ZION - Earnings call transcript Q1 2022 | Zions Bancorporation, National Association

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Operator

Greetings. Welcome to the Zions Bancorporation Q1 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator instructions] Please note, this conference is being recorded. conference Relations. your the Director James turn Investor of now over host, to Abbott, I'll

begin. may You

James Abbott

Thank and you, first you We press good release during statements, call made dealing would Kyle, although and to to this to or this the you like presentation on which deck measures, X zionsbancorporation.com. may information A be discuss during copy statements review conference the call, slide with of to actual release Slide we apply forward-looking slide the our the the available making you in results encourage as deck the call. XXXX to remind at quarter non-GAAP will of earnings I evening. earnings. disclaimer that We forward-looking equally well are welcome materially. as this differ

this Paul our Harris Officer, Chief comments Scott Chief Zions' McLean, agenda our condition. intend followed our Officer, Morris, to providing With Maio, Simmons, will today Officer. our and Keith and is Officer length Risk hour. today, and Chief Chief by For opening detail financial the of limit remarks; Credit will conclude from Burdiss, one Officer. our Executive additional to President us We also by Chief on call Michael Financial Chairman provide Operating

I one questions. question-and-answer the ask one and primary follow-up to to now you section participants Harris. question time questions to over During of enable your the that call, turn request limit to other the we will

Harris Simmons

momentum in are horizon. campaigns. recent themes we're moderate likely some part we're and showing good of the the to be of be our $X.X growth, significantly We on are want levels excess pleased growth in particularly loans loan would Thank would loan the invented promotional growth remainder is the saw loans that increased you the our growth from X, exclusive securities at Beginning We securities although expect all call. loans during to We've strong two in recent loans. significantly first the much, quarter, in on that to the prior the will developed With and of past in welcome loan themes ultimately in Overall, quarter of year. of municipal due in loan that deposits saw growth by that the that might be here, strength addition determined Slide sustainable near-term materialize PPP in deposit during quarters a some designs applicable unlikely the in invested to expect we believe C&I Loans, in balance next to months, the will portfolio rather least the through We increase to securities. James. of than near-term the and growth growth very be some flows. years. quarter. sheet size maintaining Owner-occupied that billion the on also with and you of any portfolio cash few for

futures market given we believe The pricing market funds by have you X.X% of percentage environment the is technology, this well to value significant is rate about deposit emerge rates. on item which quarters. financial The future. an in of we'll investment of or that results approximately positioned coming these see refers to deposits in in franchise points. an of interest by 'XX our for expect much us we to the designed begin very in enable participants, our a to remain many As in exceptional we're of more We competitive slide increase ongoing final rising expected rate and three know, fed mid the

the as In summary we'll which results, We'll X, to find the turn quarter, these move a Slide items the with most loss, this Diluted pleased the might Slide in to single provision per but are we be this the financial difference significant generally $X.XX slide. to you I'm seen chart. This X. earnings was credit quarterly touch slides, on, useful. the per positive to first and subsequent as a for going $X.XX. you much was go left fourth can summarized variance. on are If which share Comparing was bottom share on on quarter

quarter, of improved $X.XX. earnings earnings quarter per per our reduced share in it's this by prior provision provision whereas share $X.XX, Our the by a

the $X.XX factor major was quarter. other to PPP share contributed in first that was per earnings loans, which The income from

there that other another in impact the right share. on terms their of one on noted per the Finally, side page of items were largely offset earnings

into adjusted to release Slide latter two generally expenses These adjustments, gain X, what as shown million. income portion The are the deck. revenue press PPNR to most the notably in million net on split first PPNR forgiveness The PPP denotes quarter. $XX of of slide securities loans received with revenue direct of pre-provision contributed loss which and quarter The associated these are recurring top professional represents the portion or pages the external the of think bars services bottom net the we portions. $XXX the from our we've was first Turning of this while in loans, loans. eliminate

adjusted chart share past see PPP PPP the the included change can sequential over the to increase the income an income, understand increased on noted quarter X, of we've and it experienced Slide PPNR. basis, On I've in in year already and from XX%. X% a loans. of exclusive help PPNR As we you per reduced

and sales due related fourth gains largely quarter in earnings decline seasonal on in are the was investments property a in largely fee in losses reduced income quarter. expense the experienced and nature. middle private chart trading on also first in equity real non-recurring items the to items, which of shown non-customer the certain We The

finally increased expected was did $XX a rate contribution increases, in we now of weighed align non-PPP with effect the prior on compensation that somewhat and a outlook the our that quarter. income increase Although charitable net million incentive to period that million $XX interest there accruals revenue includes about

the very customers reflected competitive platform banking with to customers May. have of XX% highly and as results discussion couple positive for pleased that same business about digital customers to and similar results business to year done, strategic online upgrading report shifting been over a single and on the feel with highlights surveys in compared shown our also our be the and platforms large and converted new as rating new Turning the platform out from the and functionality. consumer end, you presentations. and in to We other are in we've applications we've from online to completed we've look our in we've year a prior both of we've progress our previous customers. of the financial to remaining Slide XXX,XXX the mobile compared in applications which business X, converted for ago, upgrade regional banking which during mobile application space, to Since rolling continued we been a plan, has much this to strong in well the to the away seen upgrades small banking The that platform the as side a improved such of to to banks,

relied within half and standards, of are We've yields select for Chase, results small to market all of business customer are deposit responses below the top middle hold areas loans markets, And need bottom Zions' awards. can a and a filing other and categories. proxy out Fargo offering compete specifically be across chart, notably the of us strength perform major provided year business Associates peer other grow relatively Bank upon increase with this additional of category. with with customers. exceeds listed a Greenwich areas in formation XX the widely average a This balances survey our Going ranked promoter The X, detail to is the second in business we or base surveys market to categories small group. few score similar score mapped Wells with one of Bank. along to help us rate of average and at experience in which to business customers. were the used from loan that in limits, slide, of easy natural country from the of understand the work, market peer We're banks and Greenwich's behind is industries. increasing and service and each of Morgan JP a initiative Greenwich against the well encouraged to the whom rate. It's that Research banks for but score Slide we overall middle is rankings. four and America, Across the our strategic the half major page, satisfaction that us our within group Shown we many that on deposits, the by for the course document has barometer page business such also excellence Members pertaining some improvement. lot denoted business organically elsewhere score lowering US to credit in from in these above of customer rates requires markets, for net customers of this grow

safer products. strong enable a service, reflection customer and to to top-notch technology exceptional products our efforts provide Our of superior showing is and and faster service

XX. on is detail this Additional in Slide the appendix. available topic

that, Scott? that income our certain our reputation on to and growth, President this strength deposit into of Scott support should granular our efforts McLean, technology loan in both loan the will and And expect our and with translate investments. customer customer to to We an increases growth regarding Ultimately, ask growth. and fee initiatives continue provide balance. COO update going I'm solid

Scott McLean

you, Thank Harris.

billion from significant Average a unannualized by are is non-PPP in and performance of the average lower yield in replacing yield. which attributable XX the average a total decreased the loans declining X% prior quarter period generally mix PPP Slide yields with to loans have non-PPP highlight X% which replaced loan and loans loans, fourth billion when PPP shift to end quarter. the loans loans, $X us a strong an to in increased period-end have on or growth. average points partially Moving for loans range. that The the $X.X compared The quarter, this to -- X.X% being basis XX, was period-end

more points also from which of of to XX the some the campaigns declined of the the loans, total XX average deposits attributable recent with $XXX income penalty just deposit or increasing Deposit growth slowed due X.XX% points on right, the basis declined and costs fourth basis Reserve. stable $XXX rate unannualized. quantitative quarter, Period-end X.XX%, quarters, basis effect total PPP low. first deposits interest prepayment or to in is the portion tightening a to to quarter. expected Average in our deposits Shown recognized cost remained Federal of nearly by than promotional Excluding was our X.X%, at points three million elevated million of largely X.X%, swaps. maturity compared the yield but

We territory. expect unchartered be balance perhaps trends we clearly slightly increasing although to in deposit to growth stable, are closer to

XX, to municipal Slide growth loans with and and $X.X strength $XXX quarter owner-occupied link considerable to million loans of of of Moving more -- C&I in increased loans. businesses million billion nearly $XXX than

term Additionally, attrition mortgage December our in we four XXXX This billion 'XX, offset in experienced mortgages. equity and family energy family of CRE home December one growth growth contraction particularly XXXX. to of was by encouraging lines from is to our partially through because portfolios. This with credit we four one and loans saw $X.X

C&I most California Utah, and Our in load Arizona strength municipal our in from markets all and showed from portfolios our markets. growth with growth and of owner-occupied

compared that level billion the quarter increased XX.X% the Our revolving $XX fourth compares we commitments, commitments XX.X%. return utilization the to of pre-pandemic in further of additional $X.X loan quarter result to assuming of prior billion that X.X to to in were to rate in percentage a level, would about change rates approximately XX.X%. no XXXX on balances. utilization of If This points to revolving

continue noted, businesses to that to utilization see inventories. strengthen rebuild previously we'll their as As work expect line we I

were pandemic reduce such about customer adjustment accrual fees strength business XX highlighted about in in fees. on to effect, $X are fee continued Slide syndications planning This Notably services and a to income onetime our Compared exceed where additive management quarter some and recovered of the the and treasury management from million non-sufficient retail levels. the card, softness and the Normalizing to for fourth income income, quarter, and and XXXX as improvement that funds to to regarding related X% is account fees, in capital remained the experience was we particularly markets was merchant of our strong to foreign related non-interest increased prior a fees. page, strong year. fees. million service $XXX wealth and attributable we Activity-based which exchange. commercial in charges customer banking overdraft over decline prior Turning

will by year. that expect about quarter fee million reduce third $X in the We or beginning per of this our this income so quarter

Slide XX, decline consecutive represents $X.X mortgage setting for second increase largely billion to of core continued and Turning product market the clients. first affluent MBA both factors; at the small index. fundings be a XX% business the quarterly year-over-year three record This activeness reaching and pace, versus with to our our compared quarter. would attributable a a activity for outperformance the XX% industry to to The mortgage industry our annual

fees affluent is rate Mortgage to up a representing XX% quarterly from to mortgage tailored compared customers improve approximately to declines. and in improved XXXX product paper for application digital the XXX% quarter. of $X experience enhancements, applications million from especially process average significant all our success for below demand well Secondly, fourth platform segment our all the the $X of saleable fixed XXXX, in as million the now This

balance four producing However, contributor one product investment family a the that for that to can the portfolio our that held in was growth mortgage be more we the and benefit I are to earlier. which noted on is sheet

our XX, benefit businesses replacement well from major digital that this number enhancements. underway slide initiatives implementation, has the the this noted and technology Regarding banking these feedback the receiving small Slide gone, highlights how customer were of enhanced segments the capability. Harris positive and the that and consumers from we are utilizing

is Chief only Burdiss. I Financial our I'll project, a future While that that, there's With now platform core final time third XXXX over previous phase, slide, the will this branch a Officer, for replaces core about lot Paul track to our and deposit our talk on which turn note on implementation. the to

Paul Burdiss

Thank you, associated has growth growth. deposit discussed everyone. and significantly interest of Scott XX% Nearly and net influenced is revenue good loan already Scott is our income, which evening, rates. by loan and interest

size growth The highly modest securities, period earning loans is of investments money an and declined portfolio of in XX, in assets, growth investment market levels. The over to past the mix and total at XX% a to time, nearly securities the which securities five quarter $X.X with to deposits. we year had revert over Money quarters. historical money billion. Moving by of our level the decline past Over the to $XX securities $XX Money before portfolios by as and investments to period the in market period show pandemic securities assets investments would money of and market we XXXX, increased now investments market average billion deposits. compares combination the Slide been billion reflecting in significantly end increasing market in the $X of billion and end end, liquid XX%. expect to such

interest flow moderate bonds durations shock left portfolio either We first rate regarding listed securities both are the in recent left cash points over exercise in quarter. date. caution upward upon the bottom and Again, duration finance on XX margin earning quarter, of from as an weighted purchasing average the that is the results swaps asset page. the XX deploy billion trend in X.XX%, scenario. overview by balance current in yielding continue opportunity we duration, basis gained interest trend over an of concentration coupled a interest side the growth The securities hand that's rate both. The impacted the and expect the mix forward both majority with improve the has risk chart The extension and This securities to of shows and $X.X to our information on includes is down coming net reflected but prior be quarters was annualized has until increase the maturity change investments is for higher margin. start are of with a described income in for of be net yield the securities. over in XX points prepayment in that won't larger two margin. depending investments. starting The the quarter helped white to portfolio than had the principle quarter. boxes which The Slide composition five and billion average an rate page. the securities and the the based the past Until yield cash of securities able The annualized in higher today, through to on by yield market investments in points place of the in and maturing earning volume basis the smaller of an liquidity trended market this The the of but prior year, loans $X.X reflects excess XX quarter. is market of yield purchases our of year depicted deposit-driven net yielding about of Also both first interest quarter past to or of the due yield. money lower The into a our X.X%, swaps prior basis swap money quarter. the assets interest an and and summary the net deposits money rise on Slide

underscored our shows make income related growth. sensitivity. shortfall interest interest our the to revenues up rate Importantly, XX have deposit year the from past securities increased Slide decreased and quarter about of the and exceptional the information PPP over from have helped value

asset add just net very sensitive. of on about statement, approximately all left per annual million income, holding share, a points as would other or under adds parallel XXX upper factors $X.XX of the constant. Each shift $XXX interest remain Focusing hand basis general we quadrant

interest end points income XXX Our our the as quarter. to outlook the for from estimated interest parallel basis fourth A XXXX materially interest higher percentage shock sensitivity curve. may higher -- is sensitivity than quarter hedging. reported that outlook attributable dampen the balance net change starting We about increased XXXX. to is lower natural asset active swaps to in four would income forward this yield the increased in and sensitivity. rate add rate This rate to was net securities at interest in steeper point change including a largely same which due loans, starting large swaps, help at the The reflects of first our the denominator is than continue remaining was that the to sheet asset portion March of point interest

from of to adjusted made to Harris. related revenue million $XXX by expenses non-interest seasonal due donation after primarily expect to impact to in was same were pre-provision effect by approximately grew net detailed giving offset in year. non-interest one X% earlier assets swaps the interest quarter. on decrease quarter somewhat of to typically We expense indices prior tied were to affected second again rate within to a our increased begin the $XX quarter seasonal $XX quarter the increases are first million million quarter earning $XXX Adjusted compensation, million. in the from increased as the charitable in Slide expense Non-interest $XX the short-term expenses, see to XX% which experienced fourth by XX million. the as The or linked expenses the that factors These

the our changes expense made some we You non-interest of categorization noticed the in face may statements. on of current have quarter financial the to that

have investments XX-Q certain related and information will to based the disclosures filing. operations. to industry and of the technology improved continues related in move These upcoming we and be disclosure our amplified banking products toward expenses improved As services, presentation technology our

and portfolio illustrated was Another loans, and quality Relative XX% loan problem on prior for the in as problem X%. significant dropped loans. saw definition broadest credit the classified the of highlight Slide classified XX. continued loans we balance improvement the of to Using loans dropped of the quarter criticized the quarter,

prior special relative quarter, Although XX%. not the to loans mention shown declined

contrasted in only the of see annualized was in quality. average Shown net charge credit prior quarters. net net point important with details chart rate our basis several average the offs credit was to for with had the the non-PPP ACL. losses show the allowance provision right, $XXX over ACL on of million quarter, measure one the XX can bottom or basis offs non-PPP build In loans The upper to relative left, the we the released a of scenarios pandemic. the quarter. we loss, and for economic the the the reserves we course, volatility of offs. loss model first credit loans. trend or related X.XX% the to end to ACL At stability declining and in is only first most prior recent past improved one We our in the quantitative relative of relative qualitative the associated Slide the quarter Of the five use charge that losses to charge quarter points loans ACL of expected

our However, of in recession about assessment due may largely economy, changes to war as raised profit Eastern in Europe risk a the the margins. the of in our inflation spill-over a the effects borrower's because have to uncertainty we of the partial and on of offset that, of probability

of first capital quarter. Slide $XX position absorbing is the XX. common million on We repurchased in loss stock Our shown

of during And a that with before the investor and of XXXX. pandemic the In the loan the draws line charge the the to onset but is this capital the aligned had generally we that risk. fourth we tier provide quarter year XX.X% slides, with with our in in sheet to growth we common trailing show equity in note reduced offs, the With perspective. five continued a quarters are pandemic pandemic, retention, of the ratio has returned XX% the now CETX After during CETX Shown current to the declined growth through the scales that of at capital charts of on the on for quarter in and form of of in quarter. set as known the this intentional equity. losses. the minimal can in and so for longer you'll order loss, credit losses achieved of expected one we capital believed unexpected case, in left, our relative right, earnings chart common the went incurred magnitude in balance typically allowance the timeframe back we XX%. quarter to you both the losses ratio our first set our ratio see aside XXXX, We and on order loss operating intentionally that credit We've aside matched the position for the uncertainty also capital to the

low believe extremely loss, strong level position the risk our is Given of to we relative our appropriately capital profile.

Slide be seasonality. outlook subject our reported increasing. net is quarters. are reiterate results interest Our for the outlook to XXXX, normal our of quarter couple XXXX. compared to The can the on first the expected financial best impact financial Consistent performance and found loan between This on exclude first quarters, actual results interest for to loan as of XX. The PPP recent current of next moderately income of We estimate in the over with loans. quarter at our for outlook for dissipate is income loans growth PPP for

to excluding net the We also over year. expecting interest are next loan income, PPP revenue increase

and customer interest increase, that particularly rates As many income continue to improve previously, quarter of fee we short end fees, related we for as We the net of curve. income grow. will remain the another had believe interest optimistic successful components noted along our will

income, for increasing. the shifted help to fund discussed to to fees has as with and which non-sufficient and stable slightly Scott related customer fee shifts production fees, decrease reduction banking for previously, of investment, the likely from overdraft our mortgage outlook However,

the and pressure. adjusted expense, are For factor, of risk increasing continuing expectation we wage be our non-interest reiterating price largest with to moderately

our Finally, to deployed management, that support capital growth. capital are to regarding customer we driven sheet continue be balance will hopeful

dividend the and share actions announce open and regularly coming scheduled remarks. prepared you our would capital in any Kyle, reminder, please our the such, Friday. second a our we questions. As to line for quarter of made expect for as with conjunction meeting purchase by directors concludes this This decisions board are board

Operator

[Operator instructions] KBW. your McGratty Our Please proceed is from question question. first Christ with with

Christ McGratty

question. and start believe with I'm interest the your curve it quarter, interested in for did commentary this what kind does. that. slide I it within income think change. forward didn't are Thanks. include the net not Thanks great. to about Hey, in want quarter, But I the last guide. the suggest of guidance a assumptions the I

Paul Burdiss

to there going Sure. things are going use we or only can are I'll adjectives many down. This describe that start, so is up Paul.

I income. think noted previously, we've we're we're that growth, we've interest here increase slides be expect been termed income as to in on as and clear rates without prepared -- my even pretty strong on and sensitive, net we from expecting to marks rate in additive increases, outlined interest, what the and because asset we're net we any out

up quarter. in We're the quarter. of So not did show expecting the much that, rate net incremental second we income. that into increase current short term in the March interest We're that beyond then in to rates interest expect we the quarter in very end start first up saw to be the and from fed was worked that to show the increases at

Christ McGratty

Okay.

the I interest from though understand adjust. didn't even guide So, curve forward in don't to I'm just slide the trying the suggests you make sure there. you're I changing not put that, income, it, miss if anything

Paul Burdiss

interest rates going to income, -- And the be in is without for be that incremental Well, so net without lot to a there I of that. we as of there's our continue that yeah, numbers, we interest any believe year growth. getting to added believe describe up use even short-term I many key that into only increases think so said, the adjectives there we rates is many can will -- to sort are only

Christ McGratty

you. Thank Okay.

Operator

America. Ebrahim from proceed is question with Please Bank next question. Our Poonawala with your of

Ebrahim Poonawala

One, in terms could just go demand of outlook in you to if by terms of wanted category we regionally on the to industries into talk sentiment fairly across bullish that's guess chain us the some type, particular impacting seems afternoon.I loan fed board. and Harris then to growth half or any back your driving Good the supply concern year. a incremental disrupt of actions, look growth, lot back around clearly customer maybe as there's of

your what will sense as us the fed into how borrowers, in give this terms based of year. actions you later back see to of the on borrower think we can, demand, impact extent you your Just you look

Harris Simmons

mortgages decent but know, kind believe, I It going this I and that this I of the in Sure. of in had, growth or sheet we're came in just refi about that we broad balance a And, a August, that's digits in we've going see energy cycle We've production better. mid-single lot had later I adjustable excluding still, remainder we've I think that rates likely think, X-X, phase pretty seen a the or the going component. based We categories mortgage very first energy, in good XX-X, think expect the an we on of the off to in rising we've in of deal, where rate year. see larger end to those I of that see growth overall, see our growth was think we're got talked in municipal. deal and C&I we we've are continue all, Scott also through growth lot seeing municipal. would don't pretty putting to in growth of that Well, we'll our -- but pipeline could C&I, this kind to operation. of see of we're fact is some opportunistic on X-X, -- solid expect growth just the come be that of year, and are terms one nice I this going show are solid just certainly to despite year. quarter, I decent growth

some the of expect that primary see I would And we're areas growth. going so to are those where

geographically, of seeing much it, seeing we're the across pretty pretty, United terms entire In States. Western we're it

it's personally going I to to picture. think I prior a to to if we funds got time back sentiment, enough we've fed that, this people around issues had think interest X% of fed the there's economy. strong seen And economies But, XXXX. maybe rates a interest through generation were never some see be industry X.X% that derail customer of actions, that we've probably who'd with to nothing with pretty higher been respect rate, chain in rate kind or and don't supply Yeah.

out my than kind and build maybe and is more going the know need the build that, down, if of because supply through see if the saying they to they tend to lot think I control, made that recession that this would probably you loses of seen to inflation fact, of that have could inventory businesses need if lot think kinds that the really see a hand, supply a certainly And see own before to risk of this, be they've going have cushion anything lines recovery. because interest that things fund's geopolitical their this that slow that that these they they've of suggests a think and we're in that inventory didn't gets all seeing I -- don't a chain it of business and working to in of the of had that to shorten we issues historically businesses domestically, but world, have inventory terms fed lost for source could, in have I to lot a I problem. fed rates future market but believe the supposition, are more lot of created I to kind they you're we're science going

So I quarters personally when about hold. I think few relatively what am the saying probably next

Ebrahim Poonawala

you. one for hit I first the LIBOR basis follow correctly, XX If higher the the Got saw we you loan for And of quarter. through heard it. went Paul Thanks course quick maybe down yield that. up, points

a of book led give loan how it just and why was that declined, prime to XX us that the change a mix rate? decline the sense Just the much LIBOR in points is basis of book versus

Paul Burdiss

Yeah in we mix basis then -- it on that that's There involved adversely yields, previously And rates in were rates -- a think points. the promotional also that was which ongoing talked impact some bit was we on of couple temporary. a that. by loans, little impacted a we've had there that matured change an had of about quarter overall loan adverse but I are

Ebrahim Poonawala

kind forward done? being you drag is either these a see do or of of And going that

Paul Burdiss

excess in relates largest liquidity competition loan to that of concern environment is in ongoing would yields the my as a Well, where it lot there's compression. an spread system cause

loan I biggest sort our expansion. substantially because asset yield But got, rate by it's I I frankly, than we've entirely risk to believe to earning think think well offset that's more floating our more sensitivity. of than assets liabilities.

as an up, of expansion income. going We naturally interest go to are rates see interest net naturally we're

Harris Simmons

a was is worth penalty in that's thing in yield quarter contributor the the the the fourth noting significant quarter. fourth to prepayment One

income why that factor as a dropped penalty the that first portfolio the overall in was to of prepayment quarter, declined. so contributing yield off the also And

Ebrahim Poonawala

Thanks you for questions. Thank both. Noted. my taking

Paul Burdiss

Sure. Thank you.

Operator

your is Our Ken proceed with Please Usdin next question with question. Jefferies. from

Ken Usdin

NII. Just Hey, good you? back are coming evening. the on How

right way think So about to the it. maybe Paul is

XXX of net $XXX gave be You would basis parallel approximately interest of the shift points annual million income.

add back so then we'd if just use into we of we core kind that quarter, to of us to growth XXX in but rates get think million core points help first math, year it. leading So I then top us with a sensitivity year, of $XXX for of that the about increasing you this you your were and a that's you're do were talking know that rates effectively sensitivity about to were fourth of lot and basis then, if if next of zone annualized kind trying that. get we'd let, talking, moderately kind then pre and of get NII, an growth to on

Paul Burdiss

held true the the was of know, that environment work and for they're to sort reluctant much is this are And that constant is -- the I'm apply way that. where precision that modeled, done interest shocks it doesn't all is and just banks, you as reason world, Yeah. just everything rate in doesn't too an way. else our to that

on So, there risk. an deposit Ken, you spreads. are a repricing, factor has just mentioned many this. rate as enormous factors interest I That's know impact that in loan

that ratio in is of the for size deposit liquidity my given XX%. I loan bank a our worth loan regional seeing excess large a I certain in case, know I think that that risk don't adverse reiterating it's being organization, within our that Although in in career, deposit don't our I believe this ballpark. ratio recall an don't is that the system particularly and

and I be think control a So liquidity to ahead. a deposit looking result, able there's we'll pricing lot of as the in system

speaking, I matter, or generally sort saying, of the increases of late. the then what of resets happen the and month, timing the some early happen hear So, you're resets and the of timing middle some in the rate

math. for much very a precision I it's that that figure full the remind just shock immediate approximately that year today, impact you an so apply to XXX you too But gave hard $XXX to that would And basis point that I is million

Ken Usdin

Right? Yeah. Right.

the through right I'm just I the got by rate. about eight be more, benefits numbers. saying, you'd one but in end by you you we ask then, the sensitivity have guess, if might year, of hikes hear run me So year, of XX's this let not hikes those just I playing then. the

factors out. sensitive the then like make, to -- about of like worry you be ran Like, swing the not there thanks Paul? through a that to and color would is most that be the would the for would the be what what could that you'd So that factor one XXX play

Paul Burdiss

so and impact in interest statement, The prior the be equal, largest deposit deposits, all volumes XXXX. in its yeah, factor are your things always pricing. of is would correct, the affirming sensitivity you But deposit that

Ken Usdin

you, Paul. Thank Great. right. All Okay.

Paul Burdiss

Yeah. Thank you Ken.

Operator

Please with is Denba from question. Jennifer Truist question next your Our Securities. proceed with

Jennifer Denba

afternoon. Good you. Thank

quarters. Your has many asset been so for quality good

you a at are go Just quick vulnerable here. pace wondering loan feel most fairly as up what rates buckets

Harris Simmons

Hi, Morris it swing there. Jen. take Yeah. Michael will a

Michael Morris

is more fairly interest for can the passed to may handle than the other something isn't rate costs sensitive that's easily. just labor hikes. Consumer sort industries, going and Debt the Hi in Jennifer. Thanks Any coverage to be revolving tied way. can precarious of what be that a big because little and totally matter to question. debt ratios be on consumer a

and classes our usual, industries that one in something to susceptible income hikes. may more back returned office consumer of seems around or debt haven't we're asset that's is were watching COVID is book carefully. So slowly, most if coverage the now. business be probably they Hospitality they of the rate debt be RevPAR to surely. ratio levels, sort carefully right That's to up. to that going CRE impacted the other little through as by coming watching but the portfolio a We're very change

we're and seeing You traffic hospitality signs can portfolio. see, a lot on good of so airport the

couple So of office, consumer, other categories

James Abbott

I you just to the Could And that hikes? do to think worth we underwriting Michael, rate mentioning speak that's here. this James. is anticipate

Michael Morris

at have, stress currently loan any underwriting its a product we we and Well, on plus almost product the stressing that rate campaign we're adjusted every premium.

go bit of well our So think there of underwriting and there's lot that quite forward. in a in -- as terms are a we of will bode cushion LTVs we

Jennifer Denba

much. so Thanks

Operator

with is Our Pancari proceed with John next question question. Evercore from ISI. Please your

John Pancari

Good afternoon.

points Regarding have on money to bit maybe new you're of us putting just basis yields much ongoing idea can the the little happen XX today. where and terms production in then what the give of up or that loan you loan was was it, new do promotional so you yield the sizing on rate from that. color again, also paper And an of Thanks. loan a from decline of impact yields how topic the in give us

Harris Simmons

quarter. impact the that been five on quarters of promotion campaigns, start last I'll the Well, two six for about or basis per the has points

John Pancari

have on Okay. do Thanks. you new money the yields? And

James Abbott

Yeah, fees, any origination in this embedded of money so is James. John, yield without The fees new this. sort

just is X.X%. this So about coupon is a

So with to that origination overall. probably top a basis the yield fees, basis coupon get on with of add or you'd XX points points XX to to

John Pancari

it. Got

$XX salary I for mentioned quarter adjusting $XX comp next and guess quarters, as several item, for million know the it point link model benefits the good you. Thank is then just about, line, line and in benefits the the there? million XX% going I factors, about I a it's next that, out know and you off the about and jumping up what's we from given on seasonal And quarter. Okay.

Paul Burdiss

comp of and Page X, based are. things things we've several payroll is can seasonal Things you to plans, there seasonal. all retirement tried and where on taxes. are share can in of like that Well, deck slide are Those provide you are kind -- items the the very that see there you

quote, So consider disclosure. that unquote, I about would of thinking jumping you're off as your sort point,

largest I'll have that remains mentioned competition risk have I The on we people. other I the thing think that, there, note is as expenses previously, for

just But that's, our into outlook. a and note all salaries so And that's I incorporated factor. that and risk as benefits

John Pancari

deposit think what could ask And Thanks. up just could you one I Okay. more the are that's flows you'd terms starting a burning about become as you your if to you're more balances, can in see seeing be in terms more, at What pressures outflow deposit stable competition that's, through, seeing of corporates talk or be or you deposit before impact factor actually greater you where to it for about they're rates? is getting of expectation just your you see now? some in seeing

Scott McLean

outflows. Scott Yeah, this seeing. We're seeing McLean seeing certainly and increases were the some we're we is not

investments. other rates And type of to pull interest into been enough a really so, other but I that think just there hadn't interest, term in short move bearing investors

this don't generally And so a real I see movement. cycle, just early increase in speaking you just much that rate

months. couple larger out more that's of see the there'll certainly a a next, And those play we I over numbers. think as in four so movement little be three to then increases going And to

Harris Simmons

Yeah. This Harris. is

in first quarter. I think bit, typically lot the with the quarter a of runoff do kind is, to fed all, that seasonality during in the quarter. to what cyclicality or the industry. sheet the We the to of to see What's some going hard is that's first starting a there's gauge little first balance of across kind

And But and actually sort severe. I would industry. problem. we of good getting anything I across in be at bit me. it'll make personally, it the -- see don't respects thing of in decrease to we I logically do think a that just sense a get so some the we're some waters but, little That increase, be to of could see think start uncharted I And could think kind

Scott McLean

also build inventory. I up but demand noted a well, to that pent add there did as is earlier would just Harris and I

that's decline this a on could simply healthy in potential inventory and thing. deposits moving pressure businesses And deposits into so downward some be or of cash

So watching that not necessarily closely. interest rate driven phenomenon and be we'll pretty so

John Pancari

Right.

Scott. Thanks Okay.

James Abbott

James. is This

four queue We in moment. have about in minutes people call have the XX the at and left we

move to as So round. we're affectionately to we into the refer going lighting what

Thanks. one we'll concise. just our and we'll try people do quick to answers then So and keep question, ask to

Operator

you. Thank

Our Peter Securities. is from proceed with Wedbush Winter Please with question. next your question

Peter Winter

$XXX Great. question to I mentioned about up point Thanks. of compare increase follow equaling to If I on Ken's just Can income. you're the that equals million. forward basis point you sensitivity quarter hike the going each in just sensitivity wanted going for if interesting maybe XXX $XX the that a last you rate XX asset basis and net talk the outlook to million about dampen change that? Paul,

Harris Simmons

is is I what One, had referenced in quarter. which into to prepared this larger things from last that about going Yeah, a think you're describing, interestingly a percentage I revenue. our that. asset are quarter baseline remarks There four my stated points has a sensitivity by couple fallen

time. So sort in in the into we you fourth and take And of the to the quarter. of when securities continuing them added effect have average quarter add We investment first over been sort just were substantially and due the that in investment put when of up averaging the of effect actually pretty last couple are run revenues, revenues on the to portfolio. to they rate converts how quarters

percentage -- change a net income revenues So run a actually in revenues as change rate dollar because interest smaller has higher. just are

interest as is an element sensitivity. and the forward actually important. think And also we asset as we starting sort to and that that's related add we then of portfolio, on swaps So other investment rate and has either add impact -- about, our current element that or we

higher the two and in the then interests quarter quarter over and the run addition income a swaps. form of rate key and are changes those of net securities So duration are

Peter Winter

Got it.

Okay. Thanks a lot.

Harris Simmons

looking ahead, deposits changes in inter be determined and always been then has And our sensitivity, will by really.

be in about factors the changes or mind anyway, deposits, ahead, of And we those so runoff deposits, in looking really my think as additions sensitivity. deposits the key pricing inter of will

Peter Winter

it. Got you. Thank

Operator

with question. Milsaps Brad Please question next your Sandler. proceed Piper is from Our with

Brad Milsaps

or little the my the a could curious kind Thanks of Hi, just $X add question. you Paul so maybe evening. pace if good for final billion of taking more on remaining color of you want liquidity how dice portfolio, kind flow annually, cash from quarterly, either of coming here the off however and to much slice kind it. is and remind bond us monthly,

Paul Burdiss

So the the the kind talked of you the when of part first of investments, on market billions question $X about that sheet. about the money your cash heard balance you liquid,

Brad Milsaps

sir. Yes, Yes.

Paul Burdiss

Well I'll Okay. first. start question with second the

to So, investment about is a portfolio. couple larger of things note law today. our It

extended. the to or effectively on I in slides, that say is that in However, modeling remarks modeling our fully our indicates attempted which my portfolio

is -- the that cash securities repayments on both So, looking payments. somewhat a is comes and are the Because bullet principle little that these back basis. cash billion in portfolio And bonds, as provide more securities that currently the it's ahead not model that largely quarter. is and an the a benefit principle and out at predictable of amortizing prepay ongoing the about flow form dollars a cash having billion I portfolio schedule principal running flow of a but a think flow quarter, of than extended, dollars mortgage

bought kind And Incidentally, that that's investment the we first buy over of points of fund course of higher rates mentioned the results, little if in were loans in the current our were our securities. quarter would performance places fourth additional all use indication in about basis while, to by hundred first. either quarter I'd that than are points than XX the the past basis other the as we business than of bonds of the expect So were to we cash about no I that in year prepared or a say perhaps in $X quarter. in such to a remarks future in securities higher the would they that billion today, the is in over

significant lot off portfolio So the rates and opportunity is for in participate cash of rising pretty of rates. us a move going to flow coming in a to an provide

rest expect through currently words, that enough today, would of portfolio a portfolio. billion managing that I deposits that would lot My liquidity. in your expectation The balance quarters. here hopeful of from answers question. is or lot investment the it over relates growth so be the my absorb it $X the is to hopefully to next I sheet to that that not Hopefully that excess see pickup managing or the either investment as As the continuing that's on am grow would be the we of couple loan expectation

Brad Milsaps

very Thank I Yes. much. you appreciate it.

Operator

next proceed Please Tenner Davidson. question with question. Gary is your from from Our D.A.

Gary Tenner

it Obviously afternoon. your aren't changes make and Thanks. thought whether overdraft downhill the was the more now you way we Good nor process could at of decision topic, first comment will kind overt to simply any in NSF was guys the making pressure programs. what just to on coming last wonder just, on you a that snowball that of be regulators? for you or your on of I getting kind or if

Harris Simmons

pressure no say more from overt you've on baseball inside No, seen no I'd media. But than the in regulators that.

the so it's of providence as both I people. properly think what regulators shouldn't this be within and said, and by -- it's our think disclosed look is regulators. it's I these don't encouraged long I we're I things. need to law. driven doing in But to thinking competitively available think to terms we be changed manage customers I technologies and of that world the has us it do to of the the about and certainly,

And so the about to responsive competitive changed trying simple. landscape we're to that. be It's that has so and

Gary Tenner

Okay. Thank you.

Operator

Riley B Steve with your question. with Please proceed Our final Moss from Securities. question is

Steve Moss

close pricing Good how the Maybe days. you're commercial X%, five-year curious kind thinking about just estate treasury to with as afternoon. here, these to real of

move rates rates how higher? going just then curious risk If what been have thinking you're to also you promotional here about as -- to away the you're guys from working cap shift And if at. your

Harris Simmons

Yeah.

our that since but we've it, been on haven't have have promotional about rate of up been gone The we June Xst started really part talked owner first question year. the -- occupied raising of promotion last about loans, rates promotional pricing in as

down kind we so same the maturity But here rates raising been rate we've are will it's our quarter, in consistently, the swap. of volatile. probably rates that just spread And and promotional second the process versus too slow we because appropriate maintained have

got the rate a we'll but through, program. pen of lot promotional that demand so slow we've probably go we'll and So down up see

Steve Moss

And in as about then maybe the loan to and prior to kind structures. just with if rates, of appetite, how about you risk think think of how curious terms cap guys potential to value just

Harris Simmons

as always but the real owner there. type, occupied product is the two first. on depends estate the There it business you repayments around Well, sources underwriting know,

There's using wheelhouse. So an see seeing as a a which real to and pretty underwriting lot on is conversion estate, We're possible north, We're which stabilization if that's kind the is, and within cost, a go or cap traditional and that levels there's cutting primary of not The strong movement we our of standpoint. I and rates always we're going seeing requests rates way debt coverage we're of here only classes term, construction a there. estate to interest been seen we've of going slight not to stress focus. and NOI. we're rates box strong We're On underwriting and between but cap move those interest sensitizing flat ratios determine asset that. rates, earlier, correlation back to up. and huge loan like around from And values around commercial rates really underwrite, as to all devaluation a probably rates, mentioned investor will the loan real appetite.

Steve Moss

very Thank much. Okay. you

Operator

James the turn reached of Abbott closing to end for remarks. now question-and-answer I over We have the session, call the and

James Abbott

to you, Thank all you joining today. for you and us of thank Kyle,

at call. the We website. you interest coming and or phone your concludes number our our forward listed If This look you on me please again with contact connecting have Zions thank additional the for you months, in questions, to email throughout Bancorporation.

Operator

conference, this you for time. today's and Thank your lines participation. your may This disconnect concludes at you

Zions Bancorporation, National Association (ZION) 26 Apr 222022 Q1 Earnings call transcript