Thank you, Cleo, and good evening, everyone. Welcome to our conference call to discuss Zions Bancorporation's third quarter 2026 results.

My name is Jason Arbuckle, Senior Director of Investor Relations, and before we begin, I would like to remind you that during the call, we will make forward-looking statements. Actual results may differ materially.

We encourage you to review the forward-looking statements and non-GAAP disclosures in our press release and on slide two of today's presentation, which apply equally to statements made during this call. A copy of the earnings release and the presentation are available at our website, zionsbancorporation.com.

For our agenda today, Chairman and Chief Executive Officer Harris Simmons will provide opening remarks. Following Harris's comments, Chief Financial Officer Ryan Richards will review our financial results and outlook.

Also with us today are Scott McLean, President and Chief Operating Officer, and Derek Steward, Chief Credit Officer. After our prepared remarks, we will hold a question-and-answer session.

This call is scheduled for one hour, and I will now turn the time over to Harris Simmons.

Thanks very much, Jason, and good evening, everyone. We're reasonably pleased with our financial results for the third quarter, which reflect meaningful year-over-year earnings improvement and continued progress on our strategic priorities.

Going to the slides, slide three summarizes second quarter results versus the prior quarter and last year's third quarter. Net earnings available to common was $262 million, or $1.78 per share, an increase of 20% compared to $1.48 in last year's third quarter and an increase of 2% compared with $1.74 last quarter, after adjusting for that quarter's large equity securities gains.

The increase from a year ago was due to growth in net interest income and customer-related noninterest income, modest loan growth, and exceptional credit performance. The net interest margin was 3.23%, down 4 basis points from the prior quarter and down 5 basis points from a year ago.

When compared to the prior quarter, average loans grew 3.7% on an annualized basis, led by commercial lending. Average customer deposits grew 8.8% on an annualized basis.

Credit losses were modest at 2 basis points annualized of average loans. Slide four presents the recent history of our earnings performance together with the impact of the provision for loan losses on quarterly results.

Notable items in each of the recent quarters are also included on this slide. As shown on slide five, adjusted pre-provision net revenue was $338 million.

It increased 2% from the prior quarter, reflecting improvement in adjusted tax-equivalent revenue, which more than offset a modest increase in adjusted noninterest expense. Adjusted pre-provision revenue declined $14 million, or 4%, from the prior year period, which represented a particularly strong comparison quarter.

In addition, results for the current quarter included $4 million of expense associated with a recently acquired multifamily agency platform that was not included in our original forecast. Turning to slide six, our capital markets division continues to be an important driver of fee income growth.

Since launching the business in 2020, we've nearly doubled the annual fee income contribution by investing steadily in talent, technology, and product capabilities, including investment banking, commodities hedging, real estate capital markets, and multifamily agency capabilities, which I'll discuss in more detail on the next slide. Before moving on, I'll note that the $136 million fee income number shown for 2026 is annualized based on our performance through September 30th.

Given the momentum we are seeing across the business, our expectations for the fourth quarter, we anticipate the full year results to come in somewhat above that level. Turning now to slide seven, I'd like to highlight the acquisition of Basis Investment Group's multifamily agency lending business, which closed during the third quarter.

This acquisition represents an important step in building what we believe can be a highly differentiated multifamily franchise. Our goal is straightforward: to provide clients with a single source of financing solutions across market-rate, affordable, construction, bridge, agency, and CMBS products.

With this acquisition, we are now one of only four banks in the country that combines direct access to both Fannie Mae designated underwriter servicer and Freddie Mac's Optigo programs, together with originations to third-party CMBS conduit platforms. When combined with the broader capabilities of the bank, this creates a differentiated, one-stop multifamily platform capable of serving clients throughout the lifecycle of an asset.

In addition to the talented team that joined us from Basis, we have added seasoned lenders with deep experience in multifamily agency lending and servicing to help scale the platform. We're excited about the opportunities this creates and the talent we have assembled.

This acquisition enhances our ability to serve commercial real estate clients, and in particular, those in the Western United States, where we see a real market opportunity with population growth and housing affordability issues that drive demand for multifamily products. Included in the quarter were approximately $4 million of expenses associated with our newly acquired multifamily agency platform, including personnel and other integration-related costs, and approximately $300,000 of revenue.

We expect the financial benefits to build gradually over time as the platform is integrated and production ramps up. For 2027, we anticipate approximately $17 million to $20 million of revenue and $12 million to $13 million of expense, recognizing that we're in the early process of scaling the business.

Over the medium term, we expect the business to generate approximately $30 million to $40 million of annual revenue. The pace of growth and ultimate revenue potential will be influenced by market conditions, including the of the interest rate environment.

Moving to slide eight, we see wealth management as a compelling growth opportunity, given our broad customer base and the size of wealth assets under management relative to the size of our banking franchise. We have seasoned affiliate and wealth leadership teams focused on continuing to enhance coordination between our banking and advisory businesses, which we believe positions us to deepen client relationships and capture additional growth opportunities.

A key component of our strategy is a product we call Wealth Select, which is a new offering that expands our addressable market by allowing us to serve clients with approximately $100,000 to $1 million of investable assets through a scalable advisory model. Wealth Select helps us engage clients earlier, deepen relationships over time, and create a pathway for those relationships to grow alongside their financial needs.

Slide nine provides more information about what we refer to as our Strategic 6 products. While each serves a different client segment and business need, they all share a common objective, which is strengthening sustainable growth through our branch footprint and core deposits, small business relationships, and fee income.

We continue to be encouraged by the early results. For example, year to date at September 30th, we've opened over 14,000 gold accounts for consumers, totaling approximately $275 million in new-to-bank deposits, and 1,300 Business Beyond accounts, bringing in about $120 million in new deposits.

In addition, we currently rank number 10 nationally in SBA 7(a) lending based on approval volume and number nine in SBA's 504 loans. While the near-term financial contribution is modest relative to the size of the bank, these products are helping us grow long-term relationships and creating opportunities to deliver additional banking, payments, lending, and wealth management solutions over time.

With that overview, I'll turn the call over to our Chief Financial Officer Ryan Richards to walk through the quarter in more detail and walk through our outlook. Ryan?

Thank you, Harris, and good evening, everyone. Beginning on slide 10, you can see the five-quarter trends for net interest income and net interest margin.

Taxable-equivalent net interest income was $684 million, up $7 million, or 1%, from the prior quarter and up $12 million, or 2%, from the year-ago quarter. Earning asset yields were relatively stable sequentially, while our cost of funding increased, resulting in a decline in the net interest margin compared to the prior quarter.

Slide 11 provides additional detail on the drivers of net interest margin, which decreased 4 basis points from the prior quarter and 5 basis points from a year ago. The linked-quarter decline was primarily driven by higher deposit costs and growth in lower-yielding assets.

As Harris noted in his opening remarks, deposit growth significantly outpaced loan growth during the quarter, with average customer deposits growing by 8.8% on an annual basis annualized basis. This compares with annualized loan growth of 3.7% during the quarter and a slight decrease in ending loan balances.

We used this excess funding to pay down short-term FHLB borrowings, with the residual deployed into money market investments, which increased meaningfully during the quarter. Moving forward, these lower-yielding money market balances, which are dilutive to our net interest margin, will be utilized to fund loan growth and/or reduce brokered deposits as those balances mature.

The total cost of deposits increased 11 basis points to 1.59% during the quarter. This increase was driven in part by a recent change in how we present interest paid on cash collateral associated with our derivatives portfolio.

Earlier this year, we began presenting derivatives and related cash collateral on a net basis. Beginning this quarter, we reflected the interest cost associated with the cash collateral held in the cost of deposits as opposed to short-term borrowings.

This increased our reported cost of deposits by approximately 3 basis points, but had no impact on our overall cost of funds. As Harris noted in our earnings release, we expect our asset-sensitive balance sheet to produce stronger net interest income in a higher-rate environment.

For the third quarter of 2027, we anticipate net interest income to increase by approximately 8% to 12%. Our outlook is based on the forward curve as of September 30th, which assumes three rate increases occurring in December, March, and June, respectively.

The forecast assumes our cost of deposits rise to around 2% from current levels of 1.59%, which includes migration of some noninterest-bearing deposits into interest-bearing products. If deposit pricing and mix trends develop more favorably than we have assumed, there is potential for net interest income to exceed our guidance.

Moving to noninterest income on slide 12, customer-related noninterest income was $192 million, compared with $182 million in the prior quarter and $163 million a year ago. Excluding the net credit valuation adjustment, adjusted credit customer-related noninterest income was $182 million, compared with $181 million in the prior quarter, and up $8 million, or 5%, from the year-ago quarter.

As Harris mentioned earlier, capital markets continued to deliver strong performance and remains on pace for a strong fourth quarter. In wealth, we are seeing encouraging momentum and remain focused on executing our strat our strategy to drive growth and deepen client relationships.

Looking ahead to the third quarter of 2027, we expect adjusted customer-related fee income to grow 6% to 9% relative to the third quarter of 2026 results of $182 million. We anticipate broad-based growth across our fee businesses, led by continued momentum in capital markets.

Turning to slide 13, adjusted noninterest expense was $549 million, representing an increase of $3 million, or 1%, from the prior quarter, and as Harris mentioned earlier, included $4 million of expense related to the newly acquired multifamily agency platform. Technology, telecom, and information processing expense increased $4 million, driven by higher application software licensing and maintenance costs.

Additionally, deposit and regulatory expense increased $5 million related to the decrease to our FDIC special assessment in the prior quarter. Expenses were higher year over year, reflecting higher incentive compensation, increased professional and outsourced services, and higher technology costs.

We will continue to manage manage expenses prudently, while investing to support growth. For the third quarter of 2027, we expect adjusted noninterest in expense to increase by approximately 4% to 6% relative to the third quarter of 2026.

We also continue to expect positive operating leverage for the full year of 2026. Our initial outlook of 100 to 150 basis points of operating leverage did not contemplate the acquisition of the multifamily agency platform from Basis.

Including the impact of that acquisition, we now expect operating leverage of approximately 40 to 50 basis points. Excluding the acquisition, operating leverage would approach the low end of our prior expectations of 100 to 150 basis points.

Slide 14 presents trends in average loans and deposits. Average loans grew 3.7% annualized during the quarter, primarily within the commercial and industrial portfolio, and increased 2.7% year over year.

Loan yields remained relatively stable sequentially and were down 28 basis points year over year, primarily reflecting lower interest rates. Looking ahead, we expect loan growth to be between 2% to 4% for the third quarter of 2027, compared with the third quarter of 2026.

Our outlet reflects our outlook reflects current pipeline activity, customer utilization trends, and the broader economic environment. Given the expected path of interest rates, we are tempering our outlook for loan growth, particularly within commercial real estate.

Average deposits increased $17 billion from the prior quarter, driven $1.7. Excuse me.

Thank you. Average deposits increased $1.7 billion from the prior quarter, driven largely by an increase in interest-bearing deposits.

The cost of total deposits was 1.59%, an increase of 11 basis points sequentially, primarily reflecting deposit repricing and to a lesser extent, the presentation change related to interest paid on cash collateral associated with our derivatives portfolio. Our deposit growth allowed us to reduce wholesale funding sources during the quarter, tempering the increase in total cost of funding.

Year over year, the cost of deposits declined 8 basis points, primarily due to lower interest rates. Slide 15 presents the five-quarter trend of our average and ending funding sources.

Our total funding costs increased to 1.75%, compared with 1.69% in the prior quarter. Period-end deposit balances increased by $1.3 billion compared with the prior quarter, driven by a $1.8 billion increase in customer deposits, partially offset by a decrease of $448 million in brokered deposits.

Short-term borrowings decreased $376 million linked-quarter and declined by $2.7 billion versus the prior year quarter. Turning to slide 16, the investment securities portfolio continues to serve as an important source of on-balance sheet liquidity and a tool to balance interest rate risk.

During the quarter, principal prepayment-related cash flows from investment securities of $631 million were partially offset by reinvestment of $296 million. The continued paydown of lower-yielding mortgage-backed securities supports earning asset remix and/or a reduction in wholesale funds.

The estimated price sensitivity of the portfolio inclusive of hedging activity was 3.4 years. Credit quality remains strong, as shown in slide 17.

Net charge-offs were 2 basis points of average loans annualized, and the nonperforming asset ratio was 50 basis points, compared with 48 basis points from the last quarter. Classified and criticized balances declined 12% and 8%, respectively, during the quarter.

The allowance for credit losses ended the quarter at 1.11% and remains well-positioned relative to our risk profile, with a 207% coverage of nonaccrual loans. Our capital position remains strong, as shown on slide 18.

The common equity Tier 1 ratio remained stable at 11.8% during the quarter, notwithstanding a $229 million increase in goodwill and intangible assets arising from our newly acquired multifamily agency business. We expect continued strong capital generation through earnings and improvement in AOCI.

Related improvements resulted in a 13% increase in tangible book value per share versus the prior year. When compared with June 30th, 2026, unrealized losses in AOCI increased by $122 million, reflecting declines in the fair value of AFS securities resulting from increased term interest rates.

This mark-to-market impact was tempered by pay-fixed, receive-floating interest rate swaps, designated as hedges of our AFS securities to reduce volatility in our AOCI balance. It also bears noting that a significant portion of our unrealized losses recorded in AOCI relates to securities previously transferred from AFS to held-to-maturity, the related balance of which does not fluctuate with mark-to-market changes.

Slide 19 summarizes the outlook we've discussed across loans, net interest income, fee income, and expenses. This outlook remains our best estimate based on current information and is subject to the risks and uncertainties discussed in our forward-looking statements.

This concludes our our prepared remarks. As we move to the question-and-answer section of the call, we request that you limit your questions to one primary and one follow-up question to enable other participants to ask questions.

Cleo, please open the line for questions.

Hey, good afternoon. Just on the first question on the NII guide of up 8% to 12%, can you just break down some of those assumptions like the deposit growth and mix, beta, and just the rate hikes assumed within that period of time?

Thank you, Bernard, for the question. Listen, I try to call out in my prepared remarks that we are anticipating three rate hikes as part of that guidance.

December, March, and June. We certainly expect a larger contribution in terms of deposit growth coming from interest-bearing deposits, expecting that noninterest-bearing deposit growth would be very modest in that type of rate environment.

We also have kind of sort of observed or expected relative to the last rate-hiking cycle, when we were pretty much awash with deposits and perhaps could have been more patient. We are now in a position where it's a very competitive market, and so we're anticipating that it'll be a slightly different deposit repricing behavior than what we might have experienced in the last cycle.

Our guidance, as you might have heard in my prepared remarks, we've allowed for an increase in deposit costs to the extent of about 40 basis points increase in deposit costs. That would imply sort of a beta in the upper 40s to low 50s is sort of the assumption that we're thinking of.

As in prior quarters, the contributions that you would expect there, of course, variable-rate repricing is a given. Fixed-rate loans is a significant contributor there.

We see potential for 3 to 4 basis point on earning asset yields arising from the fixed-rate loan repricing. Of course, the continued remix out of investment securities into loans, but also this notion that we continue to kind of reinvest a portion of our investment securities, and there we would expect 2 to 3 basis points of earning asset pick-up as well.

Think about sort of a 5 to 7 basis point increase in earning asset yields in that rate environment. That's how we're thinking about it.

Great. Thanks for that color.

Maybe just a follow-up. Maybe just longer term, I know you guys had talked about this 3.50% NIM, and I think inter-quarter maybe you dialed back a little bit maybe with the timing.

Just thoughts on maybe when you could reach that. Is it still kind of a goal?

Just any commentary you can add on that. Thank you.

Thanks, Bernard. Listen, I think when we talked about the mid-3s NIMs, we always sort of conditioned in the past of the kind of rate environment that we would be in.

There's tons of uncertainty in the future about how deposits behave. We know that.

We do see scenarios that would allow us to operate in the mid-3s moving forward with this type of rate environment. Of course, that's always dependent upon deposit growth, the rate paid on those deposits, the beta.

We think with some reasonably conservative assumptions that we can reach those mid-3 levels in 2027.

Great. Thanks for taking my questions.

Bet.

Good afternoon. First, yeah, I commend you on providing the quantitative ranges to the outlook and simplifying your NII outlook.

I definitely think It is definitely helpful. Appreciate that.

Just in terms of the implication for the margin, I know you didn't provide a margin outlook, but given the dynamics that you just walked through in terms of the deposit costs dynamic and some of the earning asset shifts, how do you view the trajectory of the margin, particularly as you see some of the growth on the asset side shifting away from CRE, as you indicated?

Great call-out, John, and maybe we should have a moment of silence for moderately increasing. Now let's take a moment to celebrate those terms.

Listen, you're right. We do expect some growth from CRE.

It'll probably be a little bit more pressured from the rate environment. If you think about, even not going back that far in time, there was a point in time where we're getting a pretty outsized contribution from consumer loan growth.

Given our guidance, which is reasonably modest at 2.4% 2% to 4% of loan growth, we really pointed to C&I, owner-occupied, and then to a little bit lesser contribution of CRE. That's still typically a better outcome than consumer-led growth.

That, coupled with the traditional things you've heard us talk about over time, the remix out of securities into loans, the less of the headwind of those discontinued swaps, are all contributors to, I think, a brighter prospect for NIM. Of course, you heard Harris talk about our underlying Strategic 6 offerings, that we continue to grind away at and building that new relationship.

That will also be very, very important. As we continue to drive down our wholesale borrowing costs, we've been very, very successful year over year in driving down our brokered deposits and our other short-term borrowings, and we certainly look for that to continue.

Great, Ryan. Thank you.

Then if I can just hop over to capital, maybe you could just give a little more color just around how we should think about the pace of buybacks for the coming quarters and not just maybe fourth quarter, but as you look at next year. Any reason to think that, despite the volatility in the rate backdrop, that you can't stay around the $75 level million level, or should we think about some change in that pace?

Hey, John. With all such things, I think we're subject to regulatory approvals and where the board wants us to go.

Listen, with the kind of rate environment that I just described, provided that it holds, that can translate, as you can see in our guide, to some pretty positive outcomes for us. I wouldn't be giving up on capital absorption and the potential to potentially grow in that type of operating environment.

I don't want to prejudge outcomes with our regulators and the board. I think that we see scenarios where we could actually increase our capital absorption moving forward.

If you think about our results this quarter, certainly, the mark-to-market, the run-up of the term rates was challenging for the industry. We actually fared pretty well on that basis.

A bigger driver of capital absorption this quarter for us was the goodwill and intangibles that we absorbed through the multifamily agency business. When setting that aside, with the hedges we have in place and the fact that a very large portion of our AOCI is sort of frozen from the transfer into HTM, we had very, very good performance on a relative basis.

If you think about the mark-to-market, we had about a 50% or better offset with the hedges that we have in place, that we call out in the appendix of our materials. I think with that extra level of protection and the potential for a very positive operating environment, there may be room to do a little bit more.

Great. Thank you, Ryan.

Hey, good afternoon, guys.

Hey.

On the loan growth outlook, with you're reeling in your expectations for CRE loan growth within that, which sounds like is a driver for it slowing, is that just a function of greater competitive pressures, or is it less activity given higher rates that you're expecting, or are you becoming somewhat concerned about credit in that area given your rate and economic outlook, or is it a little bit of everything? Then if you can talk about the total pipeline today, if that's improved at all versus last quarter and utilization trends that you mentioned as well, that'd be great.

Hey,

thanks, Dave. This is Derek.

On to the commercial real estate side, as far as growth there, pipeline is actually pretty good right now. It is competitive.

We're being very disciplined in our underwriting as well as risk selection as far as our approach there. I think just given the competitive environment, given some of the supply-demand issues that are going on in our market, as well as just the increase in interest rates, it could have an impact on the CRE growth.

As you look in the last quarter, we actually had pretty good growth in CRE. Actually, it was able to offset a number of payoffs that we had that exited from our classified book.

As far as the rest of the portfolio, pipeline's been good in the C&I. I think this quarter, just at period end, we had a little decrease in utilization.

Second quarter was actually strong utilization. Just saw a little decline in some capital call usage and number of other just general business activity seemed just utilization was down for the quarter.

Hey, Dave. It's Scott.

I might add a little more color to that, too. I think Derek covered the CRE, as well as just other topics related to the pipeline.

But 3Q, if you just look at H.8 data, total loan growth was down, and C&I growth was down, and we tracked pretty close to what H.8 data was. I don't know why.

Third quarters seem to be soft. They were third quarter last year was soft.

Third quarter in '23 was soft. I don't know if it's summer vacation or what it is, but there is something about the third quarter going on.

If you look at slide 25, just another way to kind of think about what's happening. Basically, what you can see there is, we're basically no growth for the quarter.

You can see that negative $9 million over there in the bottom right-hand corner. We kind fundamentally need about $500 million to $500 million to $600 million to hit a kind of a good, solid 3% to 4% growth rate.

Basically, it's happening at Amegy. Amegy was down $293 million for the quarter and as opposed to being up $150 million to $200 million.

That's kind of the difference between $500 to $600 million in quarterly growth, which isn't great. We'd like for it to grow better, but that's kind of 3% to 4% growth.

To put that in additional perspective, if you look at slide 26, where you see the year-over-year growth, 3Q '26 versus 3Q '25, you'll see that Amegy, those first two lines, C&I excluding oil and gas and owner-occupied, it produced over half of the C&I and owner-occupied growth year over year. They've been outperforming all of our other affiliates for some time in terms of C&I growth, including owner-occupied.

They just happen to have a soft quarter. We're not especially worried about that.

It just happened to be a soft quarter for them. Otherwise, I think we would have seen growth more in line with $500 to $600 million for the quarter.

Their pipelines are just fine. There's nothing unusual about their pipelines at the moment.

Got it. I thought that you had mentioned CRE is potentially slowing down in terms of growth going forward, and that's why you were a little bit lower on your loan growth expectations.

Right. It's a low-growth number.

It's a kind of a 1% to 3% sort of growth number is what we're trying to achieve.

Anything

slightly less than the growth rate of the overall portfolio. That's a moderately consistent message for us over time.

Can you just talk about just switching gears to wealth and wealth expansion that you're trying to drive here. What's the penetration of wealth in your current customer base?

Can you talk about any recent incentive changes, or any new targets you have for hires or anything like that that'll help drive greater growth in that line over the next year? Thanks.

Sure. Taking incentive comp first, we made some incentive comp adjustments 12 to 18 month 12 to 24 months ago that quite frankly created some churn in our bankers, and we sort of thought that might happen.

This kind of no-growth period that we've had in wealth fees that total about $58 million, plus or minus, right now, we've kind of had a no-growth phase. We think the incentive comp elements, both for our wealth colleagues and our private banking colleagues around the company are aligned better now, and that everybody's sort of adjusted to it.

That's the incentive comp side. The answer to your first question of what's our penetration and what's the outlook?

Our penetration is really low, and the outlook is really positive. Any data I would give you, you would say, "Boy, your penetration is really low, guys.

Come on now." Part of that is because the dog didn't eat our homework papers, but we just have never had a large trust business that we acquired.

Most of our peers either acquired large trust businesses somewhere in their past, or they grew one, and we just never did. We're kind of starting from behind.

We think the calling efforts with our private bankers, wealth bankers, our commercial bankers, and the energy level we have there right now is really positive.

Great. It's good to hear.

Thanks for all the color.

Oh, great. Thanks.

I will echo the new guide. Thank you for doing that.

On the operating leverage, I guess a question on operating leverage, is there anything in the crystal ball that would say that some degree of operating leverage next year wouldn't be possible as well? I hear you on the small impact from the deal, but I guess from the NII momentum and the expenses that you may need to invest in the company, any reason why operating leverage shouldn't continue?

Listen. Hopefully, I understood that correctly, Chris.

If not, just reguide me here. Certainly, based upon how we guided to the third quarter of 2027, we see very positive prospects for operating leverage.

Some of our assumptions and models would point to 6 points or better on that quarter. We don't typically go too far afield for that, but even for the full year of 2027, we're seeing the prospects for a pretty positive spread there.

If that's where you're going, then that's probably the color. If you were looking at something else, please let me know.

I think the other thing Ryan was talking about was our full year operating leverage in '26.

Yes.

He was commenting about we were guiding to 100 to 150. We've talked about that all year for 2026.

The third quarter is obviously been a little soft here. We actually saw it coming.

We still think for the fourth quarter, I won't repeat what he said, but that's what he was talking about in terms of the operating leverage there, being a lower number.

I think it's a great call-out, Scott. Thank you for course-correcting.

If we look at the adjusted PPNR that we had this quarter relative to what, as Harris noted, a very strong third quarter of 2025. I would just gently remind everybody that that was actually shaping up to be a very, very strong quarter for us.

On PPNR, it was. We had the credit matter that presented that quarter that was kind of dour tone for that quarter.

Underlying that, on a year-over-year basis, certainly, a contributor to our softer adjusted PPNR performance and then kind of eroding some of our potential for operating leverage in this quarter, we saw some increased incentive accruals. Our incentive accruals are sensitive to credit performance, and we've had really, truly outstanding credit performance this year.

While the core performance is a little bit softer against a strong comp, the credit has been excellent. There's been some other things that showed up in the third quarter of 2025 that were different on the noninterest fee income side, not customer-related.

There was a pretty sizable difference in terms of our SBIC securities gains and losses period over period. That was about a $13 million delta.

Then in the prior-year quarter, we also had higher dividends and other income of FHLB dividends and other matters. It would be understandable if people sort of looked at our full year and said, "Hey, tough quarter for operating leverage, tough PPNR versus a strong comp.

Can you still get there for the full year?" We do see, as I guided, once you adjust for Basis not having been our run rate, we think we can get close to the lower end of our prior guide of 100 to 150 basis points.

If some things were to break our way, could we fit our way within there? Possibly, but we'll just see how the quarter shapes out.

Okay. Thanks for all that color.

Then just a follow-up on capital, Ryan, I have you just under 9% on the adjusted CET1. Just wanted to confirm that one.

Then any change in uses of capital? You talked about the Basis deal, the fee income momentum, depository acquisitions, I guess, would be the question from there.

Any change in appetite?

I would agree with your assessment. I think we would show ourselves on a marked-capital basis being just shy of 9% as well.

I don't think anything that you would hear from this management team would change about how we would think about capital deployment. Other than just what I've said already, that, moving forward, we could have a more constructive operating environment for capital.

Capital actions, I should say.

Great. Thank you very much.

Yep.

Hi. Good afternoon.

Can you walk through some of the dynamics that you're seeing on deposit competition? Is it intensifying significantly?

Is it more on the retail side, more on the commercial side? Any geography within your footprint where things are getting significantly more competitive?

I don't think so. I think across the board, it's a competitive environment out there.

I don't think we're seeing a lot of impact from kind of neobanks and that kind of thing. Certainly, that's out there if something that's the whole industry would be watching here the next few years.

No, I think it's a competitive deposit market, but it's manageable. I think probably more price competition on the asset side than on the liability side, but well, yeah, it's just competitive all over.

It sounds like the spot rate for interest-bearing deposits was up only a couple of basis points versus the average. Given that the rate hike came in September, does that mean that clients were asking for higher rates throughout the quarter?

Could you see that dynamic going forward, where deposits reprice ahead of future rate hikes?

I think a lot of the deposit growth was in kind of higher cost deposits. We've moved a lot of money back on the balance sheet from customers that we chased away a few years ago when everybody was awash with liquidity.

Bringing that back on, our goal, as we've said before, was really just bringing down our total cost of funding. A lot of the growth was higher-cost deposits, but certainly lower costs than our marginal cost of funding.

That's kind of what you saw this quarter.

Thank you.

Hi, thanks. Good afternoon.

Ryan, just want to ask you a question on the swap adds. I'm presuming that slide 27 with the simulated repricing of earning assets and loans reflects the adds from this quarter.

Then, just related, do you have any additional purchases in the future built into the 3Q '27 outlook on top of what you already bought in the third quarter? Thanks.

Thanks, Ken. Listen, I'll speak to that maybe in broad strokes, and we've got Matt Tyler here in the room, our Corporate Treasurer, and he could probably drill down maybe another level for where I take it.

I think that the message, the big picture message that we're trying to convey with our hedging activity is we're sensitive to both earnings sensitivity and sort of tangible common equity or EVE sensitivity. That's why you see both sides of these hedges.

What you've been seeing, and I think what you're alluding to on the sort of receive-fixed side, is we do tend to measure, on a relative basis, as being more asset-sensitive than others. I've said it before, I'll say it again, these are not common methodologies in measuring things.

We do want to be also thoughtful and perhaps prudent. In what goes up sometimes goes down, and so while that asset sensitivity is serving us well, we think, and in this type of rate environment, things can always reverse.

We've on the receive-fixed side, really tried to think about the downside sensitivity, should rates reverse in a minus 100, minus 200 rate environment, and and maybe take a little bit of the edge off of how we would measure there. We did add some hedges during the quarter.

You, I think, would have seen reference to that in that related slide to that end. A little bit more modest activity as we think about that TCE protection on the pay-fixed.

Matt, I invite you to add anything you would want to that.

The additional hedging, we've really been keeping our cash flow hedges, which are the receive-fixed, shorter maturities, kind of under two years. We're kind of just rolling those out as time goes on, which has been most of the activity.

If you have two-years hedges, 2 months from now, it won't be a year and a half. Two quarters from now.

We've just been kind of rolling those on a continuous basis forward over time.

I think maybe coming full circle, could there be more hedging activity built into that guidance? Certainly, if we were to persist in adding those short-term receive-fixed hedges.

Great. Okay.

All right, that's good. Thanks a lot, Ryan.

Bet.

Hi, good afternoon. Maybe just starting on the funding side, I'm just wondering what's the remaining portion either on wholesale or broker that you're still looking to reduce going forward?

Maybe another way of asking that is how close are we to having asset growth be more closely aligned with deposit growth?

Listen, great question. I'll get started and invite other members of the team here to jump in.

What you called out is a really important part of our story. Our success year over year in paying down brokered deposits, paying down wholesale borrowing sources, having this really positive deposit growth story this quarter enabled us to pay down our FHLB borrowings almost straightaway.

Where it was a little more tricky is there's of course a term structure to brokered deposits. It takes a little bit more time for those to run off.

We show, I believe, in the fourth quarter, we have about $2.2 billion worth of maturity of brokered deposits, and we already said that we're sort of overbuilt on our money market position. That could be redeployed.

I do think, as we think about this moving forward, is to continue to pay down those sources of funding that aren't with clients. This is kind of what Harris was talking about.

We would rather be reaching out to our clients and serving them, and even in these higher-cost products when they bring net new balances to us, then paying away to a broker or some other wholesale funder. That's sort of where we see this going on the funding side.

Ryan, in terms of timing, I would just add that on the brokered deposits there, certificates of deposit, they have an average maturity of about 3 months, which, think about it, that half of it's going to roll off within 3 months. We're bringing that down.

We watch it all the time as we manage funding coming in from deposits. It just isn't instantaneous like if we had borrowings from the home loan, for example, we to just pay off.

It will adjust very quickly, and we've already seen a lot of it. We brought down a lot so far this quarter as it's matured.

It's

versus June 30th of last year, it's down about $3 billion to $4 billion. Our brokered deposits and overnight borrowings net of money market investments was about $6.5 billion then.

If you adjust for long-term debt we've issued, etc., it's down about $3 billion to $4 billion, and it's been very intentional. It's not been serendipitous.

We still have about a little over $7 billion in client funds off balance sheet. Almost 100% guarantee, when we bring them back on, their cost is accretive to our overnight cost of funding, which Harris was mentioning earlier.

Thanks for that. Then maybe I can take another shot at John Pancari's question.

Appreciate the color on deposits. Getting to call it 2% a year from now, 40 basis points higher, let's call it 10 basis points a quarter, and then average earning assets are going up call it 5 to 7 basis points a quarter.

It would imply, I think, that you need margin expansion in order to get to your NII guidance. Is the bulk of that increase from just funding mix, asset mix?

I guess how are you thinking about margin over the course of the next 12 months in terms of that NII guide?

Listen, I think it has to be yes, all of it. It's both.

It's both funding mix, it's asset mix, and it's our sensitivity to that rising rate environment. It's the driving to that new relationship through these very granular things that Harris described.

All those things combined with that sensitivity to three three future rate hikes, sets up pretty well for us if it all pulls through at that level. Again, reiterating that we recognize that that's a stronger price response on deposits than what we would experience previously, and we hope that there's some conservatism in that, but we'll see.

Great. Thank you.

Hi, good afternoon.

Afternoon.

To drill down on the funding a little bit more, could you help us size the impact on the deposit cost of bringing that off-balance sheet funding back on the balance sheet?

Deposit costs will increase, but as Harris was noting, cost of funding will decrease, all things being equal.

Thank you. For the impact on the third quarter specifically, though?

Actually, as it relates to sequential quarters, the amount of off-balance sheet deposits didn't change appreciably. It was pretty across, but there was plenty of evidence of us inviting in other net new balances that we knew were away from us to come in in the way that exactly how Scott and Harris have described.

Quantifying that impact, I don't think I have a good number for you now, but that's pretty much I'd say over the last see, 12 to 18 months, we've attracted certainly north of $3 billion of client deposits that are focused deposit efforts that are accretive to total cost of funding.

Okay.

That would be otherwise judged to be higher cost deposits.

Right. Then you had mentioned competition being stronger on the loan side than on the deposit side right now.

Would you characterize that as more just on yield and cost, or more on covenant dynamics or some of both right now in terms of where you're not interested in stepping down to where the competition is?

It's some of both. This is Derek, David.

We're seeing primarily pricing competition, but I would say on structure, covenants, etc. Again, we're maintaining our discipline there on the structural side and maintaining our underwriting and just the risk selection.

We're, again, having good luck at still winning our fair share. It's just a more competitive environment, I'd say, today.

Is there any change in that assumed in the outlook for deposit growth next year, or pretty consistent to where competition levels fit today?

It's an open question that's been discussed, I think, by analysts and others about the amount of sensitivity that people report versus the actual sensitivity that people will actually experience because we've had this higher-for-longer rate environment, and the prospect of rate hikes, will there be a stronger price sensitivity on the up side? We've allowed for some of that in sort of the guidance that we provide in the deposit beta that I would have communicated earlier on this call.

All right. Thank you.

Hi, thanks for taking the questions. I wanted to first start on the capital market outlook and the pipeline.

It sounds positive. Also curious as to what extent could higher rates impact or be a headwind to the new multifamily businesses you acquired as it relates to that $30 million to $40 million contribution over the medium term?

This is Scott. I'll start with it.

Related to the Basis business, the $30 million to $40 million was several years out. I can't remember the script, it's 2029

Medium term.

Yeah. Medium term.

Interest rates certainly can have an impact, but the production of multifamily in the country, there's just a real vibrance to it still. You're right, interest rates can have an impact on it.

It is a flow business for most people. The production builders that are doing this, they build and sell.

Derek may have more color on that, but it's not a hold and then get lucky on rates kind of thing. Then the interest rate hedging business that we have, which is about a $30 million-ish revenue business, just on interest rate hedging for our clients, that as rates continue to go up, that could actually be impacted some, although we haven't seen too much weakness there.

One of the things to note in this quarter's capital markets revenue is it included almost no investment banking or M&A advisory work, and that's a practice we started about 18 months ago. Our franchise is really very fertile grounds for small- to medium-sized business M&A, and we have a very nice pipeline there.

It's just very lumpy. We're very optimistic about that M&A business going forward.

Then our garden variety, syndications, foreign exchange, the bond underwriting that we do, etc., is, we think moving along at a pretty nice rate.

I'd just add, higher rates will be a little bit of a headwind, but I think we also have the tailwind of we're really have a lot of ground to plow here. We're seeing a lot of interest from middle-market kinds of clients we've had long relationships with on the investment banking point, for example.

We think that can turn into a really nice business across the West. A capital markets business is by their nature, kind of lumpy, and we get that.

We think It really is a nice value-add for us from a client base that needs it, so.

Yeah. No, I agree.

I think that multifamily acquisition is differentiating, which is a nice segue into my kind of follow-up on the capital question as it relates to M&A. In terms of refreshed thoughts, whether non-bank or whole-bank M&A, what are your current thoughts there?

Pretty much unchanged. We'd be very opportunistic.

It is kind of likely to be. Like this multifamily agency platform, we've long had a really solid commercial real estate business here.

We also know there kind of was a limit to what you can do with a balance sheet of a regional bank and without creating concerns. It was a really nice fit.

We've been looking for some time. We've actually looked at a couple of other opportunities and hadn't made it.

We're really pleased to have this. It's just a really nice strategic fit for us that, over time, we'll look back on this 10 years from now and say, "What a fabulous thing that was."

I think that's that's kind of what we're looking for, are things that just fit well and probably more on the smaller side. Particularly the valuation.

Look, we need to see some better valuation before we start thinking about becoming very aggressive. Anyway, I think that's been kind of consistent theme.

Very helpful. Thank you.

Yep.

Hello.

Hi. You talked about the deposit beta in the upper 40s to low 50s.

Just given the different launching point for where we are in the rising-rate cycle versus the last one, are you assuming that the NIB mix can stay relatively stable-ish from here in the low to mid-30s, or I know that you said a lot of the deposit growth will be coming from interest-bearing, obviously, but just wanted to see if there's any thoughts there. Thanks for the question, Janet.

Listen, I think it would be reasonable to assume that interest-bearing deposits would take a larger share moving forward in that higher-rate environment. We're doing a lot of great things.

We'll continue to do a lot of great things, building out the granular strategies that Harris discussed. That's something you do over many months and years and the most valuable part of our franchise.

Pressing forward, I think those noninterest-bearing balances are going to be harder to come by. I could anticipate potentially a little bit of a slightly different mix there.

Got it. Sorry to beat on the dead horse, but I just want to make sure that I heard it correctly.

I believe you said to Bernard question earlier that your net interest margin could reach that mid-3 3.50% level in 2027. Is that what you're assuming in your NII guide for the third quarter of next year year over year?

Listen, we do see very healthy NIMs. We don't provide NIM guidance.

It certainly has been our practice because of all the variables that go into it. As a general matter, just restating what I mentioned before, it really is beholding to the operating environment.

If we do see the rate hikes that we see in our forecast with the type of deposit behavior we described, we think it's realizable to be operating at that level.

Thank you. Ryan, I know you don't guide on deposits, but any more color you can give us on what drove the strength in deposits in 3Q?

Really trying to get at the degree to which you expect this high single digits annualized level to persist in 4Q and beyond. If I look at slide nine, the products you outline, it just seems like the momentum you have should continue.

Listen, thanks for the question. If you look across the past two quarters, it's been a little uneven, right?

The last quarter, we showed up with with really, really healthy loan growth, utilization picked up, really, really positive, and we fell a little bit flat on deposits. This quarter, we showed up with really, I think, really strong deposit growth, and not a whole lot of period-end loans to show for it.

It is useful to kind of step back, zoom out a little bit, and kind of think at longer time horizons. If I think back a year-over-year period, and you think about loan growth around 4%, customer deposit growth about 5% when talking about ending balances, that's pretty solid, right?

It's and if you think about the growth for our market, that probably tells you we're getting the growth in our market, and we're probably not reaching for it. Going forward, does that persist at an 8.8% average annualized growth?

I'm not sure. Probably not.

It's a lot of the same type of deposit gathering that Harris alluded to before. A lot of the growth came from money market balances, it was what we refer to as our gold sweep balances, and these are a higher-cost deposits.

The most important part is we just keep grinding away at what you referenced in that slide at those more granular deposit gathering strategies. That's where I think we'll be having a chance to delight shareholders over a longer period of time.

If we could see 0.75% to 1%, 1% 1% growth our total deposits coming from these things that we're really focusing on, these small business, consumer, noninterest-bearing kinds of accounts, or low-interest-bearing kinds of accounts. It's not just about deposit growth.

It's about the quality of the deposits, the cost of the deposits, the stickiness of the deposits. Over time, that really makes a difference, but it's like I tell people around here, this is a marathon.

This isn't a sprint. We'll be talking about this 10 years from now, I hope.

Which I guess it's just really kind of the kind of foundation we're trying to create under everything else that goes on, corporate deposits, everything else. I hope that's helpful, but that's where a lot of our focus is, but it's a longer-term kind of If it is, some of this will be watching paint dry a little bit, so.

Yep, that's fair. Thank you for that.

Then on Basis, you pointed to $30 million to $40 million of annual revenue over the medium term. What's the level of expense you expect from that business in the medium term?

I think you pointed, Ryan, to $12 million to $13 million of expense in '27. Thank you.

I think very reasonable question. I think we just want to be careful not to get too far over our skis.

It's pretty early on here. We closed the deal at the end of July.

We certainly want to have some experience. We did quote all those numbers you cited, and we said we expect this to scale over time.

That requires investments and continuing to build out the talent against a very good backdrop of talent as is now. Probably would hold off for a little bit more experience before we guide more deeply into the expense how that grows through 2027, through 2028.

We did say for the full year 2027, $12 million to $13 million of expenses. Beyond that, it will just depend on the pacing of how much we add in talent and further capability.

Fair enough. Thank you, and echoing the comments on the updated guidance presentation.

Thank you for that.

Glad that's so popular.

Hey, thanks for squeezing me in. Just one two quick ones.

On Basis, the smaller revenue number for the quarter, I think I understand it. You just closed the deal, but do you expect contributions from the revenue side to step up as soon as the fourth quarter?

Look, we're still kind of setting the table there, but I'd expect a better fourth quarter of revenue than we had in the third quarter. It closed kind of the end of July, and there was a little bit there in the pipeline, but it's just building.

I don't think we've thought a lot about what the fourth quarter is going to look like. We thought more about what next year is likely to look like.

That's why we said kind of 17 to 20, we think is kind of a target. I don't think we have anything we'd say about the fourth quarter yet.

Yeah. It was just a small number, Harris, and I didn't know if it was

Yeah. I totally get it.

transition, or there was some other reason behind that.

Yeah.

Scott, one just one for you. You mentioned slide 25, the Amegy loan trends earlier in the call.

This has come up, and is it any more or less competitive in Texas? There've been questions around those markets because of new regional bank entrants there, and just confirming you aren't seeing anything new impacting your ability to grow in Texas?

Just it's such a growth engine.

The only thing we're seeing new is that the disruption there because of these acquisitions, the acquisition of Comerica clearly, the acquisition of Cadence, the acquisition of Veritex, a few other small, that is all opportunity for us. I've said this for several quarters, and it's opportunity, and it's not just because I'm saying it and it's corporate-speak.

If we had our fellows from Texas on the phone, they would not speak with granularity that we can't talk about on a call like this, but that's what we hear internally. There is disruption.

We've already seen it. Our calling programs are highly focused on those.

They've always been on those banks, but we've especially focused on it right now. There will be competition for people, too.

There's a negative side to this, but we've seen that for decades with folks parachuting into Texas.

Yeah. More positive than negative from your point of view?

The bottom line is, yes, more positive.

Yep. Okay.

All right. Thank you.

Great. Thank you, Cleo, and thank you all for joining today and participating.

We appreciate your interest in Zions Bancorporation. If you have additional questions, please reach out to the Investor Relations team at the email and phone numbers provided on our website.

We look forward to connecting with you throughout the coming months. This concludes our call.