Breaking Down Zions Bancorporation, National Association (ZION) Financial Health: Key Insights for Investors

You are defintely right to scrutinize Zions Bancorporation, National Association (ZION) right now; the regional banking sector still has investors on edge, but the numbers for Q3 2025 tell a nuanced story that demands a closer look. While the bank delivered a solid beat with diluted earnings per share (EPS) at $1.48 and a Net Interest Margin (NIM) improving to 3.28%, you can't ignore the credit quality flashpoint: the $50 million charge-off from two related commercial and industrial (C&I) loans in the quarter caused a market ripple. Here's the quick math: that single event significantly impacted the provision for credit losses, but the core capital remains strong, with the estimated Common Equity Tier 1 (CET1) ratio climbing to a robust 11.3% as of September 30, 2025. So, the question isn't just about the single loss, but whether the overall balance sheet-with $74.9 billion in deposits-is positioned to capitalize on rising core earnings, or if that non-performing assets ratio of 0.54% signals a broader, near-term risk in their $60.3 billion loan portfolio. We need to map the path forward.

Revenue Analysis

You need to know where Zions Bancorporation, National Association (ZION) actually makes its money, because a bank's revenue mix tells you everything about its risk profile and interest rate sensitivity. The direct takeaway here is that Zions Bancorporation is defintely a classic relationship bank, heavily reliant on its core lending business, which is both its biggest strength and its biggest near-term risk.

For the trailing twelve months (TTM) ending September 30, 2025, Zions Bancorporation reported a total revenue of approximately $4.948 billion, representing a modest year-over-year growth rate of only 0.45%. This near-flat growth shows the difficulty regional banks face in the current rate environment, where funding costs often rise faster than asset yields. Honestly, growth is a grind right now.

The primary revenue streams for Zions Bancorporation, like most regional banks, split into two main buckets: Net Interest Income (NII) and Noninterest Income (fee-based services). Net Interest Income is the profit from lending-the difference between the interest it earns on loans and investments and the interest it pays on deposits and borrowings.

Here's the quick math on the Q3 2025 revenue breakdown, which totaled around $872 million:

• Net Interest Income (NII): Contributed $672 million, or about 77.06% of total revenue.
• Noninterest Income: Contributed the remaining $200 million, or about 22.94%.

This heavy reliance on NII means the company's profitability is acutely sensitive to the Federal Reserve's interest rate policy and its ability to manage its Net Interest Margin (NIM). The good news is the NIM is improving, hitting 3.28% in Q3 2025, up from 3.03% in the same quarter last year.

The Noninterest Income segment, which includes customer-related fees like service charges, wealth management, and capital markets fees, is a crucial diversifier. In Q3 2025, customer-related noninterest income was $163 million, showing a 3% year-over-year growth. While NII is the foundation, growing those fee-based services is how Zions Bancorporation can stabilize earnings against rate swings. You want to see that fee income grow faster than NII.

A significant change in the 2025 fiscal year has been the emergence of specific credit risks, which directly impacts the core lending revenue stream. In Q3 2025, the company took a substantial $50 million charge-off related to just two commercial and industrial (C&I) loans. This event, while specific, highlights the near-term risk in the C&I portfolio and the importance of credit quality management, even as core revenue streams show strength. For a deeper dive into the risks and opportunities, you can check out the full post: Breaking Down Zions Bancorporation, National Association (ZION) Financial Health: Key Insights for Investors.

Profitability Metrics

You need a clear picture of Zions Bancorporation, National Association (ZION)'s core earning power, and the Q3 2025 results show a bank that is successfully widening its margins, even if its return on assets is lagging the broader industry aggregate. The key takeaway is that ZION's operational efficiency is improving, which is a strong signal for future earnings stability.

As a seasoned financial analyst, I look past the top-line numbers to the margins, which tell the true story of management's discipline. For a bank, the traditional gross profit (revenue minus Cost of Goods Sold) isn't a standard metric, so we focus on Total Net Revenue and Pre-Provision Net Revenue (PPNR) to gauge core operational performance before loan losses.

Here's the quick math on ZION's Q3 2025 profitability:

• Gross Profit Margin (Total Net Revenue): The company reported Total Net Revenue (tax equivalent) of $861 million in Q3 2025. This is the top-line measure of earnings from both interest and non-interest sources.
• Operating Profit Margin (PPNR Margin): Adjusted Pre-Provision Net Revenue (PPNR), which is a bank's core operating profit before setting aside money for potential loan losses, was $352 million. This translates to an operating margin of roughly 40.88% ($352M / $861M).
• Net Profit Margin: Net earnings for Q3 2025 were $221 million. This results in a Net Profit Margin of about 25.67% ($221M / $861M). The trailing twelve months (TTM) Net Margin is slightly higher at 26.57%.

Trends in Profitability and Operational Efficiency

Zions Bancorporation, National Association (ZION) is defintely showing a positive trend in margin expansion, which is crucial in a rising-rate environment. The Net Interest Margin (NIM)-the difference between what the bank earns on loans and pays on deposits-expanded to 3.28% in Q3 2025. This marks a continued improvement, reflecting a disciplined strategy of shifting toward lower-cost deposits and repricing assets effectively. The bank's ability to grow its Net Interest Income (NII) by 8% year-over-year to $672 million is the primary driver of this strength.

On the expense side, the bank's operational efficiency is improving. The Adjusted Efficiency Ratio-which measures non-interest expense as a percentage of net revenue-improved to 59.6% in Q3 2025. This metric is a testament to cost management and digital investments, which are reducing processing times by up to 40% in areas like loan origination. Lowering this ratio is a direct path to higher profitability.

Peer Comparison: Where ZION Stands

When you compare Zions Bancorporation, National Association (ZION) to the industry, the picture is one of strong core operation but slightly lower asset utilization. The company's Q3 2025 Net Profit Margin of 25.67% is competitive with regional bank peers, as one comparable regional bank reported a Q3 2025 net profit margin of 26.1%. However, a key difference emerges in broader profitability ratios.

The ROA of 0.99%, which measures how effectively the bank uses its assets to generate profit, lags the overall industry aggregate of 1.13%. This suggests that while ZION is efficient at managing its costs (improving efficiency ratio), it is not generating as much profit per dollar of assets as the average US bank. This is a critical point for investors focused on asset-intensive businesses like banking, and it's a gap ZION needs to close. For a deeper look at who is buying into this strategy, you might want to read Exploring Zions Bancorporation, National Association (ZION) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You're looking at Zions Bancorporation, National Association (ZION) and want to know how they fund their operations-a classic debt-versus-equity question. The short answer is that Zions Bancorporation maintains a conservative capital structure, leaning heavily on equity and deposits, which is typical for a well-capitalized regional bank.

As of June 2025, the bank reported total debt of approximately $970 million USD, which is a manageable figure relative to its overall size. For a bank, the bulk of its funding comes from customer deposits, which are classified as liabilities, but the traditional debt-to-equity ratio (D/E) focuses on long-term borrowings versus shareholder capital.

Here's the quick math on their leverage:

• Total Debt (June 2025): $0.97 Billion USD
• Equity Capital and Reserves (June 2025): $6.8 Billion USD

This structure shows a deliberate focus on stability and regulatory capital strength. If you want to dive deeper into their core strategy, you can look at their Mission Statement, Vision, & Core Values of Zions Bancorporation, National Association (ZION).

Debt-to-Equity and Industry Comparison

The company's debt-to-equity ratio (D/E) gives a clearer picture of financial leverage (how much debt is used to finance assets). For Zions Bancorporation, this ratio has been reported as low as 0.15 in late 2025, though other calculations place it around 0.22. Either way, this is a very low figure for a bank, reflecting a strong preference for equity funding and a lower risk profile compared to many non-financial firms where a D/E of 1.0 or higher is common.

The low D/E ratio is a direct result of their strategic core capital rebuild over the last few years, which has boosted their regulatory capital. For example, their Common Equity Tier 1 (CET1) capital ratio stood at a strong 11.3% as of September 30, 2025. This high ratio means the bank has a substantial cushion of high-quality capital to absorb unexpected losses, which is defintely a key factor for investors in regional banking.

Recent Financing and Credit Health

Zions Bancorporation has been active in managing its debt profile to optimize funding costs and reduce short-term risks. In August 2025, the bank priced US$500 million of fixed-to-floating rate senior notes due in August 2028. The proceeds were explicitly intended to reduce short-term borrowings, a smart move to lengthen the maturity profile and manage interest rate risk via a fair value hedge (an accounting tool to neutralize interest rate sensitivity).

The market acknowledges this prudent approach. In November 2025, S&P Global Ratings affirmed the bank's long-term issuer credit rating at 'BBB+' and, importantly, revised the outlook to Stable from Negative. Other key ratings (as of September 2025) include Moody's Long-term Deposits at A2 and KBRA's Senior Unsecured Debt at A-, both with a Stable outlook. This is what you want to see: a stable, investment-grade profile that signals low borrowing costs and high financial flexibility.

The bank's financing balance is clear: prioritize equity and deposits for core funding, and use debt strategically for liquidity management and optimizing funding costs, not for aggressive leverage.

Liquidity and Solvency

Zions Bancorporation, National Association (ZION) shows a strong core liquidity position, primarily driven by its high-quality asset base and stable deposit funding, but the recent negative operating cash flow requires a closer look. The key takeaway is that their balance sheet structure provides a substantial liquidity cushion, even with short-term operational hurdles.

You need to look past the standard current ratio for a bank and focus on the composition of their assets and funding. For instance, as of September 30, 2025, Zions Bancorporation's on-balance sheet liquidity-cash and securities-represented about 25% of total assets. That's a big, defintely liquid buffer.

Assessing Zions Bancorporation, National Association (ZION)'s Liquidity

The traditional current and quick ratios (liquidity positions) for a bank can be misleading, but they still offer a baseline view. As of late 2025, Zions Bancorporation's Current Ratio was reported at approximately 1.86, which is quite healthy, showing they have $1.86 in current assets for every dollar of current liabilities. However, another figure showed a Quick Ratio of 0.80. This variance highlights the complexity of bank accounting, where the quick ratio calculation might exclude certain high-quality, liquid investment securities. The real strength is in the deposit base stability, with the loans-to-nonbrokered deposits ratio remaining stable at around 86%.

Here's a snapshot of the key liquidity metrics from the most recent 2025 data:

Analysis of Working Capital and Cash Flow Trends

Working capital trends for Zions Bancorporation are best viewed through its cash flow statements and changes in cash reserves. The bank's cash reserves dipped from $182 million to $129 million in a recent quarter ending in October 2025, signaling caution in liquidity management. This decline is something you need to monitor, but it's not a panic signal, especially when paired with other strong metrics.

The cash flow statements overview reveals an interesting dynamic. For a recent period in 2025, the Operating Cash Flow (OCF) clocked in at a concerning -$62 million. This negative number suggests operational hurdles, meaning the core lending and deposit-taking activities, after adjustments, did not generate positive cash flow in that specific period. But, the Free Cash Flow (FCF) for Q3 2025 was a robust $367 million. The difference here likely stems from favorable changes in non-cash working capital accounts or a strong net income figure ($243 million in Q2 2025) that is then adjusted in the OCF calculation.

Investing and financing cash flow trends show stability and a clear source of funds. The investment securities portfolio is a key liquidity source, generating $596 million in principal and prepayment-related cash flows in the third quarter of 2025. This is a significant, recurring source of liquidity that supports the bank's operations and investment activities. Overall, the bank's funding stability has improved, reducing its reliance on brokered deposits to just 7.5% of total deposits as of September 30, 2025, down from 11.4% in June 2023.

• Operating Cash Flow: -$62 million, signaling short-term operational cash strain.
• Investment Cash Flow: $596 million from securities in 3Q25, a strong liquidity source.
• Brokered Deposit Reliance: Reduced to 7.5% of total deposits, a positive stability trend.

The bank's liquidity is sound, but its operational cash generation is a watch item. You can find a deeper dive into the bank's capital structure in our full post: Breaking Down Zions Bancorporation, National Association (ZION) Financial Health: Key Insights for Investors.

Next Step: Portfolio Manager: Model a sensitivity analysis on Zions Bancorporation's Net Interest Income (NII) against a 50-basis-point drop in interest rates to stress-test the long-term liquidity generation capacity by the end of the month.

Valuation Analysis

You want to know if Zions Bancorporation, National Association (ZION) is a buy, a hold, or a sell right now. The quick answer is that the market sees it as a fair value, leaning slightly toward undervalued based on peer comparisons, but the analyst consensus remains a solid Hold.

As of November 2025, the stock is trading near $52.12, which is a key level. The valuation multiples suggest the bank is trading at a discount compared to the broader market, but regional bank valuations are often depressed due to ongoing interest rate and commercial real estate (CRE) concerns. You should look at the price-to-book (P/B) ratio closely for a bank; it's the most telling metric.

Key Valuation Multiples (FY 2025 Data)

When assessing Zions Bancorporation, National Association, we need to look beyond the simple price tag. The Price-to-Earnings (P/E) ratio shows how much investors are willing to pay for a dollar of the company's earnings, and the Price-to-Book (P/B) ratio is critical for a bank, showing the stock price relative to its book value (assets minus liabilities). The Enterprise Value-to-EBITDA (EV/EBITDA) is less useful here, honestly, because earnings before interest, taxes, depreciation, and amortization (EBITDA) is not a primary performance measure for financial institutions like banks.

The 1.13x P/B ratio is what matters most. It tells me the market values Zions Bancorporation, National Association at only 13% more than the value of its assets on the balance sheet. This is defintely a low multiple for a quality regional bank, suggesting it might be undervalued, but it also reflects market caution around the sector.

Stock Performance and Income View

The stock has had a volatile but positive run over the past year. Over the last 12 months, the stock price has increased by 14.34%, but it's still trading well below its 52-week high of $63.22. The 52-week low was $39.32, so the current price of $52.12 sits roughly in the middle of that range, which is a classic consolidation pattern.

For income-focused investors, the dividend profile is strong:

• Annual Dividend: $1.80 per share
• Dividend Yield: 3.45%
• Payout Ratio: 32.04%

A payout ratio of just over 32% means the bank is only distributing about a third of its earnings as dividends, leaving plenty of capital to reinvest or to act as a buffer against potential loan losses. That's a very safe, sustainable dividend. The bank has also increased its dividend for 12 consecutive years, which shows commitment to shareholder returns.

Analyst Consensus and Actionable Takeaway

The consensus from the analyst community is currently a Hold. This means they expect the stock to perform in line with the broader market, not dramatically better or worse. The average 12-month price target is approximately $61.00, which implies a potential upside of about 17% from the current price. The range is wide, with a high target of $70.00 and a low target of $52.00.

Here's the quick math: if the stock hits the average target of $61.00, plus the $1.80 annual dividend, you're looking at a decent total return. But still, the 'Hold' rating signals that the market is waiting for more clarity on the macroeconomic picture, especially on interest rates and loan quality. For a deeper dive into the operational risks, you should read Breaking Down Zions Bancorporation, National Association (ZION) Financial Health: Key Insights for Investors.

Next Step: Review Zions Bancorporation, National Association's Q4 2025 earnings report for any changes in Net Interest Margin (NIM) and non-performing assets, as these will be the key drivers to move the stock toward the $61.00 price target.

Risk Factors

You're looking at Zions Bancorporation, National Association (ZION) after a solid Q3 2025 earnings beat, but a regional bank's risk profile is never simple. The direct takeaway is this: while core earnings are strong, the bank is facing a higher-than-expected credit quality event alongside persistent macro risks that demand your attention.

The biggest near-term issue is credit quality, specifically a recent operational failure. In the third quarter of 2025, Zions Bancorporation, National Association disclosed a significant one-off credit event, recording a provision for credit losses of $49 million, which is a sharp increase from the $13 million provision in the year-ago quarter.

Here's the quick math on the specific loss: The bank took a $50 million charge-off tied to two related commercial and industrial (C&I) loans in its California Bank & Trust division. This was due to what management called 'apparent misrepresentations and contractual defaults' by the borrowers. Excluding this isolated event, net charge-offs were actually quite benign at just $6 million for the quarter, or 4 basis points of average loans on an annualized basis.

What this estimate hides is the operational risk (internal) that allowed the misrepresentations to happen in the first place. You need to watch how quickly Zions Bancorporation, National Association can truly tighten its underwriting processes. The stock's higher volatility, indicated by a beta of 1.31, means these kinds of surprises can lead to significant price fluctuations.

The external risks are the ones every regional bank faces, but Zions Bancorporation, National Association has a few specific exposures. Its heavy reliance on Western US markets means localized economic downturns could hit harder than for a nationally diversified peer. Also, as an asset-sensitive bank, it is highly vulnerable to interest rate fluctuations, especially if the Federal Reserve starts aggressive rate cuts, which would put pressure on the Net Interest Margin (NIM) of 3.28% reported in Q3 2025.

The following table summarizes the key risks and the latest Q3 2025 figures that frame them:

To be fair, Zions Bancorporation, National Association is not sitting still. Their mitigation strategies are clear and actionable. They are actively pursuing legal action to recover the amounts owed from the guarantors of the fraudulent loans. Plus, management has initiated proactive measures, including tightened controls and a third-party review, to manage broader credit quality risks.

Strategically, Zions Bancorporation, National Association is also reducing a key systemic risk. Their exposure to non-deposit financial institutions is modest at only about 3% of loans, which is significantly lower than the peer median of 8%. They are also focused on improving their funding mix, with total deposits at $74.9 billion, and a reduction in reliance on brokered deposits to 7.5% of total deposits as of September 30, 2025, which stabilizes funding costs.

For a deeper dive into the bank's overall financial strength and opportunities, check out the full analysis: Breaking Down Zions Bancorporation, National Association (ZION) Financial Health: Key Insights for Investors.

Your action here is to monitor the next two quarters for any recurrence of internal operational credit issues, defintely paying close attention to the net charge-off trend excluding that one-time loss.

Growth Opportunities

You're looking at Zions Bancorporation, National Association (ZION) and asking the right question: can this regional bank sustain its momentum in a shifting rate environment? The short answer is yes, but the growth will be disciplined and focused, not explosive. Their strategy is built on leveraging their strong regional footprint and expanding fee-based services, which is defintely the right play for a bank of this size.

For the full 2025 fiscal year, analysts project Zions Bancorporation, National Association's total revenue to be around $3.40 billion, a modest but healthy increase driven by Net Interest Margin (NIM) expansion and fee income growth. This is not a high-growth FinTech story, but a value-driven regional banking narrative. In the near-term, earnings are projected to grow by about 4.82% next year, from an estimated $5.39 per share to $5.65 per share, showing stability in profitability.

Strategic Drivers: Beyond the Balance Sheet

Zions Bancorporation, National Association is actively managing its growth through targeted initiatives, moving beyond simple loan volume. Their focus is on high-value customer segments and digital product innovation to diversify revenue streams, which is crucial as the interest rate environment normalizes.

• Regional Expansion: The Q2 2025 acquisition of four California branches is a calculated move to boost loans and deposits in high-growth Western markets.
• Small/Middle Market Focus: They are returning to a strategic emphasis on Small Business Administration (SBA) lending and targeting small and middle market customers, a segment where their local management structure gives them a clear advantage.
• Digital Investment: Investments in digital banking platforms and advisory services are driving noninterest income, creating a scalable source of higher-margin, recurring revenue.

Here's the quick math on their core strength: Zions Bancorporation, National Association has achieved seven consecutive quarters of NIM expansion, with the Q3 2025 NIM hitting 3.28%. This consistent improvement signals excellent discipline in deposit pricing and asset management, which is a major competitive edge in a volatile market.

Competitive Edge and Capital Strength

The bank's most significant competitive advantage is its structure: a network of seven local bank brands across 11 western states, including Zions Bank, California Bank & Trust, and Nevada State Bank. This localized approach fosters deep community ties and a loyal customer base, which translates directly into a more stable funding base.

Their capital position is also a major strength, providing flexibility for future moves. As of September 30, 2025, the estimated Common Equity Tier 1 (CET1) capital ratio was a robust 11.3%, up from 10.7% in the prior year. This strong capital base allows them to pursue organic growth, execute capital returns like the $40 million share buyback program in Q2 2025, and explore potential mergers and acquisitions (M&A) to reach peer median capital levels.

The tangible book value per common share also grew by a significant 17% to $38.64 in Q3 2025, a clear indicator of value creation for common shareholders. You can dive deeper into who is buying into this value story by Exploring Zions Bancorporation, National Association (ZION) Investor Profile: Who's Buying and Why?

What this estimate hides is the continued watchpoint on commercial real estate (CRE) exposure, which makes up about 22% of their loans, but their long-standing disciplined underwriting standards mitigate some of that risk. They are a trend-aware realist, just like you.