Zions Q3 2026 Earnings: Lower Charge-Offs Lift EPS Despite Flat Loans

Zions Bancorporation (NASDAQ: ZION) reported Q3 2026 net earnings applicable to common shareholders of $262 million, up from $221 million a year earlier, while diluted EPS increased 20% to $1.78 from $1.48. Lower net loan charge-offs were the main earnings driver, although loans remained flat from the prior quarter as faster payoffs and competition offset new activity.

Core Earnings Data

Improved credit quality drove the year-over-year increase in earnings. Net loan charge-offs declined to $3 million from $56 million, a reduction of approximately 95%, supporting an approximately 19% increase in earnings applicable to common shareholders.

Results were substantially lower than Q2 2026, when Zions reported common earnings of $452 million and diluted EPS of $3.05. That represents sequential declines of approximately 42% for both measures, but the supplied release did not explain the factors behind the unusually large quarter-over-quarter difference.

The release did not provide quarterly revenue, net interest income, margins, or cash-flow figures, limiting the ability to assess how much of the earnings improvement came from operating growth versus lower credit costs.

Lower Charge-Offs Lift Earnings While Loan Growth Stalls

The decline in net loan charge-offs was the clearest reason for the year-over-year improvement. Charge-offs fell by $53 million, providing a meaningful earnings benefit compared with the prior-year quarter.

Loan growth presented a different picture. Loans were flat compared with Q2 because an increased pace of loan payoffs and a highly competitive market offset new lending activity. Customer deposits, meanwhile, grew at a rate of nearly 10% annualized from second-quarter levels. Deposit growth therefore did not translate into sequential loan expansion during the quarter.

Zions also completed its acquisition of Basis Multifamily Finance I, LLC at the end of July. Management described the acquired multifamily finance platform as a strategic addition for serving commercial real estate customers, particularly in the bank’s Western markets. The release did not quantify the acquisition’s contribution to Q3 earnings, loans, or fee income.

Management Outlook

Management said short- and medium-term interest rates began rising during the final month of the quarter. Because Zions describes its balance sheet as moderately asset-sensitive, the bank expects a higher-rate environment to produce stronger net interest income.

Management also reported continued improvement in noninterest income and expects that trend to extend into the following year. These comments provide directional expectations rather than quantitative financial guidance.

Recent Insider Transactions

The supplied insider summary reports 403,879 shares purchased through 11 transactions and 93,546 shares sold through five transactions over the past six months. That produced reported net purchases of 310,333 shares, while total insider holdings were approximately 1.85 million shares and the reported net-purchase percentage was 20.10%.

The latest 10 reported transactions consist of four sales, three derivative-security conversions, and three stock gifts. They do not include an open-market purchase.

Stock gifts and derivative conversions are economically different from open-market purchases or sales. The transactions alone do not establish insiders’ views about the bank’s outlook.

Risks Investors Need to Watch

• Loan growth remains constrained. Faster loan payoffs and competition left loans unchanged from Q2. Continued pressure could limit growth in earning assets even if deposits continue to increase.
• The earnings improvement depended heavily on credit quality. The reduction in net charge-offs was the primary reason earnings increased. A reversal in borrower performance or portfolio quality would reduce that benefit.
• The net interest income outlook depends on rates. Management expects the asset-sensitive balance sheet to benefit from higher rates, but the benefit depends on the interest-rate environment developing as anticipated.
• The acquisition’s financial impact remains unclear. Zions identified strategic benefits from the Basis multifamily platform but did not disclose its contribution to loans, fees, expenses, or earnings.

Summary

Zions’ Q3 2026 earnings improved from the prior year primarily because net loan charge-offs fell sharply, lifting diluted EPS by 20%. At the same time, flat sequential loan growth showed that payoffs and competition continued to constrain balance-sheet expansion despite deposit growth. The next key indicators are whether credit costs remain low, deposits can support renewed lending growth, and the bank’s asset sensitivity and improving noninterest income translate into stronger recurring earnings.