transferred from AFS to HTM was $2.0 billion ($1.5 billion after tax) at March 31, 2024.

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AFS securities are measured at fair value, and changes in fair value (unrealized gains and losses) are reported as net increases or decreases to AOCI, net of related taxes. Trading securities are measured at fair value with gains and losses recognized in current period earnings. The carrying values of our securities do not include accrued interest receivables of ~~$67 million~~ ~~and $75 million at June 30, 2023 and December 31, 2022, respectively. These receivables are presented on the consolidated balance sheet in “Other assets.”~~ See Notes 3 and 5 of our ~~2022~~2023 Form 10-K for more information regarding our process to estimate the fair value and accounting for our investment securities, respectively.

The following schedule presents the amortized cost and estimated fair values of our HTM and AFS securities:


		June 30, 2023
	March 31, 2024													March 31, 2024
(In millions)	(In millions)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value		(In millions)	Amortized cost	Gross unrealized gains 1	Gross unrealized losses		Estimated fair value
Held-to-maturity	Held-to-maturity
U.S. Government agencies and corporations:	U.S. Government agencies and corporations:
U.S. Government agencies and corporations:
U.S. Government agencies and corporations:
Agency securities	Agency securities	$	96	$	—	$	6	$	90
Agency guaranteed mortgage-backed securities 1		10,289		116		70		10,335
Agency securities
Agency securities
Agency guaranteed mortgage-backed securities
Municipal securities	Municipal securities	368		—		25		343
Total held-to-maturity	Total held-to-maturity	10,753		116		101		10,768
Available-for-sale	Available-for-sale
U.S. Treasury securities	U.S. Treasury securities	565		—		90		475
U.S. Treasury securities
U.S. Treasury securities
U.S. Government agencies and corporations:	U.S. Government agencies and corporations:
Agency securities
Agency securities
Agency securities	Agency securities	717		—		40		677
Agency guaranteed mortgage-backed securities	Agency guaranteed mortgage-backed securities	8,991		—		1,344		7,647
Small Business Administration loan-backed securities	Small Business Administration loan-backed securities	646		—		27		619
Municipal securities	Municipal securities	1,480		—		89		1,391
Other debt securities	Other debt securities	25		—		2		23
Total available-for-sale	Total available-for-sale	12,424		—		1,592		10,832
Total HTM and AFS investment securities	Total HTM and AFS investment securities	$	23,177	$	116	$	1,693	$	21,600


		December 31, 2022
	December 31, 2023													December 31, 2023
(In millions)	(In millions)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value		(In millions)	Amortized cost	Gross unrealized gains 1	Gross unrealized losses		Estimated fair value
Held-to-maturity	Held-to-maturity
U.S. Government agencies and corporations:	U.S. Government agencies and corporations:
U.S. Government agencies and corporations:
U.S. Government agencies and corporations:
Agency securities	Agency securities	$	100	$	—	$	7	$	93
Agency guaranteed mortgage-backed securities 1		10,621		165		14		10,772
Agency securities
Agency securities
Agency guaranteed mortgage-backed securities
Municipal securities	Municipal securities	405		—		31		374
Total held-to-maturity	Total held-to-maturity	11,126		165		52		11,239
Available-for-sale	Available-for-sale
U.S. Treasury securities	U.S. Treasury securities	557		—		164		393
U.S. Treasury securities
U.S. Treasury securities
U.S. Government agencies and corporations:	U.S. Government agencies and corporations:
Agency securities
Agency securities
Agency securities	Agency securities	782		—		46		736
Agency guaranteed mortgage-backed securities	Agency guaranteed mortgage-backed securities	9,652		—		1,285		8,367
Small Business Administration loan-backed securities	Small Business Administration loan-backed securities	740		1		29		712
Municipal securities	Municipal securities	1,732		1		99		1,634
Other debt securities	Other debt securities	75		—		2		73
Total available-for-sale	Total available-for-sale	13,538		2		1,625		11,915
Total HTM and AFS investment securities	Total HTM and AFS investment securities	$	24,664	$	167	$	1,677	$	23,154

1~~During~~ Gross unrealized gains for the ~~fourth quarter of 2022, we transferred approximately $10.7 billion fair value ($13.1 billion amortized cost) of mortgage-backed~~respective AFS securities to the HTM category to reflect our intent for these securities. The transfer of these securities from AFS to HTM at fair value resulted in a discount to the amortized cost basis of the HTM securities equivalent to the $2.4 billion ($1.8 billion after tax) of unrealized losses in AOCI. The amortization of the unrealized losses will offset the effect of the accretion of the discount created by the transfer. At June 30, 2023, the unamortized discount on the HTM securities totaled approximately $2.2 billion ($1.7 billion after tax).security categories were individually less than $1 million.

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Maturities

The following schedule presents the amortized cost and weighted average yields of debt securities by contractual maturity of principal payments at ~~June 30, 2023.~~March 31, 2024. This schedule does not reflect the duration of the portfolio, which would incorporate amortization, expected prepayments, interest rate resets, and fair value ~~hedges.~~hedges; the effects of which result in measured durations shorter than contractual maturities.


		June 30, 2023
		Total debt securities				Due in one year or less				Due after one year through five years				Due after five years through ten years				Due after ten years
	March 31, 2024																																																										March 31, 2024
	Total debt securities																														Total debt securities								Due in one year or less									Due after one year through five years								Due after five years through ten years									Due after ten years
(Dollar amounts in millions)	(Dollar amounts in millions)	Amortized cost		Average yield		Amortized cost		Average yield		Amortized cost		Average yield		Amortized cost		Average yield		Amortized cost		Average yield		(Dollar amounts in millions)		Amortized cost					Average yield					Amortized cost						Average yield			Amortized cost							Average yield				Amortized cost							Average yield					Amortized cost							Average yield
Held-to-maturity	Held-to-maturity
U.S. Government agencies and corporations:	U.S. Government agencies and corporations:
U.S. Government agencies and corporations:
U.S. Government agencies and corporations:
Agency securities
Agency securities
Agency securities	Agency securities	$	96	3.54	%	$	—	—	%	$	—	—	%	$	—	—	%	$	96	3.54	%	$	92			3.52		3.52		%			$	—			—			—	%		$	—			—				—	%			$	—			—			—	%				$	92			3.52			3.52	%
Agency guaranteed mortgage-backed securities	Agency guaranteed mortgage-backed securities	10,289		1.84		—		—		—		—		46		2.02		10,243		1.84
Municipal securities 1	Municipal securities 1	368		3.15		27		2.77		135		2.98		168		3.33		38		3.19
Total held-to-maturity securities	Total held-to-maturity securities	10,753		1.90		27		2.77		135		2.98		214		3.05		10,377		1.86
Available-for-sale	Available-for-sale
U.S. Treasury securities	U.S. Treasury securities	565		3.12		164		5.01		—		—		—		—		401		2.35
U.S. Treasury securities
U.S. Treasury securities
U.S. Government agencies and corporations:	U.S. Government agencies and corporations:
Agency securities
Agency securities
Agency securities	Agency securities	717		2.65		114		1.07		191		3.13		218		2.63		194		3.12
Agency guaranteed mortgage-backed securities	Agency guaranteed mortgage-backed securities	8,991		1.99		21		4.38		233		1.56		1,502		2.09		7,235		1.97
Small Business Administration loan-backed securities	Small Business Administration loan-backed securities	646		5.22		—		—		33		5.84		146		4.30		467		5.46
Municipal securities 1	Municipal securities 1	1,480		2.18		122		2.40		500		2.62		678		1.84		180		2.08
Other debt securities	Other debt securities	25		8.53		—		—		—		—		10		9.50		15		7.88
Total available-for-sale securities	Total available-for-sale securities	12,424		2.28		421		3.15		957		2.58		2,554		2.22		8,492		2.22
Total HTM and AFS investment securities	Total HTM and AFS investment securities	$	23,177	2.10	%	$	448	3.13	%	$	1,092	2.63	%	$	2,768	2.29	%	$	18,869	2.02	%	Total HTM and AFS investment securities		$	21,661		2.12			2.12		%			$	508		3.29			3.29	%			$	839			2.66			2.66	%				$	2,663		2.30			2.30	%					$	17,651		2.04			2.04	%

1 The yields on tax-exempt securities are calculated on a tax-equivalent basis.

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The following schedule presents gross unrealized losses for AFS securities and the estimated fair value by length of time the securities have been in an unrealized loss ~~position.~~position:


		June 30, 2023
		Less than 12 months				12 months or more				Total
	March 31, 2024																				March 31, 2024
	Less than 12 months																Less than 12 months		12 months or more				Total
(In millions)	(In millions)	Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value		(In millions)	Gross unrealized losses	Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value

Available-for-sale	Available-for-sale

Available-for-sale

Available-for-sale
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securities	U.S. Treasury securities	$	—	$	55	$	90	$	311	$	90	$	366
U.S. Government agencies and corporations:	U.S. Government agencies and corporations:
Agency securities
Agency securities
Agency securities	Agency securities	2		33		38		617		40		650
Agency guaranteed mortgage-backed securities	Agency guaranteed mortgage-backed securities	83		482		1,261		7,140		1,344		7,622
Small Business Administration loan-backed securities	Small Business Administration loan-backed securities	—		21		27		525		27		546
Municipal securities	Municipal securities	7		495		82		871		89		1,366
Other	Other	—		—		2		13		2		13

Total available-for-sale investment securities	Total available-for-sale investment securities	$	92	$	1,086	$	1,500	$	9,477	$	1,592	$	10,563

Total available-for-sale investment securities

Total available-for-sale investment securities


		December 31, 2022
		Less than 12 months				12 months or more				Total
	December 31, 2023																				December 31, 2023
	Less than 12 months																Less than 12 months		12 months or more				Total
(In millions)	(In millions)	Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value		(In millions)	Gross unrealized losses	Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value

Available-for-sale	Available-for-sale

Available-for-sale

Available-for-sale
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securities	U.S. Treasury securities	$	94	$	308	$	70	$	85	$	164	$	393
U.S. Government agencies and corporations:	U.S. Government agencies and corporations:
Agency securities
Agency securities
Agency securities	Agency securities	39		634		7		102		46		736
Agency guaranteed mortgage-backed securities	Agency guaranteed mortgage-backed securities	447		4,322		838		4,042		1,285		8,364
Small Business Administration loan-backed securities	Small Business Administration loan-backed securities	8		101		21		524		29		625
Municipal securities	Municipal securities	63		1,295		36		256		99		1,551
Other	Other	2		13		—		—		2		13

Total available-for-sale investment securities	Total available-for-sale investment securities	$	653	$	6,673	$	972	$	5,009	$	1,625	$	11,682

Total available-for-sale investment securities

Total available-for-sale investment securities

At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, approximately ~~3,219~~2,940 and ~~3,562~~2,998 AFS investment securities were in an unrealized loss position, respectively.

Impairment

On a quarterly basis, we review our investment securities portfolio for the presence of impairment on an individual security basis. For additional information on our policy and impairment evaluation process for investment securities, see Note 5 of our ~~2022~~2023 Form 10-K.

AFS Impairment

We did not recognize any impairment on our AFS investment securities portfolio during the first ~~six~~three months of ~~2023.~~2024. Unrealized losses primarily relate to ~~changes in~~higher interest rates subsequent to the purchase of securities and are not attributable to credit; as such, absent any future sales, we would expect to receive the full principal value at maturity. At ~~June 30, 2023,~~March 31, 2024, we had not initiated any sales of AFS securities, nor did we have an intent to sell any identified securities with unrealized losses. We do not believe it is more likely than not that we would be required to sell such securities before recovery of their amortized cost basis.

HTM Impairment

For HTM securities, the allowance for credit losses (“ACL”) is assessed consistent with the approach described in Note 6 for loans and leases measured at amortized cost. At ~~June 30, 2023,~~March 31, 2024, the ACL on HTM securities was less than $1 million, all HTM securities were risk-graded as “Pass” in terms of credit quality, and none were considered past due.

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Securities Gains and Losses Recognized in Income

The following schedule presents securities gains and losses recognized in ~~the consolidated income statement.~~income:


		Three Months Ended June 30,												Six Months Ended June 30,
		2023						2022						2023						2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
(In millions)
		(In millions)		Gross gains			Gross losses			Gross gains			Gross losses			Gross gains			Gross losses			Gross gains			Gross losses
(In millions)

Available-for-sale

Available-for-sale

Available-for-sale	Available-for-sale	$	71		$	71		$	—		$	—		$	72		$	73		$	—		$	—
Trading	Trading	7			7			—			—			10			9			—			—
Trading
Trading
Other noninterest-bearing investments
Other noninterest-bearing investments
Other noninterest-bearing investments	Other noninterest-bearing investments	10			10			1			—			13			12			5			21
Total gains	Total gains	88			88			1			—			95			94			5			21
Total gains
Total gains
Net gains (losses) 1
Net gains (losses) 1
Net gains (losses) 1	Net gains (losses) 1				$	—					$	1					$	1					$	(16)

1 Net gains (losses) were recognized in ~~securities~~“Securities gains (losses) in, net” on the ~~income statement.~~consolidated statement of income.

The following schedule presents interest income by security ~~type.~~type:

Three Months Ended June 30,
2023 2022
(In millions) Taxable Nontaxable Total Taxable Nontaxable Total
Investment securities:
Held-to-maturity $ 59 $ 1 $ 60 $ 3 $ 1 $ 4
Available-for-sale 69 8 77 109 11 120
Trading — 1 1 — 4 4
Total securities $ 128 $ 10 $ 138 $ 112 $ 16 $ 128


		Six Months Ended June 30,
		2023						2022
	Three Months Ended March 31,																			Three Months Ended March 31,
	2024																2024					2023
(In millions)	(In millions)	Taxable		Nontaxable		Total		Taxable		Nontaxable		Total		(In millions)	Taxable	Nontaxable		Total	Taxable		Nontaxable		Total
Investment securities:	Investment securities:
Held-to-maturity
Held-to-maturity
Held-to-maturity	Held-to-maturity	$	120	$	2	$	122	$	5	$	2	$	7
Available-for-sale	Available-for-sale	138		14		152		205		19		224
Trading	Trading	—		1		1		—		9		9
Total securities	Total securities	$	258	$	17	$	275	$	210	$	30	$	240

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6. LOANS, LEASES, AND ALLOWANCE FOR CREDIT LOSSES

Loans, Leases, and Loans Held for Sale

Loans and leases are summarized as follows according to major portfolio segment and specific loan class:

(In millions) June 30,
2023 December 31,
2022
Loans held for sale $ 36 $ 8
Commercial:
Commercial and industrial 1
$ 16,622 $ 16,377
Leasing 388 386
Owner-occupied 9,328 9,371
Municipal 4,354 4,361
Total commercial 30,692 30,495
Commercial real estate:
Construction and land development 2,498 2,513
Term 10,406 10,226
Total commercial real estate 12,904 12,739
Consumer:
Home equity credit line 3,291 3,377
1-4 family residential 7,980 7,286
Construction and other consumer real estate 1,434 1,161
Bankcard and other revolving plans 466 471
Other 150 124
Total consumer 13,321 12,419
Total loans and leases $ 56,917 $ 55,653

1~~Commercial and industrial loan balances~~ ~~include Paycheck Protection Program (“PPP”) loans of $126 million and $197 million for the respective periods presented.~~


(In millions)	March 31, 2024		December 31, 2023

Loans held for sale	$	12	$	53
Commercial:
Commercial and industrial	$	16,519	$	16,684
Leasing	388		383
Owner-occupied	9,295		9,219
Municipal	4,277		4,302
Total commercial	30,479		30,588
Commercial real estate:
Construction and land development	2,686		2,669
Term	10,892		10,702
Total commercial real estate	13,578		13,371
Consumer:
Home equity credit line	3,382		3,356
1-4 family residential	8,778		8,415
Construction and other consumer real estate	1,321		1,442
Bankcard and other revolving plans	439		474
Other	132		133
Total consumer	14,052		13,820

Total loans and leases	$	58,109	$	57,779

Loans and leases are measured and presented at their amortized cost basis, which includes net unamortized purchase premiums, discounts, and deferred loan fees and costs totaling ~~$38~~$32 million and ~~$49~~$37 million at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. Amortized cost basis does not include accrued interest receivables of ~~$263~~$300 million and ~~$247~~$299 million at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. These receivables are presented in the consolidated balance sheet within the “Other assets” line item.

Municipal loans generally include loans to state and local governments (“municipalities”) with the debt service being repaid from general funds or pledged revenues of the municipal entity, or to private commercial entities or 501(c)(3) not-for-profit entities utilizing a pass-through municipal entity to achieve favorable tax treatment.

Land acquisition and development loans included in the construction and land development loan portfolio were ~~$229~~$237 million at ~~June 30, 2023~~March 31, 2024 and ~~$262~~$219 million at December 31, ~~2022.~~2023.

Loans with a carrying value of ~~$39.8~~$38.7 billion at ~~June 30, 2023~~March 31, 2024 and ~~$27.6~~$36.3 billion at December 31, ~~2022~~2023 have been pledged at the Federal Reserve (“FRB”) and the Federal Home Loan Bank (“FHLB”) of Des Moines as collateral for current and potential borrowings.

At the time of origination, we determine the classification of loans as either held for investment or held for sale. Loans held for sale are measured at fair value or the lower of cost or fair value and primarily consist of (1) commercial real estate (“CRE”) loans that are sold into securitization entities, and (2) conforming residential mortgages that are generally sold to U.S. government agencies. The following schedule presents loans added to, or sold from, the held for sale category during the periods ~~presented.~~presented:

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		Three Months Ended June 30,				Six Months Ended June 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(In millions)
(In millions)
(In millions)	(In millions)	2023		2022		2023		2022

Loans added to held for sale	Loans added to held for sale	$	220	$	190	$	306	$	487

Loans added to held for sale

Loans added to held for sale
Loans sold from held for sale	Loans sold from held for sale	188		187		277		523
Loans sold from held for sale
Loans sold from held for sale

Occasionally, we have continuing involvement in the sold loans in the form of servicing rights or guarantees. The principal balance of sold loans for which we retain servicing was ~~$3.4~~$0.5 billion and ~~$3.5~~$0.4 billion at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. Income from sold loans, excluding servicing, was ~~$2 million and $7~~$1 million for the three ~~and six~~ months ended ~~June 30, 2023,~~March 31, 2024, and ~~$4 million and $10~~$5 million for the three ~~and six~~ months ended ~~June 30, 2022, respectively.~~March 31, 2023. Other income from loans sold includes fair value adjustments on loans that are included in “Capital markets fees” on the consolidated statement of income.

Allowance for Credit Losses

The allowance for credit losses (“ACL”), which consists of the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”), represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date. For additional information regarding our policies and methodologies used to estimate the ACL, see Note 6 of our ~~2022~~2023 Form 10-K.

The ACL for AFS and HTM debt securities is estimated separately from loans. For HTM securities, the ACL is estimated consistent with the approach for loans measured at amortized cost. See Note 5 of our ~~2022~~2023 Form 10-K for further discussion of our methodology used to estimate the ACL on AFS and HTM debt securities.

Changes in the ACL are summarized as follows:


	Three Months Ended March 31, 2024													Three Months Ended March 31, 2024
(In millions)										(In millions)	Commercial	Commercial real estate	Consumer		Total
Allowance for loan losses

		Three Months Ended June 30, 2023
(In millions)		Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses
Balance at beginning of period

Balance at beginning of period

Balance at beginning of period	Balance at beginning of period	$	313	$	160	$	145	$	618
Provision for loan losses	Provision for loan losses	24		21		1		46
Gross loan and lease charge-offs	Gross loan and lease charge-offs	20		—		2		22
Recoveries	Recoveries	6		—		3		9
Net loan and lease charge-offs (recoveries)	Net loan and lease charge-offs (recoveries)	14		—		(1)		13
Balance at end of period	Balance at end of period	$	323	$	181	$	147	$	651
Reserve for unfunded lending commitments	Reserve for unfunded lending commitments
Balance at beginning of period	Balance at beginning of period	$	19	$	28	$	13	$	60
Balance at beginning of period
Balance at beginning of period
Provision for unfunded lending commitments	Provision for unfunded lending commitments	1		1		(2)		—
Balance at end of period	Balance at end of period	$	20	$	29	$	11	$	60
Total allowance for credit losses at end of period	Total allowance for credit losses at end of period
Allowance for loan losses	Allowance for loan losses	$	323	$	181	$	147	$	651
Allowance for loan losses
Allowance for loan losses
Reserve for unfunded lending commitments	Reserve for unfunded lending commitments	20		29		11		60
Total allowance for credit losses	Total allowance for credit losses	$	343	$	210	$	158	$	711

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		Six Months Ended June 30, 2023
	Three Months Ended March 31, 2023													Three Months Ended March 31, 2023
(In millions)	(In millions)	Commercial		Commercial real estate		Consumer		Total		(In millions)	Commercial	Commercial real estate	Consumer		Total
Allowance for loan losses	Allowance for loan losses
Balance at December 31, 2022		$	300	$	156	$	119	$	575
Adjustment for change in accounting standard		—		(4)		1		(3)
Balance at beginning of period
Balance at beginning of period
Balance at beginning of period	Balance at beginning of period	$	300	$	152	$	120	$	572
Provision for loan losses	Provision for loan losses	34		29		29		92
Gross loan and lease charge-offs	Gross loan and lease charge-offs	23		—		6		29
Recoveries	Recoveries	12		—		4		16
Net loan and lease charge-offs (recoveries)	Net loan and lease charge-offs (recoveries)	11		—		2		13
Balance at end of period	Balance at end of period	$	323	$	181	$	147	$	651
Reserve for unfunded lending commitments	Reserve for unfunded lending commitments

Balance at beginning of period

Balance at beginning of period

Balance at beginning of period	Balance at beginning of period	$	16	$	33	$	12	$	61
Provision for unfunded lending commitments	Provision for unfunded lending commitments	4		(4)		(1)		(1)
Balance at end of period	Balance at end of period	$	20	$	29	$	11	$	60
Total allowance for credit losses at end of period	Total allowance for credit losses at end of period
Allowance for loan losses	Allowance for loan losses	$	323	$	181	$	147	$	651
Allowance for loan losses
Allowance for loan losses
Reserve for unfunded lending commitments	Reserve for unfunded lending commitments	20		29		11		60
Total allowance for credit losses	Total allowance for credit losses	$	343	$	210	$	158	$	711

Three Months Ended June 30, 2022
(In millions) Commercial Commercial real estate Consumer Total
Allowance for loan losses
Balance at beginning of period $ 282 $ 102 $ 94 $ 478
Provision for loan losses 12 12 15 39
Gross loan and lease charge-offs 15 — 3 18
Recoveries 7 — 2 9
Net loan and lease charge-offs (recoveries) 8 — 1 9
Balance at end of period $ 286 $ 114 $ 108 $ 508
Reserve for unfunded lending commitments
Balance at beginning of period $ 14 $ 12 $ 10 $ 36
Provision for unfunded lending commitments (1) 3 — 2
Balance at end of period $ 13 $ 15 $ 10 $ 38
Total allowance for credit losses at end of period
Allowance for loan losses $ 286 $ 114 $ 108 $ 508
Reserve for unfunded lending commitments 13 15 10 38
Total allowance for credit losses $ 299 $ 129 $ 118 $ 546

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Six Months Ended June 30, 2022
(In millions) Commercial Commercial
real estate Consumer Total
Allowance for loan losses
Balance at beginning of period $ 311 $ 107 $ 95 $ 513
Provision for loan losses (12) 7 15 10
Gross loan and lease charge-offs 28 — 7 35
Recoveries 15 — 5 20
Net loan and lease charge-offs (recoveries) 13 — 2 15
Balance at end of period $ 286 $ 114 $ 108 $ 508
Reserve for unfunded lending commitments
Balance at beginning of period $ 19 $ 11 $ 10 $ 40
Provision for unfunded lending commitments (6) 4 — (2)
Balance at end of period $ 13 $ 15 $ 10 $ 38
Total allowance for credit losses at end of period
Allowance for loan losses $ 286 $ 114 $ 108 $ 508
Reserve for unfunded lending commitments 13 15 10 38
Total allowance for credit losses $ 299 $ 129 $ 118 $ 546

Nonaccrual Loans

Loans are generally placed on nonaccrual status when payment in full of principal and interest is not expected, or the loan is 90 days or more past due as to principal or interest, unless the loan is both well-secured and in the process of collection. Factors we consider in determining whether a loan is placed on nonaccrual include delinquency status, collateral value, borrower or guarantor financial statement information, bankruptcy status, and other information which would indicate that the full and timely collection of interest and principal is uncertain.

A nonaccrual loan may be returned to accrual status when (1) all delinquent interest and principal become current in accordance with the terms of the loan agreement, (2) the loan, if secured, is well-secured, (3) the borrower has paid according to the contractual terms for a minimum of six months, and (4) an analysis of the borrower indicates a reasonable assurance of the borrower's ability and willingness to maintain payments.

~~The amortized cost basis of nonaccrual loans is summarized as follows:~~
June 30, 2023
Amortized cost basis Total amortized cost basis
(In millions) with no allowance with allowance Related allowance
Commercial:
Commercial and industrial $ 11 $ 60 $ 71 $ 33
Owner-occupied 20 9 29 1
Total commercial 31 69 100 34
Commercial real estate:
Term 7 6 13 1
Total commercial real estate 7 6 13 1
Consumer:
Home equity credit line — 12 12 3
1-4 family residential 2 35 37 5
Total consumer loans 2 47 49 8
Total $ 40 $ 122 $ 162 $ 43

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December 31, 2022
Amortized cost basis Total amortized cost basis
(In millions) with no allowance with allowance Related allowance
Commercial:
Commercial and industrial $ 8 $ 55 $ 63 $ 27
Owner-occupied 13 11 24 1
Total commercial 21 66 87 28
Commercial real estate:
Term — 14 14 2
Total commercial real estate — 14 14 2
Consumer:
Home equity credit line 1 10 11 2
1-4 family residential 9 28 37 3
Total consumer loans 10 38 48 5
Total $ 31 $ 118 $ 149 $ 35
The amortized cost basis of nonaccrual loans is summarized as follows:


	March 31, 2024
	Amortized cost basis				Total amortized cost basis
(In millions)	with no allowance		with allowance				Related allowance


Commercial:
Commercial and industrial	$	7	$	103	$	110	$	25
Leasing	—		2		2		1
Owner-occupied	13		7		20		1

Total commercial	20		112		132		27
Commercial real estate:
Construction and land development	—		1		1		—
Term	34		8		42		1
Total commercial real estate	34		9		43		1
Consumer:
Home equity credit line	4		23		27		4
1-4 family residential	8		36		44		6

Bankcard and other revolving plans	—		1		1		1
Other	—		1		1		—
Total consumer loans	12		61		73		11
Total	$	66	$	182	$	248	$	39


	December 31, 2023
	Amortized cost basis				Total amortized cost basis
(In millions)	with no allowance		with allowance				Related allowance



Commercial:
Commercial and industrial	$	11	$	71	$	82	$	30
Leasing	—		2		2		1
Owner-occupied	12		8		20		1

Total commercial	23		81		104		32
Commercial real estate:
Construction and land development	22		—		22		—
Term	37		2		39		1
Total commercial real estate	59		2		61		1
Consumer:
Home equity credit line	1		16		17		5
1-4 family residential	8		32		40		5



Total consumer loans	9		48		57		10
Total	$	91	$	131	$	222	$	43

For accruing loans, interest is accrued and interest payments are recognized into interest income according to the contractual loan agreement. For nonaccruing loans, the accrual of interest is discontinued, any uncollected or accrued interest is reversed from interest income in a timely manner (generally within one month), and any payments received on these loans are not recognized into interest income, but are applied as a reduction to the principal outstanding. When the collectability of the amortized cost basis for a nonaccrual loan is no longer in doubt, then interest payments may be recognized in interest income on a cash basis. For the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ there was no interest income recognized on a cash basis during the period the loans were on nonaccrual.

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The amount of accrued interest receivables reversed from interest income during the periods presented is summarized by loan portfolio segment as follows:


		Three Months Ended June 30,				Six Months Ended June 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(In millions)
(In millions)
(In millions)	(In millions)	2023		2022		2023		2022

Commercial	Commercial	$	3	$	4	$	5	$	8

Commercial

Commercial
Commercial real estate
Commercial real estate
Commercial real estate	Commercial real estate	—		—		—		—
Consumer	Consumer	1		—		1		—
Consumer
Consumer
Total	Total	$	4	$	4	$	6	$	8
Total
Total

Past Due Loans

Closed-end loans with payments scheduled monthly are reported as past due when the borrower is in arrears for two or more monthly payments. Similarly, open-end credits, such as bankcard and other revolving credit plans, are reported as past due when the minimum payment has not been made for two or more billing cycles. Other multi-payment obligations (i.e., quarterly, semi-annual, etc.), single payment, and demand notes, are reported as past due when either principal or interest is due and unpaid for a period of 30 days or more.

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Past due loans (accruing and nonaccruing) are summarized as follows:
June 30, 2023
(In millions) Current 30-89 days
past due 90+ days
past due Total
past due Total
loans Accruing
loans
90+ days
past due
Nonaccrual
loans
that are
current 1
Commercial:
Commercial and industrial $ 16,594 $ 18 $ 10 $ 28 $ 16,622 $ 3 $ 57
Leasing 388 — — — 388 — —
Owner-occupied 9,320 5 3 8 9,328 — 24
Municipal 4,347 7 — 7 4,354 — —
Total commercial 30,649 30 13 43 30,692 3 81
Commercial real estate:
Construction and land development 2,497 1 — 1 2,498 — —
Term 10,385 18 3 21 10,406 3 13
Total commercial real estate 12,882 19 3 22 12,904 3 13
Consumer:
Home equity credit line 3,275 12 4 16 3,291 — 6
1-4 family residential 7,950 10 20 30 7,980 — 14
Construction and other consumer real estate 1,434 — — — 1,434 — —
Bankcard and other revolving plans 463 2 1 3 466 1 —
Other 149 1 — 1 150 — —
Total consumer loans 13,271 25 25 50 13,321 1 20
Total $ 56,802 $ 74 $ 41 $ 115 $ 56,917 $ 7 $ 114
December 31, 2022
(In millions) Current 30-89 days
past due 90+ days
past due Total
past due Total
loans Accruing
loans
90+ days
past due
Nonaccrual
loans
that are
current 1
Commercial:
Commercial and industrial $ 16,331 $ 24 $ 22 $ 46 $ 16,377 $ 4 $ 45
Leasing 386 — — — 386 — —
Owner-occupied 9,344 20 7 27 9,371 1 15
Municipal 4,361 — — — 4,361 — —
Total commercial 30,422 44 29 73 30,495 5 60
Commercial real estate:
Construction and land development 2,511 2 — 2 2,513 — —
Term 10,179 37 10 47 10,226 — 4
Total commercial real estate 12,690 39 10 49 12,739 — 4
Consumer:
Home equity credit line 3,369 5 3 8 3,377 — 6
1-4 family residential 7,258 9 19 28 7,286 — 16
Construction and other consumer real estate 1,161 — — — 1,161 — —
Bankcard and other revolving plans 467 3 1 4 471 1 —
Other 124 — — — 124 — —
Total consumer loans 12,379 17 23 40 12,419 1 22
Total $ 55,491 $ 100 $ 62 $ 162 $ 55,653 $ 6 $ 86


	March 31, 2024
(In millions)	Current		30-89 days past due		90+ days past due		Total past due		Total loans		Accruing loans 90+ days past due		Nonaccrual loans that are current 1

Commercial:
Commercial and industrial	$	16,480	$	17	$	22	$	39	$	16,519	$	2	$	87
Leasing	386		2		—		2		388		—		—
Owner-occupied	9,288		5		2		7		9,295		—		18
Municipal	4,276		1		—		1		4,277		—		—
Total commercial	30,430		25		24		49		30,479		2		105
Commercial real estate:
Construction and land development	2,682		3		1		4		2,686		—		—
Term	10,818		44		30		74		10,892		—		3
Total commercial real estate	13,500		47		31		78		13,578		—		3
Consumer:
Home equity credit line	3,361		11		10		21		3,382		—		14
1-4 family residential	8,740		15		23		38		8,778		—		16
Construction and other consumer real estate	1,321		—		—		—		1,321		—		—
Bankcard and other revolving plans	436		2		1		3		439		1		—
Other	131		1		—		1		132		—		1
Total consumer loans	13,989		29		34		63		14,052		1		31
Total	$	57,919	$	101	$	89	$	190	$	58,109	$	3	$	139


	December 31, 2023
(In millions)	Current		30-89 days past due		90+ days past due		Total past due		Total loans		Accruing loans 90+ days past due		Nonaccrual loans that are current 1

Commercial:
Commercial and industrial	$	16,631	$	38	$	15	$	53	$	16,684	$	1	$	65
Leasing	381		2		—		2		383		—		—
Owner-occupied	9,206		11		2		13		9,219		1		18
Municipal	4,301		1		—		1		4,302		—		—
Total commercial	30,519		52		17		69		30,588		2		83
Commercial real estate:
Construction and land development	2,645		2		22		24		2,669		—		—
Term	10,661		14		27		41		10,702		—		3
Total commercial real estate	13,306		16		49		65		13,371		—		3
Consumer:
Home equity credit line	3,334		17		5		22		3,356		—		9
1-4 family residential	8,375		17		23		40		8,415		—		13
Construction and other consumer real estate	1,442		—		—		—		1,442		—		—
Bankcard and other revolving plans	468		5		1		6		474		1		—
Other	132		1		—		1		133		—		—
Total consumer loans	13,751		40		29		69		13,820		1		22
Total	$	57,576	$	108	$	95	$	203	$	57,779	$	3	$	108

1 Represents nonaccrual loans that are not past due more than 30 days; however, full payment of principal and interest is ~~still~~ not expected.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

Credit Quality Indicators

In addition to the nonaccrual and past due criteria, we also analyze loans using loan risk-grading systems, which vary based on the size and type of credit risk exposure. The internal risk grades assigned to loans follow our definition of Pass, Special Mention, Substandard, and Doubtful, which are consistent with published definitions of regulatory risk classifications.

•Pass – A Pass asset is higher-quality and does not fit any of the other categories described below. The likelihood of loss is considered low.

•Special Mention – A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in our credit position at some future date.

•Substandard – A Substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have well-defined weaknesses and are characterized by the distinct possibility that we may sustain some loss if deficiencies are not corrected.

•Doubtful – A Doubtful asset has all the weaknesses inherent in a Substandard asset with the added characteristics that the weaknesses make collection or liquidation in full highly questionable and improbable.

~~There were no~~The balance of loans classified as Doubtful was $5 million at ~~June 30, 2023 and~~March 31, 2024, compared with zero at December 31, ~~2022.~~2023.

For consumer loans and for ~~commercial and commercial real estate (“CRE”)~~CRE loans with commitments greater than $1 million, we generally assign internal risk grades similar to those described previously based on automated rules that depend on refreshed credit scores, payment performance, and other risk indicators. These are generally assigned either a Pass, Special Mention, or Substandard grade, and are reviewed as we identify information that might warrant a grade change.

The following schedule presents the amortized cost basis of loans and leases categorized by year of origination and by credit quality classification as monitored by management. The schedule also summarizes the current period gross charge-offs by year of origination.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES


	March 31, 2024
	Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
	Amortized cost basis by year of origination
(In millions)	2024		2023		2022		2021		2020		Prior						Total
Commercial:
Commercial and industrial
Pass	$	361	$	2,617	$	2,200	$	1,133	$	568	$	968	$	7,978	$	166	$	15,991
Special Mention	—		7		90		20		3		4		72		2		198
Accruing Substandard	19		30		9		13		5		40		100		4		220
Nonaccrual	—		4		32		1		2		47		18		6		110
Total commercial and industrial	380		2,658		2,331		1,167		578		1,059		8,168		178		16,519
Gross charge-offs	—		1		3		1		—		—		4		1		10
Leasing
Pass	39		94		116		42		26		57		—		—		374
Special Mention	—		2		8		1		1		—		—		—		12
Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		2		—		—		—		—		—		2
Total leasing	39		96		126		43		27		57		—		—		388
Gross charge-offs	—		—		—		—		—		—		—		—		—
Owner-occupied
Pass	248		1,126		1,852		1,979		975		2,524		209		50		8,963
Special Mention	—		5		9		21		14		25		15		5		94
Accruing Substandard	6		10		31		28		20		115		8		—		218
Nonaccrual	—		—		1		1		7		11		—		—		20
Total owner-occupied	254		1,141		1,893		2,029		1,016		2,675		232		55		9,295
Gross charge-offs	—		—		—		—		—		—		—		—		—
Municipal
Pass	121		598		1,056		1,014		599		855		2		3		4,248
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		15		—		6		3		5		—		—		29
Nonaccrual	—		—		—		—		—		—		—		—		—
Total municipal	121		613		1,056		1,020		602		860		2		3		4,277
Gross charge-offs	—		—		—		—		—		—		—		—		—
Total commercial	794		4,508		5,406		4,259		2,223		4,651		8,402		236		30,479
Total commercial gross charge-offs	—		1		3		1		—		—		4		1		10
Commercial real estate:
Construction and land development
Pass	95		613		933		273		35		12		501		124		2,586
Special Mention	—		—		8		70		—		—		—		—		78
Accruing Substandard	—		19		1		—		1		—		—		—		21
Nonaccrual	—		—		—		—		—		—		1		—		1
Total construction and land development	95		632		942		343		36		12		502		124		2,686
Gross charge-offs	—		—		—		—		—		—		—		—		—
Term
Pass	431		1,735		2,375		1,680		1,286		2,136		286		109		10,038
Special Mention	95		74		183		103		109		4		—		10		578
Accruing Substandard	41		69		30		12		17		30		—		35		234
Nonaccrual	—		4		26		—		—		12		—		—		42
Total term	567		1,882		2,614		1,795		1,412		2,182		286		154		10,892
Gross charge-offs	—		—		—		—		—		—		—		—		—
Total commercial real estate	662		2,514		3,556		2,138		1,448		2,194		788		278		13,578
Total commercial real estate gross charge-offs	—		—		—		—		—		—		—		—		—

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES


	March 31, 2024																										March 31, 2024
	Term loans
		Amortized cost basis by year of origination
		Amortized cost basis by year of origination
		Amortized cost basis by year of origination
(In millions)
(In millions)
(In millions)																				2024	2023	2022	2021	2020	Prior	Total

		June 30, 2023
		Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
		Amortized cost basis by year of origination
(In millions)		2023		2022		2021		2020		2019		Prior						Total
Commercial:
Commercial and industrial

Consumer:

Consumer:

Consumer:
Home equity credit line
Home equity credit line
Home equity credit line
Pass
Pass
Pass	Pass	$	1,442	$	2,955	$	1,550	$	758	$	600	$	703	$	8,039	$	177	$	16,224
Special Mention	Special Mention	1		3		7		5		1		49		88		1		155
Accruing Substandard	Accruing Substandard	1		37		3		3		33		28		65		2		172
Nonaccrual	Nonaccrual	5		5		2		2		1		1		52		3		71
Total commercial and industrial		1,449		3,000		1,562		768		635		781		8,244		183		16,622
Total home equity credit line
Gross charge-offs	Gross charge-offs	—		6		5		—		—		—		7		2		20
Leasing
1-4 family residential
Pass
Pass
Pass	Pass	53		146		58		38		54		31		—		—		380
Special Mention	Special Mention	—		1		1		—		—		—		—		—		2
Accruing Substandard	Accruing Substandard	—		2		—		—		—		4		—		—		6
Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		—		—
Total leasing		53		149		59		38		54		35		—		—		388
Total 1-4 family residential
Gross charge-offs	Gross charge-offs	—		—		—		—		—		—		—		—		—
Owner-occupied
Construction and other consumer real estate
Pass
Pass
Pass	Pass	662		2,027		2,077		1,058		761		2,128		199		48		8,960
Special Mention	Special Mention	2		5		66		3		17		13		2		—		108
Accruing Substandard	Accruing Substandard	5		32		51		20		17		102		4		—		231
Nonaccrual	Nonaccrual	1		—		1		12		3		11		1		—		29
Total owner-occupied		670		2,064		2,195		1,093		798		2,254		206		48		9,328
Total construction and other consumer real estate
Gross charge-offs	Gross charge-offs	—		—		—		—		—		—		—		—		—
Municipal
Bankcard and other revolving plans
Pass
Pass
Pass	Pass	250		1,188		1,194		688		407		575		4		—		4,306
Special Mention	Special Mention	—		38		—		—		—		—		—		—		38
Accruing Substandard	Accruing Substandard	—		—		6		3		1		—		—		—		10
Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		—		—
Total municipal		250		1,226		1,200		691		408		575		4		—		4,354
Total bankcard and other revolving plans
Gross charge-offs	Gross charge-offs	—		—		—		—		—		—		—		—		—
Total commercial		2,422		6,439		5,016		2,590		1,895		3,645		8,454		231		30,692
Total commercial gross charge-offs		—		6		5		—		—		—		7		2		20
Commercial real estate:
Construction and land development
Other consumer
Pass
Pass
Pass	Pass	182		667		667		270		36		3		490		118		2,433
Special Mention	Special Mention	5		—		—		12		—		—		15		—		32
Accruing Substandard	Accruing Substandard	—		10		1		—		22		—		—		—		33
Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and land development		187		677		668		282		58		3		505		118		2,498
Total other consumer
Gross charge-offs	Gross charge-offs	—		—		—		—		—		—		—		—		—
Term
Pass		876		2,704		1,888		1,673		969		1,639		219		173		10,141
Special Mention		23		17		1		41		2		9		—		—		93
Accruing Substandard		30		23		1		37		27		41		—		—		159
Nonaccrual		—		—		—		—		4		9		—		—		13
Total term		929		2,744		1,890		1,751		1,002		1,698		219		173		10,406
Gross charge-offs		—		—		—		—		—		—		—		—		—
Total commercial real estate		1,116		3,421		2,558		2,033		1,060		1,701		724		291		12,904
Total commercial real estate gross charge-offs		—		—		—		—		—		—		—		—		—
Total consumer
Total consumer gross charge-offs
Total loans
Total gross charge-offs

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES


		June 30, 2023
		Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
		Amortized cost basis by year of origination
	December 31, 2023																																				December 31, 2023
	Term loans
		Amortized cost basis by year of origination
		Amortized cost basis by year of origination
		Amortized cost basis by year of origination
(In millions)	(In millions)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis		Total

Consumer:
Home equity credit line
(In millions)
(In millions)																					2023		2022		2021		2020		2018		Prior		Total
Commercial:
Commercial and industrial
Commercial and industrial
Commercial and industrial
Pass
Pass
Pass	Pass	—		—		—		—		—		—						3,184		93		3,277
Special Mention	Special Mention	—		—		—		—		—		—				—		—		—
Accruing Substandard	Accruing Substandard	—		—		—		—		—		—		2		—		2
Nonaccrual	Nonaccrual	—		—		—		—		—		—		10		2		12
Total home equity credit line		—		—		—		—		—		—		3,196		95		3,291
Total commercial and industrial
Gross charge-offs	Gross charge-offs	—		—		—		—		—		—		—		—		—		Gross charge-offs	1		10	10	6	6	—	—	—	—	2	2	24	24	2	2		45	45
1-4 family residential
Leasing
Pass
Pass
Pass	Pass	651		1,970		1,664		1,011		620		2,025		—		—		7,941
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	Accruing Substandard	—		—		—		—		—		2		—		—		2
Nonaccrual	Nonaccrual	—		—		2		3		4		28		—		—		37
Total 1-4 family residential		651		1,970		1,666		1,014		624		2,055		—		—		7,980
Total leasing
Gross charge-offs	Gross charge-offs	—		—		—		—		—		—		—		—		—
Construction and other consumer real estate
Owner-occupied
Pass
Pass
Pass	Pass	74		940		372		27		12		9		—		—		1,434
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and other consumer real estate		74		940		372		27		12		9		—		—		1,434
Total owner-occupied
Gross charge-offs	Gross charge-offs	—		—		—		—		—		—		—		—		—
Bankcard and other revolving plans
Municipal
Pass
Pass
Pass	Pass	—		—		—		—		—		—		462		2		464
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	Accruing Substandard	—		—		—		—		—		—		2		—		2
Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		—		—
Total bankcard and other revolving plans		—		—		—		—		—		—		464		2		466
Total municipal
Gross charge-offs	Gross charge-offs	—		—		—		—		—		—		2		—		2
Other consumer
Total commercial
Total commercial gross charge-offs
Commercial real estate:
Construction and land development
Construction and land development
Construction and land development
Pass
Pass
Pass	Pass	61		48		24		8		6		3		—		—		150
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		—		—
Total other consumer		61		48		24		8		6		3		—		—		150
Total construction and land development
Gross charge-offs	Gross charge-offs	—		—		—		—		—		—		—		—		—
Total consumer		786		2,958		2,062		1,049		642		2,067		3,660		97		13,321
Total consumer gross charge-offs		—		—		—		—		—		—		2		—		2
Total loans		$	4,324	$	12,818	$	9,636	$	5,672	$	3,597	$	7,413	$	12,838	$	619	$	56,917
Total gross charge-offs		$	—	$	6	$	5	$	—	$	—	$	—	$	9	$	2	$	22
Term
Pass
Pass
Pass
Special Mention
Accruing Substandard
Nonaccrual
Total term
Gross charge-offs
Total commercial real estate
Total commercial real estate gross charge-offs

Table of Contents

ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

December 31, 2022
Term loans Revolving loans amortized cost basis Revolving loans converted to term loans amortized cost basis
Amortized cost basis by year of origination
(In millions) 2022 2021 2020 2019 2018 Prior Total
Commercial:
Commercial and industrial
Pass $ 3,363 $ 1,874 $ 979 $ 876 $ 293 $ 264 $ 8,054 $ 182 $ 15,885
Special Mention 1 2 10 52 1 2 50 — 118
Accruing Substandard 26 7 17 78 30 67 84 2 311
Nonaccrual — 8 5 11 1 2 32 4 63
Total commercial and industrial 3,390 1,891 1,011 1,017 325 335 8,220 188 16,377
Leasing
Pass 160 71 47 66 18 19 — — 381
Special Mention — — — — — — — — —
Accruing Substandard — — — — — 5 — — 5
Nonaccrual — — — — — — — — —
Total leasing 160 71 47 66 18 24 — — 386
Owner-occupied
Pass 2,157 2,285 1,143 874 654 1,679 187 74 9,053
Special Mention 1 15 5 8 3 16 1 — 49
Accruing Substandard 16 33 48 20 55 64 9 — 245
Nonaccrual 1 1 2 4 5 10 1 — 24
Total owner-occupied 2,175 2,334 1,198 906 717 1,769 198 74 9,371
Municipal
Pass 1,230 1,220 816 441 168 437 8 — 4,320
Special Mention 32 6 — — — — — — 38
Accruing Substandard — — — — — 3 — — 3
Nonaccrual — — — — — — — — —
Total municipal 1,262 1,226 816 441 168 440 8 — 4,361
Total commercial 6,987 5,522 3,072 2,430 1,228 2,568 8,426 262 30,495
Commercial real estate:
Construction and land development
Pass 548 671 455 81 2 2 617 96 2,472
Special Mention 1 1 — — — — — — 2
Accruing Substandard 17 — — 22 — — — — 39
Nonaccrual — — — — — — — — —
Total construction and land development 566 672 455 103 2 2 617 96 2,513
Term
Pass 2,861 2,107 1,686 1,012 666 1,229 276 112 9,949
Special Mention 39 21 11 — 4 1 — — 76
Accruing Substandard 42 2 34 21 53 35 — — 187
Nonaccrual — — — 4 1 9 — — 14
Total term 2,942 2,130 1,731 1,037 724 1,274 276 112 10,226
Total commercial real estate 3,508 2,802 2,186 1,140 726 1,276 893 208 12,739

~~Table of Contents~~

~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~


		December 31, 2022
		Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
		Amortized cost basis by year of origination
	December 31, 2023																										December 31, 2023
	Term loans
		Amortized cost basis by year of origination
		Amortized cost basis by year of origination
		Amortized cost basis by year of origination
(In millions)
(In millions)
(In millions)	(In millions)	2022		2021		2020		2019		2018		Prior		Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis		Total		2023	2022	2021	2020	2018	Prior	Total

Consumer:	Consumer:

Consumer:

Consumer:
Home equity credit line	Home equity credit line
Home equity credit line
Home equity credit line
Pass
Pass
Pass	Pass	—		—		—		—		—		—						3,265		98	3,363
Special Mention	Special Mention	—		—		—		—		—		—				—		—		—
Accruing Substandard	Accruing Substandard	—		—		—		—		—		—		3		—		3
Nonaccrual	Nonaccrual	—		—		—		—		—		—		8		3		11
Total home equity credit line	Total home equity credit line	—		—		—		—		—		—		3,276		101		3,377
Gross charge-offs
1-4 family residential	1-4 family residential
Pass
Pass
Pass	Pass	1,913		1,503		1,024		638		381		1,788		—		—		7,247
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	Accruing Substandard	—		—		—		—		—		2		—		—		2
Nonaccrual	Nonaccrual	—		2		2		4		3		26		—		—		37
Total 1-4 family residential	Total 1-4 family residential	1,913		1,505		1,026		642		384		1,816		—		—		7,286
Gross charge-offs
Construction and other consumer real estate	Construction and other consumer real estate
Pass
Pass
Pass	Pass	583		485		64		19		5		5		—		—		1,161
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and other consumer real estate	Total construction and other consumer real estate	583		485		64		19		5		5		—		—		1,161
Gross charge-offs
Bankcard and other revolving plans	Bankcard and other revolving plans
Pass
Pass
Pass	Pass	—		—		—		—		—		—		468		2		470
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	Accruing Substandard	—		—		—		—		—		—		1		—		1
Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		—		—
Total bankcard and other revolving plans	Total bankcard and other revolving plans	—		—		—		—		—		—		469		2		471
Gross charge-offs
Other consumer	Other consumer
Pass
Pass
Pass	Pass	68		30		12		8		4		2		—		—		124
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		—		—
Total other consumer	Total other consumer	68		30		12		8		4		2		—		—		124
Gross charge-offs
Total consumer	Total consumer	2,564		2,020		1,102		669		393		1,823		3,745		103		12,419
Total consumer gross charge-offs
Total loans	Total loans	$	13,059	$	10,344	$	6,360	$	4,239	$	2,347	$	5,667	$	13,064	$	573	$	55,653
Total gross charge-offs

Loan Modifications

~~On January 1, 2023, we adopted ASU 2022-02,~~ ~~Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures,~~ which eliminated the recognition and measurement of troubled debt restructurings (“TDRs”) and their related disclosures. As a result, we no longer separately measure an allowance for credit losses for TDRs, relying instead on our credit loss estimation models. The adoption of this guidance did not have a material impact on our financial statements.

~~ASU 2022-02 requires enhanced disclosures for loan modifications to borrowers experiencing financial difficulty.~~ Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral position. Loan modifications may also occur when the borrower experiences financial difficulty and needs

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temporary or permanent relief from the original contractual terms of the loan. For loans that have been modified with a borrower experiencing financial difficulty, we use the same credit loss estimation methods that we use for the

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rest of the loan portfolio. These methods incorporate the post-modification loan terms, as well as defaults and charge-offs associated with historical modified loans. All nonaccruing loans more than $1 million are evaluated individually, regardless of modification.

We consider many factors in determining whether to agree to a loan modification and we seek a solution that will both minimize potential loss to us and attempt to help the borrower. We evaluate borrowers’ current and forecasted future cash flows, their ability and willingness to make current contractual or proposed modified payments, the value of the underlying collateral (if applicable), the possibility of obtaining additional security or guarantees, and the potential costs related to a repossession or foreclosure and the subsequent sale of the collateral.

A modified loan on nonaccrual will generally remain on nonaccrual until the borrower has proven the ability to perform under the modified structure for a minimum of six months, and there is evidence that such payments can and are likely to continue as agreed. Performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual at the time of modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual. ~~There were no~~

On an ongoing basis, we monitor the performance of all modified loans according to ~~borrowers experiencing financial difficulty~~their modified terms. The amortized cost of modified loans that had a payment default during the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, which were still in default at period end, and were within 12 months or less of being ~~modified.~~modified was approximately $18 million, primarily commercial real estate loans, and less than $1 million, respectively.

The amortized cost of loans to borrowers experiencing financial difficulty that were modified during the period, by loan class and modification type, is summarized in the following schedule:


		Three Months Ended June 30, 2023
		Amortized cost associated with the following modification types:
(In millions)		Interest rate reduction		Maturity or term extension		Principal forgiveness		Multiple modification types 1		Total 2		Percentage of total loans 3
		Three Months Ended March 31, 2024
		Three Months Ended March 31, 2024
		Three Months Ended March 31, 2024
	Amortized cost associated with the following modification types:
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)																Interest rate reduction						Maturity or term extension						Principal forgiveness						Payment deferral				Multiple modification types 1							Total 2							Percentage of total loans 3
Commercial:	Commercial:
Commercial and industrial
Commercial and industrial
Commercial and industrial	Commercial and industrial	$	1	$	27	$	—	$	—	$	28	0.2	%	$	—			$		$	26			$		$	—			$		$	—			$			$	4			$			$	30			0.2			0.2	%
Owner-occupied	Owner-occupied	—		20		—		—		20		0.2

Total commercial	Total commercial	1		47		—		—		48		0.2
Total commercial
Total commercial
Commercial real estate:	Commercial real estate:
Construction and land development
Construction and land development
Construction and land development	Construction and land development	—		18		—		—		18		0.7
Term	Term	—		34		—		—		34		0.3
Total commercial real estate	Total commercial real estate	—		52		—		—		52		0.4
Consumer:	Consumer:

Home equity credit line
Home equity credit line
Home equity credit line
1-4 family residential	1-4 family residential	—		—		1		1		2		—

Bankcard and other revolving plans	Bankcard and other revolving plans	—		1		—		—		1		0.2

Bankcard and other revolving plans
Bankcard and other revolving plans
Other
Total consumer loans	Total consumer loans	—		1		1		1		3		—
Total	Total	$	1	$	100	$	1	$	1	$	103	0.2	%	Total		$	—		$			$	114		$			$	2		$			$	—		$				$	7		$				$	123		0.2			0.2	%

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		Six Months Ended June 30, 2023
		Amortized cost associated with the following modification types:
(In millions)		Interest rate reduction		Maturity or term extension		Principal forgiveness		Multiple modification types 1		Total 2		Percentage of total loans 3
		Three Months Ended March 31, 2023
		Three Months Ended March 31, 2023
		Three Months Ended March 31, 2023
		Amortized cost associated with the following modification types:
		Amortized cost associated with the following modification types:
		Amortized cost associated with the following modification types:
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)
Commercial:
Commercial:
Commercial:	Commercial:
Commercial and industrial	Commercial and industrial	$	1	$	42	$	—	$	—	$	43	0.3	%
Commercial and industrial
Commercial and industrial
Owner-occupied
Owner-occupied
Owner-occupied	Owner-occupied	4		22		—		—		26		0.3

Total commercial	Total commercial	5		64		—		—		69		0.2

Total commercial

Total commercial
Commercial real estate:
Commercial real estate:
Commercial real estate:	Commercial real estate:
Construction and land development	Construction and land development	—		18		—		—		18		0.7
Construction and land development
Construction and land development
Term
Term
Term	Term	—		58		—		—		58		0.6
Total commercial real estate	Total commercial real estate	—		76		—		—		76		0.6
Total commercial real estate
Total commercial real estate
Consumer:	Consumer:

Consumer:
Consumer:
Home equity credit line
Home equity credit line
Home equity credit line
1-4 family residential
1-4 family residential
1-4 family residential	1-4 family residential	—		—		1		1		2		—

Bankcard and other revolving plans	Bankcard and other revolving plans	—		1		—		—		1		0.2

Bankcard and other revolving plans

Bankcard and other revolving plans
Other
Other
Other
Total consumer loans
Total consumer loans
Total consumer loans	Total consumer loans	—		1		1		1		3		—
Total	Total	$	5	$	141	$	1	$	1	$	148	0.3	%
Total
Total

1 Includes modifications that resulted from a combination of interest rate reduction, maturity or term extension, principal forgiveness, and payment deferral modifications.

2 Unfunded lending commitments related to loans modified to borrowers experiencing financial difficulty totaled ~~$10~~$3 million and $8 millionat ~~June 30, 2023.~~March 31, 2024 and March 31, 2023, respectively.

3 Amounts less than 0.05% are rounded to zero.

The financial impact of loan modifications to borrowers experiencing financial difficulty ~~during the three and six months ended June 30, 2023,~~ is summarized in the following ~~schedule:~~schedules:

Three Months Ended June 30, 2023

Six Months Ended June 30, 2023

(In millions)

Weighted-average interest rate reduction (in percentage points)

Weighted-average term extension
(in months)

Weighted-average interest rate reduction (in percentage points)

Weighted-average term extension
(in months)

Three Months Ended
March 31, 2024

Three Months Ended
March 31, 2023

Weighted-average interest rate reduction (in percentage points)

Commercial:

Commercial and industrial

1.0

Owner-occupied

—

4.4

Owner-occupied

Total commercial

1.0

3.7

Commercial real estate:

Construction and land development

—

Term

—

Term

Total commercial real estate

—

Consumer: 1

Home equity credit line

1-4 family residential

1.3

110

1.3

110

Bankcard and other revolving plans

—

Bankcard and other revolving plans

Other

Total consumer loans

1.3

Total weighted average financial impact

1.1

3.4

Total weighted average financial impact

1 Primarily relates to ~~one loan~~a small number of loans within each consumer loan class.

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Loan modifications to borrowers experiencing financial difficulty during the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023 ~~resulted~~did not result in ~~$1 million of~~ principal forgiveness for any class of loan for each respective period.

The following schedule presents the ~~total~~aging of loans to borrowers experiencing financial difficulty that were modified on or after April 1, 2023 through March 31, 2024, presented by portfolio segment and loan ~~portfolio for both periods.~~class:


	March 31, 2024
(In millions)	Current		30-89 days past due		90+ days past due		Total past due		Total amortized cost of loans

Commercial:
Commercial and industrial	$	62	$	—	$	6	$	6	$	68

Owner-occupied	10		—		—		—		10
Municipal	8		—		—		—		8
Total commercial	80		—		6		6		86
Commercial real estate:
Construction and land development	23		1		1		2		25
Term	199		17		4		21		220
Total commercial real estate	222		18		5		23		245
Consumer:
Home equity credit line	2		—		—		—		2
1-4 family residential	2		—		2		2		4

Bankcard and other revolving plans	—		—		—		—		—
Other	1		—		—		—		1
Total consumer loans	5		—		2		2		7
Total	$	307	$	18	$	13	$	31	$	338

The following schedule presents the aging of loans to borrowers experiencing financial difficulty that were modified on or after January 1, 2023, ~~(the~~the date we adopted ASU ~~2022-02)~~2022-02, through ~~June 30,~~March 31, 2023, presented by portfolio segment and loan ~~class.~~class:

June 30, 2023
(In millions) Current 30-89 days
past due 90+ days
past due Total
past due Total
amortized cost of loans
Commercial:
Commercial and industrial $ 40 $ 3 $ — $ 3 $ 43
Owner-occupied 25 — 1 1 26
Total commercial 65 3 1 4 69
Commercial real estate:
Construction and land development 18 — — — 18
Term 58 — — — 58
Total commercial real estate 76 — — — 76
Consumer:
1-4 family residential 2 — — — 2
Bankcard and other revolving plans 1 — — — 1
Total consumer loans 3 — — — 3
Total $ 144 $ 3 $ 1 $ 4 $ 148

~~Troubled Debt Restructuring Disclosures Prior to Our Adoption of ASU 2022-02~~

Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral position. Loan modifications and restructurings may also occur when the borrower experiences financial difficulty and needs temporary or permanent relief from the original contractual terms of the loan. Loans that have been modified to accommodate a borrower who is experiencing financial difficulties, and for which we have granted a concession that we would not otherwise consider, are considered TDRs. For further discussion of our policies and processes regarding TDRs, see Note 6 of our 2022 Form 10-K.


	March 31, 2023
(In millions)	Current		30-89 days past due		90+ days past due		Total past due		Total amortized cost of loans

Commercial:
Commercial and industrial	$	20	$	16	$	—	$	16	$	36

Owner-occupied	10		—		—		—		10
Municipal	—		—		—		—		—
Total commercial	30		16		—		16		46
Commercial real estate:
Construction and land development	—		—		—		—		—
Term	49		—		—		—		49
Total commercial real estate	49		—		—		—		49
Consumer:
Home equity credit line	—		—		—		—		—
1-4 family residential	—		1		—		1		1

Bankcard and other revolving plans	1		—		—		—		1
Other	—		—		—		—		—
Total consumer loans	1		1		—		1		2
Total	$	80	$	17	$	—	$	17	$	97

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~~Information on TDRs, including the amortized cost on an accruing and nonaccruing basis by loan class and modification type is summarized in the following schedules:~~
December 31, 2022
Amortized cost resulting from the following modification types:
(In millions) Interest
rate below
market Maturity
or term
extension Principal
forgiveness Payment
deferral
Other 1
Multiple
modification
types 2
Total
Accruing
Commercial:
Commercial and industrial $ 1 $ 12 $ — $ — $ 9 $ 28 $ 50
Owner-occupied — 1 — 2 13 12 28
Municipal — — — — — — —
Total commercial 1 13 — 2 22 40 78
Commercial real estate:
Construction and land development — — — — — 8 8
Term 1 27 — 27 28 1 84
Total commercial real estate 1 27 — 27 28 9 92
Consumer:
Home equity credit line — 1 4 — — 1 6
1-4 family residential 2 1 2 — 1 15 21
Total consumer loans 2 2 6 — 1 16 27
Total accruing 4 42 6 29 51 65 197
Nonaccruing
Commercial:
Commercial and industrial — — — 3 9 3 15
Owner-occupied 4 — — — — 4 8
Total commercial 4 — — 3 9 7 23
Commercial real estate:
Term — 10 — — — — 10
Total commercial real estate — 10 — — — — 10
Consumer:
Home equity credit line — — 1 — — — 1
1-4 family residential — 1 — — 1 2 4
Total consumer loans — 1 1 — 1 2 5
Total nonaccruing 4 11 1 3 10 9 38
Total $ 8 $ 53 $ 7 $ 32 $ 61 $ 74 $ 235

1 Includes TDRs that resulted from other modification types including, but not limited to, a legal judgment awarded on different terms, a bankruptcy plan confirmed on different terms, a settlement that includes the delivery of collateral in exchange for debt reduction, etc.

2 ~~Includes TDRs that resulted from a combination of the previous modification types reflected in the schedule.~~

~~Unfunded lending commitments related to TDRs totaled $7 million at December 31, 2022.~~

The total amortized cost of all TDRs in which interest rates were modified below market was $63 million at December 31, 2022. These loans are included in the previous schedule in the columns for interest rate below market and multiple modification types.

~~The net financial impact on interest income due to interest rate modifications below market for accruing TDRs for the year ended December 31, 2022 was not significant.~~

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On an ongoing basis, we monitor the performance of all TDRs according to their restructured terms. Subsequent payment default is defined in terms of delinquency, when principal or interest payments are past due 90 days or more for commercial loans, or 60 days or more for consumer loans.

The amortized cost of TDRs that had a payment default during the year ended December 31, 2022, which were still in default at period end, and were within 12 months or less of being modified as TDRs was approximately $10 million.

Collateral-Dependent Loans

When a loan is individually evaluated for expected credit losses, we estimate a specific reserve for the loan based on (1) the projected present value of the loan’s future cash flows discounted at the loan’s effective interest rate, (2) the observable market price of the loan, or (3) the fair value of the loan’s underlying collateral.

Select information on loans for which the borrower is experiencing financial difficulties and repayment is expected to be provided substantially through the operation or sale of the underlying collateral, including the type of collateral and the extent to which the collateral secures the loans, is summarized as follows:

March 31, 2024

(Dollar amounts in millions)

Amortized cost

Major types of collateral

Weighted average LTV 1

Commercial:

June 30, 2023

(Dollar amounts in millions)

Amortized cost

Major types of collateral

Weighted average LTV 1

Commercial:

Commercial and industrial

Accounts Receivable

81%

Owner-occupied

Hospital

29%

Hospital

51%

Commercial real estate:

Construction and land development

Lots / Homes

107%

Term

Hotel, Multi-family

89%

Term

Office Building

86%

Consumer:

Home equity credit line

Residential

21%

Total

December 31, 2022

December 31, 2023

(Dollar amounts in millions)

Amortized cost

Major types of collateral

Weighted average LTV 1

(Dollar amounts in millions)

Amortized cost

Major types of collateral

Weighted average LTV 1

Commercial:

Owner-occupied

Land, Warehouse

29%

Owner-occupied

Hospital

17%

Commercial real estate:

Construction and land development

Office Building

92%

Term

Multi-family

55%

Term

Office Building

87%

Consumer:

Home equity credit line

Single family residential

13%

1-4 family residential

Single family residential

41%

Home equity credit line

—

Total

1 The fair value is based on the most recent appraisal or other collateral evaluation.

Foreclosed Residential Real Estate

~~At June 30, 2023 and December 31, 2022, we did not have any~~The balance of foreclosed residential real estate ~~property.~~property was less than $1 million at March 31, 2024, compared with zero at December 31, 2023. The amortized cost basis of consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure was ~~$8 million and $10~~$11 million for ~~the same periods, respectively.~~both periods.

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7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Objectives and Accounting

Our primary objective for using derivatives is to manage interest rate risk. We use derivatives to stabilize forecasted interest income from variable-rate assets and to modify the coupon or the duration of fixed-rate financial assets or liabilities. We also assist clients with their risk management needs through the use of derivatives. Cash receipts and payments from derivatives designated in qualifying hedging relationships are classified in the same category as the cash flows from the items being hedged in the statement of cash flows, and cash flows from undesignated derivatives are classified as operating activities. For a more detailed discussion of the use of and accounting policies regarding derivative instruments, see Note 7 of our ~~2022~~2023 Form 10-K.

Fair Value Hedges of Liabilities – During the second quarter of 2023, we terminated our remaining receive-fixed interest rate swap with a notional amount of $500 million that had been designated in a qualifying fair value hedge relationship of fixed-rate debt. The receive-fixed interest rate swap effectively converted the interest on our fixed-rate debt to floating until it was terminated. Prior to termination, changes in the fair value of derivatives designated

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as fair value hedges of debt were offset by changes in the fair value of the hedged debt instruments as shown in the schedules on the following pages. The unamortized hedge basis adjustments resulting from the terminated hedging relationship will be amortized over the remaining life of the fixed-rate debt.

Fair Value Hedges of Assets – During the second quarter of 2023, we entered into new fair value hedges of a defined portfolio of AFS securities using pay-fixed, receive-floating swaps with an aggregate notional amount of $2.5 billion that are designated as hedges under the portfolio layer method described in ASU 2022-01, ~~Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method.~~ In July 2023, we entered into additional pay-fixed swaps with an aggregate notional amount of $1 billion that were designated as fair value hedges of a defined portfolio of fixed-rate commercial loans.

At June 30, 2023, we also had pay-fixed, receive-floating interest rate swaps with an aggregate notional amount of $1.1 billion designated as fair value hedges of specifically identified AFS securities. Fair value hedges of fixed-rate ~~AFS securities~~assets effectively convert the fixed interest income to a floating rate on the hedged portion of the ~~securities.~~assets. Changes in fair value of derivatives designated as fair value hedges of fixed-rate ~~AFS securities~~financial assets were largely offset by changes in the value of the hedged ~~securities,~~assets, as shown in the schedules on the following pages. At March 31, 2024, we had pay-fixed, receive-floating interest rate swaps with an aggregate notional amount of $3.6 billion designated as fair value hedges of fixed-rate AFS securities. We had an additional $1.0 billion of aggregate notional designated as hedges of fixed-rate commercial loans.

Cash Flow Hedges – Cash flow hedges of variable-rate assets and liabilities effectively convert the variable interest receipts and payments to fixed. At ~~June 30, 2023,~~March 31, 2024, we had receive-fixed interest rate swaps with an aggregate notional amount of ~~$2.9 billion~~$850 million designated as cash flow hedges of pools of floating-rate commercial loans. ~~During the second quarter of 2023,~~Additionally, at March 31, 2024, we ~~terminated cash flow hedging relationships~~had one pay-fixed interest rate swap with ~~an aggregate~~a notional amount of ~~$2.8 billion. At June 30, 2023, there was $222~~$500 million ~~of losses deferred in AOCI related to terminated~~designated as a cash flow ~~hedges that are expected to be fully amortized by October 2027.~~hedge of the variability in the interest payments on certain FHLB advances. Changes in the fair value of qualifying cash flow hedges during the quarter were recorded in AOCI as shown in the schedule below. The amounts deferred in AOCI are reclassified into earnings in the periods in which the hedged interest receipts or payments occur (i.e., when the hedged forecasted transactions affect earnings). At March 31, 2024, there was $173 million of losses deferred in AOCI related to terminated cash flow hedges that are expected to be fully amortized by October 2027.

Collateral and Credit Risk

Exposure to credit risk arises from the possibility of nonperformance by counterparties. No significant losses on derivative instruments have occurred as a result of counterparty nonperformance. For more information on how we incorporate counterparty credit risk in derivative valuations, see Note 3 of our ~~2022~~2023 Form 10-K. For additional discussion of collateral and the associated credit risk related to our derivative contracts, see Note 7 of our ~~2022~~2023 Form 10-K.

Our derivative contracts require us to pledge collateral for derivatives that are in a net liability position at a given balance sheet date. Certain of these derivative contracts contain credit risk-related contingent features that include the requirement to maintain a minimum debt credit rating. We may be required to pledge additional collateral if a credit risk-related feature were triggered, such as a downgrade of our credit rating. In past situations, ~~not all~~ counterparties have not generally demanded that additional collateral be pledged when provided for by the contractual terms. At ~~June 30, 2023,~~March 31, 2024, the fair value of our derivative liabilities was ~~$409~~$388 million, for which we were required to pledge

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cash collateral of $2less than $1 million in the normal course of business. If our credit rating were downgraded one notch by either Standard & Poor’s (“S&P”) or Moody’s at ~~June 30, 2023,~~March 31, 2024, there would likely be no additional collateral required to be pledged.

Derivative Amounts

The following schedule presents information regarding notional amounts and recorded gross fair values at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, and the related gain (loss) of derivative ~~instruments.~~instruments:

June 30, 2023 December 31, 2022
Notional
amount 1
Fair value Notional
amount Fair value
(In millions) Other
assets Other
liabilities Other
assets Other
liabilities
Derivatives designated as hedging instruments:
Cash flow hedges of floating-rate assets:
Receive-fixed interest rate swaps $ 2,850 $ — $ — $ 7,633 $ — $ 1
Cash flow hedges of floating-rate liabilities:
Pay-fixed interest rate swaps 500 — — — — —
Fair value hedges:
Debt hedges: Receive-fixed interest rate swaps — — — 500 — —
Asset hedges: Pay-fixed interest rate swaps 3,572 80 — 1,228 84 —
Total derivatives designated as hedging instruments 6,922 80 — 9,361 84 1
Derivatives not designated as hedging instruments:
Customer interest rate derivatives 2
13,726 406 407 13,670 296 443
Other interest rate derivatives 3,576 2 — 862 — —
Foreign exchange derivatives 216 2 2 605 6 7
Purchased credit derivatives 18 1 — — — —
Total derivatives not designated as hedging instruments 17,536 411 409 15,137 302 450
Total derivatives $ 24,458 $ 491 $ 409 $ 24,498 $ 386 $ 451

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	March 31, 2024						December 31, 2023
	Notional amount 1		Fair value				Notional amount		Fair value
(In millions)			Other assets		Other liabilities				Other assets		Other liabilities
Derivatives designated as hedging instruments:
Cash flow hedges of floating-rate assets:


Receive-fixed interest rate swaps	$	850	$	—	$	—	$	1,450	$	—	$	—
Cash flow hedges of floating-rate liabilities:
Pay-fixed interest rate swaps	500		—		—		500		—		—
Fair value hedges:
Debt hedges: Receive-fixed interest rate swaps	—		—		—		—		—		—
Asset hedges: Pay-fixed interest rate swaps	4,570		89		—		4,571		78		—
Total derivatives designated as hedging instruments	5,920		89		—		6,521		78		—
Derivatives not designated as hedging instruments:
Customer interest rate derivatives 1	14,694		389		387		14,375		337		330
Other interest rate derivatives	1,461		1		—		1,001		1		—
Foreign exchange derivatives	267		2		1		216		3		3
Purchased credit derivatives	—		—		—		35		1		—
Total derivatives not designated as hedging instruments	16,422		392		388		15,627		342		333
Total derivatives	$	22,342	$	481	$	388	$	22,148	$	420	$	333

1 Centrally cleared swaps originally indexed to London Interbank Offered Rate (“LIBOR”) were divided into short-dated, LIBOR-indexed spot starting swaps and forward starting Secured Overnight Financing Rate (“SOFR”) swaps when the clearing houses transitioned to SOFR. The LIBOR-indexed swaps will fully mature in the third quarter of 2023. The notional amounts above reflect the economic substance of our derivatives and do not include the duplicate notional amounts during the transition period.

2 Customer interest rate derivatives include both customer-facing ~~derivative~~derivatives as well as offsetting derivatives facing other dealer banks. The fair value of these derivatives include a net credit valuation adjustment ~~(“CVA”)~~ of ~~$10~~$9 million, reducing the fair value of the liability at ~~June 30, 2023,~~both March 31, 2024, and ~~$13 million, reducing the fair value of the liability at~~ December 31, ~~2022.~~2023.

The amount of derivative gains (losses) from cash flow and fair value hedges that were deferred in other comprehensive income (“OCI”) or recognized in earnings for the three and ~~six~~three months ended ~~June 30,~~March 31, 2024 and 2023 ~~and 2022~~ is presented in the schedules below.


	Three Months Ended March 31, 2024
(In millions)	Effective portion of derivative gain/(loss) deferred in AOCI		Amount of gain/(loss) reclassified from AOCI into income		Interest on fair value hedges
Cash flow hedges of floating-rate assets:1

Interest rate swaps	(5)		(36)		—
Cash flow hedges of floating-rate liabilities:
Pay-fixed interest rate swaps	4		2		—
Fair value hedges:2
Debt hedges: Receive-fixed interest rate swaps	—		—		(2)

Asset hedges: Pay-fixed interest rate swaps	—		—		23

Total derivatives designated as hedging instruments	$	(1)	$	(34)	$	21

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Three Months Ended June 30, 2023

Three Months Ended March 31, 2023

(In millions)

Effective portion of derivative gain/(loss) deferred in AOCI

Amount of gain/(loss) reclassified from AOCI into income

Interest on fair value hedges

Cash flow hedges of floating-rate assets:1

Purchased interest rate floors

—

Received-fixed interest rate swaps

(21)

(41)

—

Cash flow hedges of floating-rate assets:1

Interest rate swaps

Cash flow hedges of floating-rate liabilities:

Pay-fixed interest rate swaps

—

Fair value hedges:

Pay-fixed interest rate swaps

Fair value hedges: 2

Debt hedges: Receive-fixed interest rate swaps

—

(8)

Basis amortization on terminated hedges2

—

(1)

Asset hedges: Pay-Fixed interest rate swaps

—

Basis amortization on terminated asset hedges3

—

Debt hedges: Receive-fixed interest rate swaps

Asset hedges: Pay-fixed interest rate swaps

Total derivatives designated as hedging instruments

(10)

(40)

—

Total derivatives designated as hedging instruments

Six Months Ended June 30, 2023
(In millions) Effective portion of derivative gain/(loss) deferred in AOCI Amount of gain/(loss) reclassified from AOCI into income Interest on fair value hedges
Cash flow hedges of floating-rate assets: 1
Purchased interest rate floors $ — $ — $ —
Received-fixed interest rate swaps 17 (90) —
Cash flow hedges of floating-rate liabilities:
Pay-fixed interest rate swaps 11 1 —
Fair value hedges:
Debt hedges: Receive-fixed interest rate swaps — — (5)
Basis amortization on terminated debt hedges 2
— — (1)
Asset hedges: Pay-fixed interest rate swaps — — 16
Basis amortization on terminated asset hedges 3
— — —
Total derivatives designated as hedging instruments $ 28 $ (89) $ 10

Three Months Ended June 30, 2022
(In millions) Effective portion of derivative gain/(loss) deferred in AOCI Amount of gain/(loss) reclassified from AOCI into income Interest on fair value hedges
Cash flow hedges of floating-rate assets: 1
Purchased interest rate floors $ — $ — $ —
Interest rate swaps (66) 6 —
Fair value hedges of liabilities:
Receive-fixed interest rate swaps — — 1
Basis amortization on terminated hedges2
— — —
Fair value hedges of assets:
Pay-fixed interest rate swaps — — (1)
Basis amortization on terminated hedges 2
— — —
Total derivatives designated as hedging instruments $ (66) $ 6 $ —

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Six Months Ended June 30, 2022
(In millions) Effective portion of derivative gain/(loss) deferred in AOCI Amount of gain/(loss) reclassified from AOCI into income Interest on fair value hedges
Cash flow hedges of floating-rate assets: 1
Purchased interest rate floors $ — $ 2 $ —
Interest rate swaps (244) 17 —
Fair value hedges of liabilities:
Receive-fixed interest rate swaps — — 3
Basis amortization on terminated hedges 2, 3
— — 1
Fair value hedges of assets:
Pay-fixed interest rate swaps — — (2)
Basis amortization on terminated hedges 2, 3
— — —
Total derivatives designated as hedging instruments $ (244) $ 19 $ 2

1 For the 12 months following ~~June 30, 2023,~~March 31, 2024, we estimate that ~~$106~~$102 million of losses will be reclassified from AOCI into interest income, compared with an estimate of ~~$94~~$156 million of losses at ~~June 30, 2022.~~March 31, 2023.

2 At ~~June 30, 2023,~~March 31, 2024, the total cumulative unamortized basis adjustment for terminated fair value hedges of debt was ~~$50~~$45 million. We did not have any cumulative unamortized basis adjustment for terminated fair value hedges of debt at ~~June 30, 2022.~~March 31, 2023. We had $3 million and $7$10 million of cumulative unamortized basis adjustments from terminated fair value hedges of assets at ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively. Interest on fair value hedges presented above include the amortization of the remaining unamortized basis adjustments.

The amount of gains (losses) recognized from derivatives not designated as accounting hedges is summarized as follows:


		Other Noninterest Income/(Expense)
		Other Noninterest Income/(Expense)
		Other Noninterest Income/(Expense)
		Other Noninterest Income/(Expense)
(In millions)	(In millions)	Three Months Ended June 30, 2023		Six Months Ended June 30, 2023		Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:
Derivatives not designated as hedging instruments:
Derivatives not designated as hedging instruments:
Customer-facing interest rate derivatives
Customer-facing interest rate derivatives
Customer-facing interest rate derivatives	Customer-facing interest rate derivatives	$	10	$	11	$	17	$	30
Other interest rate derivatives	Other interest rate derivatives	3		3		(1)		—
Other interest rate derivatives
Other interest rate derivatives
Foreign exchange derivatives
Foreign exchange derivatives
Foreign exchange derivatives	Foreign exchange derivatives	7		15		8		14
Purchased credit derivatives	Purchased credit derivatives	$	(1)	$	(1)	$	—	$	—
Purchased credit derivatives
Purchased credit derivatives
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments	$	19	$	28	$	24	$	44
Total derivatives not designated as hedging instruments
Total derivatives not designated as hedging instruments

The following schedule presents derivatives used in fair value hedge accounting relationships, as well as pre-tax gains/(losses) recorded on such derivatives and the related hedged items for the periods ~~presented.~~presented:


		Gain/(loss) recorded in income
		Three Months Ended June 30, 2023						Three Months Ended June 30, 2022
		Gain/(loss) recorded in income
		Gain/(loss) recorded in income
		Gain/(loss) recorded in income
		Three Months Ended March 31, 2024
		Three Months Ended March 31, 2024
		Three Months Ended March 31, 2024
(In millions)
(In millions)
(In millions)	(In millions)	Derivatives 2		Hedged items		Total income statement impact		Derivatives 2		Hedged items		Total income statement impact

Debt: Receive-fixed interest rate swaps 1, 2	Debt: Receive-fixed interest rate swaps 1, 2	$	2	$	(2)	$	—	$	(18)	$	18	$	—

Debt: Receive-fixed interest rate swaps 1, 2

Debt: Receive-fixed interest rate swaps 1, 2
Assets: Pay-fixed interest rate swaps 1, 2	Assets: Pay-fixed interest rate swaps 1, 2	66		(67)		(1)		97		(97)		—
Assets: Pay-fixed interest rate swaps 1, 2
Assets: Pay-fixed interest rate swaps 1, 2

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Gain/(loss) recorded in income
Six Months Ended June 30, 2023 Six Months Ended June 30, 2022
(In millions)
Derivatives 2
Hedged items Total income statement impact
Derivatives 2
Hedged items Total income statement impact
Debt: Receive-fixed interest rate swaps 1, 2
$ 14 $ (14) $ — $ (50) $ 50 $ —
Assets: Pay-fixed interest rate swaps 1, 2
26 (27) (1) 150 (150) —

1 Consists of hedges of benchmark interest rate risk of fixed-rate long-term debt, fixed-rate AFS securities, and fixed-rate ~~AFS securities.~~commercial loans. Gains and losses were recorded in net interest expense or income consistent with the hedged items.

2 The income/expense for derivatives does not reflect interest income/expense from periodic accruals and payments to be consistent with the presentation of the gains/(losses) on the hedged items.

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The following schedule provides information regarding basis adjustments for hedged ~~items.~~items:

Par value of hedged assets/(liabilities)
Carrying amount of the hedged assets/(liabilities) 1
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item
(In millions) June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022
Long-term fixed-rate debt 2
$ — $ (500) $ — $ (435) $ — $ 65
Fixed-rate assets 3
11,129 1,228 10,898 962 (231) (266)

Par value of hedged assets/(liabilities)

Carrying amount of the hedged assets/(liabilities) 1

Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item

(In millions)

March 31, 2024

December 31, 2023

March 31, 2024

December 31, 2023

March 31, 2024

December 31, 2023

Fixed-rate assets 2

12,039

12,389

11,761

12,209

(278)

(180)

1 Carrying amounts exclude (1) issuance and purchase discounts or premiums, (2) unamortized issuance and acquisition costs, and (3) amounts related to terminated fair value hedges.

2 ~~We terminated the remaining fair value hedge of debt during the second quarter of 2023. The remaining hedge basis adjustments will be amortized over the life of the associated debt.~~

3These amounts include the amortized cost basis of defined portfolios of AFS securities and commercial loans used to designate hedging relationships in which the hedged item is the stated amount of assets in the defined portfolio anticipated to be outstanding for the designated hedged period. At ~~June 30, 2023,~~March 31, 2024, the amortized cost basis of the defined portfolios used in these hedging relationships was ~~$10.1~~$11.0 billion; the cumulative basis adjustment associated with these hedging relationships was ~~$36.8~~$50.5 million; and the notional amounts of the designated hedging instruments were ~~$2.5~~$3.5 billion.

8. LEASES

We have operating and finance leases for branches, corporate offices, and data centers. At ~~June 30, 2023,~~March 31, 2024, we had ~~412~~408 branches, of which ~~277~~278 are owned and ~~135~~130 are leased. We lease our headquarters in Salt Lake City, Utah. The remaining maturities of our lease commitments range from the year ~~2023~~2024 to 2062,, and some lease arrangements include options to extend or terminate the leases.

All leases with lease terms greater than twelve months are reported as a lease liability with a corresponding right-of-use (“ROU”) asset. We present ROU assets for operating leases and finance leases on the consolidated balance sheet in “Other assets,” and “Premises, equipment and software, net,” respectively. The corresponding liabilities for those leases are presented in “Other liabilities,” and “Long-term debt.” For more information about our lease policies, see Note 8 of our ~~2022~~2023 Form 10-K.

The following schedule presents ROU assets and lease liabilities with associated weighted average remaining life and discount rate:


(Dollar amounts in millions)	March 31, 2024			December 31, 2023
Operating leases
ROU assets, net of amortization	$	168		$	172
Lease liabilities	193			198
Finance leases
ROU assets, net of amortization	3			3
Lease liabilities	4			4
Weighted average remaining lease term (years)
Operating leases	8.6			8.7
Finance leases	16.2			16.5
Weighted average discount rate
Operating leases	3.4		%	3.4		%
Finance leases	3.1		%	3.1		%

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The following schedule presents ~~ROU assets and lease liabilities with associated weighted average remaining life and discount rate.~~

(Dollar amounts in millions) June 30,
2023 December 31, 2022
Operating leases
ROU assets, net of amortization $ 170 $ 173
Lease liabilities 195 198
Finance leases
ROU assets, net of amortization 3 4
Lease liabilities 4 4
Weighted average remaining lease term (years)
Operating leases 8.6 8.4
Finance leases 16.9 17.4
Weighted average discount rate
Operating leases 3.1 % 2.9 %
Finance leases 3.1 % 3.1 %

~~Additional~~additional information related to lease ~~expense is presented in the following schedule.~~expense:


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(In millions)
(In millions)
(In millions)
Lease expense:
Lease expense:
Lease expense:
Operating lease expense
Operating lease expense
Operating lease expense

		Three Months Ended June 30,				Six Months Ended June 30,
(In millions)		2023		2022		2023		2022
Lease expense:
Operating lease expense		$	11	$	12	$	22	$	24

Other expenses associated with operating leases 1

Other expenses associated with operating leases 1

Other expenses associated with operating leases 1	Other expenses associated with operating leases 1	16		12		30		24

Total lease expense	Total lease expense	$	27	$	24	$	52	$	48

Total lease expense

Total lease expense

Related cash disbursements from operating leases	Related cash disbursements from operating leases	$	12	$	12	$	24	$	25

Related cash disbursements from operating leases

Related cash disbursements from operating leases

1 Other expenses primarily include property taxes and building and property maintenance.

The following schedule presents the total contractual undiscounted lease payments for operating lease liabilities by expected due date for each of the next five ~~years.~~years:


(In millions)	(In millions)	Total undiscounted lease payments		(In millions)	Total undiscounted lease payments

2023 1		$	24
2024		40
2024 1
2024 1
2024 1
2025	2025	32
2026	2026	27
2027	2027	18
2028
Thereafter	Thereafter	87
Total	Total	$	228

1 Contractual maturities for the ~~six~~nine months remaining in ~~2023.~~2024.

We enter into certain lease agreements where we are the lessor of real estate. Real estate leases are made from bank-owned and subleased property to generate cash flow from the property, including from leasing vacant suites in which we occupy portions of the building. Operating lease income was ~~$4 million~~ ~~and~~ $3 million for both the ~~second~~first quarter of ~~2023~~2024 and ~~2022, respectively, and $8 million and $7 million for the first six months of 2023 and 2022, respectively.~~2023.

We originated equipment leases, considered to be sales-type leases or direct financing leases, totaling ~~$388~~$388 million and ~~$386~~$383 million at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. We recorded income of $4 million~~$4 million and $3 million~~ on these leases for both the ~~second~~first quarter of ~~2023~~2024 and ~~2022, respectively, and $8 million and $6 million for the first six months of 2023 and 2022, respectively.~~2023.

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9. LONG-TERM DEBT AND SHAREHOLDERS’ EQUITY

Long-Term Debt

The long-term debt carrying values presented inon the consolidated balance sheet represent the par value of the debt, adjusted for any unamortized premium or discount, unamortized debt issuance costs, and basis adjustments for interest rate swaps designated as fair value hedges.

The following schedule presents the components of our long-term ~~debt.~~debt:

LONG-TERM DEBT

(In millions)

June 30,
2023

December 31, 2022

Subordinated notes 1

534

519

Senior notes

—

128

Subordinated notes 1

Finance lease obligations

Total

538

651

Total

1 The change in the subordinated notes balance is primarily due to a fair value hedge accounting adjustment. See also Note 7.

~~The decrease in long-term debt was primarily due to the redemption of $128 million, 4.50% matured senior notes during the second quarter of 2023.~~

Shareholders' Equity

Our common stock is traded on the National Association of Securities Dealers Automated Quotations (“NASDAQ”) Global Select Market. At ~~June 30, 2023,~~March 31, 2024, there were ~~148.1~~147.7 million shares of $0.001 par value common stock ~~outstanding. Common stock and additional paid-in capital decreased $32 million, or 2%, to~~ ~~$1.7 billion~~ at June 30, 2023, from December 31, 2022, primarily due to common stock repurchases during the first quarter of 2023. As the macroeconomic environment remained uncertain, we did not repurchase common shares during the second quarter of 2023, nor do we expect to repurchase common shares during the third quarter of 2023.

~~AOCI was a~~ ~~$2.9 billion~~ ~~loss at June 30, 2023. The following schedule presents the changes in AOCI by component.~~

(In millions) Net unrealized gains/(losses) on investment securities Net unrealized gains/(losses) on derivatives and other Pension and post-retirement Total
Six Months Ended June 30, 2023
Balance at December 31, 2022 $ (2,800) $ (311) $ (1) $ (3,112)
OCI before reclassifications, net of tax 1
94 21 — 115
Amounts reclassified from AOCI, net of tax — 67 — 67
Other comprehensive income 94 88 — 182
Balance at June 30, 2023 $ (2,706) $ (223) $ (1) $ (2,930)
Income tax expense included in OCI $ 31 $ 28 $ — $ 59
Six Months Ended June 30, 2022
Balance at December 31, 2021 $ (78) $ — $ (2) $ (80)
OCI (loss) before reclassifications, net of tax (1,820) (185) — (2,005)
Amounts reclassified from AOCI, net of tax — (15) — (15)
Other comprehensive loss (1,820) (200) — (2,020)
Balance at June 30, 2022 $ (1,898) $ (200) $ (2) $ (2,100)
Income tax benefit included in OCI (loss) $ (590) $ (65) $ — $ (655)

1 For the six months ended June 30, 2023, the OCI related to net unrealized gains/(losses) on investment securities reflected a $9 million decline in the fair value of fixed-rate AFS securities as a result of higher interest rates, offset by a $103 million increase in amortization of the discount on the securities transferred from AFS to HTM during the fourth quarter of 2022.

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Amounts reclassified from AOCI 1
Statement of income (SI)
(In millions) Three Months Ended
June 30, Six Months Ended
June 30,
Details about AOCI components 2023 2022 2023 2022 Affected line item
Net unrealized gains (losses) on derivative instruments $ (40) $ 6 $ (89) $ 20 SI Interest and fees on loans
Less: Income tax expense (benefit) (10) 2 (22) 5
Amounts reclassified from AOCI $ (30) $ 4 $ (67) $ 15
outstanding. Common stock and additional paid-in capital decreased $26 million, or 2%, to $1.7 billion at March 31, 2024, from December 31, 2023, primarily due to common stock repurchases. During the first quarter of 2024, we repurchased 0.9 million common shares outstanding for $35 million at an average price of $39.32 per share.

1 ~~Positive reclassification amounts indicate increases to earnings~~The AOCI balance was a loss of $2.6 billion at March 31, 2024, and primarily reflects the decline in the ~~income statement.~~fair value of fixed-rate investment securities as a result of higher interest rates, and includes $2.0 billion ($1.5 billion after tax) of unrealized losses on the securities previously transferred from AFS to HTM. The following schedule presents the changes in AOCI by major component:


(In millions)	Net unrealized gains/(losses) on investment securities		Net unrealized gains/(losses) on derivatives and other		Pension and post-retirement		Total
Three Months Ended March 31, 2024
Balance at December 31, 2023	$	(2,526)	$	(165)	$	(1)	$	(2,692)
Other comprehensive income (loss) before reclassifications, net of tax	12		(1)		—		11
Amounts reclassified from AOCI, net of tax	46		26		—		72
Other comprehensive income	58		25		—		83
Balance at March 31, 2024	$	(2,468)	$	(140)	$	(1)	$	(2,609)
Income tax expense included in OCI	$	19	$	8	$	—	$	27
Three Months Ended March 31, 2023
Balance at December 31, 2022	$	(2,800)	$	(311)	$	(1)	$	(3,112)
Other comprehensive income before reclassifications, net of tax	77		29		—		106
Amounts reclassified from AOCI, net of tax	49		37		—		86
Other comprehensive income	126		66		—		192
Balance at March 31, 2023	$	(2,674)	$	(245)	$	(1)	$	(2,920)
Income tax expense included in OCI	$	41	$	22	$	—	$	63


	Amounts reclassified from AOCI
(In millions)	Three Months Ended March 31,
AOCI components	2024		2023		Affected line item on statement of income





Net unrealized gains (losses) on investment securities	$	(61)	$	(65)		Securities gains (losses), net
Less: Income tax expense (benefit)	(15)		(16)
Total	$	(46)	$	(49)



Net unrealized gains (losses) on derivative instruments	$	(34)	$	(49)		Interest and fees on loans; Interest on short- and long-term borrowings
Less: Income tax expense (benefit)	(8)		(12)
Total	$	(26)	$	(37)

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10. COMMITMENTS, GUARANTEES, AND CONTINGENT LIABILITIES

Commitments and Guarantees

The following schedule presents the contractual amounts related to off-balance sheet financial instruments used to meet the financing needs of our ~~customers.~~customers:

(In millions)

June 30,
2023

December 31,
2022

(In millions)

March 31,
2024

December 31,
2023

Unfunded lending commitments 1

29,731

29,628

Unfunded lending commitments 1

Standby letters of credit:

Financial

579

667

Performance

178

184

Commercial letters of credit

Mortgage-backed security purchase agreements 2

Total unfunded commitments

30,575

30,513

1 Net of participations.

2 Represents agreements with Farmer Mac to purchase securities backed by certain agricultural mortgage loans.

For more information about these commitments and guarantees including their terms and collateral requirements, see Note 16 of our ~~2022~~2023 Form 10-K.

Legal Matters

We are involved in various legal proceedings or governmental inquiries, which may include litigation in court and arbitral proceedings, as well as investigations, examinations, and other actions brought or considered by governmental and self-regulatory agencies. Litigation may relate to lending, deposit and other customer relationships, vendor and contractual issues, employee matters, intellectual property matters, personal injuries and torts, regulatory and legal compliance, and other matters. While most matters relate to individual claims, we are also subject to putative class action claims and similar broader claims. Proceedings, investigations, examinations, and other actions brought or considered by governmental and self-regulatory agencies may relate to our banking, investment advisory, trust, securities, and other products and services; our customers’ involvement in money laundering, fraud, securities violations and other illicit activities or our policies and practices relating to such customer activities; and our compliance with the broad range of banking, securities and other laws and regulations applicable to us. At any given time, we may be in the process of responding to subpoenas, requests for documents, data and testimony relating to such matters and engaging in discussions to resolve the matters.

At ~~June 30, 2023,~~March 31, 2024, we were subject to the following material ~~litigation or governmental inquiries:~~litigation:

•Two civil cases, Lifescan Inc. and Johnson & Johnson Health Care Services v. Jeffrey Smith, et. al., brought against us in the United States District Court for the District of New Jersey in December 2017, and Roche Diagnostics and Roche Diabetes Care Inc. v. Jeffrey C. Smith, et. al., brought against us in the United States District Court for the District of New Jersey in March 2019. In these cases, certain manufacturers and distributors of medical products seek to hold us liable for allegedly fraudulent practices of a borrower of the Bank who filed for bankruptcy protection in 2017. The cases are in ~~discovery phases. Trial~~the late stages of discovery. No trial has ~~not~~ been ~~scheduled in either case.~~set.

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•Sipple v. Zions Bancorporation, N.A., brought against us in the District Court of Clark County, Nevada in February 2021 with respect to foreign transaction fees. This case is in the ~~early~~ discovery phase and trial has ~~not~~ been ~~scheduled.~~scheduled for October 2024. The parties are currently engaged in settlement discussions.

At least quarterly, we review outstanding and new legal matters, utilizing ~~then available~~then-available information. In accordance with applicable accounting guidance, if we determine that a loss from a matter is probable and the amount of the loss can be reasonably estimated, we establish an accrual for the loss. In the absence of such a determination, no accrual is made. Once established, accruals are adjusted to reflect developments relating to the matters.

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In our review, we also assess whether we can determine the range of reasonably possible losses for significant matters in which we are unable to determine that the likelihood of a loss is remote. Because of the difficulty of predicting the outcome of legal matters, discussed subsequently, we are able to meaningfully estimate such a range only for a limited number of matters. Based on information available at ~~June 30, 2023,~~March 31, 2024, we estimated that the aggregate range of reasonably possible losses for those matters to be from zero to approximately $5$10 million in excess of amounts accrued. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from this estimate. Those matters for which a meaningful estimate is not possible are not included within this estimated range and, therefore, this estimated range does not represent our maximum loss exposure.

Based on our current knowledge, we believe that our ~~current~~ estimated liability for litigation and other legal actions and claims, reflected in our accruals and determined in accordance with applicable accounting guidance, is adequate and that liabilities in excess of the amounts currently accrued, if any, arising from litigation and other legal actions and claims for which an estimate as previously described is possible, will not have a material impact on our financial condition, results of operations, or cash flows. However, in light of the significant uncertainties involved in these matters, and the very large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could be material to our financial condition, results of operations, or cash flows for any given reporting period.

Any estimate or determination relating to the future resolution of litigation, arbitration, governmental or self-regulatory examinations, investigations or actions or similar matters is inherently uncertain and involves significant judgment. This is particularly true in the early stages of a legal matter, when legal issues and facts have not been well articulated, reviewed, analyzed, and vetted through discovery, preparation for trial or hearings, substantive and productive mediation or settlement discussions, or other actions. It is also particularly true with respect to class action and similar claims involving multiple defendants, matters with complex procedural requirements or substantive issues or novel legal theories, and examinations, investigations and other actions conducted or brought by governmental and self-regulatory agencies, in which the normal adjudicative process is not applicable. Accordingly, we usually are unable to determine whether a favorable or unfavorable outcome is remote, reasonably likely, or probable, or to estimate the amount or range of a probable or reasonably likely loss, until relatively late in the course of a legal matter, sometimes not until a number of years have elapsed. Accordingly, our judgments and estimates relating to claims will change from time to time in light of developments and actual outcomes will differ from our estimates. These differences may be material.

11. REVENUE RECOGNITION

We derive our revenue primarily from interest income on loans and ~~securities, which represented approximately 80% of our total revenue in the second quarter of 2023.~~securities. Only noninterest income is considered to be revenue from contracts with customers in scope of ASC 606. For more information about our revenue recognition from contracts, see Note 17 of our ~~2022~~2023 Form 10-K.

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Disaggregation of Revenue

The following schedule ~~below~~ presents net revenue by ~~our~~ operating business ~~segments~~segment for the three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022.~~2023:


		Zions Bank				CB&T				Amegy
	Zions Bank																Zions Bank			CB&T				Amegy
(In millions)	(In millions)	2023		2022		2023		2022		2023		2022		(In millions)	2024	2023			2024		2023		2024		2023

Commercial account fees
Commercial account fees
Commercial account fees	Commercial account fees	$	14	$	12	$	8	$	7	$	14	$	11
Card fees	Card fees	13		14		5		5		8		8
Retail and business banking fees	Retail and business banking fees	5		6		3		3		4		4

Capital markets fees
Capital markets fees
Capital markets fees	Capital markets fees	—		—		—		—		—		—
Wealth management fees	Wealth management fees	6		6		1		1		4		4
Other customer-related fees	Other customer-related fees	2		2		2		2		2		2
Total noninterest income from contracts with customers (ASC 606)	Total noninterest income from contracts with customers (ASC 606)	40		40		19		18		32		29
Other noninterest income (non-ASC 606 customer-related)	Other noninterest income (non-ASC 606 customer-related)	6		6		14		8		8		13
Total customer-related noninterest income	Total customer-related noninterest income	46		46		33		26		40		42
Other noncustomer-related noninterest income	Other noncustomer-related noninterest income	3		3		2		1		15		—
Total noninterest income	Total noninterest income	49		49		35		27		55		42

Net interest income	Net interest income	178		170		152		142		116		120
Net interest income
Net interest income
Total net revenue	Total net revenue	$	227	$	219	$	187	$	169	$	171	$	162

		NBAZ				NSB				Vectra
		NBAZ
		NBAZ
		NBAZ																NSB				Vectra
(In millions)	(In millions)	2023		2022		2023		2022		2023		2022		(In millions)	2024	2023			2024		2023		2024		2023

Commercial account fees
Commercial account fees
Commercial account fees	Commercial account fees	$	2	$	2	$	3	$	2	$	2	$	2
Card fees	Card fees	4		4		4		4		2		2
Retail and business banking fees	Retail and business banking fees	2		2		3		3		1		1

Capital markets fees
Capital markets fees
Capital markets fees	Capital markets fees	—		—		—		—		—		—
Wealth management fees	Wealth management fees	1		1		1		1		1		—
Other customer-related fees	Other customer-related fees	—		—		—		—		1		1
Total noninterest income from contracts with customers (ASC 606)	Total noninterest income from contracts with customers (ASC 606)	9		9		11		10		7		6
Other noninterest income (non-ASC 606 customer-related)	Other noninterest income (non-ASC 606 customer-related)	1		1		—		2		—		2
Total customer-related noninterest income	Total customer-related noninterest income	10		10		11		12		7		8
Other noncustomer-related noninterest income	Other noncustomer-related noninterest income	1		1		—		—		—		—
Total noninterest income	Total noninterest income	11		11		11		12		7		8

Net interest income	Net interest income	64		55		49		39		38		35
Net interest income
Net interest income
Total net revenue	Total net revenue	$	75	$	66	$	60	$	51	$	45	$	43

		TCBW				Other				Consolidated Bank
		TCBW
		TCBW
		TCBW																Other				Consolidated Bank
(In millions)	(In millions)	2023		2022		2023		2022		2023		2022		(In millions)	2024	2023			2024		2023		2024		2023

Commercial account fees
Commercial account fees
Commercial account fees	Commercial account fees	$	1	$	1	$	1	$	—	$	45	$	37
Card fees	Card fees	1		1		—		(2)		37		36
Retail and business banking fees	Retail and business banking fees	—		—		(2)		1		16		20

Capital markets fees
Capital markets fees
Capital markets fees	Capital markets fees	—		—		1		1		1		1
Wealth management fees	Wealth management fees	—		—		—		—		14		13
Other customer-related fees	Other customer-related fees	—		—		8		9		15		16
Total noninterest income from contracts with customers (ASC 606)	Total noninterest income from contracts with customers (ASC 606)	2		2		8		9		128		123
Other noninterest income (non-ASC 606 customer-related)	Other noninterest income (non-ASC 606 customer-related)	—		—		5		(1)		34		31
Total customer-related noninterest income	Total customer-related noninterest income	2		2		13		8		162		154
Other noncustomer-related noninterest income	Other noncustomer-related noninterest income	—		—		6		13		27		18
Total noninterest income	Total noninterest income	2		2		19		21		189		172

Net interest income	Net interest income	15		15		(21)		17		591		593
Net interest income
Net interest income
Total net revenue	Total net revenue	$	17	$	17	$	(2)	$	38	$	780	$	765

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~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

~~The schedule below presents net revenue by our operating business segments for the six months ended June 30, 2023 and 2022.~~

Zions Bank CB&T Amegy
(In millions) 2023 2022 2023 2022 2023 2022
Commercial account fees $ 28 $ 27 $ 15 $ 14 $ 28 $ 22
Card fees 26 27 10 10 16 16
Retail and business banking fees 9 12 6 6 7 8
Capital markets fees — — — — — —
Wealth management fees 12 11 2 2 8 8
Other customer-related fees 4 4 4 3 3 3
Total noninterest income from contracts with customers (ASC 606) 79 81 37 35 62 57
Other noninterest income (non-ASC 606 customer-related) 13 11 19 14 17 22
Total customer-related noninterest income 92 92 56 49 79 79
Other noncustomer-related noninterest income 7 3 3 2 17 —
Total noninterest income 99 95 59 51 96 79
Net interest income 363 326 311 271 240 232
Total net revenue $ 462 $ 421 $ 370 $ 322 $ 336 $ 311
NBAZ NSB Vectra
(In millions) 2023 2022 2023 2022 2023 2022
Commercial account fees $ 5 $ 4 $ 7 $ 6 $ 3 $ 4
Card fees 7 7 8 7 4 4
Retail and business banking fees 4 5 5 6 2 2
Capital markets fees — — — — — —
Wealth management fees 2 2 3 2 1 1
Other customer-related fees 1 1 — — 2 1
Total noninterest income from contracts with customers (ASC 606) 19 19 23 21 12 12
Other noninterest income (non-ASC 606 customer-related) 1 3 — 4 1 4
Total customer-related noninterest income 20 22 23 25 13 16
Other noncustomer-related noninterest income 1 1 — — — —
Total noninterest income 21 23 23 25 13 16
Net interest income 129 106 99 77 79 68
Total net revenue $ 150 $ 129 $ 122 $ 102 $ 92 $ 84
TCBW Other Consolidated Bank
(In millions) 2023 2022 2023 2022 2023 2022
Commercial account fees $ 1 $ 1 $ 1 $ — $ 88 $ 78
Card fees 1 1 — — 72 72
Retail and business banking fees — — (1) 1 32 40
Capital markets fees — — 2 2 2 2
Wealth management fees — — (1) — 27 26
Other customer-related fees 1 — 15 18 30 30
Total noninterest income from contracts with customers (ASC 606) 3 2 16 21 251 248
Other noninterest income (non-ASC 606 customer-related) — 1 11 (2) 62 57
Total customer-related noninterest income 3 3 27 19 313 305
Other noncustomer-related noninterest income — — 8 3 36 9
Total noninterest income 3 3 35 22 349 314
Other real estate owned gain from sale — — — — — —
Net interest income 31 28 18 29 1,270 1,137
Total net revenue $ 34 $ 31 $ 53 $ 51 $ 1,619 $ 1,451

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Revenue from contracts with customers did not generate significant contract assets and liabilities. Contract receivables are included in “Other assets” on the consolidated balance sheet. Payment terms vary by services offered, and the timing between completion of performance obligations and payment is generally not significant.

12. INCOME TAXES

The effective income tax rate was ~~22.6%~~24.6% for the ~~second~~first quarter of 2024, compared with 27.7% for the first quarter of 2023. The higher effective tax rate in the first quarter of 2023 ~~compared with 21.9%~~was the result of a change in a discrete item that affected the reserve for ~~the second quarter of 2022. The effective~~uncertain tax ~~rates for the first six months of 2023 and 2022 were 25.4% and 21.2%, respectively.~~positions. The tax rates during both periods were reduced by nontaxable municipal interest income and nontaxable income from certain bank-owned life insurance (“BOLI”), and were increased by the ~~non-deductibility~~nondeductibility of Federal Deposit Insurance Corporation (“FDIC”) premiums, certain executive compensation plans, and other fringe benefits. The FDIC insurance premiums are nondeductible, whereas the FDIC special assessments are tax ~~rate for the~~ ~~first six months of 2023~~ ~~was higher relative to the same prior year period, primarily as a result of a discrete item that affected the reserve for uncertain tax positions during the first quarter of~~ ~~2023~~.deductible.

At both ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, we had a net deferred tax asset (“DTA”) totaling ~~$1.1~~$1.0 billion. OnThe net DTA or DTL is included in either “Other assets” or “Other liabilities,” respectively, on the consolidated balance ~~sheet, the net DTA is included in “Other assets.”~~sheet.

We evaluate DTAs on a regular basis to determine whether a valuation allowance is required. In conducting this evaluation, we consider all available evidence, both positive and negative, based on the more-likely-than-not criteria that such assets will be realized. This evaluation includes, but is not limited to, the following:

•Future reversals of existing deferred tax liabilities (“DTLs”) — These DTLs have a reversal pattern generally consistent with DTAs and are used to realize the DTAs.

•Tax planning strategies — We have considered prudent and feasible tax planning strategies that we would implement to preserve the value of the DTAs, if necessary.

•Future projected taxable income — We expect future taxable income will offset the reversal of remaining net DTAs.

Based on this evaluation, we concluded that a valuation allowance was not required at both ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023.

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13. NET EARNINGS PER COMMON SHARE

Basic and diluted net earnings per common share based on the weighted average outstanding shares are summarized as follows:


		Three Months Ended June 30,				Six Months Ended June 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(In millions, except shares and per share amounts)
(In millions, except shares and per share amounts)
(In millions, except shares and per share amounts)	(In millions, except shares and per share amounts)	2023		2022		2023		2022
Basic:	Basic:
Basic:
Basic:
Net income	Net income	$	175	$	203	$	379	$	406
Net income
Net income
Less common and preferred dividends
Less common and preferred dividends
Less common and preferred dividends	Less common and preferred dividends	70		66		138		132

Undistributed earnings	Undistributed earnings	105		137		241		274

Undistributed earnings

Undistributed earnings
Less undistributed earnings applicable to nonvested shares
Less undistributed earnings applicable to nonvested shares
Less undistributed earnings applicable to nonvested shares	Less undistributed earnings applicable to nonvested shares	1		1		2		2
Undistributed earnings applicable to common shares	Undistributed earnings applicable to common shares	104		136		239		272
Undistributed earnings applicable to common shares
Undistributed earnings applicable to common shares
Distributed earnings applicable to common shares
Distributed earnings applicable to common shares
Distributed earnings applicable to common shares	Distributed earnings applicable to common shares	61		57		121		115
Total earnings applicable to common shares	Total earnings applicable to common shares	$	165	$	193	$	360	$	387
Total earnings applicable to common shares
Total earnings applicable to common shares
Weighted average common shares outstanding (in thousands)
Weighted average common shares outstanding (in thousands)
Weighted average common shares outstanding (in thousands)	Weighted average common shares outstanding (in thousands)	147,692		150,635		147,852		150,958
Net earnings per common share	Net earnings per common share	$	1.11	$	1.29	$	2.44	$	2.56
Net earnings per common share
Net earnings per common share
Diluted:
Diluted:
Diluted:	Diluted:
Total earnings applicable to common shares	Total earnings applicable to common shares	$	165	$	193	$	360	$	387
Total earnings applicable to common shares
Total earnings applicable to common shares
Weighted average common shares outstanding (in thousands)
Weighted average common shares outstanding (in thousands)
Weighted average common shares outstanding (in thousands)	Weighted average common shares outstanding (in thousands)	147,692		150,635		147,852		150,958

Dilutive effect of stock options (in thousands)	Dilutive effect of stock options (in thousands)	4		203		13		306

Dilutive effect of stock options (in thousands)

Dilutive effect of stock options (in thousands)
Weighted average diluted common shares outstanding (in thousands)
Weighted average diluted common shares outstanding (in thousands)
Weighted average diluted common shares outstanding (in thousands)	Weighted average diluted common shares outstanding (in thousands)	147,696		150,838		147,865		151,264
Net earnings per common share	Net earnings per common share	$	1.11	$	1.29	$	2.44	$	2.56
Net earnings per common share
Net earnings per common share

The following schedule presents the weighted average stock awards that were anti-dilutive and not included in the calculation of diluted earnings per share:


		Three Months Ended June 30,		Six Months Ended June 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(In thousands)
(In thousands)
(In thousands)	(In thousands)	2023	2022	2023	2022

Restricted stock and restricted stock units	Restricted stock and restricted stock units	1,421	1,251	1,378	1,289

Restricted stock and restricted stock units

Restricted stock and restricted stock units
Stock options	Stock options	1,449	200	1,381	155
Stock options
Stock options

14. OPERATING SEGMENT INFORMATION

We manage our operations with a primary focus on geographic area. We conduct our operations primarily through seven separately managed affiliate banks, each with its own local branding and management team, including Zions Bank, California Bank & Trust, Amegy Bank, National Bank of Arizona, Nevada State Bank, Vectra Bank Colorado, and The Commerce Bank of Washington. These affiliate banks comprise our primary business segments. Performance assessment and resource allocation are based upon this geographic structure. Our affiliate banks are supported by an enterprise operating segment (referred to as the “Other” segment) that provides governance and risk management, allocates capital, establishes strategic objectives, and includes centralized technology, back-office functions, and certain lines of business not operated through our affiliate banks.

We allocate the cost of centrally provided services to the business segments based upon estimated or actual usage of those services. We also allocate capital based on the risk-weighted assets held at each business segment. We use an internal funds transfer pricing (“FTP”) allocation process to report results of operations for business segments. This process is subject to change and refinement over time. Total average loans and deposits presented for the business segments include insignificant intercompany amounts between business segments and may also include deposits with the “Other” segment.

At ~~June 30, 2023,~~March 31, 2024, Zions Bank operated 95 branches in Utah, 25 branches in Idaho, and one branch in Wyoming. CB&T operated 7775 branches in California. Amegy operated 75 branches in Texas. NBAZ operated 56 branches in

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Arizona. NSB operated 4643 branches in Nevada. Vectra operated 3334 branches in Colorado and one branch in New Mexico. TCBW operated two branches in Washington and one branch in Oregon.

Transactions between business segments are primarily conducted at fair value, resulting in profits that are eliminated for reporting consolidated results of operations. The following schedule presents average loans, average deposits, and income before income taxes because we use these metrics when evaluating performance and making decisions pertaining to the business segments. The condensed statement of income identifies the components of income and expense which affect the operating amounts presented in the “Other” segment.

The following schedule presents selected operating segment information for the three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022:~~2023:


		Zions Bank				CB&T				Amegy
	Zions Bank																Zions Bank			CB&T				Amegy
(In millions)	(In millions)	2023		2022		2023		2022		2023		2022		(In millions)	2024	2023			2024		2023		2024		2023
SELECTED INCOME STATEMENT DATA	SELECTED INCOME STATEMENT DATA
Net interest income
Net interest income
Net interest income	Net interest income	$	178	$	170	$	152	$	142	$	116	$	120
Provision for credit losses	Provision for credit losses	7		1		15		16		12		5
Net interest income after provision for credit losses	Net interest income after provision for credit losses	171		169		137		126		104		115
Noninterest income	Noninterest income	49		49		35		27		55		42
Noninterest expense	Noninterest expense	138		125		94		84		100		88
Income (loss) before income taxes	Income (loss) before income taxes	$	82	$	93	$	78	$	69	$	59	$	69
SELECTED AVERAGE BALANCE SHEET DATA	SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	Total average loans	$	14,250	$	13,120	$	14,152	$	12,895	$	12,880	$	11,934
Total average loans
Total average loans
Total average deposits	Total average deposits	19,191		25,035		13,333		16,663		11,873		16,253

		NBAZ				NSB				Vectra
		NBAZ
		NBAZ
		NBAZ																NSB				Vectra
(In millions)	(In millions)	2023		2022		2023		2022		2023		2022		(In millions)	2024	2023			2024		2023		2024		2023
SELECTED INCOME STATEMENT DATA	SELECTED INCOME STATEMENT DATA
Net interest income
Net interest income
Net interest income	Net interest income	$	64	$	55	$	49	$	39	$	38	$	35
Provision for credit losses	Provision for credit losses	4		6		7		3		2		10
Net interest income after provision for credit losses	Net interest income after provision for credit losses	60		49		42		36		36		25
Noninterest income	Noninterest income	11		11		11		12		7		8
Noninterest expense	Noninterest expense	45		42		42		37		34		30
Income (loss) before income taxes	Income (loss) before income taxes	$	26	$	18	$	11	$	11	$	9	$	3
SELECTED AVERAGE BALANCE SHEET DATA	SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	Total average loans	$	5,243	$	4,888	$	3,427	$	2,914	$	3,998	$	3,527
Total average loans
Total average loans
Total average deposits	Total average deposits	6,873		8,447		6,630		7,546		3,271		4,189

		TCBW				Other				Consolidated Bank
		TCBW
		TCBW
		TCBW																Other				Consolidated Bank
(In millions)	(In millions)	2023		2022		2023		2022		2023		2022		(In millions)	2024	2023			2024		2023		2024		2023
SELECTED INCOME STATEMENT DATA	SELECTED INCOME STATEMENT DATA
Net interest income
Net interest income
Net interest income	Net interest income	$	15	$	15	$	(21)	$	17	$	591	$	593
Provision for credit losses	Provision for credit losses	—		1		(1)		(1)		46		41
Net interest income after provision for credit losses	Net interest income after provision for credit losses	15		14		(20)		18		545		552
Noninterest income	Noninterest income	2		2		19		21		189		172
Noninterest expense	Noninterest expense	6		6		49		52		508		464
Income (loss) before income taxes	Income (loss) before income taxes	$	11	$	10	$	(50)	$	(13)	$	226	$	260
SELECTED AVERAGE BALANCE SHEET DATA	SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	Total average loans	$	1,689	$	1,579	$	1,040	$	927	$	56,679	$	51,784
Total average loans
Total average loans
Total average deposits	Total average deposits	1,099		1,547		7,379		1,207		69,649		80,887

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~~The following schedule presents selected operating segment information for the six months ended June 30, 2023 and 2022:~~

Zions Bank CB&T Amegy
(In millions) 2023 2022 2023 2022 2023 2022
SELECTED INCOME STATEMENT DATA
Net interest income $ 363 $ 326 $ 311 $ 271 $ 240 $ 232
Provision for credit losses 31 — 15 22 23 (22)
Net interest income after provision for credit losses 332 326 296 249 217 254
Noninterest income 99 95 59 51 96 79
Noninterest expense 273 248 186 168 198 175
Income (loss) before income taxes $ 158 $ 173 $ 169 $ 132 $ 115 $ 158
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans $ 14,115 $ 12,969 $ 14,084 $ 12,870 $ 12,862 $ 11,865
Total average deposits 20,067 25,574 13,985 16,566 12,576 16,333
NBAZ NSB Vectra
(In millions) 2023 2022 2023 2022 2023 2022
SELECTED INCOME STATEMENT DATA
Net interest income $ 129 $ 106 $ 99 $ 77 $ 79 $ 68
Provision for credit losses 4 2 11 — 6 6
Net interest income after provision for credit losses 125 104 88 77 73 62
Noninterest income 21 23 23 25 13 16
Noninterest expense 92 82 82 74 67 59
Income (loss) before income taxes $ 54 $ 45 $ 29 $ 28 $ 19 $ 19
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans $ 5,197 $ 4,831 $ 3,377 $ 2,866 $ 3,990 $ 3,463
Total average deposits 7,025 8,201 6,800 7,492 3,488 4,243
TCBW Other Consolidated Bank
(In millions) 2023 2022 2023 2022 2023 2022
SELECTED INCOME STATEMENT DATA
Net interest income $ 31 $ 28 $ 18 $ 29 $ 1,270 $ 1,137
Provision for credit losses 2 1 (1) (1) 91 8
Net interest income after provision for credit losses 29 27 19 30 1,179 1,129
Noninterest income 3 3 35 22 349 314
Noninterest expense 13 12 109 110 1,020 928
Income (loss) before income taxes $ 19 $ 18 $ (55) $ (58) $ 508 $ 515
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans $ 1,700 $ 1,585 $ 1,092 $ 911 $ 56,417 $ 51,360
Total average deposits 1,240 1,564 4,720 1,271 69,901 81,244

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our most significant risks include interest rate and market risk, which are closely monitored by management as previously discussed. For more information regarding interest rate and market risk, see the “Interest Rate and Market Risk Management” section in this Form 10-Q.

~~Table of Contents~~

~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

ITEM 4. CONTROLS AND PROCEDURES

Our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures at ~~June 30, 2023.~~March 31, 2024. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at ~~June 30, 2023.~~March 31, 2024. There were no changes in our internal control over financial reporting during the ~~second~~first quarter of ~~2023~~2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information contained in Note 10 of the Notes to Consolidated Financial Statements is incorporated by reference herein.

ITEM 1A. RISK FACTORS

~~We amend~~There have been no material changes to the ~~following two~~ risk factors ~~discussed~~as previously disclosed in Part I, Item 1A. Risk Factors in our ~~2022~~2023 Form ~~10-K:~~10-K.

~~Changes~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following schedule summarizes our share repurchases for the first quarter of 2024:

SHARE REPURCHASES


Period	Total number of shares repurchased 1		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs

January		—	—			—
February		890,167	$	39.32		890,167
March		—	—			—
First quarter 2024		890,167	39.32			890,167

1 Includes common shares acquired in ~~levels~~connection with our stock compensation plan. Shares were acquired from employees to pay for their payroll taxes and ~~sources~~stock option exercise cost upon the exercise of ~~liquidity~~stock options under provisions of an employee share-based compensation plan.

ITEM 5. OTHER INFORMATION

None of our directors or officers have adopted, modified, or terminated a Rule 10b5-1(c) trading arrangement during the three months ended March 31, 2024. Our directors and ~~capital, including~~officers participate in certain of our benefits plans such as our Omnibus Incentive Plan and Payshelter 401(k) and Employee Stock Ownership Plan, and may from time to time make elections to have shares withheld to cover withholding taxes or pay the ~~resulting effects~~exercise price of ~~recent events in the banking industry, may limit our operations and potential growth.~~

~~Our primary source of liquidity is deposits from our customers,~~options granted thereunder, which elections may be ~~impacted by market-related forces such~~designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act or may constitute non-Rule 10b5-1 trading arrangements as ~~increased competition for these deposits and a variety~~defined in Item 408(c) of other factors. Deposits across the banking industry have been fluctuating in recent quarters in large part due to the increased interest rate environment and prominent bank failures. We, like many other banks, experienced some deposit outflows as customers spread deposits among several different banks to maximize their amount of FDIC insurance, moved deposits to institutions offering higher rates or banks deemed “too big to fail,” or removed deposits from the U.S. financial system entirely. Although our deposit levels have stabilized during the most recent quarter, our cost of funds has increased, and the potential for greater volatility remains, particularly if there is negative news surrounding us or perceived risks regarding our safety and soundness. If we are unable to continue to fund assets through customer bank deposits or access funding sources on favorable terms, or if we suffer an increase in borrowing costs or FDIC insurance assessments, or otherwise fail to manage liquidity effectively, our liquidity, operating margins, financial condition, and results of operations may be materially and adversely affected.

The Federal Reserve's tightened monetary policy may contribute to a decline in the value of our fixed-rate loans and investment securities that are pledged as collateral to support short-term borrowings, and other economic conditions may also affect our liquidity and efforts to manage associated risks. The FHLB system and Federal Reserve have been, and continue to be, a significant source of additional liquidity and funding. Changes in FHLB funding programs could adversely affect our liquidity and management of associated risks.

~~Problems encountered by other financial institutions could adversely affect financial markets generally and have indirect adverse effects on us.~~

The soundness and stability of many financial institutions may be closely interrelated as a result of credit, trading, clearing, or other relationships between the institutions. As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses, or defaults by other institutions. This is sometimes referred to as “systemic risk” and may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms, and exchanges, with which we interact on a daily basis, and therefore, could adversely affect us.This phenomenon has been evident in the recent events affecting the banking industry, as financial institutions, like us, have been impacted by concerns regarding the soundness or creditworthiness of other financial institutions. This has caused substantial and cascading disruption within the financial markets, increased expenses, and adversely impacted the market price and volatility of our common stock.Regulation S-K.

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ITEM ~~2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

~~None.~~

~~ITEM~~ 6. EXHIBITS

a.Exhibits


Exhibit Number	Description

3.1	Second Amended and Restated Articles of Association of Zions Bancorporation, National Association, incorporated by reference to Exhibit 3.1 of Form 8-K filed on October 2, 2018.	*

3.2	Second Amended and Restated Bylaws of Zions Bancorporation, National Association, incorporated by reference to Exhibit 3.2 of Form 8-K filed on April 4, 2019.	*

10.1	Zions Bancorporation 2024-2026 Value Sharing Plan (filed herewith).

31.1	Certification by Chief Executive Officer required by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (filed herewith).

31.2	Certification by Chief Financial Officer required by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (filed herewith).

32	Certification by Chief Executive Officer and Chief Financial Officer required by Sections 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 (15 U.S.C. 78m) and 18 U.S.C. Section 1350 (furnished herewith).

101	Pursuant to Rules 405 and 406 of Regulation S-T, the following information is formatted in Inline XBRL (i) the Consolidated Balance Sheets as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, (ii) the Consolidated Statements of Income for the three months ended ~~June 30,~~March 31, 2024 and March 31, 2023, ~~and June 30, 2022 and the six months ended June 30, 2023 and June 30, 2022,~~ (iii) the Consolidated Statements of Comprehensive Income for the three months ended ~~June 30,~~March 31, 2024 and March 31, 2023, ~~and June 30, 2022 and the six months ended June 30, 2023 and June 30, 2022,~~ (iv) the Consolidated Statements of Changes in Shareholders’ Equity for the three months ended ~~June 30,~~March 31, 2024 and March 31, 2023, ~~and June 30, 2022 and the six months ended June 30, 2023 and June 30, 2022,~~ (v) the Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2024 and March 31, 2023, ~~and June 30, 2022,~~ and (vi) the Notes to Consolidated Financial Statements (filed herewith).

104	The cover page from this Quarterly Report on Form 10-Q, formatted as Inline XBRL.

* Incorporated by reference

Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, copies of certain instruments defining the rights of holders of long-term debt are not filed. We agree to furnish a copy thereof to the Securities and Exchange Commission and the Office of the Comptroller of the Currency upon request.

8580

Table of Contents

ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



ZIONS BANCORPORATION, NATIONAL ASSOCIATION

/s/ Harris H. Simmons
Harris H. Simmons, Chairman and Chief Executive Officer

/s/ ~~Paul E. Burdiss~~R. Ryan Richards
~~Paul E. Burdiss,~~R. Ryan Richards, Executive Vice President and Chief Financial Officer

Date: ~~August 4, 2023~~May 8, 2024

8681


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	38

	Consolidated Balance Sheets	38
	Consolidated Statements of Income	39
	Consolidated Statements of Comprehensive Income (Loss)	40
	Consolidated Statements of Changes in Shareholders’ Equity	40
	Consolidated Statements of Cash Flows	4241
	Notes to Consolidated Financial Statements	4342

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	8379

Item 4.	Controls and Procedures	8479

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	8479

Item 1A.	Risk Factors	8479

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8579

Item 5.	Other Information	79

Item 6.	Exhibits	8580

Signatures		8681


	Six Months Ended June 30, 2023						Six Months Ended June 30, 2022
(Dollar amounts in millions)	Average balance		Amount of interest 1		Average yield/rate 1		Average balance		Amount of interest 1		Average yield/rate 1
ASSETS
Money market investments:
Interest-bearing deposits	$	2,771	$	68	4.98	%	$	4,914	$	8	0.34	%
Federal funds sold and securities purchased under agreements to resell	1,428		37		5.19		2,422		10		0.84
Total money market investments	4,199		105		5.05		7,336		18		0.50
Securities:
Held-to-maturity	10,928		122		2.26		462		7		3.04
Available-for-sale 2	11,500		156		2.73		25,485		229		1.81
Trading	78		1		2.14		370		9		4.91
Total securities	22,506		279		2.50		26,317		245		1.88
Loans held for sale	39		1		6.67		48		—		1.44
Loans and leases
Commercial	30,664		798		5.25		28,725		535		3.76
Commercial real estate	12,904		434		6.78		12,134		213		3.53
Consumer	12,849		300		4.71		10,501		169		3.24
Total loans and leases	56,417		1,532		5.48		51,360		917		3.60
Total interest-earning assets	83,161		1,917		4.65		85,061		1,180		2.80
Cash and due from banks	598						621
Allowance for credit losses on loans and debt securities	(597)						(497)
Goodwill and intangibles	1,064						1,015
Other assets	5,574						4,463
Total assets	$	89,800					$	90,663
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
Savings and money market	$	31,585	$	175	1.12	%	$	38,726	$	11	0.05	%
Time	6,232		127		4.11		1,538		2		0.25

Total interest-bearing deposits	37,817		302		1.61		40,264		13		0.06
Borrowed funds:
Federal funds and security repurchase agreements	5,015		121		4.85		661		1		0.43
Other short-term borrowings	7,266		184		5.09		8		—		—
Long-term debt	644		20		6.42		750		12		3.17
Total borrowed funds	12,925		325		5.07		1,419		13		1.88
Total interest-bearing liabilities	50,742		627		2.49		41,683		26		0.12
Noninterest-bearing demand deposits	32,084						40,980
Other liabilities	1,817						1,422
Total liabilities	84,643						84,085
Shareholders’ equity:
Preferred equity	440						440
Common equity	4,717						6,138
Total shareholders’ equity	5,157						6,578
Total liabilities and shareholders’ equity	$	89,800					$	90,663
Spread on average interest-bearing funds					2.16	%					2.68	%
Net impact of noninterest-bearing sources of funds					0.97	%					0.05	%
Net interest margin			$	1,290	3.13	%			$	1,154	2.73	%
Memo: total cost of deposits					0.87	%					0.03	%
Memo: total deposits and interest-bearing liabilities	$	82,826	627		1.54	%	$	82,663	26		0.06	%


(Dollar amounts in millions)	Six Months Ended June 30, 2023			Twelve Months Ended December 31, 2022			Six Months Ended June 30, 2022

Loans and leases outstanding	$	56,917		$	55,653		$	52,370
Average loans and leases outstanding:
Commercial	30,664			29,225			28,725
Commercial real estate	12,904			12,251			12,134
Consumer	12,849			11,122			10,501
Total average loans and leases outstanding	$	56,417		$	52,598		$	51,360
Allowance for loan and lease losses:
Balance at beginning of period 1	$	572		$	513		$	513
Provision for loan losses	92			101			10
Charge-offs:
Commercial	23			72			28
Commercial real estate	—			—			—
Consumer	6			10			7
Total	29			82			35
Recoveries:
Commercial	12			32			15
Commercial real estate	—			—			—
Consumer	4			11			5
Total	16			43			20
Net loan and lease charge-offs	13			39			15
Balance at end of period	$	651		$	575		$	508
Reserve for unfunded lending commitments:
Balance at beginning of period	$	61		$	40		$	40
Provision for unfunded lending commitments	(1)			21			(2)
Balance at end of period	$	60		$	61		$	38
Total allowance for credit losses:
Allowance for loan and lease losses	$	651		$	575		$	508
Reserve for unfunded lending commitments	60			61			38
Total allowance for credit losses	$	711		$	636		$	546

Ratio of allowance for credit losses to net loans and leases, at period end	1.25		%	1.14		%	1.04		%
Ratio of allowance for credit losses to nonaccrual loans, at period end	439		%	427		%	280		%
Ratio of allowance for credit losses to nonaccrual loans and accruing loans past due 90 days or more, at period end	421		%	410		%	272		%
Ratio of total net charge-offs to average loans and leases 2	0.05		%	0.07		%	0.06		%
Ratio of commercial net charge-offs to average commercial loans 2	0.07		%	0.14		%	0.09		%
Ratio of commercial real estate net charge-offs to average commercial real estate loans 2	—		%	—		%	—		%
Ratio of consumer net charge-offs to average consumer loans 2	0.03		%	(0.01)		%	0.04		%


	June 30, 2023										December 31, 2022
	Parallel shift in rates (in bps)1										Parallel shift in rates (in bps)1
Repricing scenario	-100		0		+100		+200		+300		-100		0		+100		+200		+300
Historical-based assumptions:
Earnings at Risk (EaR)	(5.8)	%	—	%	5.9	%	11.8	%	17.7	%	(2.4)	%	—	%	2.4	%	4.8	%	7.1	%
Economic Value of Equity (EVE)	(0.1)	%	—	%	1.9	%	3.5	%	4.8	%	2.0	%	—	%	(1.1)	%	(2.3)	%	(3.7)	%

Adjusted assumptions:
Earnings at Risk (EaR)	(1.3)	%	—	%	1.4	%	2.9	%	4.4	%
Economic Value of Equity (EVE)	4.8	%	—	%	(4.1)	%	(8.6)	%	(12.9)	%


	December 31, 2022
	Amortized cost resulting from the following modification types:
(In millions)	Interest rate below market		Maturity or term extension		Principal forgiveness		Payment deferral		Other 1		Multiple modification types 2		Total
Accruing
Commercial:
Commercial and industrial	$	1	$	12	$	—	$	—	$	9	$	28	$	50
Owner-occupied	—		1		—		2		13		12		28
Municipal	—		—		—		—		—		—		—
Total commercial	1		13		—		2		22		40		78
Commercial real estate:
Construction and land development	—		—		—		—		—		8		8
Term	1		27		—		27		28		1		84
Total commercial real estate	1		27		—		27		28		9		92
Consumer:
Home equity credit line	—		1		4		—		—		1		6
1-4 family residential	2		1		2		—		1		15		21


Total consumer loans	2		2		6		—		1		16		27
Total accruing	4		42		6		29		51		65		197
Nonaccruing
Commercial:
Commercial and industrial	—		—		—		3		9		3		15
Owner-occupied	4		—		—		—		—		4		8

Total commercial	4		—		—		3		9		7		23
Commercial real estate:

Term	—		10		—		—		—		—		10
Total commercial real estate	—		10		—		—		—		—		10
Consumer:
Home equity credit line	—		—		1		—		—		—		1
1-4 family residential	—		1		—		—		1		2		4


Total consumer loans	—		1		1		—		1		2		5
Total nonaccruing	4		11		1		3		10		9		38
Total	$	8	$	53	$	7	$	32	$	61	$	74	$	235


	Amounts reclassified from AOCI 1								Statement of income (SI)
(In millions)	Three Months Ended June 30,				Six Months Ended June 30,
Details about AOCI components	2023		2022		2023		2022			Affected line item











Net unrealized gains (losses) on derivative instruments	$	(40)	$	6	$	(89)	$	20	SI	Interest and fees on loans
Less: Income tax expense (benefit)	(10)		2		(22)		5
Amounts reclassified from AOCI	$	(30)	$	4	$	(67)	$	15