Zions Bancorporation Q1 Earnings Show EPS Strength

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.