Quick Take on 2Q26 Earnings Result: NII Miss Makes Stock a Show Me Story for 2H26

Research evidence excerpt

Quick Take on 2Q26 Earnings Result: NII Miss Makes Stock a Show Me Story for 2H26

Update

July 21, 2026 01:23 AM GMT

Morgan Stanley & Co. LLCMZions Bancorporation NA | North America Manan Gosalia

Equity Analyst

Quick Take on 2Q26 Earnings Manan.Gosalia@morganstanley.comAlexander L Ward +1 212 761-4092

Research Associate

Alex.Ward@morganstanley.com +1 212 296-3096

Result: NII Miss Makes Stock a

Zions Bancorporation NA (ZION.O, ZION US)

Midcap Banks | United States of AmericaShow Me Story for 2H26

Stock Rating Overweight

Industry View Attractive

Price target $77.00

AlphaSignals Earnings Reaction Shr price, close (Jul 20, 2026) $71.89

Mkt cap, curr (mm) $10,492

Weakens our thesis Modest upside Modest revision lower 52-Week Range $73.34-46.19

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

2Q26 NII Disappoints as Competition Intensifies

• Zions' 2Q NII missed consensus by 1% as deposit competition weighed on

NIM. Spot interest-bearing deposit rates rose to 2.27% as of 6/30, up from

2.20% at 3/31, while loan yields slipped 1bp Q/Q.

• We expect ZION underperforms tomorrow given disappointing NIM and NII.

• We are reducing our 2026/2027 NII estimates ~1.5%

Positive Operating Leverage guide intact, but a soft 1H26 raises the bar for 2H26

• Zions reiterated its FY 100–150bp positive operating leverage guide despite

the softer quarter, and we expect Street (currently around 40bps) still needs

to move higher as a result.

• After two straight disappointing NII quarters, ZION needs to demonstrate the

deposit initiatives are working and / or loan growth is accelerating

meaningfully before investors give full credit to the reiterated guide.