ZION - Earnings call transcript Q3 2024 | Zions Bancorporation, National Association

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Operator

Greetings, and welcome to the Zions Bancorporation Q3 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Shannon Drage. Thank you.

begin. may You

Shannon Drage

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

Chief Chairman Harris agenda and will our Executive For opening provide Officer, remarks. today, Simmons,

Financial Also Chief are review Kyriakakis, Following will our Ryan comments, Chief Officer; Risk Derek results. Operating McLean, Richards, Scott Officer; Steward, Chief Officer. financial and Harris' Credit today Chris Officer, President us with and

remarks, prepared call the hour. over question-and-answer turn session. Simmons. will our scheduled for After will X hold is I Harris to time now we a This

Harris Simmons

for We're pleased generally Thanks our very much, Shannon. which with the the reflect performance. quite results quarter, financial in improvement

franchise expense while investing discipline benefit We growing management, our business. continued the from strength and to valuable in of risk our deposit credit the and

of headwinds as will we refinancing the we what around costs improve face manage real the In near-term estate continue rates from to ongoing performance economy. interest to be expect We the expect uncertainty carefully despite in assets. funding of

with $XXX Coachella an in First in deal announcement with First in to the with their community. X customers team to of $XXX deposits provide of with with strong market quarter agreement approximately the California of and strengthen in is position Bank us and their still regulatory a XX,XXX that competitive This million the that about we ties subject Bankers million to acquire concluded will our approval, reached branches Valley at new We loans.

specific at to earnings percentage were expenses. for deposits, on quarter, X% revenues for beginning by million increased Customer the stabilization due X and and point key reflects further quarter Looking the deposits demand $XXX lower points, increased point are results million, metrics. $XX some higher for to point in noninterest-bearing improving Net the which point Slide to quarter quarter. X.X

X flat. quarter Net interest the yields increased margin funding expand, earning of the as up remains basis continued asset in to -- points cost

points the will environment, rate customer X% quarter. income was interest pricing the interest grew the to for further growth behavior net of under optimism against basis as ago at speak recent near presentation. expectation the in of light Anecdotally, rate in Our will along modest downward Ryan magnitude we the believe the could in impact Timing changes term. net continue of year benchmark XX and movements a in interest both in the the margin improved Loan quarter. reduction and rate deposits future and with falling

to product applications continues a provides technology, communities application intuitive strong we aided upload and counts product experience, were more grow alone SBA and user application which pipelines simplified launch our the for Demand fewer digital new by incomplete capabilities. document the of also serve, and

which more I construction net function in were of places and quarter. increase more multifamily and level and impacted is repayment to for million. acutely annualized values grading, in classified loans the the source for low less which primary largely current of loan of average as also in sponsors. higher rates the We're of emphasis rent charge-offs period. XXXX The on in points basis lease-up percentage just losses on The and is performance, higher-than-expected loan continued adequacy balances a emphasis collateral of been by portfolio cash the have due a with pleased flow guarantors to weaker interest approach the of experienced and portfolio downgrades during X strength increased the particularly were the concessions Classified vintages. loan XXXX $XXX change the loans

equity believe next sponsor continue losses and strong to We practices, lies quarters will quite hype strong to the underwriting manageable support. over be few due yields borrower and

ago, common while XX.X% ratio improved basis Tier X.X%. in points, common quarter equity XX.X% a equity from ratio was the XX.X% also by the X Our XX second and tangible year

prior year share or Moving during clean to and were $X.XX Slide period. X. and impacting the the from quarter, XX% was $X.XX the quarter up items per was very there It quarter. no X% ago earnings Diluted earnings from of notable per share a

Capital our underlying On up Slide income, adjusted had quarter Markets division, noninterest pre-provision several to million, quarter in the The income, revenue net which was particularly improvement second across our million measures, decreases $XXX in second net and quarter a X, including increase attributable expense multiple fee categories. in in growth from $XX linked record in was adjusted important strong interest customer-related quarter.

I'm to additional to details Officer, Richards, financial related overview, Ryan going provide our high-level ask performance. Ryan? to That Financial our Chief

R. Richards

Thank measures is shown reflected Net net for the everyone. net begin X shows discussion income as is The X both. interest quarters the our increase repricing on trend outpaced the interest X-quarter net Slide you, earning the Both of recent boxes. income overview margin. Harris, and chart of a consecutive good on the interest the pre-provision the evening, revenue. I components of bars costs. and net will with reflect and margin in improvement income assets white for includes of interest

our sheet. to from on in asset favorable changes mix We balance also benefit continue

net margin X. on interest are included Slide Additional in on details changes the

yields to page, in reduced net in of interest to interest slight money basis asset earning attributable key side is expanded borrowing points points outlining On mix. margin chart, improved driven with in by basis market basis margin by the the interest-bearing improvements and quarter costs and securities a cost to contributed the reflected in Higher waterfall average market margin. Overall, net margin the higher were effects in waterfall were the noninterest-bearing Net prior to declines and quarter. slide were short-term changes lesser increased comparison and an this year component incorporating basis borrowings from quarter. to provide points and of balance on the a benefits left-hand we shows components net volume. point the changes both interest respectively. deposits XX by sequentially, deposit Funding margin, higher increase basis profitability offset costs, versus a X additional of yields the linked This reflected These X loans, margin year the as associated contribution X by the points offsetting Right-hand and and in in the money which rates deposits. the XX increased sheet. noninterest positive interest securities were and loan of in this the our chart deposits offset the net somewhat contributions the value prior interest

grow revenue market noninterest market to meaningfully X, to million moving optimistic was income quarter, income to income capital that Moving noninterest $X capital focus alluded We compared by increase that $XXX $XXX Slide customer-related remain in expanded to in and fee million a forward. fees million on Harris allow prior largely us previously. will driven our the

and Our needs strategic risk -- address a to of offering full our enables us complement management customers. of

relative the on factors revenue calculation. customer-related the quarter quarter increased The XXXX. Adjusted right adjusted for third noted noninterest is XXXX interest to of previously revenue, moderately income this pre-provision revenue used customer-related is for third efficiency in in from outlook side revenue of page periods and and the which the quarter prior is income. ratio our net Our of ago the includes to increasing chart fee included adjusted net the and income for year due both

services, Adjusted and to expense the quarter. X, Slide employee excluding -- FDIC million, also $X in million ] lighter on legal Reported largely decreased compared prior million decreases at the $X and shown in noninterest premiums attributable salaries and million expenses benefits, $XXX decreased to [ and benefits to severance. bars $XXX blue professional

the adjusted Risks increasing vendor costs. Our noninterest increases outlook our third outlook and in is slightly ability its associated technology XXXX. and of employment opportunities XXXX quarter include manage of costs, for quarter to with relative third to contractual expense

our over past Slide the year. in average deposits XX loans and trends highlights

side, that left in increased the quarter. loans can the slightly average On you see

previously, expectation that we the customer reduction optimism will to As rates believe Harris that improved noted has downward and recent the in in move to term. continue response near the

will XXXX. Our be of third loans to guidance third is that XXXX of the quarter in to increasing relative quarter stable the slightly

our growth this mortgage residential led commercial decline. to offset rates as as to loans somewhat expect are by commercial portfolio expected refinance real be and estate We and

slightly. declined third in boxes the points deposits the the with right by rate to month The We in the quarter balances blended quarter modestly, deposits encouraged to September compared basis during prior trending of total average while deposit the of and on X.XX% spot X the deposit Average turning X.XX% to X.X% end, declining the this at X.XX%. were noninterest-bearing for the balances from quarter. Now page. quarter increased cost white to deposit interest-bearing increased costs shown for side

the about X/X cut. a at priced or above As rates prior benchmark reminder, our rate to of deposits were

beta the seeing on far. are this will few over trend cost We deposits rate anticipate near XXX% those cuts. a We higher so next continue

deposits includes trends. The a left Compared the cost view deposits. total balance more comprehensive quarter, trends. of noninterest-bearing of customer funding to and X% grew slightly. increased Period-end deposits to XX includes sources prior Slide total chart funding side ending XX%

shown average side, funding. funding total our cost balances are right along key for categories of the the On with

funding on noted, seen previously costs this the As chart sequentially. total remained flat and

Moving to Slide XX.

Duration amortization primarily market to our of balance related changes. rates price our -- $XXX earning portfolio funds to as portfolio our wholesale better continues slide, of favorable quarter. which to costs. money well demand On the third changes portfolios over means investment principal in be interest portfolio, quarters. investment of this securities in a the flows X remix to estimated prepayment to is storehouse customer-driven we from as were Maturities, is to last on investment exists million Our funding contribute of a assets securities cash show absorb sheet our sensitivity at a the Paydown and and securities lower-yielding our X.X%.

opportunities realized deposits XX. income increasing relative be curve. to yield interest to third third include moderately of and and loan rates the with of will slightly Risks behavior XXXX. this believe competition We interest outlook Slide Transitioning and to of that across XXXX in path for quarter growth, depositor net quarter associated the the the

XX that we sensitivity, be of presentation, While impact measures shock in we have path quarter interest the in includes our here sensitivity to rate on compared XXXX September standard net Slide the when higher of this interest the interest of assuming quarter rate appendix of follow third rates interest view Modeled sensitivity income the the implied and in parallel present both XX. third on provided latent of This X.X% out expected quarters. broken is emergent prior to we XXXX.

XXX As evolve, expectations to between we to path by implied on path, which positive rate rates provide the range suggests shocks and the sensitivity basis point the a X.X% also X.X%. forward negative continue

static sensitivity include interest factors income reminder, rate strategic this included changes, of a in of based view guidance. and sheet strategies view is on a balance As net other does management's It modeled not relatively pricing assumptions. our

to the over Moving the loans basis months. quarter annualized points XX. quality points in in with XX to Slide on of be just Realized charge-offs last X continue X net portfolio basis low, credit and the losses of

respectively, some of to charge-offs. increased million million we level credit deterioration quarter. pleased on metrics are abnormally the earlier this We the the this of Harris we real commercial of owned. represents further and and $XXX basis continue remarks. this call. estate $XXX by other by million in C&I reasons noted to a balances expect Classified don't his Harris quality in experienced to While increased of loan and operate with to now $XXX low to assets driven $XXX outcome, alluded at estate was Nonperforming credit and million, small points loans credits. XX Increase number and criticized opening of real due

leases. in credits we prior on environment losses lending, CRE be benefit for increased basis improvement portfolio credit rates rate consider over declining grade we will will require as seasoning risk gradual to the but allowance total of of quarter X.XX% and before point The upgrades. A X loans ultimately the

know in appendix detail with we a is have included of presentation. included portfolio this information topic commercial the estate As we interest, real the additional it of regarding

granular, a of the over balances. provides represents growth portfolio, CRE portfolio of decade. XX% overview is total XX an managed which $XX.X this loan Slide have billion The we carefully

with classified sub-portfolios credits. our bottom of assets Slide loans, during criticized XX which detailed million was right-hand of the a drove $XXX chart by loans a breakout driven provides on LTVs low reflects LTV on The outlook, -- The chart of million by preponderance limited relatively the view side support. we problem multifamily losses this of Overall, and of the of provides CRE CRE being apartment on with in of in loans borrowers, in loan-to-value the the expect slide continued increases based and economic left-hand perform or CRE to side XX% loans, portfolio of $XXX the distribution portfolio. classified increase ratios the quarter sponsor classified the types less. reasonably problems the showing estimated experienced the current well

level to of Slide combined loss-absorbing This, to net with profile allowance Our the shown risk third grow in compares XX. loan credit in The on the when our XX.X%. continued capital reflected charge-offs. ratio quarter ongoing CETX as losses, low for well is the to

from organically accretion equity and that continue through improvement portfolio securities the and to both regulatory pay AOCI earnings securities down immature. our common to We through a GAAP natural individual as increase perspective will expect

Slide financial XX this the over summarizes course provided the of outlook presentation.

this reminder, to estimate represents outpaces of this a financial expect operating XXXX. we and for positive performance growth as as expense third see As quarter leverage outlook of And the improved the efficiency With XXXX. our to pressures. quarter for compared third the outlook, and funding revenue best

Shannon Drage

This concludes remarks. our prepared

that the question X move we to you please of questions. ask call, request open X to questions. to for other your Matt, participants we to question-and-answer questions As line primary enable the the section and follow-up limit

Operator

Instructions]. [Operator

from first is Morgan from Our Manan Gosalia question Stanley. here

Manan Gosalia

touch costs. on to deposit afternoon. wanted I Good

there the with rate you different spot from really you've What gave expect been that about a the or of helpful. you sounds so us Could how to customers you rate deposit the like types? through already It early was of progress? Fed seen XX% So deposit first discussions have cut. take

Unknown Executive

are we think I Listen, bet. You encouraged.

are up probably sure the they we that X/X that cost think our they that would effectively be wholesale I the interest beta. given shared these coming remarks, rates, as of the cycle in is of XX% behave remarks. slide, did kind by the call seeing we're a think do point to for rate XXX% close on to were beta point to voice us. as had been to in we've my in forward we would It It our far a is preparing it of all-in sensitivity down we anticipating back. didn't very But that focus I that for a and that, that could would my of and you beta I we higher good. we we deposits sort heightened an was a of prepared make sort on It's sort implied And something about curve, which so there represented give so and would down, in that sort way encouraging. approaching out that operationally

the since of migration out our September in have forward assumption for deposits we allowing of Clearly, some been in time. deposits of terms changes there's Just to interest-bearing reiterate then. that over was ruled an the not But slide of XX. curve we to as there part cite that curve noninterest-bearing of process, that additional as

Manan Gosalia

And just just deposits, deposit of that is deposits, to clear, XX% for be beta correct? not total interest-bearing

Unknown Executive

the a of Yes. curve, and models all that Correct. data closer XX% XX% beta were coming more to was we and up, world view in. down using Correct. our brake XX% the all-in Coming down showed interest-bearing seeing from in

Manan Gosalia

Got it.

And progress couple like should on How down? as from it think come should what we quarters here feels of expect impact that on you've dropped I just Okay. rates to NIM Great. have that a about as NIM, ago.

Unknown Executive

been in suffice NIM we variables here into where given And to that to a next that amounts say, X growth year. what hasn't specifically, it an that But NIM our guidance have we've expand the -- and out all practice that. see see from quarters fortunate NII call allows in and an had Yes. Thank continuing in been and NIM for to you loan NII around for we've row, we increase for and to that perspective.

premise within all, think, our guidance. that's I So

Operator

from from Our next question is Evercore ISI. John Pancari

John Pancari

afternoon. Good

loan side that know Just wanted you loan increase to that of partly increase a classified internal and on credit the did color How attributed increase that it? rating the the classified in And mentioned corresponds the rating much risk on I not little was problem to the change? with it loss related was increase loan of a part rating. was a to risk more in necessitate why that a risk if get increase, reserve NPAs. change change,

Derek Steward

and would exactly become Derek. I'd be what less quantify rely the the we as because taking see Thanks, grading concessions, we what we've way support in the longer for percentage change reliance things to in say approach. especially see guarantor lease-up John. more sponsor This as the on and is multifamily support we the is hard placing It's done of there. in conservative we're

the that's economy, did risk CECL, less seeing far they allowance As and years the rating you're -- does changes the with the CECL downturn corresponding over And a allowance not changes much of that increase. we've in saw to reserves CECL couple we impact impact than as today the really, downturn last potential the years, with the why built how in past. as actually

John Pancari

would you credit hurdles borrowers that assume impacted front, Okay. debt loan All rates, just to inherently inflection this? modifications. a their be meet for right. And the in then also turn help -- also here coverage your the would curious and accordingly, I with decline the positive on the how how rates service

that classified and your that here curious impacted. your terms trends nonaccruals influenced have how the may seeing how and of was in So we're

if versus right by it the for the CRE if now through allocation book? walk Then rest lastly, out can reserve you multifamily -- of your you the break just

Derek Steward

Okay.

the I'll allocation. off, just First touch on reserve

For allowance overall X.X%. is multifamily, at the X.X%. coverage And portfolio the versus CRE

which situation primarily as the on than longer-term As short with rates, the there's lend short-term rate impact, we rates. rates, short-term far higher much term, they're

easier some And think does carry going future. we activity have it's combined decreasing with make begin to it see rates. I so books. we impacts over year, as seen to and the rates, easier situation That work the refinance encouraging do we've we'll work the, are higher borrowers with XX-year short-term much in the see through through with some that the last It XX-year reduced the But still in to refinance. But we're to say, that coverage situations, on our it's we that some stabilization of the to situations.

Harris Simmons

just it's Harris. I'd John, add,

which think underwriting I multifamily the here, it was we've more amount go certainly been industry, crisis, I with across the isolated Since different CRE certainly, you equity it's multifamily so. or And financial think with XX in or generally, but not to deals, if years ago. respect XX% has specifically fundamentally for is routinely back underwriting seen of than us. the

classifying for additional lot the reserves that it's borrower kind of because and the equity by by of respect a it created too, reasons, putting were creating deal And disconnect a in. a there's of to actually one a reserve probably between

And improving. taking that additional fact the well-defined equity cap so may in plan, reserves not create not classifying of rates to that the more that you And seriously. having strength it, can watching because it you of where we're by is deal. necessarily are more But just have the that the carefully, the a their a fact even deal meeting but offset slower, there's or lease-up they're -- where weakness be original

elsewhere. of and So going into that's think I it's what hope window but kind how is perhaps on I here helpful, a

Unknown Executive

of to time, the Derek's view the include how classifieds set useful Because We that's a supportable with here that Slide message opposite we go the the comments they first factor point the allowance did in over sometimes sort our This and in XX relationship more and materials. probably to dominant accounting a that shows of returning requires to the how with question. model forecast, reference being us future, nonaccruals directions, for into and the of John, the right? peer reserves. reasonable build your a on

means we the terms that would we years prior the is and what in economy got to that the our didn't it if around fact, dark that cloud of probably saw expectation more down in and is of just then mean nonaccruals up, this classifieds for road. the wrong show this that sort In reinforcing is what credit, just evidence probably fact so forming, of

Operator

from is from question Citi. next Gerlinger Our Ben

Benjamin Gerlinger

of guidance, but sense -- CRE a think that you loan a on XXX their off? you have there's And that But -- do you next think potentially I have ] of at for? behavioral is everybody. future, XX headwind in another of would I of get basis to there's component -- guys And are is math, refinancing [ of kind a In risk you XXX, months? outstanding. little a that need kind for then the also a is dollar over when to Do your to credits when XX, you you try in think think makes line that just about amount get bit lower. actually there the it and the points you people people about refinance kind can XX looking earmarked and

Derek Steward

a drive Yes. specific there's don't know I rate activity. decrease that if would

goals reductions, and will accomplish dependent drive and are. refinance what borrower rate to I more they're trying their think with it's upon Certainly, what the activity.

go the to it. of If sell I property, a they're want they're into just the the long-term they on and to borrower different and think it what variables do trying situation that a accomplish. hold, lot depends there's

Scott McLean

generally to Scott. just recourse we've concerned them. eliminate just a is is have they've large got that more said, most the overall there about to go longer at term to apt of of that, as our loans, on This their element recourse. Because their be they're portfolio, would on I play add portion to we other to if holdings,

generally, term, no there's recourse long go they [indiscernible]. when And

Derek Steward

And than the is to because much thing, the they're incented actually assets, to cases, Because able this more in the more actually the long-term many today. even once are leased one just books on rates, than curve, to again. of borrowers refinance. receive add, loan right they're multifamily higher And and accomplish at up, so of short-term it the we on proceeds what and have opportunity Derek especially are rates go

So it's future. in opportunities the we'll borrowers I think, see the have the that something, as right

Benjamin Gerlinger

Is And caused But cut talking said -- slightly forward Got the to for kind these investments. the kind catching of current forward? technology in up? of your spend not or overall noninterest growth. you. guess are just of I then is or they the And Helpful. is sign, going looking onetime Or it consistent kind increasing you to X to it kind just on XXX you the close sort likely immediate guidance, onetime nature, more And the investment in -- but quarter, like going given I'm expense. of be future? end of

Unknown Executive

to change. I'm That's going started on jump continually colleagues fit. to Listen, expenses. invite we're focused in improvement. be for let to thanks No, that. they and going get not that as happy to just there Continuous see first Yes. my me emphasize

the we doesn't investing. where forward. You'll think borne hear investments, be that from recent that us again. might plenty of out to That that in time And change us things that that while there's been -- here periods and mean deploying and stop will we're that's I mix those important think I moving

spend to wouldn't So expect but greatly. the I the allocation slightly, overall change change could

Scott McLean

that core have or don't pressure replace it's costly. don't down you on said, the just to We And I agree materially Ryan large on in that anymore technology something do has own change. almost other spend financial will bank The This to is Scott, the and every pressure is as go that something institution, with just own mix I going will think. ever our us and any that. totally to is not them

strategic a think big difference. So I that's

The future the if other to makes the I items easier. because it about it'd expense a it's that just a it, past, we we have that would practices, that certainly, costs small say of X may reducing that that The items. in gone big greater basket is though that XXXX we just period part we've to of from adoption items time thing even be great helpful really coming point of is about we your large investment made, automation have this particularly we or could of to -- 'XX spend down 'XX, and thing job amount bucket is had we big reallocate X common core

But this a we collectively, went keep to through if outlook expenses we if you, be, you'd yawn. real that so think, will with can them accomplishment. of we And kind

Operator

Our next Deutsche question from Bernard is Bank. from Von Gizycki

Bernard Von Gizycki

I had interest like First pickup, How branch bank on branch about think a acquisitions up a deal merger? or acquisition. bolt-on Bankers the maybe a whole asset follow do another in further you

Harris Simmons

time. right Well, of I think have on we'll the economics, thinking a think it in means the working think with on not at been little all. it's more kind not fit, latitude front We a of for our focused core about through that than we're as something long it's opportunistically. being a we've But had before that highly of because It's really right of conversion that something growth. kind burner we probably

Bernard Von Gizycki

from that's you color expanded in estate you. and fees, can the been Any the maybe and nice increase And then XXXX. And an the during just just quarter Obviously, Understood. on like thus going quarter. real markets. syndications capital the swaps obviously, pickup into XQ loan for there's in far? a emphasis markets. provide capital expectations And for

Unknown Executive

we've pleased one areas compound back mentioned, X We've This where years, nice to really all rate mentioned, it's were focused been going not in another those had Thanks of way, quarter fees along evidence rate. there. mix just that that And listen, for growth X growth FX with also a for annual solely as on categories this you yes, this investing been bearing business with fruit. the the really expenses, that's and quarter, is a Harris the now -- I'm XX% the question. record

of kind Suffice that. with say franchise already to significant give to built to build quarter on continues that that, practice enhancing X a and the on group continue guidance type capabilities. they've made very haven't We ambitions for to have growth

forward. moving for come looking things markets we're to practice from So good capital that

Scott McLean

add some previous about some risk infrastructure, fundamentally I revenue. totally flat the growth significantly, just products. levels this. would hit support expertise, accidental is in infrastructure, intentional. that the kind we of higher just years of we've We've to of the and there previous all which a But quarters, place about this It's invested subject business, It's it's in for the technology matter there's talked nothing the years. infrastructure,

Harris Simmons

I'd mean it's little see -- grow other a in nicely, I business to see really I probably nature business. with of lines variability you'll than that of just more that we probably -- growth, you tends but also said, mean, that some the variable. to it is it's quarter-to-quarter, expect add be greater this it

Operator

Next question Clark is Piper from Matthew from Sandler.

Matthew Clark

just on up was what the special just million. think, $XXX Can special criticized a imply that one classified. mention That confirm drove mention? down, then lot that's you almost And I case? the in than First been would the less upgrades

Scott McLean

We of into notch Well, so already or -- just classified mention a into had a criticized they most mention, the actually -- both moved special special in classified. the the of moved down. them had we lot

Matthew Clark

it. Got

and budget? further appetite reduced then X/X, on on general your outlook the Okay. by reduce those about those I or for thoughts to you And borrowings, on borrowings think in any updated

Scott McLean

at in invest happening sheet of look I brokered borrowings potentially loan our to wholesale CD of we lower-yielding the growth growth. balance our think and my potentially prepared cash was advantage, where going what's alluded and we're at we of in concert securities what's balance those we investment at remarks our pay receive asset with look we'll books the assets deposits that paid to on in borrowings broker core the sources to them with with having deposits, sort deploy short-term seeing down side and when terms of to in levels, down look flows funding where choosing have as

a hard more in is it's an performing So to really answer one about isolation. the balance equation sheet how overall. It's of

Operator

Our KBW. Chris next from is question from McGratty

Christopher McGratty

quarter you were Harris points on extremely credit, low. basis this

of I've think in do normalized how think losses I the asked you forward? past, going

Harris Simmons

quartile. That's basis that's be lumpy. maybe you it like to know. to isn't And because it's It's through if to of as the currently, don't like, said best in as kind we've tends something I going basis again, sort it know, capital about I think of about closer aspire XX sustainable to consistently Well, markets. -- again, I the it's to top go also something or you're said, way become points we don't X cycles. also we -- points But probably change that. probably

of quarter picture kind And are. any of think you fair where stitch given there. X So get start isn't quarters, to to But a a we fair the of back of X, I come. representation what's course of a over probably probably that's you what's reflection

Christopher McGratty

looking backup then And we equation? capital more there should the return, recently. the be appetite rates, albeit in Great. follow-up with Has active drop be any of of in what buybacks for or my the on change kind part been to

Harris Simmons

cross to I kind more like. we're before think I to think yet. bit looking -- got we clarity going a we're like. not going what the I mean to No, for are I we've of like don't XXX, still that's capital time rules luxury know I to the look of with little respect mean, but of

We'll watch we're don't comfortable build. more tangible yet. continue there equity that to a we're but point capital continues And probably we as to aggressively, get so I think more where certainly to managing

Operator

question next from UBS. from Varga Our Samuel is

Samuel Varga

I to meaningfully the just higher liquidity the balance sheet on for is the this than end average, a bit. the quarter to based of levels back little period. The wanted go the

XQ any commentary numbers? see and in levels whether I So to sort wanted impacted you just there move expect could broadly the seasonality around if you'd where was that liquidity XQ some give of to

Unknown Executive

amplify what And liquidity out there what's when that drawing just you your can comment? -- levels, in say you

Samuel Varga

Yes.

where in terms and move? the might just those market investments of So cash

Matt Tyler

the Matt Treasurer. this I'm Corporate Yes. Tyler. is

market. portfolio, mean in just we investment short-term heavily overnight and repo the I participate Our

And so really securities we we not we portfolio tend cash is pretty liquidity lot to have because into on hold our in for of can turn the deep cash securities that and the easily demand. and repo market a just

at declined of some the absolute we because had. And the quarter -- so end is of of kind cash level borrowings it just that we our off paid the of

mean, I of level And think cash a measure liquidity. so of it's I is the -- our core

Samuel Varga

just some you potential the give of guess, then Understood. I average seems like in the deposit And are front, period noninterest-bearing XQ on can sense it converging. there? seasonality then the and the

Unknown Executive

in XQ called seasonality do I out year. don't We really earlier in that deposits. ever we've the at know times noninterest-bearing probably

deposits out to we're be in call pattern trend front stabilization sure is a the hate in for pleased on that in be and to than that prepared interest-bearing that with that my it in. also the not coming the there seeing are So some out more And rate migration, ruling continued we I'm does say seem other remarks, not the area. down. could We're but it called there settling I

to pleased picture, we're going big think seeing, watch always with So we're but closely. this what I we're

Operator

is Our Mike from Fargo. Mayo next question Wells from

Michael Mayo

seeing recently of great virtues hear benefits the upward yield an it and hear poetic you I curve. wake was sloping and about you

and I sensitivity. first, of desire more do conviction It's higher very you're rate have doesn't guess, seeing ongoing for cuts in And it the reconcile work are with you you're seeing way. your cake but you looks you NII lots with I to It guide now, the eat clear over So always your that too, do how year. that next like and what you asset it get out -- market? the have

scenario? your that? what of the risks about that So what And thoughts are are

Harris Simmons

the couple Well, I'll betting next. think mean, offer fool's might don't That's yield the money have as totally it's at it probably that's area against it already into Ryan of predict is I I and and expectations I formed some smart a where thoughts, lot of a well. are try know of reflected curve that there. a to

balance Valley's opportunity Silicone lot of I in to failure, that as do expected reprice were going But pretty I we so things the was kind We balances better a with a through of that That's -- the moving be other the the really noninterest-bearing to part to of hit continued I it's immediate have We're are that, among in believe story deposit back think that. there deposits. one recent terms lot wake margins stabilization dislocation. off of us think of some in of of sheet. of things, aggressive working as well -- sheet, improving story had respect balance why on than we

we're the the believe continue some would And margin to that that the next year. those the going else? of so anything in to factors see some to be me lead course Ryan, firming of over

R. Richards

the be peer for rate own Yes. And to down that good No, you. spend thanks on in it's with time that. asset the environment higher I we a mean, the sensitivity set, Mike, has to Listen, we discussions. you're right. screen

at down. terms investment as to that become There's chance to right think of those continues the term balance near out, you in about of at earnings tangible portfolio something even sort term, for were together this exposure reverse short about equity of we but longer-term just know about through I the seeing to point. more asset a figure securities what's turns it between you you vis-a-vis rates where spoke some about risk pay if that's As go. sensitive cycle don't kind out managing sort want should the could of what not

your what turn on So tangible thinking balance right talking vis-a-vis and exposure common between around if actively about we're rates that earnings equity. happens about constantly down

imagine a we'll a think to where on in our and back, need duration could risk side on that support holistically the you prior liability investment again, our But some call of runoff for duration that see balance sheet side. So mind security and the from said as we if as about bearing think asset we we either about also you opportunities what about portfolio have liquidity there's today the little needs, solving here. to could to add we think

to in the try those of be we balanced risks. management So

Harris Simmons

are probably I'd a add you with has more may that just going whoever but leaning at think this be tariffs notion election, economy. believed, extent, pretty I personally And kind -- terms lot the mentioned the we -- you've think -- think are -- of trillion they're my in in us, when time, good to thought, I of little deficit here. in of least Fed to recent were deglobalization, further a weeks. that than some a I seen I my inflationary if of that existing forces betting is or you're peace world, what seeing money this and I were our own prospect just in personal plus a $X.X the wins kind stubborn a have inflation is of a There

I is think rates. that I real toward more to rates and continue decreasing increasing that the risk believe

X maybe years. next If or months, X X the you get kind beyond out of look

So hope that's anyway, helpful. I

Michael Mayo

earnings given on pressures yield longer willing of that those line I some see Yes. conviction bottom you're guess going your the is some term, you're short-term to curve. sacrifice to the

Harris Simmons

X maybe likelihood of or Yes, maybe rate X like even with somewhat. who the say, cut, But I another knows. another

I a even will here the strengthen lot that of there's margin. stabilize think can work still that that we and things on

Operator

Anthony is question next Our from from Elian JPMorgan.

Anthony Elian

the the drove else what benefit most I combined guess, by third NII NII that look driven year. guide moderately about benefit Or noted you X.X% a that? were percentage X.X%. that at reduction and by combined by realizing the in impact quarter, to But of your only Last Slide emerging quarter? next latent rate to if of I sensitivities XX, NII reiterated was over NII just the benefit should Today, expected in you slightly increasing. the the

Unknown Executive

on of enjoyed commentary that already call question. thank try part the just And we've increase No, part you to guidance that make from as quarter's a out Yes. absolutely, quarter. to we the help people XX for it, last that that of is to this X% bridge Slide

course, of September in any here to then. as what what since of path you're is There's Of at sort rate to, XX. as been the reiterate extraordinarily again that you're here, a change yield of Harris sort alluded I what the seeing seeing of anticipating curve lot is quite challenging. just But time point want

we're going important would earning of including allow most things mentioned, I to of the seeing how for back probably the through So sheet, management think our you've other like this balance well. and growth is assumptions which asset which guidance our piece dynamic of as kind

Anthony Elian

broad-based in is loans specific And classified was multifamily, follow-up, that markets? the footprint my or in increase across for your concentrated then

Scott McLean

didn't see slides, We're we geographic diversification actually across very one market. our But actually of in Derek. it the specific not the specific see all a It's This is within It diversified market. lot footprint. our is. one footprint. you'll where is In

Operator

Our is from Jon from Arfstrom next Capital Markets. question RBC

Jon Arfstrom

mean, on is Thanks. loan optimistic more than time? of Good some were our Are our ask pipeline getting on higher you was you just over it I overall a expect loan want a you I confident, evening, Harris, everyone. and ago? to question there you growth. more quarter growth borrower

Harris Simmons

rates a I'm a and to estate. real probably But loan originate of little for lower, approach to that going with of with we're growth. are sell an you're X-family, we'll in matter, kind And that model. more X- even commercial more to commercial toward probably that though respect belief temper headwinds take that optimistic see greater I would probably expecting

income, And will the we'll would growth probably help the eliminate that in noninterest but of so actually that, hope to had with some that I X- we've X-family.

whatever that's say to modest, the pieces. loan So slightly increasing gets we this those combination what kind us of of growth,

Jon Arfstrom

trend you to hear or more there? of this was sure core will that little good on better. who same for it, kind on is the the this And capital Maybe markets what other happened can a energy comment quarter, factor that? just not there? Or the is bit of balance I'm should It's you, but C&I take expect we Scott.

Scott McLean

reduction been a of significant lending energy in the business. the there's number banks John, Yes. in

next and And just back a saw But some some go I've that's up. $X we grow time, they And portfolio consolidation that $X.X ] I tick of years, the been or think because billion down energy our down quite little think and bit. nice rate [ could hadn't But they've the been billion a at for time, I so over happened. X outstandings saying they ticked industry. around right X for really in

great time of any a We're other be are pricing better any can banks, relationships, not the the underwriting relationships. remember, can continue is long-term newcomer I are I financing we fewer because and kind time growth other principles better there I to than have remember. the to so than ever about And energy. optimistic And that

optimistic growth. continue our but overall of part kind C&I of So of it, a anyway, be I balanced to kind be about would it

Operator

to question-and-answer for floor closing comments. the to the I'd concludes any turn like management This session. back

Shannon Drage

thank you today. Thank you, Matt, joining all us and for

please look throughout at coming to questions, us additional Zions you with have our the listed We concludes the Bancorporation and on connecting forward This our If months. website. number contact interest e-mail call. you appreciate your in phone or

Operator

This teleconference. today's concludes

disconnect this time. your lines you for at participation. You Thank may your again

Zions Bancorporation, National Association (ZION) 21 Oct 242024 Q3 Earnings call transcript