Zions Earnings: Solid Net Interest Income Growth and Expecting More Loan Growth in 2026

Key Morningstar Metrics for Zions Bancorporation

• Fair Value Estimate: $59.00
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: High

What We Thought of Zions Bancorporation’s Earnings

Zions Bancorporation ZION reported strong fourth-quarter earnings growth, driven primarily by a 9% year-over-year increase in net interest income. The bank’s 2026 loan growth guidance implies modest improvement over prior expectations.

Why it matters: Zions expects loan balances at the end of 2026 to be modestly higher than in 2025. While the guidance is based on a rolling 12-month measure and is not strictly comparable, it represents an improvement from the “slightly increasing to modestly increasing” outlook provided in the third quarter of 2025.

• Commercial lending is expected to be the primary driver of loan growth in 2026, with commercial real estate also contributing, while consumer loan balances are expected to remain relatively stable.
• The bank’s loan growth has been tepid in 2025, with commercial real estate being a headwind. 2025 loan balances increased by 2.5% from a year ago.

The bottom line: As we incorporate its latest results and updated guidance, we expect to increase our $59 per share fair value estimate for no-moat-rated Zions by low single digits, with higher near-term revenue growth partially offset by higher 2026 expense growth. We view shares as fairly valued with our contemplated update.

• Adjusted capital markets fee income grew an impressive 24% year over year in full-year 2025, and management expects capital markets fees to remain a key fee income growth driver in 2026.
• For 2026, the bank expects a positive operating leverage of 100-150 basis points. Technology spending and marketing expenses are major drivers of expense growth.

Key stats: Credit results were solid in the fourth quarter, with net charge-offs declining by $46 million sequentially to $7 million. The previous quarter’s results were negatively affected by two California-related charge-offs.

• The non-performing assets ratio declined by 2 basis points to 0.52% from a year ago, and the classified loans ratio also declined by 92 basis points to 3.91%.