Zions Bancorp NA: Downgrade to Underweight: With Deposit Costs Likely Ramping, Shares‘ Steep Premium Valuation At Risk

Research evidence excerpt

Zions Bancorp NA: Downgrade to Underweight: With Deposit Costs Likely Ramping, Shares‘ Steep Premium Valuation At Risk

Anthony Elian, CFA AC North America Equity Research

(1-212) 622-5067 21 July 2026 J P M O R G A N

anthony.elian@jpmorgan.com

Management Outlook for 2Q27e vs. 2Q26

Figure 1: Management Outlook for 2Q27e vs. 2Q26

From 1Q26 Earnings: From 2Q26 Earnings:

Category

1Q27e vs. 1Q26 2Q27e vs. 2Q26

Period-End Loans Moderately increasing Reiterated

Net Interest Income Moderately increasing (top end) Reiterated

Customer Related Fee Income Moderately increasing (top end) Reiterated

Adjusted Non-Interest Expense Moderately increasing Reiterated

Source: Company reports.

Key Trends and Conference Call Highlights

• We estimate core EPS of $1.65, which is above expectations, above our forecast

of $1.60 and above consensus of $1.63. Compared to our forecast, the beat was

entirely driven by provision expense coming in nearly $10mm below our forecast

while PTPP income was largely in line with our estimate.

• Core EPS (our estimate) of $1.65 excludes $269mm of total securities gains

(including $215mm gain on sale of Visa shares and $44mm unrealized gains from

SBIC investments), -$7mm success fee accrual, -$6mm FDIC special assessment,

$2mm amortization of core deposit and other intangibles, $1mm of severance costs,

and $1mm other real estate expense.

• Credit quality better than expected. NCO ratio +3 bps q/q to 0.06% of average

loans (below forecast of 0.08%). Provision expense was $3mm or 0.02% of average

loans (below forecast of 0.08%). NPAs flat q/q at 0.33% of assets. From the call:

No incremental credit concerns were identified; reserve positioning was described as

strong enough to cover approximately six years of losses at the current charge-off