Zions' Q3 Earnings Beat Estimates on Higher NII & Fee Income, Stock Up

Shares of Zions Bancorporation ZION rose 1.6% in yesterday’s after-market hours trading session on better-than-expected quarterly results. Its third-quarter 2025 adjusted earnings per share (EPS) of $1.54 beat the Zacks Consensus Estimate of $1.40. Moreover, the bottom line surged 12.4% from the year-ago quarter.The results were primarily aided by higher net interest income (NII) and non-interest income. Additionally, a higher deposit balance was a positive. However, a rise in adjusted non-interest expenses and provisions alongside a decline in loans was a major headwind.Results in the reported quarter excluded the negative impact of 6 cents per share from net credit valuation adjustment (CVA) loss due to an update in valuation methodology for derivatives. After considering it, net income attributable to its common shareholders (GAAP) was $221 million, up 8.3% year over year. We had projected the metric to be $211.7 million.Zions’ Revenues & Expenses RiseNet revenues (tax equivalent) were $861 million, up 8.7% year over year. Further, the top line beat the Zacks Consensus Estimate of $845.5 million.NII was $672 million, up 8.4%. The increase was mainly attributed to lower funding costs alongside a favorable mix in average interest-earning assets, reflecting growth in higher-yielding loans and a decline in lower-yielding money market investments and securities. Likewise, net interest margin (NIM) expanded 25 basis points (bps) to 3.28%. Our estimates for NII and NIM were $644.6 million and 3.04%, respectively.Non-interest income rose 9.9% to $189 million. The rise was driven by an increase in almost all the components except capital markets fees and income. We had projected non-interest income to be $169.9 million.Adjusted non-interest expenses increased 4.2% to $520 million. Our estimate for the metric was $517.7 million.Adjusted efficiency ratio was 59.6%, down from 62.5% in the prior-year period. A decline in the efficiency ratio indicates an increase in profitability.As of Sept. 30, 2025, net loans and leases held for investment were $59.6 billion, down roughly 1% from the prior quarter. On the other hand, total deposits were up 1.5% to $74.9 billion. Our estimates for net loans and leases held for investment and total deposits were $60.2 billion and $75.7 billion, respectively.Credit Quality of ZION: A Mixed BagThe ratio of non-performing assets to loans and leases, as well as other real estate owned, contracted 8 bps year over year to 0.54%.In the reported quarter, the company recorded net loan and lease charge-offs of $56 million, significantly up from $3 million in the prior-year quarter. Provision for credit losses was $49 million in the reported quarter compared with the provision for credit losses of $13 million in the year-ago quarter.Zions’ Profitability & Capital RatiosTier 1 leverage ratio was 8.8% as of Sept. 30, 2025, up from 8.6% in the prior-year quarter. The common equity tier 1 capital ratio was 11.3%, up from 10.7% in the prior-year period.As of Sept. 30, 2025, the tier 1 risk-based capital ratio was stable at 11.4% compared with the prior-year quarter.At the end of the third quarter, the return on average assets was 0.99%, up from 0.95% in the prior-year quarter. Return on average tangible common equity was 16%, down from 17.4% in the year-ago quarter.Our Take on ZION StockZions’ rising loan demand and improving fee income, alongside relatively higher interest rates, bode well for the future. However, persistently increasing operating expenses and significant exposure to commercial loans and weak asset quality are major concerns.Zions Bancorporation, N.A. Price, Consensus and EPS Surprise Zions Bancorporation, N.A. price-consensus-eps-surprise-chart | Zions Bancorporation, N.A. QuoteCurrently, Zions carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Performance of Other BanksF.N.B. Corporation’s FNB third-quarter 2025 adjusted earnings of 41 cents per share outpaced the Zacks Consensus Estimate of 37 cents. Also, the bottom line compared favorably with earnings of 34 cents in the prior-year quarter.FNB’s results benefited from growth in NII and non-interest income. Higher loans and deposits were the other positives. However, higher provisions and adjusted expenses were the undermining factors.KeyCorp’s KEY third-quarter 2025 EPS from continuing operations of 41 cents surpassed the Zacks Consensus Estimate of 38 cents. The bottom line reflected a 36.7% jump from the prior-year quarter.KEY’s results primarily benefited from higher NII and a substantial rise in non-interest income. The average loan balance increased sequentially, which was another positive. However, higher expenses and a rise in provisions were the undermining factors.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KeyCorp (KEY): Free Stock Analysis Report Zions Bancorporation, N.A. (ZION): Free Stock Analysis Report F.N.B. Corporation (FNB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks