Zions Bancorporation Q1 Earnings Show EPS Strength

Zions Bancorporation Q1 earnings showed lower funding costs and an improved deposit mix that lifted EPS and supported NII momentum and investor positioning

April 21, 2026·3 min read
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Flat vector bank vault and widening margin band representing Zions Bancorporation Q1 earnings and funding improvement

KEY TAKEAWAYS

  • Net earnings $232 million and diluted EPS $1.56 rose 38% year over year.
  • Net interest income $662 million climbed 6% and NIM improved to 3.3% year over year.
  • Deposits $76.9 billion rose 2% with noninterest-bearing balances up $2.0 billion.

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Zions Bancorporation’s Q1 earnings for the quarter ended March 31, 2026, showed strong improvement as lower funding costs and a better deposit mix supported higher earnings per share (EPS) and prompted management to reaffirm a full-year positive operating-leverage target.

Earnings and Margin Drivers

Zions reported net earnings of $232 million and diluted EPS of $1.56, each up 38% year over year, according to a press release on April 20, 2026. The EPS exceeded Street consensus but declined about 11% from the prior quarter, which management attributed to two fewer calendar days, significantly lower securities gains, and seasonal compensation expenses.

Reported revenue ranged from $849 million to $860 million, roughly 0.8% below consensus, while adjusted taxable-equivalent revenue rose 7.4% year over year. Adjusted pre-provision net revenue reached $301 million, customer-related noninterest income grew about 10% to $174 million, and adjusted noninterest expense was $558 million. These figures yielded a 65.0% efficiency ratio and positive operating leverage of 2.7% for the quarter.

Net interest income totaled $662 million, up 6% year over year but down sequentially as yields on earning assets eased and average demand deposits declined. The net interest margin settled at 3.27%, up 17 basis points from a year earlier but down 4 basis points from the prior quarter. Funding costs fell 8 basis points to 1.68%.

Balance Sheet and Credit Outlook

Period-end deposits stood at $76.9 billion, up 2% year over year and about $1.3 billion higher than at year-end 2025. The deposit mix shifted toward core balances, with non-interest-bearing deposits rising about $2.0 billion. Brokered deposits and short-term borrowings declined roughly $3.8 billion, while long-term debt increased about $1.0 billion.

Loans and leases totaled $61.3 billion, about 2% higher than a year earlier. Average loans grew at an annualized pace near 2.4% in the quarter, translating to roughly 2.5% year-over-year growth. Credit quality remained strong: net charge-offs ran at about 0.03% annualized, nonperforming assets were 0.48% of loans and other real estate owned, and classified loans fell about 19% year over year. The allowance for credit losses was 1.16% of loans, providing roughly 239% coverage, and the company recorded a $7 million credit-provision benefit.

Capital remained steady, with the Common Equity Tier 1 (CET1) ratio at 11.5% quarter over quarter as earnings offset about $77 million in share repurchases and dividends plus risk-weighted asset growth. Tangible book value per share rose about 19% year over year.

Management said on April 21, 2026, that preliminary work on the Basel III standardized approach indicated a potential 9%–10% reduction in risk-weighted assets, which could translate to roughly a 93-basis-point CET1 increase on a static basis. The company also reached an agreement in Q1 to acquire the agency-lending business of Basis Multifamily Finance I, LLC to expand origination, underwriting, and servicing for Fannie Mae DUS® and Freddie Mac Optigo® programs, subject to customary approvals.

Management reaffirmed a full-year positive operating-leverage target of 100–150 basis points. It described net interest income as moderately increasing, with sensitivity of about 7%–8% over 12 months if rates hold. Fee income and noninterest expense are expected to rise modestly as the company pursues $7 billion to $12 billion of off-balance-sheet deposit repatriation and shifts funding toward customer deposits and senior debt.

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