8-K: Zions Bancorporation Reports Strong Q4, Full-Year 2025 Earnings

Zions Bancorporation announced robust fourth quarter and full-year 2025 financial results, with diluted EPS rising 31% year-over-year in Q4 and 21% for the full year, driven by improved revenue and strong credit quality.

Summary

• Net earnings for the fourth quarter of 2025 were $262 million, with diluted earnings per share (EPS) of $1.76, representing a 31% increase from $1.34 in 4Q24 and a 19% increase from $1.48 in 3Q25.
• Annual net earnings for 2025 reached $895 million, with diluted EPS of $6.01, an increase of 21% compared to $737 million and $4.95, respectively, in 2024.
• Net interest income for 4Q25 was $683 million, up 9% from $627 million in 4Q24, primarily due to lower funding costs.
• The net interest margin (NIM) improved to 3.31% in 4Q25, up from 3.05% in 4Q24 and 3.28% in 3Q25.
• Pre-provision net revenue (PPNR) was $356 million in 4Q25, up 10% from 4Q24; adjusted PPNR was $331 million, up 6% from 4Q24.
• Loans and leases totaled $60.9 billion at December 31, 2025, an increase of 3% from $59.4 billion in 4Q24.
• The annualized ratio of net loan and lease charge-offs to average loans and leases was 0.05% in 4Q25, significantly down from 0.24% in 4Q24.
• The provision for credit losses was $6 million in 4Q25, a substantial decrease from $41 million in 4Q24.
• Nonperforming assets were $320 million, or 0.52% of loans and leases and other real estate owned, compared with $298 million, or 0.50%, in 4Q24.
• Classified loans decreased to $2.4 billion, or 3.91% of loans and leases, from $2.9 billion, or 4.83%, in 4Q24.
• Total deposits were $75.6 billion, down 1% from $76.2 billion in 4Q24; however, customer deposits (excluding brokered deposits) increased 1% to $71.8 billion.
• The estimated Common Equity Tier 1 (CET1) capital ratio strengthened to 11.5% at December 31, 2025, from 10.9% a year ago.
• Tangible book value per common share increased 21% to $40.79 from $33.85 in 4Q24.
• A $15 million donation to the Zions Bancorporation Foundation was included in 4Q25 adjusted operating expenses.
• A $9 million accrual reversal related to the FDIC special assessment positively impacted 4Q25 results.

Sentiment

Score: 8

Explanation: The filing reports strong financial performance with significant earnings growth, expanding margins, robust capital, and excellent credit quality. While there are minor negatives like a slight dip in total deposits and an AOCI loss, the overall picture is very positive, indicating effective management and a healthy financial position.

Positives

• Net earnings and diluted EPS saw significant year-over-year growth, with Q4 EPS up 31% and full-year EPS up 21%.
• Net interest margin continued its expansion for the eighth consecutive quarter, reaching 3.31% in 4Q25.
• Credit quality remained strong, evidenced by a very low annualized net charge-off ratio of 0.05% and an 85% decrease in the provision for credit losses year-over-year.
• Capital position strengthened, with the estimated CET1 capital ratio increasing to 11.5% and tangible book value per common share rising 21% over the past twelve months.
• Customer deposits (excluding brokered deposits) grew 1% year-over-year, and loans and leases increased 3% year-over-year.
• Excluding the $15 million charitable contribution, adjusted operating expenses would have increased 4.7%, resulting in positive operating leverage of 2.4% and an efficiency ratio of 60.6% for the quarter.
• A $9 million accrual reversal related to the FDIC special assessment positively contributed to earnings.
• Net unrealized gains for SBIC investments contributed $11 million, or $0.06 per share, to Q4 results.

Negatives

• Total deposits decreased by 1% year-over-year, primarily driven by a reduction in brokered deposits.
• Nonperforming assets increased slightly to $320 million (0.52% of loans) in 4Q25 from $298 million (0.50%) in 4Q24.
• Adjusted pre-provision net revenue (PPNR) decreased 6% on a linked-quarter basis, despite being up 6% year-over-year.
• The accumulated other comprehensive income (AOCI) balance reflected a net loss of $1.9 billion at December 31, 2025, primarily due to unrealized losses on fixed-rate available-for-sale (AFS) securities.

Risks

• The quality and composition of loan and investment securities portfolios and the quality and composition of deposits.
• Changes in general industry, political, and economic conditions, including increases in the national debt, elevated inflation, economic slowdowns or recessions, and other macroeconomic challenges.
• Changes in interest and reference rates, which could negatively impact revenues and expenses, the valuation and performance of assets and liabilities, and the availability and cost of capital and liquidity.
• Political developments, including government shutdowns and other significant disruptions and changes in the funding, size, scope, and effectiveness of the government and its agencies and services.
• The effects of newly enacted and proposed regulations affecting the banking industry, as well as changes and uncertainties in the interpretation, enforcement, and applicability of laws and fiscal, monetary, regulatory, trade, and tax policies.
• Actions taken by governments, agencies, central banks, and similar organizations, including those that result in decreases in revenue, increases in regulatory bank fees, insurance assessments, and capital standards; and other regulatory requirements.
• Evolving trade policies and disputes, such as proposed and implemented tariffs and resulting market volatility and uncertainty, including the effects on supply chains, expenses, and revenues for both the company and its customers.
• Judicial, regulatory and administrative inquiries, investigations, examinations or proceedings and the outcomes thereof that create uncertainty for, or are adverse to, the company or the banking industry.
• Changes in the company's credit ratings.
• The company's ability to innovate and otherwise address competitive pressures and other factors that may affect aspects of its business, such as pricing, relevance of, and demand for, products and services, and the ability to recruit and retain talent.
• The potential for both positive and disruptive impacts of emerging technologies, including stablecoins and other digital currencies, tokenized deposits, blockchain, artificial intelligence, quantum computing, and related innovations affecting both the company and the banking industry.
• The company's ability to complete projects and initiatives and execute strategic plans, manage risks, control compensation and other expenses, and achieve business objectives.
• The company's ability to develop and maintain technology and information security systems, along with effective controls designed to guard against fraud, cybersecurity, and privacy risks and related incidents.
• The company's ability to provide adequate oversight of suppliers to help prevent or mitigate effects upon the company and its customers of inadequate performance, systems failures, or cyber and other incidents by, or affecting, third parties.
• The effects of wars, geopolitical conflicts, and other local, national, or international disasters, crises, or conflicts that may occur in the future.
• Natural disasters, pandemics, wildfires, catastrophic events, and other emergencies and incidents, and their impact on the company's and its customers' operations, business, and communities, including the increasing difficulty in, and the expense of, obtaining property, auto, business, and other insurance products.
• Governmental and social responses to environmental, social, and governance issues, including those with respect to climate change and diversity.
• Securities and capital markets behavior, including volatility and changes in market liquidity and the company's ability to raise capital.
• The possibility that recorded goodwill could become impaired, which may have an adverse impact on earnings and shareholders' equity.
• The impact of bank closures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks.
• Adverse news and other expressions of negative public opinion whether directed at the company, other banks, the banking industry, or otherwise that may adversely affect reputation.

Future Outlook

Zions Bancorporation anticipates moderately increasing loan balances, primarily driven by commercial loans, and continued growth in net interest income due to balance sheet remix, loan and deposit growth, and fixed-rate asset repricing. Adjusted customer-related noninterest income is also expected to moderately increase, led by capital markets and loan-related fees, reflecting increased customer activity. While adjusted noninterest expense is projected to moderately increase due to technology costs, marketing, and investments in revenue-generating businesses, the company expects to achieve positive operating leverage in the coming year (FY 2026).

Management Comments

• "We're pleased with fourth quarter results, with earnings per share rising 31% to $1.76 from the prior year's quarterly earnings of $1.34."
• "Adjusted taxable-equivalent revenue increased 7.1% to $879 million, while adjusted noninterest expense rose 7.7% to $548 million."
• "Excluding this donation, adjusted operating expenses would have increased 4.7%, resulting in positive operating leverage during the quarter of 2.4%, and an efficiency ratio of 60.6%."
• "Credit quality was strong during the quarter, with annualized net charge-offs totaling 0.05% of loans."
• "Capital continued to strengthen, with tangible book value per share rising 21% over the past twelve months, and the Common Equity Tier 1 capital ratio strengthening to 11.5% from 10.9% a year ago."
• "Both loans and deposits grew at a 4.1% annualized rate during the quarter, and the net interest margin continued to improve, reaching 3.31%, up from 3.28% last quarter and 3.05% a year ago."
• "Results for the full year 2025 continued to demonstrably strengthen relative to 2024. Earnings per share increased 21%, while adjusted taxable equivalent revenue rose 7.4% and adjusted operating expenses grew 4.8%, or 4.0% when excluding the $15 million donation."
• "We're looking forward to continued prudent growth in the coming year."

Industry Context

Zions Bancorporation's strong Q4 and full-year 2025 results demonstrate effective navigation of the current interest rate environment, marked by continued net interest margin expansion and robust capital growth. The company's exceptional credit quality, with very low net charge-offs and a significant reduction in credit loss provisions, stands out amidst broader industry concerns about potential economic slowdowns and commercial real estate risks. The disciplined approach to loan growth, particularly in commercial real estate, and the focus on customer deposits align with a conservative yet growth-oriented strategy, positioning Zions favorably against competitors in a dynamic financial landscape.

Comparison to Industry Standards

• Zions' annualized net charge-offs to loans ratio (0.15% over the last 12 months) is consistently in the best (lowest) quartile of its peer banks, according to S&P CapIQ data as of September 30, 2025.
• The ratio of nonperforming assets plus 90 days past due loans to total loans and other real estate owned (NPA Ratio) for Zions is also consistently in the top quartile of its peers.
• Zions generally experiences less severe loan losses (lower NCOs / Nonaccrual Loans) compared to peers over both five-year and fifteen-year averages, indicating strong collateral and underwriting practices.
• Commercial real estate loan growth at Zions lags its peers, reflecting a deliberate and disciplined exercise of concentration risk management over more than a decade, which contributes to its strong credit quality metrics in this segment.

Stakeholder Impact

• Shareholders are positively impacted by significant increases in net earnings, diluted EPS, tangible book value per share, and strengthening capital ratios. Common dividends also increased.
• Employees benefit from higher base salaries and increased incentive compensation accruals, reflecting improved profitability.
• Customers see continued growth in customer deposits and loans, the introduction of new noninterest-bearing offerings, and a sustained focus on serving smallto medium-sized businesses.
• Communities benefit from a $15 million donation to the Zions Bancorporation Foundation, which will be used for charitable donations over the next three years.

Next Steps

• Host a conference call to discuss the fourth quarter results at 5:30 p.m. ET on January 20, 2026.
• Continue prudent growth in the coming year (FY 2026), with a focus on commercial loans.
• Utilize the $15 million donation to the Zions Bancorporation Foundation for charitable donations over the coming three years.

Key Dates

Recommendation

The filing demonstrates exceptional financial performance, with significant year-over-year growth in net earnings and EPS, coupled with expanding net interest margins and robust capital accumulation. Credit quality remains strong with very low charge-offs, outperforming peers. The company's disciplined approach to risk management, particularly in commercial real estate, and its strategic focus on customer-related activities position it well for continued prudent growth. The positive outlook for 2026, including anticipated positive operating leverage, further reinforces a strong investment case.

Keywords

Zions Bancorporation, ZION, Financial Results, Earnings, Banking, Net Interest Income, Net Interest Margin, EPS, Credit Quality, Deposits, Loans, Capital Ratio, Tangible Book Value, SEC Filing, 8-K, Q4 2025, Full Year 2025