10q10k10q10k.net

What changed in ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+511 added−474 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-23)

Top changes in ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/'s 2023 10-K

511 paragraphs added · 474 removed · 340 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

50 edited+33 added−13 removed23 unchanged
Biggest changeThe following schedule presents certain demographic attributes of our employees. 10 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Schedule 2 December 31, 2022 Women People of Color Disabled Veterans Employee Roles Management 52% 28% 12% 2% Non-management 61% 39% 12% 2% Overall 59% 37% 12% 2% The following objectives and initiatives are integral to our human capital management efforts: Cultivating a diverse, equitable, and inclusive environment for our employees, our customers, and the communities in which we operate We believe in an environment where people are respected and valued, and where individual and cultural differences are embraced.
Biggest changeThe following schedule presents certain demographic attributes of our workforce as self-identified by our employees: Schedule 2 December 31, 2023 Women People of Color Disabled Veterans Employee Roles Management 52% 29% 9% 2% Non-management 60% 40% 10% 2% All employees 58% 38% 10% 2% The following objectives and initiatives are integral to our human capital management efforts: Cultivating an environment where people are respected and valued, and where individual and cultural differences are embraced We believe that (1) our performance is stronger when we are able to draw upon the talents and experience of a diverse team of employees, and (2) in-person exchange of ideas and viewpoints, in both formal and informal settings, improves productivity and supports a strong corporate culture while still offering flexibility to balance personal needs. 12 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES We endeavor to provide opportunities for growth, development, and leadership to every employee.
These regulations affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors. In addition, consumers may also prevent disclosure of certain information among affiliated companies that is assembled or used to determine eligibility for a product or service, such as that shown on consumer credit reports and asset and income information from applications.
These laws and regulations also affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors. In addition, consumers may prevent disclosure of certain information among affiliated companies that is assembled or used to determine eligibility for a product or service, such as that shown on consumer credit reports and asset and income information from applications.
During the past several years, a growing number of states, including those in which we conduct business, have enacted, or are considering enacting, regulations granting consumers enhanced privacy rights and control over personal information, establishing or modifying data breach notification requirements, and requiring certain financial institutions to implement detailed and prescriptive cybersecurity programs.
Additionally, during the past several years, a growing number of states, including those in which we conduct business, have enacted, or are considering enacting, laws and regulations granting consumers enhanced privacy rights and control over personal information, establishing or modifying data breach notification requirements, and requiring certain financial institutions to implement detailed and prescriptive cybersecurity programs.
These restrictions include documentation and governance, deferral, risk-balancing, and clawback requirements. Any deficiencies in compensation practices may be incorporated into supervisory ratings, which can affect our ability to make acquisitions or engage in certain other activities, or could result in regulatory enforcement actions. • Anti-money laundering regulations.
These restrictions include documentation and governance, deferral, risk-balancing, and the aforementioned clawback requirements. Any deficiencies in compensation practices may be incorporated into supervisory ratings, which can affect our ability to make acquisitions or engage in certain other activities, or could result in regulatory enforcement actions. • Anti-money laundering regulations.
We conduct our operations primarily through seven separately managed bank divisions, which we refer to as “affiliates,” or “affiliate banks,” each with its own local branding and management team. These affiliate banks comprise our primary business segments as referred to throughout this document.
We conduct our operations primarily through seven separately managed and geographically defined bank divisions, which we refer to as “affiliates,” or “affiliate banks,” each with its own local branding and management team. These affiliate banks comprise our primary business segments as referred to throughout this document.
These regulations include, but are not limited to, the following: • Limitations on dividends payable to shareholders. Our ability to pay dividends on both our common and preferred stock is subject to regulatory restrictions.
These regulations and other proposals include, but are not limited to, the following: • Limitations on dividends payable to shareholders. Our ability to pay dividends on both our common and preferred stock is subject to regulatory restrictions.
Our common stock and certain other securities are registered under the Exchange Act, which vests the OCC with the power to administer and enforce certain sections of the Exchange Act applicable to national banks, though we continue to make filings required by the Exchange Act with the SEC as a voluntary filer.
Our common stock and certain other securities are registered under the Securities and Exchange Act of 1934 (“Exchange Act”), which vests the OCC with the power to administer and enforce certain sections of the Exchange Act applicable to national banks, though we continue to make filings required by the Exchange Act with the SEC as a voluntary filer.
ITEM 1. BUSINESS DESCRIPTION OF BUSINESS Zions Bancorporation, National Association (“Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”) is a bank headquartered in Salt Lake City, Utah with annual net revenue (net interest income and noninterest income) of $3.2 billion in 2022, and total assets of approximately $90 billion at December 31, 2022.
ITEM 1. BUSINESS DESCRIPTION OF BUSINESS Zions Bancorporation, National Association (“Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”) is a bank headquartered in Salt Lake City, Utah with annual net revenue (net interest income and noninterest income) of $3.1 billion in 2023, and total assets of approximately $87 billion at December 31, 2023.
Our most direct competition for loans, deposits, and other banking services comes from other commercial banks, credit unions, and financial technology companies (“fintechs”). Some of these financial institutions do not have a physical presence in our market footprint, but solicit business via the internet and other means.
Our most direct competition for loans, deposits, and other banking services generally comes from other commercial banks, credit unions, financial technology companies (“fintechs”), and private credit or debt funds. Some of these financial institutions do not have a physical presence in our market footprint, but solicit business via the internet and other means.
The Basel III capital rules require us to maintain certain minimum capital ratios, as well as a 2.5% “capital conservation buffer,” which is designed to absorb losses during periods of economic stress, composed entirely of common equity Tier 1 (“CET1”), and in excess of the minimum risk-based capital ratios.
The Basel III capital rules require us to maintain certain minimum capital ratios, as well as a 2.5% “capital conservation buffer,” which is designed to absorb losses during periods of economic stress, composed entirely of common equity Tier 1 (“CET1”).
In addition, as a bank with $10 billion or more in assets, we are subject to examination and primary enforcement authority with respect to consumer financial laws by the CFPB, which has broad rule making, supervisory and enforcement powers under various federal consumer financial protection laws. • Community Reinvestment Act (“CRA”) requirements.
In addition, as a bank with $10 billion or more in assets, we are subject to examination and primary enforcement authority with respect to consumer financial laws by the CFPB, which has broad rule making, supervisory, and enforcement powers under various federal consumer financial protection laws.
Our retail banking products and services include: ◦ Residential mortgages ◦ Home equity lines of credit ◦ Personal lines of credit and installment consumer loans ◦ Depository account services ◦ Consumer cards ◦ Personal trust services • Wealth management. We offer various wealth management solutions to customers.
We provide quality retail banking products and services to our customers that include: ◦ Residential mortgages; ◦ Home equity lines of credit; ◦ Personal lines of credit and installment consumer loans; ◦ Depository account services; ◦ Consumer cards; and ◦ Personal trust services. • Wealth management. We offer various wealth management products and services to customers.
These actions help us compensate employees fairly. On a biennial basis, we enlist the services of an independent third party to review our pay equity. Results of the most recent review revealed that after adjusting for relevant variables such as education, experience, performance, and geography, there were no meaningful differences in pay levels among men, women, and people of color.
On a biennial basis, we enlist the services of an independent third party to review our pay equity. Results of the most recent review revealed that after adjusting for relevant variables such as education, experience, performance, and geography, there were no meaningful differences in pay levels among men, women, and people of color.
The National Bank Act Our corporate affairs are governed by the National Bank Act, and related regulations are administered by the OCC. With respect to securities matters, we are not subject to the Securities Act, but are subject to OCC regulations governing securities offerings.
The National Bank Act Our corporate affairs are governed by the National Bank Act, and related regulations are administered by the OCC. With respect to securities matters, we are not subject to the Securities Act of 1933 (“Securities Act”), but are subject to OCC regulations governing securities offerings.
The Bank Secrecy Act, Title III of the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA Patriot Act”), and other federal laws require financial institutions to assist United States (“U.S.”) government agencies in detecting and preventing money laundering and other illegal acts by maintaining policies, procedures and controls designed to detect and report money laundering, terrorist financing, and other suspicious activity.
The Bank Secrecy Act, Title III of the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA Patriot Act”), and other federal laws require financial institutions to assist U.S. government agencies in detecting and preventing money laundering and other illegal acts by maintaining policies, procedures and controls designed to detect and report money laundering, terrorist financing, and other suspicious activity. • Tax laws of the U.S., its states, and other jurisdictions where we conduct business.
Although we believe the way we do business has been and is consistent with many of these standards and expectations, our ongoing monitoring enables us to enhance our business practices by incorporating ESG recommendations that we believe will benefit our investors, customers, employees, and communities.
Although we believe the way we do business has been and is consistent with many of these standards and expectations, we strive to enhance our business practices by incorporating sustainability recommendations that we believe will benefit our investors, customers, employees, and communities.
Liquidity We manage liquidity in accordance with Basel III liquidity requirements, and we utilize internal liquidity stress tests as our primary tool for establishing and managing liquidity guidelines including, but not limited to, holdings of investment securities and other liquid assets, levels of readily available contingency funding, concentrations of funding sources, and the maturity profile of liabilities.
Liquidity We utilize internal liquidity stress tests as a primary tool for establishing and managing liquidity guidelines including, but not limited to, holdings of investment securities and other liquid assets, levels of readily available contingency funding, concentrations of funding sources, and the maturity profile of liabilities.
This system includes frameworks, policies, and guidelines such as the following: • Corporate Governance Guidelines; • A Code of Business Conduct and Ethics for Employees; • A Director's Code of Conduct; • A Risk Management Framework; • A Related Party Transaction Policy; • A Compensation Clawback Policy; • Stock Ownership and Retention Guidelines; • An Insider Trading Policy, including provisions prohibiting hedging and placing restrictions on the pledging of bank stock by insiders; and • Charters for our Executive, Audit, Risk Oversight, Compensation, and Nominating and Corporate Governance Committees.
This system includes frameworks, policies, and guidelines such as the following: • Corporate Governance Guidelines; • A Code of Business Conduct and Ethics for Employees; • A Director’s Code of Conduct; • A Risk Management Framework; • A Related Party Transaction Policy; • Incentive Compensation Recoupment and Clawback Policies; • Stock Ownership and Retention Guidelines; • An Insider Trading Policy; and • Charters for our Executive, Audit, Risk Oversight, Compensation, and Nominating and Corporate Governance Committees.
We provide meaningful upside 11 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES opportunities for those who take accountability for business objectives that help us deliver superior results while reducing risk. We routinely assess pay equity among employees across our organization by analyzing potential disparities in pay based on gender, minority status, and other factors.
We provide meaningful upside opportunities for those who take accountability for business objectives that help us deliver superior results while reducing risk. We routinely assess pay equity among employees across our organization by analyzing potential disparities in pay based on gender, minority status, and other factors. These actions help us compensate employees fairly.
The severity of the constraint depends on the amount of the shortfall and the institution’s “eligible retained income,” which is defined as four quarters of trailing net income, net of distributions and associated tax effects not already reflected in net income. For information about our capital ratios, see “Capital Management” on page 65 in MD&A.
The severity of the constraint depends on the amount of the shortfall and the institution’s “eligible retained income,” which is defined as four quarters of trailing net income, net of distributions and associated tax effects not already reflected in net income.
Capital Planning and Stress Testing We utilize stress testing as an important mechanism to inform our decisions on the appropriate level of capital, based upon actual and hypothetically stressed economic conditions.
Capital Planning and Stress Testing We utilize stress testing as an important mechanism to inform our decisions on the appropriate level of capital, based upon actual and hypothetically stressed economic conditions, which are comparable in severity to the scenarios published by the Federal Reserve Board (“FRB”).
SUPERVISION AND REGULATION The banking and financial services business in which we engage is highly regulated. Such regulation is intended to promote the stability of banking and financial companies and to protect the interests of customers, depositors, and communities. In some cases, these regulations may not be aligned with, or intended to protect, the interests of our shareholders or creditors.
Such regulation is intended to promote the stability of banking and financial companies and to protect the interests of customers, depositors, and communities. Although banks and their customers benefit from many of these regulations, in some cases, they may not be aligned with, or intended to protect, the interests of our shareholders or creditors.
Capital Standards – Basel Framework At December 31, 2022, we exceeded all capital adequacy requirements under the Basel III capital rules, which include certain risk-based capital and leverage ratio requirements prescribed by the OCC.
Capital Standards – Basel Framework At December 31, 2023, we exceeded all capital adequacy requirements under the Basel III capital rules, which include certain risk-based capital and leverage ratio requirements prescribed by the OCC. The Basel III capital rules define the components of capital and other factors, such as risk weights, affecting banking institutions’ regulatory capital ratios.
Prompt Corrective Action The Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) requires each federal banking agency to take prompt corrective action to resolve identified problems of insured depository institutions, including, but not limited to, those that fall below one or more prescribed minimum capital ratios.
For more information about our capital ratios, see “Capital Management” in MD&A on page 72. 7 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Prompt Corrective Action The Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) requires each federal banking agency to take prompt corrective action to resolve identified problems of insured depository institutions, including, but not limited to, those that fall below one or more prescribed minimum capital ratios.
For further information about our segments, see “Business Segment Results” on page 38 in Management's Discussion and Analysis (“MD&A”) and Note 22 of the Notes to Consolidated Financial Statements. We focus on serving our customers and communities. Our experienced bankers develop long-lasting relationships with our customers by providing competitive products and award-winning service.
For more information about our segments, see “Business Segment Results” in Management’s Discussion and Analysis (“MD&A”) on page 42 and Note 22 of the Notes to Consolidated Financial Statements. PRODUCTS AND SERVICES We focus on serving customers in the communities in which we operate.
We also compete with finance companies, mutual fund companies, insurance companies, brokerage firms, securities dealers, investment banking companies, other nontraditional lending and banking companies, and a variety of other types of companies. Some of our competitors may have fewer regulatory constraints, and some have lower cost structures or tax burdens.
We also compete with finance companies, mutual fund companies, insurance companies, brokerage firms, securities dealers, investment banking companies, other nontraditional lending and banking companies, and a variety of other types of companies.
Throughout the organization, employee business resource groups foster a sense of community and enable greater connectivity and support among employees through forum meetings and discussions, which are open to all employees and offer networking and initiatives that support our commitment to diversity, both internally and externally.
Throughout the organization, the employee business forums foster a sense of community and enable greater connectivity and support among employees through meetings and discussions, which are open to all employees and offer networking and connections to the communities in which we operate.
To identify qualified candidates, our recruiting team partners with community organizations, schools, and governmental entities that support marginalized and underserved communities in our footprint. Our annual Corporate Responsibility Report, which is published on our website, highlights several achievements in this area, such as our Banker Development Program, which attracts and advances undergraduates and early career professionals.
Our annual Corporate Responsibility Report, which is published on our website, highlights several achievements in this area, such as our Banker Development Program, which attracts and advances undergraduates and early career professionals.
Our key differentiators include the quality of service delivered, our local community knowledge, convenience of branch and office locations, mobile and online banking functionality and other delivery methods, a wide range of products and services offered, and the overall relationship with our customers. We strive to compete effectively in all of these areas to remain successful.
Our key differentiators include the quality of service delivered, our local community knowledge, convenience of branch and office locations, a wide range of products and services offered, and the overall relationships with our customers.
See discussion under “Risk Factors.” Other laws and regulations governing national banks contain similar provisions concerning acquisitions and activities. • Limits on interchange fees imposed under the Dodd-Frank Act, including a set of rules requiring that interchange transaction fees for electronic debit transactions be reasonable and proportional to certain costs associated with processing the transactions. • Limitations on the dollar amount of loans made to a borrower and its affiliates. • Limitations on transactions with affiliates. • Restrictions on the nature and amount of any investments and ability to underwrite certain types of securities (e.g., common equity). • Requirements for opening and closing of branches. • A number of federal and state consumer protection laws, including fair lending and truth in lending requirements, to provide equal access to credit and to protect consumers in credit transactions.
See further discussion in “Risk Factors.” Other laws and regulations governing national banks contain similar provisions concerning acquisitions and activities. • Limits on interchange fees imposed under the Dodd-Frank Act, including a set of rules requiring that interchange transaction fees for electronic debit transactions be reasonable and proportional to certain costs associated with processing the transactions.
In 2022, we hosted more than 1,000 training experiences to support employees, build new skills, or to assist in career advancement. We offer new manager programs, tuition reimbursement, education sponsorship opportunities, job shadowing, coaching, and formal mentoring programs. Our talent development program and individual development plans focus on education, experience, and exposure to help create well-rounded and successful employees.
We offer new manager programs, tuition reimbursement, education sponsorship opportunities, job shadowing, coaching, and formal mentoring programs. Our talent development program and individual development plans focus on education, experience, and exposure to help create well-rounded, highly skilled, and successful employees. We are also mindful of the continued competition for talent in the labor market.
We are also subject to the Sarbanes-Oxley Act of 2002, certain provisions of the Dodd-Frank Act, and other federal and state laws and regulations which address, among other issues, corporate governance, auditing and accounting, internal controls over financial reporting, and enhanced and timely disclosure of corporate information. 9 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Environmental, social, and governance (“ESG”) standards and related concerns, including those related to global climate change, continue to evolve and have become more prominent in recent years.
We are also subject to the Sarbanes-Oxley Act of 2002, certain provisions of the Dodd-Frank Act, and other federal and state laws and regulations which address, among other matters, corporate governance, auditing and accounting, internal controls over financial reporting, and enhanced and timely disclosure of corporate information.
We are closely monitoring developments in standards published by ESG interest groups and organizations, as well as proposed regulatory initiatives and expectations relating to ESG issues.
Sustainability standards and related concerns, including those related to global climate change, continue to evolve and have become more prominent in recent years. We are closely monitoring developments in standards published by sustainability interest groups and organizations, as well as proposed regulatory initiatives and expectations relating to these issues.
We publish an annual Corporate Responsibility Report that provides a summary of how we address ESG issues. The report is available on our website. Corporate Governance Our Board of Directors (“Board”) has overseen management’s establishment of a comprehensive system of corporate governance and risk management practices.
The report is available on our website. 11 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Corporate Governance Our Board of Directors (“Board”) has overseen management’s establishment of a comprehensive system of corporate governance and risk management practices.
During 2022, we continued to enhance certain benefits for our employees to adapt to the changing practices of the labor market. Recent changes include more flexibility with paid time off, more options with health care plans, and greater access to mental health benefits. We had 9,989 full-time equivalent employees December 31, 2022.
Recent changes include more flexibility with paid time off, more health care plan alternatives, and greater access to mental health benefits. We had 9,679 full-time equivalent employees at December 31, 2023.
These forums for employee input continue to help strengthen working relationships with managers, improve clarity of organizational purpose and goals, and reinforce our Guiding Principles and Code of Business Conduct and Ethics. We value work-life balance and strive to create a work environment that supports our employees with mental, physical, social, and financial wellness.
These forums for 13 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES employee input continue to help strengthen working relationships with managers, improve clarity of organizational purpose and goals, and reinforce our Guiding Principles and Code of Business Conduct and Ethics.
Our planning-driven offerings, combined with high-touch service and sophisticated asset management capabilities, have resulted in continued growth in assets under management.
Our planning-driven offerings, combined with high-touch service and sophisticated asset management capabilities, have resulted in continued growth in assets under management. Additional offerings to our wealth management customers include: ◦ Investment management services; ◦ Fiduciary and estate services; and ◦ Advanced business succession and estate planning services. COMPETITION We operate in a highly competitive environment.
Furthermore, if a bank is classified in one of the under-capitalized categories, it is required to submit a capital restoration plan to the federal banking regulator. 8 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Other Regulations We are subject to a wide range of other requirements and restrictions contained in both federal and state laws.
Furthermore, if a bank is classified in one of the under-capitalized categories, it is required to submit a capital restoration plan to the federal banking regulator.
We also believe that our performance is stronger when we are able to draw upon the talents and experience of a diverse team of employees. We use analytics, recruiting outreach efforts, and manager training to reach a diverse, qualified group of potential applicants to secure a high-performing workforce drawn from all segments of society.
We use analytics, recruiting outreach efforts, and manager training to reach a diverse, qualified group of potential applicants to secure a high-performing workforce drawn from all segments of society. To identify qualified candidates, our recruiting team partners with community organizations, schools, and governmental entities that support marginalized and underserved communities in our footprint.
Schedule 1 MINIMUM CAPITAL RATIO AND CAPITAL CONSERVATION BUFFER REQUIREMENTS December 31, 2022 Minimum capital requirement Capital conservation buffer Minimum capital ratio requirement with capital conservation buffer Current capital ratio CET1 to risk-weighted assets 4.5 % 2.5 % 7.0 % 9.8 % Tier 1 capital (i.e., CET1 plus additional Tier 1 capital) to risk-weighted assets 6.0 2.5 8.5 10.5 Total capital (i.e., Tier 1 capital plus Tier 2 capital) to risk-weighted assets 8.0 2.5 10.5 12.2 Tier 1 capital to average consolidated assets (known as the “Tier 1 leverage ratio”) 4.0 N/A 4.0 7.7 Financial institutions with a ratio of CET1 to risk-weighted assets above the minimum, but below the capital conservation buffer, face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall.
The following schedule presents minimum capital ratio and capital conservation buffer requirements, our capital ratios at December 31, 2023, and the minimum requirements to be well-capitalized: Schedule 1 MINIMUM CAPITAL RATIO AND CAPITAL CONSERVATION BUFFER REQUIREMENTS December 31, 2023 Minimum requirement to be “ well-capitalized ” Minimum capital requirement Capital conservation buffer Minimum capital ratio requirement with capital conservation buffer Current capital ratio CET1 to risk-weighted assets 4.5 % 2.5 % 7.0 % 10.3 % 6.5 % Tier 1 capital (i.e., CET1 plus additional Tier 1 capital) to risk-weighted assets 6.0 2.5 8.5 10.9 8.0 Total capital (i.e., Tier 1 capital plus Tier 2 capital) to risk-weighted assets 8.0 2.5 10.5 12.8 10.0 Tier 1 capital to average consolidated assets (known as the “Tier 1 leverage ratio”) 4.0 N/A 4.0 8.3 5.0 Recent Regulatory Developments Basel III Endgame On July 27, 2023, bank regulators issued a proposal to implement the Basel Committee on Banking Supervision’s finalization of the post-crisis bank regulatory capital reforms.
We provide a wide range of banking products and related services, primarily in the states of Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming.
We provide a wide range of banking products and related services, primarily in the states of Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. We had more than one million customers at year-end 2023, served by 407 branches and various online, mobile, and digital offerings. We had 9,679 full-time equivalent employees at December 31, 2023.
Building and sustaining these relationships is essential to understanding and meeting our customers’ needs. PRODUCTS AND SERVICES Some of the products and services we provide include: • Commercial and small business banking. We serve a wide range of commercial customers, generally small- and medium-sized businesses.
Our experienced bankers strive to develop long-lasting relationships with our customers by providing competitive products and award-winning service. Building and sustaining these relationships is essential to understanding and meeting our customers’ needs. Some of the products and services we provide, whether delivered digitally or by other means, include: • Commercial and small business banking.
If we fail to adequately serve our communities, penalties may be imposed including denials of applications to add branches, relocate, add subsidiaries and affiliates, and merge with or purchase other financial institutions. • Requirements regarding the time, manner, and form of compensation given to key executives and other personnel receiving incentive compensation, including requirements related to the SEC’s 2022 rule on pay versus performance disclosures.
The CRA requires banks to help serve the credit needs in their communities, including providing credit to low- and moderate-income individuals. If we fail to adequately serve our communities, penalties may be imposed including denials of applications to add branches, relocate, add subsidiaries and affiliates, and merge with or purchase other financial institutions.
As we attract and hire talent, we proactively consider the demand for competencies that will be needed within the workforce of the future. We offer more than 2,000 virtual, in-person, expert-led, and pre-recorded or self-paced learning options for employees to create custom learning plans for personal and professional development.
We offer more than 1,500 virtual, in-person, expert-led, and pre-recorded or self-paced learning options for employees to create custom learning plans for personal and professional development. In 2023, we hosted more than 1,000 training experiences to support employees, build new skills, or to assist in career advancement.
We provide lending products secured by commercial real estate to borrowers that include: ◦ Owner-occupied, construction and land development, and term financing ◦ Residential development financing • Retail banking. We have a strong retail banking business with quality products and highly competitive online and mobile offerings.
We provide lending products secured by commercial real estate to borrowers that include: ◦ Term and construction/land development financing, including the following collateral types: ▪ Commercial multi-family, industrial, and office; and ▪ Residential single-family, community development, and affordable housing. • Retail banking.
We continue to actively manage our deposit base and associated deposit costs in response to the rising interest rate environment. 7 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Financial Privacy and Cybersecurity The federal banking regulators have enacted rules that limit the ability of banks and other financial institutions to disclose nonpublic information about consumers to unaffiliated third parties, including provisions of the Gramm-Leach-Bliley Act, which require financial institutions to disclose privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to an unaffiliated third party.
These laws and rules limit the ability of banks and other financial institutions to disclose nonpublic information about consumers to unaffiliated third parties, require financial institutions to disclose privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to an unaffiliated third party.
We are committed to identifying, recognizing, and creating fulfilling opportunities for our employees, and rewarding them for their contributions to our success. The recent COVID-19 pandemic had a significant impact on how and where we work.
We are committed to identifying, recognizing, and creating fulfilling opportunities for our employees, and rewarding them for their contributions to our success. During 2023, we continued to enhance certain benefits for our employees to adapt to the changing practices of the labor market.
In addition to proposed and evolving rulemaking by federal regulators, such as the SEC’s 2022 proposed rule on climate-related disclosures, many states have adopted, or are considering, laws that address ESG issues. These laws may include provisions that conflict with other state and federal regulations and may increase our costs or limit our ability to conduct business in certain jurisdictions.
In addition to proposed and evolving rulemaking by federal regulators, such as the SEC’s proposed rule on climate-related disclosures and the bank regulatory agencies’ recently issued principles designed to provide a framework for large financial institutions to manage exposure to climate-related financial risks, many states have adopted, or are considering, laws that address climate and social issues.
State regulators have been increasingly active in implementing privacy and cybersecurity standards and regulations.
Federal and state regulators have been increasingly active in implementing privacy and cybersecurity standards and regulations. For example, recently effective SEC rules now require timely disclosure of material cybersecurity incidents and description of cybersecurity risk management, strategy, and governance.
Products and services within our commercial business banking include: ◦ Commercial and industrial lending and leasing ◦ Municipal and public finance services ◦ Cash management services ◦ Commercial card and merchant processing services ◦ Capital markets, syndication, and foreign exchange services • Commercial real estate lending.
Products and services we provide to our commercial and small business banking customers include: ◦ Commercial and industrial and owner-occupied lending and leasing; ◦ Municipal and public finance services; ◦ Depository account and cash management services; 5 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES ◦ Commercial and small business cards, as well as merchant processing services; ◦ Corporate trust services; and ◦ Correspondent banking and international lending services. • Capital markets and investment banking.
Removed
We had more than one million customers at year- 4 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES end 2022, served by 416 branches and various online, mobile, and digital offerings. We had 9,989 full-time equivalent employees at December 31, 2022.
Added
We serve a wide range of commercial customers, generally small- and medium-sized businesses.
Removed
Additional offerings to our wealth management customers include: ◦ Investment management services ◦ Fiduciary and estate services ◦ Advanced business succession and estate planning services 5 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES COMPETITION We operate in a highly competitive environment.
Added
We provide customized financing solutions to help our customers raise capital efficiently, execute strategic transactions, and manage exposure to financial markets.
Removed
The Basel III capital rules 6 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES define the components of capital and other factors, such as risk weights, affecting banking institutions’ regulatory capital ratios.
Added
Capital markets products and services include: ◦ Loan syndications; ◦ Foreign exchange services and interest rate derivatives; ◦ Fixed income securities underwriting; ◦ Advisory and capital raising; ◦ Commercial mortgage-backed security (“CMBS”) conduit lending; and ◦ Power and project financing. • Commercial real estate lending.
Removed
The following schedule presents minimum capital ratio and capital conservation buffer requirements, compared with our capital ratios at December 31, 2022.
Added
Some of our competitors may have fewer regulatory constraints, greater ability to develop, implement, and offer technologies and other innovative financial services, and lower-cost structures, taxes, and regulatory burdens.
Removed
Regulations promulgated under the Dodd-Frank Act require many banks to adhere to an annual Comprehensive Capital Analysis and Review (“CCAR”) process and stress testing administered by the Federal Reserve Board (“FRB”). We are not regulated by the FRB and therefore are not subject to this process.
Added
We strive to compete effectively in all of these areas to remain successful. 6 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES SUPERVISION AND REGULATION The banking and financial services business in which we engage is highly regulated.
Removed
However, we use the FRB’s CCAR process, including published economic scenarios, to inform our stress testing activities.
Added
Financial institutions with a ratio of CET1 to risk-weighted assets above the minimum, but below the capital conservation buffer, face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall.
Removed
During the recent pandemic, our liquidity profile benefited from a significant influx of deposits, which was impacted by certain fiscal and monetary policy decisions. In 2022, with the withdrawal of such measures by the federal government, our deposit levels decreased; however, our liquidity profile remained above regulatory and internal Bank limits.
Added
The proposal, commonly referred to as the “Basel III Endgame,” would significantly revise the capital requirements applicable to large banking organizations, defined as those with total assets of $100 billion or more. The proposal is subject to a three-year phase-in period for certain aspects of the proposal, and would be effective beginning July 1, 2025.
Removed
Data and cybersecurity laws and regulations are evolving rapidly and remain a focus of state and federal regulators. For example, in 2022, the SEC proposed new cybersecurity disclosure rules for public companies. If the proposed rules are adopted, they may require changes in the way such companies disclose material cybersecurity events.
Added
At December 31, 2023, we had $87.2 billion in total assets and do not currently qualify as a large banking organization.
Removed
These evolving laws and rules will continue to have an impact on our risk management practices.
Added
We are evaluating the potential future impact of the proposal, as we expect it is more likely than not we would become subject to this proposal in the future, were it to be finalized in its current form. 8 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Under the proposal, if at such time we were to increase our total assets to $100 billion or more, we would, among other things, be required to (1) include certain components of accumulated other comprehensive income (“AOCI”) in regulatory capital and be subject to increased limitations on deferred tax assets (“DTAs”) as a percent of CET1, (2) hold capital for operational risk and market risk, and (3) calculate risk-based capital ratios under both the standardized approach and the expanded risk-based approach.
Removed
The CRA requires banks to help serve the credit needs in their communities, including providing credit to low- and moderate-income individuals.
Added
Long-term Debt On August 29, 2023, bank regulators issued a proposal that would expand a long-term debt requirement to all banks with total assets of $100 billion or more.
Removed
We were successful in transitioning most of our employees to working remotely, and as the pandemic subsided and related treatments improved, we returned to more in-person collaboration while supporting certain flexible and remote work arrangements. We believe that in-person exchange of ideas and viewpoints, in both formal and informal settings, improves productivity and supports a strong corporate culture.
Added
The proposed rule would require these banks to have a minimum outstanding amount of eligible long-term debt that is the greatest of (1) 6% of total risk-weighted assets, (2) 2.5% of total leverage exposure, and (3) 3.5% of average total assets.
Removed
We have instituted enterprise-wide and affiliate diversity, equity, and inclusion councils; employee business forums; regional inclusion champions; mental health initiatives; and a broad range of employee and community events.
Added
In the event we were to increase our total assets to $100 billion or more, we would have a three-year implementation period to issue debt and meet the other requirements under the proposal.
Removed
We are also mindful of the increasing competition for talent in the labor market. We experienced greater challenges in the recent past in filling certain job openings relative to when labor market conditions were more balanced, but we began to see improvement in 2022.
Added
At December 31, 2023, if enacted as proposed, the estimated amount of incremental debt that would be implied by the proposal (based on our asset size at year end) would be approximately $3.5 billion over the three year phase-in period. We expect that the issuance of incremental debt would replace other sources of funding.
Added
Resolution Planning Additionally, on August 29, 2023, the FDIC issued a proposal that would revise the requirements for resolution planning (“living wills”) for banks in two asset categories.
Added
Under the proposal, banks with total assets of $100 billion or more would be required to submit more detailed living wills, while banks with total assets between $50 billion and $100 billion would submit more limited information filings, in each case filed biennially beginning in 2025.
Added
FDIC Special Assessment In November 2023, the FDIC issued a final rule to implement a special assessment pursuant to a systemic risk determination to recover the costs associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank in early 2023.
Added
Using an assessment base equal to the estimated amount of uninsured deposits above $5 billion at December 31, 2022, the FDIC is expected to collect the special assessment from banks at an annual rate of approximately 13.4 basis points (“bps”) for an anticipated eight quarterly assessment periods, beginning with the first quarterly assessment period of 2024.

… 16 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

63 edited+33 added−14 removed48 unchanged
Biggest changeIn addition, the transition to a lower-carbon economy could subject us to risks through our customers' exposure to volatility in commodity prices and the market for carbon-related products and services.
Biggest changeIn addition, the transition to a lower-carbon economy could subject us to other risks, such as through our customers’ exposure to volatility in commodity prices, increased insurance costs or inability to access insurance, and changes in the market for carbon-related products and services. 23 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Protracted congressional negotiations and political stalemates in Washington, D.C. regarding government funding and other issues may introduce additional volatility in the U.S. economy including capital and credit markets and the banking industry in particular.
Inflationary pressures have also increased our compensation costs and are likely to continue to do so in the future. We have made, and are continuing to make, significant changes that include, among other things, organizational restructurings, efficiency initiatives, and replacement or upgrades of technology systems to improve our control environment and operating efficiency.
Inflationary pressures have also increased our compensation costs and are likely to continue to do so in the future. We have made, and are continuing to make, significant changes that include, among other things, organizational restructurings, efficiency initiatives, and replacement or upgrades of technology systems to improve our operating efficiency and control environment.
A slowing economy and uncertainty related to inflationary pressures, including related changes in monetary policies and actions, rising interest rates, and decreased values of our fixed-rate assets, can increase these risks and lead to lower demand for loans, higher credit losses, and lower fee income, among other negative effects.
A slowing economy and uncertainty related to inflationary pressures, including related changes in monetary and fiscal policies and actions, rising interest rates, and decreased values of our fixed-rate assets, can increase these risks and lead to lower demand for loans, higher credit losses, and lower fee income, among other negative effects.
The Federal Home Loan Bank (“FHLB”) system and Federal Reserve have been, and continue to be, a significant source of additional liquidity and funding. Changes in FHLB funding programs could adversely affect our liquidity and management of associated risks. We and the holders of our securities could be adversely affected by unfavorable rating actions from rating agencies.
The Federal Home Loan Bank (“FHLB”) system and Federal Reserve have been, and continue to be, a significant source of additional liquidity and funding. Changes in FHLB or Federal Reserve funding programs could adversely affect our liquidity and management of associated risks. We and the holders of our securities could be adversely affected by unfavorable rating actions from rating agencies.
These regions are known for being vulnerable to natural disasters and other risks, such as hurricanes, tornadoes, earthquakes, fires, floods, prolonged droughts, and other weather-related events, some of which may be exacerbated by global climate change and become more frequent and intense.
These regions are known for being vulnerable to natural disasters and other risks, such as hurricanes, tornadoes, earthquakes, fires, floods, prolonged droughts, and other weather-related events, some of which may be exacerbated by climate change and become more frequent and intense.
ESG expectations of investors and regulators could, over time, lead us to restrict or modify some of our business practices. In addition, our business practices could be adversely affected by laws and regulations enacted or promulgated by federal, state, and local governments that relate to environmental and social issues.
Expectations of investors and regulators could, over time, lead us to restrict or modify some of our business practices. In addition, our business practices could be adversely affected by laws and regulations enacted or promulgated by federal, state, and local governments that relate to environmental and social issues.
We have experienced losses in the past as a result of these schemes and may not be able to identify, prevent, or otherwise mitigate all instances of fraud in the future that have the potential to result in material losses.
We have experienced losses in the past as a result of these attempts and schemes and may not be able to identify, prevent, or otherwise mitigate all instances of fraud in the future that have the potential to result in material losses.
For example, in 2021 and 2022, certain states passed, or considered passing, laws prohibiting financial institutions from restricting the services that they provide to certain types of businesses if the institutions also conduct business with governmental entities in such states. Depending on how these laws are worded and implemented, they could adversely affect our ability to manage risk.
For example, in 2022 and 2023, certain states passed, or considered passing, laws prohibiting financial institutions from restricting the services that they provide to certain types of businesses if the institutions also conduct business with governmental entities in such states. Depending on how these laws are worded and implemented, they could adversely affect our ability to manage risk.
OPERATIONAL RISK Our operations could be disrupted by the effects of our new and ongoing projects and initiatives. We may encounter significant operational disruption arising from our numerous projects and initiatives. These may include significant time delays, cost overruns, loss of key people, technological problems, and processing failures.
OPERATIONAL RISK Our operations could be disrupted by the effects of new and ongoing projects and initiatives. We may encounter significant operational disruptions arising from our numerous projects and initiatives. These may include significant time delays, cost overruns, loss of key people, technological problems, and processing failures.
We may also experience operational disruptions due to capacity constraints, service level failures and inadequate performance, the level of concentration, and certain replacement costs. Any or all of these issues could result in disruptions to our systems, processes, control environment, procedures, employees, and customers.
We may also experience operational disruptions due to capacity constraints, service level failures and inadequate performance, and certain replacement costs. Any or all of these issues could result in disruptions to our systems, processes, control environment, procedures, employees, and customers.
Our exposure to these proceedings has increased and may further increase as a result of stresses on customers, counterparties, and others arising from the past or current economic environments, more frequent claims and actions resulting from fraud schemes perpetrated by or involving our customers, new regulations promulgated under recently enacted statutes, the creation of new examination and enforcement bodies, and enforcement and legal actions against banking organizations.
Our exposure to these proceedings may increase as a result of stresses on customers, counterparties, and others arising from the past or current economic environments, more frequent claims and actions resulting from fraud schemes perpetrated by or involving our customers, new regulations promulgated under recently enacted statutes, the creation of new examination and enforcement bodies, and enforcement and legal actions against banking organizations.
Because of their inherent limitations, our internal controls may not prevent or detect the risk of misstatements in our financial statements, or capital arising from inadequate or failed internal processes or systems, human errors or misconduct, or other adverse external events.
Because of their inherent limitations, our internal controls may not prevent or detect the risk of operational failures, misstatements in our financial statements, or capital arising from inadequate or failed internal processes or systems, human errors or misconduct, or other adverse external events.
We use models in the management of the Bank. There is risk that these models are inaccurate in various ways, which can cause us to make suboptimal decisions. We rely on models in the management of the Bank.
We use models in the management of the Bank. There is risk that these models are inaccurate in various ways, which may cause us to make suboptimal decisions. We rely on models in the management of the Bank.
At December 31, 2022, loan balances associated with our banking operations in Utah/Idaho, Texas, and California comprised 77%, 71%, and 70% of the commercial, CRE, and consumer lending portfolios, respectively. As a result of this geographic concentration, our financial performance depends largely upon economic conditions in these market areas.
At December 31, 2023, loan balances associated with our banking operations in Utah, Idaho, Texas, and California comprised 77%, 69%, and 70% of the commercial, CRE, and consumer lending portfolios, respectively. As a result of this geographic concentration, our financial performance depends largely upon economic conditions in these market areas.
TECHNOLOGY RISK We could be adversely affected by our ability to develop, adopt, and implement technology advancements. Our ability to remain competitive is increasingly dependent upon our ability to maintain critical technological capabilities, and to identify and develop new, value-added products for existing and future customers. These technological competitive pressures arise from both traditional banking and non-traditional sources.
We could be adversely affected by our ability to develop, adopt, implement, and deliver technology advancements. Our ability to remain competitive is increasingly dependent upon our ability to maintain critical technological capabilities, and to identify and develop new, value-added products for existing and future customers. These technological competitive pressures arise from both traditional banking and nontraditional sources.
These laws and rules related to ESG issues may include provisions that conflict with other state and federal regulations and may increase our costs or limit our ability to conduct business in certain jurisdictions.
These laws and rules related to environmental and social issues may include provisions that conflict with other state and federal regulations and may increase our costs or limit our ability to conduct business in certain jurisdictions.
At December 31, 2022, we had a net deferred tax asset of $1.1 billion. The accounting treatment for realization of deferred tax assets is complex and requires judgment.
At December 31, 2023, we had a net deferred tax asset of $1.0 billion. The accounting treatment for realization of deferred tax assets is complex and requires judgment.
The Federal Reserve's tightened monetary policy may contribute to a decline in the value of our fixed-rate loans and investment securities that are pledged as collateral to support short-term borrowings, and other economic conditions may also affect our liquidity and efforts to manage associated risks.
The Federal Reserve’s tightened monetary policy has contributed to a decline in the value of our fixed-rate loans and investment securities that are pledged as collateral to support short-term borrowings. Other economic conditions may also affect (or continue to affect) our liquidity and efforts to manage associated risks.
Accordingly, deterioration in economic conditions, such as that caused by climate change or natural disasters, may specifically affect these states, and could result in higher credit losses and significantly affect our consolidated operations and financial results. For information about our lending exposure to various industries and how we manage credit risk, see “Credit Risk Management” on page 49 in MD&A.
Accordingly, deterioration in economic conditions, including those caused by climate change or natural disasters, may specifically affect these states, and could result in higher credit losses and significantly affect our consolidated operations and financial results. For information about our lending exposure to various industries and how we manage credit risk, see “Credit Risk Management” in MD&A on page 54.
However, if enacted, some of these proposals could adversely affect us by, among other things: impacting after-tax returns earned by financial services firms in general; limiting our ability to grow; increasing FDIC insurance 18 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES assessments, taxes or fees on our funding or activities; limiting the range of products and services that we could offer; and requiring us to raise capital at inopportune times.
However, if enacted, some of these proposals could adversely affect us by, among other things: impacting after-tax returns earned by financial services firms in general; limiting our ability to grow; increasing FDIC insurance assessments, taxes or fees on our funding or activities; limiting the range of products and services that we could offer; and requiring us to raise capital at inopportune times.
Concentrations of risk from counterparties could adversely affect us, and risk across our loan and investment securities portfolios could pose significant additional credit risk to us due to similar exposures between the two asset types. Counterparty risk arising from derivative or securities financing transactions could also pose additional credit risk.
Concentrations of risk from counterparties could adversely affect us, and risk across our loan and investment securities portfolios could pose significant additional credit risk to us due to similar exposures between the two asset types. Concentrations with counterparties on derivative or securities financing transactions could pose additional credit risk.
Ratings downgrades to us or our securities could increase our costs or otherwise have a negative effect on our liquidity position, financial condition, or the market prices of our securities. For information about how we manage liquidity risk, see “Liquidity Risk Management” on page 60 in MD&A.
Ratings downgrades to us or our securities could increase our costs or otherwise have a negative effect on our liquidity position, financial condition, or the market prices of our securities. For information about how we manage liquidity risk, including rating agency actions, see “Liquidity Risk Management” in MD&A on page 67.
We, and our third-party vendors, have experienced security breaches due to cyberattacks in the past that have not had material impact to our data, customers, or operations, but there can be no assurance that any such failure, interruption, or significant security breach will not occur in the future, or, if any future occurrences will be adequately addressed .
We, and our third-party suppliers, have experienced cybersecurity incidents in the past that have not had material impact to our data, customers, or operations, but there can be no assurance that any such failure, interruption, or significant security breach will not occur in the future, or, if any future occurrences will be adequately addressed.
The range of permissible financial activities is set forth in the Gramm-Leach-Bliley Act and is more limited for banks than for bank holding company organizations. The differences relate mainly to insurance underwriting (but not insurance agency activities) and merchant banking (but not broker-dealer and investment advisory activities).
The range of permissible financial activities is set forth in the Gramm-Leach-Bliley Act and is more limited for banks than for bank holding company organizations. The differences relate mainly to insurance underwriting (but not insurance agency activities) and 22 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES merchant banking (but not broker-dealer and investment advisory activities).
Failure to effectively manage our interest rate risk could adversely affect our results. Net interest income is the largest component of our revenue. Interest rate risk is managed by our Asset Liability Management Committee. Factors beyond our control can significantly influence the interest rate environment and increase our risk.
Failure to effectively manage our interest rate risk could adversely affect our results. Net interest income is the largest component of our revenue. Factors beyond our control can significantly influence the interest rate environment and increase our risk.
As cybersecurity threats continue to evolve, we will be required to expend significant additional resources to continue to modify or enhance our layers of defense or to investigate or remediate any information security vulnerabilities.
As cybersecurity threats continue to evolve, we will be required to expend additional resources to continue to modify or enhance our defenses or to investigate or remediate any information security vulnerabilities.
Any such matters may result in material adverse consequences to our results of operations, financial condition or ability to conduct our business, including adverse judgments, settlements, fines, penalties (e.g., civil money penalties under applicable banking laws), injunctions, restrictions on our business activities, or other relief.
Any such matters may result in material adverse consequences to our results of operations, financial 21 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES condition or ability to conduct our business, including adverse judgments, settlements, fines, penalties (e.g., civil money penalties under applicable banking laws), injunctions, restrictions on our business activities, or other relief.
Heightened regulatory and social focus on climate change may place additional requirements on public companies, including financial institutions, regarding the measurement, management, and disclosure of climate-related risks and associated lending and investment activities. This may result in higher regulatory, compliance, credit, and reputational risks and costs.
Heightened regulatory and social focus on climate change may place additional requirements on public companies, including financial institutions, regarding the measurement, management, and disclosure of climate-related risks and associated lending and investment activities.
The expansion of blockchain technologies and the potential creation and adoption of central bank digital currencies present similar risks. Our failure to remain technologically competitive could impede our time to market and reduce customer satisfaction, product accessibility, and relevance.
Industry experimentation with, and adoption of, artificial intelligence (“AI”), the expansion of blockchain technologies, and digital currencies, including the potential creation and adoption of central bank digital currencies, present similar risks. Our failure to remain technologically competitive could impede our competitive market position and reduce customer satisfaction, product accessibility, and relevance.
While these events have not materially interrupted our operations, these or future developments resulting from these conflicts, such as cyberattacks on the U.S., the Bank, our customers, or our suppliers, could make it difficult to conduct business activities for us, our customers, or our vendors.
While these events have not materially interrupted our operations, these or future developments resulting from these conflicts, such as cyberattacks on the U.S., the Bank, our customers, or our suppliers, could make it difficult to conduct business. Sustainability-related risk developments could lead or require us to restrict or modify some of our business activities.
These types of catastrophic events at 15 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES times have disrupted the local economy, our business and customers, and have posed physical risks to our property. In addition, catastrophic events occurring in other regions of the world may have an impact on us and our customers.
These types of catastrophic events at times have posed physical risks to our property and have disrupted the local economy, our business, and customers, including decreased access to insurance and other services. In addition, catastrophic events occurring in other regions of the world may have an impact on us and our customers.
The ability of our hardware and software providers to deliver patches and updates to mitigate vulnerabilities and our ability to implement them in a timely manner can introduce additional risks, particularly when a vulnerability is being actively exploited by threat actors.
We may face additional risks to the extent our hardware and software providers are unable to deliver patches and updates to mitigate vulnerabilities or we are unable to implement patches in a timely manner, particularly when a vulnerability is being actively exploited by threat actors.
We maintain certain risk-based and leverage capital ratios, as required by our banking regulators, which can change depending upon general economic conditions, as well as the particular conditions, risk profiles, and our growth plans. Compliance with capital requirements may limit our ability to expand and has required, and may require, us to raise additional capital.
We maintain certain risk-based and leverage capital ratios, as required by our banking regulators, which can change depending upon general economic conditions, as well as the particular conditions, risk profiles, and our growth plans.
A failure in our internal controls could have a significant negative impact not only on our earnings, but also on the perception that customers, regulators, and investors may have of us and adversely affect our business and our stock price. We could be adversely affected by internal and external fraud schemes.
A failure in our internal controls could have a 17 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES significant negative impact not only on our earnings, but also on the perception that customers, regulators, and investors may have of us and adversely affect our business and our stock price.
These regulations and guidance may adversely affect our ability to attract and retain key personnel. Some of these limitations may not apply to institutions with which we compete for talent, in particular, as we are more frequently competing for personnel with financial technology providers and other entities that may not have the same limitations on compensation as we do.
Some of these limitations may not apply to institutions with which we compete for 16 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES talent, in particular, as we are more frequently competing for personnel with financial technology providers and other entities that may not have the same limitations on compensation as we do.
For information regarding risks associated with the replacement or upgrades of our core technology systems, see “Strategic and Business Risk” on page 14 in Risk Factors.
For information regarding risks associated with the replacement or upgrades of our core technology systems, see “Strategic and Business Risk” in Risk Factors on page 16. For information about how we manage technology risk, see “Operational, Technology, and Cybersecurity Risk Management” in MD&A on page 70.
Our operational controls and third-party management programs may not provide adequate oversight and control, and inadequate performance by third parties can adversely affect our ability to deliver products and services to our customers and conduct our business.
Although there are benefits in entering into these relationships, there are risks associated with such activities. Our operational controls and third-party management programs may not provide adequate oversight and control. Inadequate performance by third parties can adversely affect our ability to deliver products and services to our customers and conduct our business.
It is impossible to determine the severity or potential effects of these events with any certainty, but any such breach could result in material adverse consequences for us and our customers. System enhancements and updates may also create risks associated with implementing new systems and integrating them with existing ones.
It is impossible to determine the severity or potential effects of these incidents with any certainty. System enhancements and updates may also create risks associated with implementing new systems and integrating them with existing ones.
CAPITAL/FINANCIAL REPORTING RISK Internal stress testing and capital management, as well as provisions of the National Bank Act and OCC regulations, may limit our ability to increase dividends, repurchase shares of our stock, and access the capital markets.
For information about how we manage cybersecurity risk, see Part I, Item 1C. Cybersecurity on page 24. CAPITAL/FINANCIAL REPORTING RISK Internal stress testing and capital management, as well as provisions of the National Bank Act and OCC regulations, may limit our ability to increase dividends, repurchase shares of our stock, and access the capital markets.
Information security risks for large financial institutions have increased significantly in recent years, in part because of the proliferation of new technologies, internet connections, and the increased sophistication and activities of organized crime, hackers, terrorists, nation-states, activists, and other external third parties.
Information security risks for us and other large financial institutions have increased significantly in recent years, in part because of the proliferation of new technologies, the ubiquity of internet connections, and the increased sophistication and activities of threat actors.
OTHER RISKS The Russian invasion of Ukraine and other geopolitical conflicts, and retaliatory measures imposed by the U.S. and other countries, including the responses to such measures, may cause significant disruptions to domestic and foreign economies and markets. The Russia/Ukraine war and other geopolitical conflicts have created new risks for global markets, trade, economic conditions, cybersecurity, and similar concerns.
OTHER RISKS The Russian invasion of Ukraine, the conflicts in the Middle East, other geopolitical conflicts, and retaliatory measures imposed by the U.S. and other countries, including the responses to such measures, may cause significant disruptions to domestic and foreign economies and markets.
We engage in commercial real estate (“CRE”) term and construction lending, primarily in our Western states footprint. We also engage in oil and gas-related lending, primarily in Texas, and we provide leveraged and enterprise value loans across our entire footprint.
We also engage in oil and gas-related lending, and we provide leveraged and enterprise value loans across our entire footprint.
Climate-related and other catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, floods, prolonged drought, and pandemics may adversely affect us, our customers, and the general economy, financial and capital markets, and specific industries. The occurrence of pandemics, natural disasters, and other climate-related or catastrophic events could materially and adversely affect our operations and financial results.
These attempts may go undetected by the systems and procedures that we have in place to monitor our operations. Climate-related and other catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, floods, prolonged drought, and pandemics may adversely affect us, our customers, and the general economy, financial and capital markets, and specific industries.
Our primary source of liquidity is deposits from our customers, which may be impacted by market-related forces such as increased competition for these deposits and a variety of other factors.
LIQUIDITY RISK Changes in levels and sources of liquidity and capital, including the resulting effects of recent events in the banking industry, may limit our operations and potential growth. Our primary source of liquidity is deposits from our customers, which may be impacted by market-related forces such as increased competition for these deposits and a variety of other factors.
While certain specific risks associated with operating under these frameworks are described below, unless and until these frameworks are further developed and established over time, the uncertainty of how these frameworks might apply to any given corporate or securities matters may prevent us from effecting transactions in an efficient and optimal manner or perhaps at all. 19 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Differences between the National Bank Act and state law requirements regarding mergers could hinder our ability to execute acquisitions as efficiently and advantageously as bank holding companies or other financial institutions.
While certain specific risks associated with operating under these frameworks are described below, unless and until these frameworks are further developed and established over time, the uncertainty of how these frameworks might apply to any given corporate or securities matters may prevent us from effecting transactions in an efficient and optimal manner or perhaps at all.
Rising interest rates, increased market volatility, or a decline in the strength of the U.S. economy in general or the local economies in which we conduct operations could result in, among other things, deterioration in credit quality and reduced demand for credit, including a resultant adverse effect on the income from our loan and investment portfolios, an increase in charge-offs, and an increase in the allowance for credit losses (“ACL”). 12 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES We have concentration of risk from counterparties and risk in our loan portfolio, including, but not limited to, loans secured by real estate, oil and gas-related lending, and leveraged and enterprise value lending, which may have unique risk characteristics that may adversely affect our results.
Rising interest rates, increased market volatility, or a decline in the strength of the U.S. economy in general or the local economies in which we conduct operations could result in, among other things, deterioration in credit quality and reduced demand for credit, including a resultant adverse effect on the income from our loan and investment portfolios, an increase in charge-offs, and an increase in the allowance for credit losses (“ACL”).
We rely heavily on communications and information systems to conduct our business. We, our customers, and other financial institutions with which we interact, are subject to ongoing, continuous attempts to penetrate key systems by individual hackers, organized criminals, and in some cases, state-sponsored organizations.
We, our customers, and other financial institutions with which we interact, are subject to ongoing, continuous attempts by threat actors, such as organized cybercrime, hackers, and state-sponsored organizations to penetrate key systems.
These requirements may limit our ability to respond to and take advantage of market developments. 17 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Economic and other circumstances may require us to raise capital at times or in amounts that are unfavorable to us.
Under the National Bank Act and OCC regulations, certain capital transactions, including share repurchases, are subject to the approval of the OCC. These requirements may limit our ability to respond to and take advantage of market developments. Regulatory requirements, economic and other circumstances may require us to raise capital at times or in amounts that are unfavorable to us.
If we were to suffer such adverse effects with respect to our employees, our business, financial condition and results of operations could be adversely or materially affected. 14 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Our ability to retain talent may also be adversely affected by changes in the economy and workforce trends, priorities, migration, modes of delivery and other considerations, such as the increased ability of employees to work from anywhere in many industries.
Our ability to retain talent may also be adversely affected by changes in the economy and workforce trends, priorities, migration, modes of delivery and other considerations, such as the increased ability of employees to work from anywhere in many industries.
Due to the complexity and interconnectedness of information technology systems, the process of enhancing our layers of defense can itself create a risk of systems disruptions and security issues. In addition, addressing certain information security vulnerabilities, such as hardware-based vulnerabilities, may affect the performance of our information technology systems.
Due to the complexity and interconnectedness of information technology systems, the process of enhancing our defenses itself can create a risk of systems disruptions and security issues.
We have significant operations and customers in Utah, Texas, California, and other regions where natural and other disasters have occurred, and are likely to continue to occur.
The occurrence of pandemics, natural disasters, and other climate-related or catastrophic events could materially and adversely affect our operations and financial results. We have significant operations and customers in Utah, Texas, California, and other regions where natural and other disasters have occurred, and are likely to continue to occur.
Many of our vendors have experienced adverse effects upon operations, supply chains, personnel, and businesses arising from inflationary pressures, wars and geopolitical conflicts, COVID-19, and other events, all of which can impact our operations as well. For information about how we manage operational risk, see “Operational, Technology, and Cybersecurity Risk Management” on page 63 in MD&A.
Many of our vendors have experienced adverse effects upon their operations, supply chains, personnel, and businesses arising from inflationary pressures, wars and geopolitical conflicts, cyber vulnerabilities, and other events, all of which can impact our operations as well.
Attempts to commit fraud both internally and externally are becoming increasingly more sophisticated and may increase in an adverse economic environment. These attempts may go undetected by the systems and procedures that we have in place to monitor our operations.
We could be adversely affected by internal and external fraud schemes. Attempts to commit fraud both internally and externally are becoming increasingly more sophisticated and may increase in an adverse economic environment.
LEGAL/COMPLIANCE RISK Laws and regulations applicable to us and the financial services industry impose significant limitations on our business activities and subject us to increased regulation and additional costs. We, and the entire financial services industry, have incurred, and will continue to incur, substantial costs related to personnel, systems, consulting, and other activities in order to comply with banking regulations.
We, and the entire financial services industry, have incurred, and will continue to incur, substantial costs related to personnel, systems, consulting, and other activities in order to comply with banking regulations. See “Supervision and Regulation” on page 7 for further information about the regulations applicable to us and the financial services industry generally. Regulators, the U.S.
Third parties, including vendors and suppliers, also present operational and information security risks to us, including security breaches or failures of their own systems. In incidents involving third parties, we may not be informed promptly of any effect on our services or our data, or be able to participate in any investigation, notification, or remediation that occurs as a result.
In incidents involving third parties, we may not be informed promptly of any effect on our services or our data, or be able to participate in any related investigation, notification, or remediation that occurs. The possibility of third-party or employee error, failure to follow security procedures, or malfeasance also presents these risks.
We could be adversely impacted by system vulnerabilities, failures, or outages impacting operations and customer services such as online and mobile banking. We rely on various information technology systems that work together in supporting internal operations and customer services.
We rely on various information technology systems that work together in supporting internal operations and customer services.
Our ability to fully realize our deferred tax asset could be reduced in the future if our estimates of future taxable income from our operations, future reversals of existing deferred tax liabilities, or tax planning strategies do not support the realization of our deferred tax asset.
Our ability to fully realize our deferred tax asset could be reduced in the future if our estimates of future taxable income from our operations, future reversals of existing deferred tax liabilities (“DTLs”), or tax planning strategies do not support the realization of our deferred tax asset. 20 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Changes in applicable tax laws, regulations, macroeconomic conditions, or market conditions may adversely affect our financial results, and there can be no assurance that we will be able to fully realize our deferred tax assets.
For information about how we manage technology risk, see “Operational, Technology, and Cybersecurity Risk Management” on page 63 in MD&A. 16 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES CYBERSECURITY RISK We are subject to a variety of information system failure and cybersecurity risks that could adversely affect our business and financial performance.
For information about how we manage operational risk, see “Operational, Technology, and Cybersecurity Risk Management” in MD&A on page 70. 18 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES TECHNOLOGY RISK We could be adversely impacted by system vulnerabilities, failures, or outages impacting operations and customer services such as online and mobile banking.
These loan types may be subject to specific risks, including governmental and social responses to environmental issues and climate change, volatility, and potential significant and prolonged declines in collateral-values and activity levels. We may have other unidentified risks in our loan portfolio. Our business is highly correlated to local economic conditions in a specific geographic region of the U.S.
Certain of these loans may be subject to specific risks, including governmental and social responses to environmental issues and climate change, volatility, and potential significant and prolonged declines in 14 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES collateral-values and activity levels.
The occurrence of any failure, interruption or security breach of our information systems could damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny, or expose us to civil litigation and possible financial liability. For information about how we manage cybersecurity risk, see “Operational, Technology, and Cybersecurity Risk Management” on page 63 in MD&A.
The occurrence of any failure, interruption or security incident to our information systems or those of our third-party suppliers could interfere with or disrupt our 19 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES operations and services, damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny, expose us to civil litigation and financial liability, or otherwise result in material adverse consequences on us.
The ultimate impact of these proposals cannot be predicted as it is unclear which, if any, may be enacted. We could be adversely affected by legal and governmental proceedings. We are subject to risks associated with legal claims, litigation, and regulatory and other government proceedings.
The ultimate impact of these proposals cannot be predicted as it is unclear which, if any, may be enacted. Tax laws, regulations, and case law may change due to legislative, administrative, and judicial changes that could adversely impact our business and financial performance.
Management decisions based in part on such models, therefore, may be suboptimal. We outsource various operations to third-party vendors, which could adversely impact our business and operational performance. We rely on various vendors to perform operational activities to conduct our business. Although there are benefits in entering into these relationships, there are risks associated with such activities.
For more information about our deposit models, see “Interest Rate and Market Risk Management” in MD&A on page 63. We outsource various operations to third-party vendors, which could adversely impact our business and operational performance. We rely on various vendors to perform operational activities to conduct our business.
These uncertainties and risks, including those created by legislative and regulatory uncertainties, may increase our cost of capital and other financing costs. We could be adversely affected by accounting, financial reporting, and regulatory compliance risk. We are exposed to accounting, financial reporting, and regulatory compliance risk.
These uncertainties and risks, including those created by legislative and regulatory change and uncertainties, such as recent regulatory proposals that would significantly revise the capital requirements and expand long-term debt requirements applicable to large banking organizations, may increase our cost of capital and other financing costs.
Removed
Interest rates on our financial instruments are subject to change based on developments related to LIBOR, which could adversely impact our revenue, expenses, and value of those financial instruments. The London Interbank Offered Rate (“LIBOR”) is being phased out globally, and banks are required to migrate to alternative reference rates no later than June 2023.
Added
We have concentration of risk from counterparties and risk in our loan portfolio, including, but not limited to, loans secured by real estate, oil and gas-related lending, and leveraged and enterprise value lending, which may have unique risk characteristics that may adversely affect our results.
Removed
The market transition away from LIBOR could have a range of adverse effects on our business, financial condition, and results of operations.
Added
We engage in commercial real estate (“CRE”) term and construction lending, primarily in our Western states footprint. Certain CRE collateral types, particularly office CRE, continue to experience increased vacancy rates, declining property values, and pressures from rising interest rates, which could result in increased delinquencies and defaults.
Removed
In particular, the transition could (1) adversely affect the interest rates paid or received on, and the value of, our floating-rate obligations, loans, deposits, 13 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES derivatives, and other financial instruments indexed to LIBOR; and (2) result in disputes, litigation or other actions with counterparties regarding the interpretation and enforceability of certain fallback language in financial instruments.
Added
Any decline in these portfolios could cause increased credit losses and reduced loan demand, which could adversely affect our business and that of our customers. We may have other unidentified risks in our loan portfolio. Our business is highly correlated to local economic conditions in a specific geographic region of the U.S.
Removed
For information about how we manage the transition from LIBOR, interest rate risk, and market risk, see “Interest Rate and Market Risk Management” on page 56 in MD&A. LIQUIDITY RISK Changes in levels and sources of liquidity and capital and liquidity requirements may limit our operations and potential growth.
Added
Additionally, asset and liability values may be significantly impacted by customer behavior, as customers may choose to withdraw certain deposits or prepay certain loans at any time, which may significantly affect our expected cash flows. For information about how we manage interest rate risk and market risk, see “Interest Rate and Market Risk Management” in MD&A on page 63.
Removed
Any such incidents may have a material adverse effect upon our operations, reputation, customers, and services. The possibility of third-party or employee error, failure to follow security procedures, or malfeasance also presents these risks.
Added
Deposits across the banking industry have fluctuated in recent quarters in large part due to the increased interest rate environment and prominent bank closures.
Removed
Under the National Bank Act and OCC regulations, certain capital transactions, including share repurchases, are subject to the approval of the OCC.
Added
We, like many other banks, experienced deposit outflows as customers spread deposits among several different banks to maximize their amount of FDIC insurance, moved deposits to institutions offering higher rates or removed deposits from the U.S. financial system entirely.
Removed
Changes in applicable tax laws, regulations, macroeconomic conditions, or market conditions may adversely affect our financial results, and there can be no assurance that we will be able to fully realize our deferred tax assets. For information about how we manage capital, see “Capital Management” on page 65 in MD&A.
Added
Since the FDIC insurance limit is not inflation-indexed and has not increased since 2008, the percent of our and other regional bank uninsured deposits has steadily increased, and may continue to increase without additional congressional action to increase the FDIC insurance limits. 15 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Although our deposit levels have increased during the latter half of 2023, our cost of funds has also increased, primarily as a result of declining noninterest-bearing deposits, growth in interest-bearing deposits, and a higher interest rate environment.
Removed
See “Supervision and Regulation” on page 6 for further information about the regulations applicable to us and the financial services industry generally. Regulators, the U.S.
Added
The potential for greater volatility and further increased costs remains, particularly if there is negative news surrounding the banking industry or perceived risks regarding bank safety and soundness.
Removed
Our business, financial condition, liquidity and results of operations have been, and will likely continue to be, adversely affected by the COVID-19 pandemic.

… 30 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed0 unchanged
Biggest changeITEM 2. PROPERTIES At December 31, 2022, we operated 416 branches, of which 277 are owned and 139 are leased. We also lease our headquarters in Salt Lake City, Utah. The annual rentals under long-term leases for leased premises are determined under various formulas and factors, including operating costs, maintenance, and taxes.
Biggest changeITEM 2. PROPERTIES At December 31, 2023, we operated 407 branches, of which 278 are owned and 129 are leased. We also lease our headquarters in Salt Lake City, Utah. The annual rentals under long-term leases for leased premises are determined under various formulas and factors, including operating costs, maintenance, and taxes.
For additional information regarding leases and rental payments, see Note 8 of the Notes to Consolidated Financial Statements. ITEM 3. LEGAL PROCEEDINGS The information contained in Note 16 of the Notes to Consolidated Financial Statements is incorporated by reference herein. ITEM 4. MINE SAFETY DISCLOSURES None. 21 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES PART II
For additional information regarding leases and rental payments, see Note 8 of the Notes to Consolidated Financial Statements. ITEM 3. LEGAL PROCEEDINGS The information contained in Note 16 of the Notes to Consolidated Financial Statements is incorporated by reference herein. ITEM 4. MINE SAFETY DISCLOSURES None. 25 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 21 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22 Item 6. Reserved 23 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 24
Biggest changeItem 4. Mine Safety Disclosures 25 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. Reserved 27 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+1 added−1 removed2 unchanged
Biggest changeIn January 2023, our Board declared a dividend of $0.41 per common share payable on February 23, 2023 to shareholders of record on February 16, 2023. Share Repurchases During 2022, the Board approved plans to repurchase up to $200 million of common shares outstanding.
Biggest changeEquity Capital and Dividends As of February 5, 2024, there were 3,530 shareholders of record of our common stock. In February 2024, the Board declared a dividend of $0.41 per common share payable on February 22, 2024 to shareholders of record at the close of business on February 15, 2024.
Shares were acquired from employees to pay for their payroll taxes and stock option exercise cost upon the exercise of stock options. 22 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Performance Graph The following stock performance graph compares the five-year cumulative total return of our common stock with the Standard and Poor’s (“S&P”) 500 Index and the Keefe, Bruyette & Woods, Inc.
Shares were acquired from employees to pay for their payroll taxes and stock option exercise cost upon the exercise of stock options. 26 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Performance Graph The following stock performance graph compares the five-year cumulative total return of our common stock with the Standard and Poor’s (“S&P”) 500 Index and the Keefe, Bruyette & Woods, Inc.
As of December 31, 2022, 66,139, 138,390, 98,555, and 136,368 of preferred shares series A, G, I, and J respectively, are outstanding. See Note 14 of the Notes to Consolidated Financial Statements for further information regarding our preferred stock.
As of December 31, 2023, 66,139, 138,390, 98,555, and 136,368 of preferred shares series A, G, I, and J respectively, are outstanding. See Note 14 of the Notes to Consolidated Financial Statements for further information regarding our preferred stock.
The stock performance graph is based upon an initial investment of $100 on December 31, 2017 and assumes reinvestment of dividends. PERFORMANCE GRAPH FOR ZIONS BANCORPORATION, N.A.
The stock performance graph is based upon an initial investment of $100 on December 31, 2018 and assumes reinvestment of dividends. PERFORMANCE GRAPH FOR ZIONS BANCORPORATION, N.A.
For further information regarding our common stock activity, see the Consolidated Statement of Changes in Shareholders' Equity on page 80.
For more information regarding our common stock activity, see the Consolidated Statement of Changes in Shareholders’ Equity on page 87.
INDEXED COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN 2017 2018 2019 2020 2021 2022 Zions Bancorporation, N.A. 100.0 81.7 107.1 93.0 138.7 104.0 KRX Regional Bank Index 100.0 82.5 102.2 93.3 127.5 118.7 S&P 500 100.0 95.6 125.7 148.8 191.5 156.8 SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The information contained in Item 12 of this Form 10-K is incorporated by reference herein.
INDEXED COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN 2018 2019 2020 2021 2022 2023 Zions Bancorporation, N.A. 100.0 131.1 113.8 169.7 127.2 119.0 KRX Regional Bank Index 100.0 123.9 113.1 154.6 143.9 143.3 S&P 500 100.0 131.5 155.7 200.3 164.0 207.0 SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The information contained in Item 12 of this Form 10-K is incorporated by reference herein.
In January 2023, the Board approved a plan to repurchase up to $50 million of common shares outstanding during the first quarter of 2023. In February 2023, we repurchased 946,644 common shares outstanding for $50 million at an average price of $52.82.
In February 2024, the Board approved a plan to repurchase up to $35 million of common shares outstanding during the fiscal year 2024. In February 2024, we repurchased 0.9 million common shares outstanding for $35 million at an average price of $39.32.
The following schedule summarizes our share repurchases for the year ended December 31, 2022: Schedule 3 2022 Share Repurchases Period Total number of shares purchased 1 Average price paid per share Shares purchased as part of publicly announced plans First quarter 778,248 $ 65.42 765,581 Second quarter 936,256 53.73 930,905 Third quarter 888,092 56.30 888,092 October — — November 978,491 51.11 978,281 December — — Fourth quarter total 978,491 51.11 978,281 Total 2022 3,581,087 $ 56.19 3,562,859 1 Includes common shares acquired in connection with our stock compensation plan.
The following schedule summarizes our share repurchases for the year ended December 31, 2023: Schedule 3 2023 SHARE REPURCHASES Period Total number of shares purchased 1 Average price paid per share Shares purchased as part of publicly announced plans First quarter 953,080 $ 52.82 946,644 Second quarter — — — Third quarter — — — October — — — November — — — December 18,851 45.59 — Fourth quarter total 18,851 45.59 — Total 2023 971,931 $ 52.68 946,644 1 Includes common shares acquired in connection with our stock compensation plan.
COMMON STOCK Market Information Our common stock is traded on the NASDAQ Global Select Market under the symbol “ZION.” The reported sale price of the common stock on NASDAQ was $54.10 per share on February 6, 2023. Equity Capital and Dividends As of February 6, 2023, there were 3,602 shareholders of record of our common stock.
COMMON STOCK Market Information Our common stock is traded on the National Association of Securities Dealers Automated Quotations (“NASDAQ”) Global Select Market under the symbol “ZION.” The closing price of our common stock on NASDAQ was $38.87 per share on February 5, 2024.
Removed
As part of these plans, we repurchased 3.6 million common shares outstanding for $200 million at an average price of $56.13 per share. During 2021, we repurchased 13.5 million common shares outstanding for $800 million at an average price of $59.27 per share.
Added
Share Repurchases During the first quarter of 2023, we repurchased 0.9 million common shares outstanding for $50 million at an average price of $52.82 per share. We did not repurchase common shares during the second, third, or fourth quarters of 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

215 edited+104 added−106 removed50 unchanged
Biggest changeThe following schedules present the changes in and allocation of the ACL: 54 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Schedule 29 CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES (Dollar amounts in millions) 2022 2021 2020 2019 2018 Loans and leases outstanding, on December 31, $ 55,653 $ 50,851 $ 53,476 $ 48,709 $ 46,714 Average loans and leases outstanding: Commercial - excluding PPP loans 28,500 25,014 25,193 24,990 23,333 Commercial - PPP loans 725 4,566 4,534 — — Commercial real estate 12,251 12,136 11,854 11,675 11,079 Consumer 11,122 10,267 11,435 11,600 11,013 Total average loans and leases outstanding $ 52,598 $ 51,983 $ 53,016 $ 48,265 $ 45,425 Allowance for loan and lease losses: Balance at beginning of year 1 $ 513 $ 777 $ 497 $ 495 $ 518 Provision for loan losses 101 (258) 385 37 (39) Charge-offs: Commercial 72 35 113 57 46 Commercial real estate — — 1 4 5 Consumer 10 13 14 17 18 Total 82 48 128 78 69 Recoveries: Commercial 32 29 14 25 68 Commercial real estate — 3 — 6 9 Consumer 11 10 9 10 8 Total 43 42 23 41 85 Net loan and lease charge-offs 39 6 105 37 (16) Balance at end of year $ 575 $ 513 $ 777 $ 495 $ 495 Reserve for unfunded lending commitments: Balance at beginning of year 1 $ 40 $ 58 $ 29 $ 57 $ 58 Provision for unfunded lending commitments 21 (18) 29 2 (1) Balance at end of year $ 61 $ 40 $ 58 $ 59 $ 57 Total allowance for credit losses: Allowance for loan and lease losses $ 575 $ 513 $ 777 $ 495 $ 495 Reserve for unfunded lending commitments 61 40 58 59 57 Total allowance for credit losses $ 636 $ 553 $ 835 $ 554 $ 552 Ratio of allowance for credit losses to net loans and leases, on December 31, 2 1.14 % 1.09 % 1.56 % 1.14 % 1.18 % Ratio of allowance for credit losses to nonaccrual loans, on December 31, 427 % 204 % 228 % 228 % 224 % Ratio of allowance for credit losses to nonaccrual loans and accruing loans past due 90 days or more, on December 31, 410 % 198 % 220 % 220 % 216 % Ratio of total net charge-offs to average total loans and leases 3 0.07 % 0.01 % 0.20 % 0.08 % (0.04) % Ratio of commercial net charge-offs to average commercial loans 0.14 % 0.02 % 0.33 % 0.13 % (0.09) % Ratio of commercial real estate net charge-offs to average commercial real estate loans 0.00 % (0.02) % 0.01 % (0.02) % (0.04) % Ratio of consumer net charge-offs to average consumer loans (0.01) % 0.03 % 0.04 % 0.06 % 0.09 % 1 Beginning balances at January 1, 2020 for the allowance for loan and lease losses and reserve for unfunded lending commitments do not agree to their respective ending balances at December 31, 2019 because of the adoption of the CECL accounting standard. 2 The ratio of allowance for credit losses to net loans and leases (ex-PPP loans), at December 31, 2022 and 2021 was 1.15% and 1.13%, respectively. 3 The ratio of total net charge-offs to average loans and leases (ex-PPP loans), at December 31, 2022 and 2021 was 0.08% and 0.01%, respectively. 55 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Schedule 30 ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES December 31, 2022 2021 2020 2019 2018 (Dollar amounts in millions) % of total loans Allocation of ACL % of total loans Allocation of ACL % of total loans Allocation of ACL % of total loans Allocation of ACL % of total loans Allocation of ACL Loan segment Commercial 54.8 % $ 316 55.9 % $ 330 57.0 % $ 494 52.1 % $ 380 51.7 % $ 371 Commercial real estate 22.9 189 24.0 118 22.6 191 23.7 121 23.8 127 Consumer 22.3 131 20.1 105 20.4 150 24.2 53 24.5 54 Total 100.0 % $ 636 100.0 % $ 553 100.0 % $ 835 100.0 % $ 554 100.0 % $ 552 The total ACL increased $83 million during 2022, primarily due to loan growth and deterioration in economic scenarios, partially offset by improvements in credit quality.
Biggest changeThe following schedules present the changes in, and allocation of, the ACL: 61 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Schedule 30 CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES Year Ended December 31, (Dollar amounts in millions) 2023 2022 2021 Loans and leases outstanding, $ 57,779 $ 55,653 $ 50,851 Average loans and leases outstanding: Commercial 30,519 29,225 29,580 Commercial real estate 13,023 12,251 12,136 Consumer 13,198 11,122 10,267 Total average loans and leases outstanding $ 56,740 $ 52,598 $ 51,983 Allowance for loan and lease losses: Balance at beginning of year 1, 2 $ 572 $ 513 $ 777 Provision for loan losses 148 101 (258) Charge-offs: Commercial 45 72 35 Commercial real estate 3 — — Consumer 14 10 13 Total 62 82 48 Recoveries: Commercial 20 32 29 Commercial real estate — — 3 Consumer 6 11 10 Total 26 43 42 Net loan and lease charge-offs 36 39 6 Balance at end of year $ 684 $ 575 $ 513 Reserve for unfunded lending commitments: Balance at beginning of year 1, 2 $ 61 $ 40 $ 58 Provision for unfunded lending commitments (16) 21 (18) Balance at end of year $ 45 $ 61 $ 40 Total allowance for credit losses: Allowance for loan and lease losses $ 684 $ 575 $ 513 Reserve for unfunded lending commitments 45 61 40 Total allowance for credit losses $ 729 $ 636 $ 553 Ratio of allowance for credit losses to net loans and leases 1.26 % 1.14 % 1.09 % Ratio of allowance for credit losses to nonaccrual loans 328 % 427 % 204 % Ratio of allowance for credit losses to nonaccrual loans and accruing loans past due 90 days or more 324 % 410 % 198 % Ratio of total net charge-offs to average total loans and leases 0.06 % 0.07 % 0.01 % Ratio of commercial net charge-offs to average commercial loans 0.08 % 0.14 % 0.02 % Ratio of commercial real estate net charge-offs to average commercial real estate loans 0.02 % — % (0.02) % Ratio of consumer net charge-offs to average consumer loans 0.06 % (0.01) % 0.03 % 1 Beginning balances at January 1, 2020 for the allowance for loan and lease losses and reserve for unfunded lending commitments do not agree to their respective ending balances at December 31, 2019 because of the adoption of the CECL accounting standard. 2 The beginning balance at January 1, 2023 for the allowance for loan and lease losses and reserve for unfunded lending commitments do not agree to the ending balance at December 31, 2022 because of the adoption of the new accounting standard related to loan modifications to borrowers experiencing financial difficulties. 62 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Schedule 31 ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES December 31, 2023 2022 2021 (Dollar amounts in millions) % of total loans Allocation of ACL % of total loans Allocation of ACL % of total loans Allocation of ACL Loan segment Commercial 53.0 % $ 321 54.8 % $ 316 55.9 % $ 330 Commercial real estate 23.1 258 22.9 189 24.0 118 Consumer 23.9 150 22.3 131 20.1 105 Total 100.0 % $ 729 100.0 % $ 636 100.0 % $ 553 The total ACL increased to $729 million in 2023, from $636 million in 2022.
Consumer Loans Residential Mortgages We originate first-lien residential home mortgages considered to be of prime quality. We generally hold variable-rate loans in our portfolio and sell “conforming” fixed-rate loans to third parties, including Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, for which we make representations and warranties that the loans meet certain underwriting and collateral documentation standards.
Consumer Loans We originate first-lien residential home mortgages considered to be of prime quality. We generally hold variable-rate loans in our portfolio and sell “conforming” fixed-rate loans to third parties, including Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, for which we make representations and warranties that the loans meet certain underwriting and collateral documentation standards.
Full or partial write-offs of an AFS security are recorded in the period in which the security is deemed to be uncollectible. While certain of our assets and liabilities are measured at fair value, such as our AFS securities, the majority of our assets and liabilities are not adjusted for changes in fair value.
Full or partial write-offs of an AFS security are recorded in the period in which the security is deemed to be uncollectible. While certain assets and liabilities are measured at fair value, such as our AFS securities, the majority of our assets and liabilities are not adjusted for changes in fair value.
Other major CMC responsibilities include: • Setting overall capital targets within the Board-approved Capital Policy, monitoring performance compared with our Capital Policy limits, and recommending changes to capital including dividends, common stock issuances and repurchases, subordinated debt, and changes in major strategies to maintain ourselves at well-capitalized levels; • Maintaining an adequate capital cushion to withstand adverse stress events while continuing to meet the borrowing needs of our customers, and to provide reasonable assurance of continued access to wholesale funding, consistent with fiduciary responsibilities to depositors and bondholders; and • Reviewing our agency ratings.
Other major CMC responsibilities include: • Setting overall capital targets within the Board-approved Capital Policy, monitoring performance compared with our Capital Policy limits, and recommending changes to capital including dividends, common stock issuances and repurchases, subordinated debt, and changes in major strategies to maintain ourselves at well-capitalized levels; • Maintaining an adequate capital cushion to withstand adverse stress events while continuing to meet the borrowing needs of our customers, and to provide reasonable assurance of continued access to wholesale funding, consistent with fiduciary responsibilities to depositors and bondholders; and • Reviewing our credit agency ratings.
Critical assumptions used as part of these methods generally include: • Selection of comparable publicly traded companies based on location, size, and business focus and composition; • Selection of market comparable acquisition transactions, if available, based on location, size, business focus and composition, and date of the transaction; • The discount rate, which is based on our estimate of the cost of equity capital; • The projections of future earnings and cash flows of the reporting unit; • The relative weight given to the valuations derived by the two methods described previously; and • The control premium associated with reporting units.
Critical assumptions used as part of these methods include: • Selection of comparable publicly traded companies based on location, size, and business focus and composition; • Selection of market comparable acquisition transactions, if available, based on location, size, business focus and composition, and date of the transaction; • The discount rate, which is based on our estimate of the cost of equity capital; • The projections of future earnings and cash flows of the reporting unit; • The relative weight given to the valuations derived by the two methods described previously; and • The control premium associated with reporting units.
Significant enhancements have also been made to governance, technology, and reporting, including the establishment of Policy and Committee Governance programs; the implementation of a governance, risk, and control system to manage and integrate business processes, risks, controls, assessments, and control testing; and the creation of an Enterprise Risk Profile and Operational Risk Profile.
Significant enhancements have also been made to governance, technology, and reporting, including the establishment of Policy and Committee Governance programs; the implementation of a governance, risk, and control system to manage and integrate business processes, risks, controls, assessments, and control testing; and the creation of an Enterprise Risk Profile.
Interest payments received on nonaccrual loans are not recognized into interest income, but are applied as a reduction to the principal outstanding. In addition, interest on restructured loans is generally accrued at modified rates.
Interest payments received on nonaccrual loans are not recognized into interest income, but are applied as a reduction to the principal outstanding. In addition, interest on modified loans is generally accrued at the modified rates.
Loan modifications and restructurings may also occur when the borrower experiences financial difficulty and needs temporary or permanent relief from the original contractual terms of the loan.
Loan modifications may also occur when the borrower experiences financial difficulty and needs temporary or permanent relief from the original contractual terms of the loan.
Loans include nonaccrual and restructured loans. 31 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES The following schedule presents year-over-year changes in net interest income on a fully taxable-equivalent basis for the years indicated. For purposes of calculating the yields in this schedule, the average loan balances also include the principal amounts of nonaccrual and restructured loans.
Loans include nonaccrual and restructured loans. 35 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES The following schedule presents year-over-year changes in net interest income on a fully taxable-equivalent basis for the years indicated. For purposes of calculating the yields in this schedule, the average loan balances also include the principal amounts of nonaccrual and restructured loans.
Technology projects, initiatives, and operations are governed by a change management framework that assesses the activities and risk within our business processes to limit disruption and resource constraints. New, expanded, or modified products and services, as well as new lines of business, change initiative status, and other risks are regularly reviewed and approved by the Change, Initiatives, and Technology Committee.
Technology projects, initiatives, and operations are governed by a change management framework that assesses the activities and risk within our business processes to limit disruption and resource constraints. New, expanded, or modified products and services, as well as new lines of business, change initiatives, and other risks are regularly reviewed and approved by the Change, Initiatives, and Technology Committee.
Under the OCC’s “Earnings Limitation Rule,” our dividend payments are restricted to an amount equal to the sum of the total of (1) our net income for that year, and (2) retained earnings for the preceding two years, unless the OCC approves the declaration and payment of dividends in excess of such amount.
Pursuant to the OCC’s “Earnings Limitation Rule,” our dividend payments are restricted to an amount equal to the sum of the total of (1) our net income for that year, and (2) retained earnings for the preceding two years, unless the OCC approves the declaration and payment of dividends in excess of such amount.
This asymmetrical accounting creates volatility in AOCI and equity. Notes 1, 3 , 5, 7, and 10 of the Notes to Consolidated Financial Statements and the “Investment Securities Portfolio” on page 42 contain further information regarding the use of fair value estimates.
This asymmetrical accounting creates volatility in AOCI and equity. Notes 1, 3 , 5, 7, and 10 of the Notes to Consolidated Financial Statements and the “Investment Securities Portfolio” on page 46 contain further information regarding the use of fair value estimates.
Fair Value Estimates We measure certain of our assets and liabilities at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.
Fair Value Estimates We measure certain assets and liabilities at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.
They are due upon demand and may be drawn immediately. Therefore, these commitments are shown as having indeterminable maturities. 4 The values presented do not reflect the associated hedges. In addition to the commitments specifically noted in the schedule above, we enter into a number of contractual commitments in the ordinary course of business.
They are due upon demand and may be drawn immediately. Therefore, these commitments are shown as having indeterminable maturities. 4 The values presented do not reflect the impact of associated fair value hedges. In addition to the commitments specifically noted in the schedule above, we enter into a number of contractual commitments in the ordinary course of business.
Unlike EaR, which measures net interest income over 12 months, latent and emergent interest rate sensitivity explains changes in current quarter net interest income (ex-PPP), compared with expected net interest income in the same quarter one year forward.
Unlike EaR, which measures net interest income over 12 months, latent and emergent interest rate sensitivity explains changes in current quarter net interest income, compared with expected net interest income in the same quarter one year forward.
In the analysis of taxable-equivalent net interest income changes due to volume and rate, changes are allocated to volume with the following exceptions: when volume and rate both increase, the variance is allocated proportionately to both volume and rate; when the rate increases and volume decreases, the variance is allocated to rate.
In the analysis of changes in taxable-equivalent net interest income attributed to volume and rate, changes are allocated to volume with the following exceptions: when volume and rate both increase, the variance is allocated proportionately to both volume and rate; when the rate increases and volume decreases, the variance is allocated to rate.
Our Board approves the overall policies relating to the management of our financial risk, including interest rate and market risk management. The Board has delegated the responsibility of managing our interest rate and market risk to the Asset/Liability Committee (“ALCO”), which consists of members of management.
Our Board approves the key policies relating to the management of our financial risk, including interest rate and market risk management. The Board has delegated the responsibility of managing our interest rate and market risk to the Asset/Liability Committee (“ALCO”), which consists of members of management.
The NIM is calculated as net interest income as a percent of interest-earning assets.
The NIM is calculated as net interest income as a percent of average interest-earning assets.
This Committee includes, among other senior executives, the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Information Officer, and Chief Risk Officer. Initiative risk and change impact from the framework are reported to the ROC.
This Committee includes, among other senior executives, the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, CTOO, and Chief Risk Officer. Initiative risk and change impact from the framework are reported to the ROC.
In addition, our Enterprise Exam Management department has standardized our response and reporting, and increased our effectiveness and efficiencies with regulatory examination, communications and issues management. Technology Risk Management Technology risk is the risk of adverse impact to business operations and customers due to reduced or denied availability or inadequate value delivery caused by technology-related assets, infrastructure, strategy or processes.
In addition, our Enterprise Exam Management department has standardized our response and reporting, and increased our effectiveness and efficiencies with regulatory examination, communications, and issues management. Technology Risk Management Technology risk is the risk of adverse impact to business operations and customers due to reduced or denied availability or inadequate value delivery related to technology-related applications, infrastructure, strategy, or processes.
We are a member of the FHLB of Des Moines, which allows member banks to borrow against eligible loans and securities to satisfy liquidity and funding requirements. We are required to invest in FHLB and Federal Reserve stock to maintain our borrowing capacity.
We are a member of the FHLB of Des Moines, which allows member banks to borrow against eligible loans and securities to satisfy liquidity and funding requirements. We are required to invest in FHLB and FRB stock to maintain our borrowing capacity.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Key Corporate Objectives We conduct our operations through seven separately managed affiliates, each with its own local branding and management team.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Key Corporate Objectives We conduct our operations primarily through seven separately managed and geographically defined affiliates, each with its own local branding and management team.
RESULTS OF OPERATIONS Our Financial Performance This section and other sections provide information about our recent financial performance. For information about our results of operations for 2021 compared with 2020, see the respective sections in MD&A included in our 2021 Form 10-K.
Our Financial Performance This section and other sections provide information about our recent financial performance. For more information about our results of operations for 2022 compared with 2021, see the respective sections in MD&A included in our 2022 Form 10-K.
Changes in the ALLL and RULC, net of charge-offs and recoveries, are recorded as the provision for loan and lease losses and the provision for unfunded lending commitments, respectively, in the income statement. The ACL for debt securities is estimated separately from loans and is recorded in investment securities on the consolidated balance sheet.
Changes in the ALLL and RULC, net of charge-offs and recoveries, are recorded as the provision for loan and lease losses and the provision for unfunded lending commitments, respectively, on the consolidated statement of income. The ACL for debt securities is estimated separately from loans and is included in “Investment securities” on the consolidated balance sheet.
Total technology spend represents expenditures for technology systems and infrastructure and is reported as a combination of the following: • Technology, telecom, and information processing expense — includes expenses related to application software licensing and maintenance, related amortization, telecommunications, and data processing; • Other technology-related expenses — includes related noncapitalized salaries and employee benefits, occupancy and equipment, and professional and legal services; and • Technology investments — includes capitalized technology infrastructure equipment, hardware, and purchased or internally developed software, less related amortization or depreciation.
Technology spend is reported as a combination of the following: • Technology, telecom, and information processing expense — includes expenses related to application software licensing and maintenance, related amortization, telecommunications, and data processing; • Other technology-related expense — includes related noncapitalized salaries and employee benefits, occupancy and equipment, and professional and legal services; and • Technology investments — includes capitalized technology infrastructure equipment, hardware, and purchased or internally developed software, less related amortization or depreciation.
If interest rates rise consistent with the forward curve at December 31, 2022, we expect emergent sensitivity to reduce net interest income by approximately 1% from the latent sensitivity level, for a cumulative 2% reduction in net interest income. Our focus on business banking also plays a significant role in determining the nature of our asset-liability management posture.
If interest rates rise consistent with the forward curve at December 31, 2023, we expect emergent sensitivity to increase net interest income by approximately 1% from the latent sensitivity level, for a cumulative 2% increase in net interest income. Our focus on business banking also plays a significant role in determining the nature of our asset-liability management posture.
Credit risk arises primarily from our lending activities, as well as from off-balance sheet credit instruments. The Board, through the ROC, is responsible for approving the overall credit policies relating to the management of credit risk. The ROC also oversees and monitors adherence to key credit policies and the credit risk appetite as defined in the Risk Management Framework.
Credit risk arises primarily from our lending activities, as well as from off-balance sheet credit instruments. The Board, through the ROC, is responsible for approving key credit policies. The ROC also oversees and monitors adherence to these policies and the credit risk appetite as defined in the Risk Management Framework.
The primary assumptions of the quantitative model are the economic forecast, the length of the reasonable and supportable forecast period, the length of the reversion period, prepayment rates, and the credit quality of the portfolio. The quantitative ACL estimate is a probability-weighted amount based on losses under multiple economic scenarios that reflect optimistic, baseline, and stressed economic conditions.
The primary assumptions of the quantitative model are the economic forecast, the length of the reasonable and supportable forecast period, the length of the reversion period, prepayment rates, and the credit quality of the portfolio. The quantitative ACL estimate is based on losses under multiple economic scenarios that reflect optimistic, baseline, and stressed economic conditions.
The provision for securities losses was less than $1 million during 2022 and 2021. 33 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES The bar chart above illustrates the broad categories of change in the ACL from the prior year period.
The provision for securities losses was less than $1 million during 2023 and 2022. 37 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES The bar chart above illustrates the broad categories of change in the ACL from the prior year period.
Additionally, if the probability of default risk-grade for all pass-graded loans was immediately downgraded one grade on our internal risk-grading scale, the quantitatively determined amount of the ACL at December 31, 2022 would increase by approximately $52 million.
Additionally, if the probability of default risk-grade for all pass-graded loans was immediately downgraded one grade on our internal risk-grading scale, the quantitatively determined amount of the ACL at December 31, 2023 would increase by approximately $51 million.
The decrease was due to a $21 million increase in the provision for credit losses, a $6 million increase in noninterest expense, and a $2 million decrease in noninterest income, partially offset by a $17 million increase in net interest income.
The decrease was due to a $17 million increase in noninterest expense, a $3 million decrease in noninterest income, and a $3 million decrease in net interest income, partially offset by a $2 million decrease in the provision for credit losses.
Equity investments may be accounted for at cost less impairment and adjusted for observable price changes, fair value, the equity method, or full consolidation methods of accounting, depending on our ownership position and degree of influence over the investees’ business. Regardless of the accounting method, the value of our investment is subject to fluctuation.
Equity investments may be accounted for at cost less impairment and adjusted for observable price changes, fair value, the equity method, or proportional or full consolidation methods of accounting, depending on our ownership position and degree of influence over the investees’ business. Regardless of the accounting method, the values of our investments are subject to fluctuation.
The ACL represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date. To determine the adequacy of the allowance, our loan and lease portfolio is segmented based on loan type.
Allowance for Credit Losses The ACL includes the ALLL and the RULC. The ACL represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date. To determine the adequacy of the allowance, our loan and lease portfolio is segmented based on loan type.
Loans include nonaccrual and restructured loans. 32 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Provision for Credit Losses The allowance for credit losses (“ACL”) is the combination of both the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”).
Loans include nonaccrual and modified loans. 36 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Provision for Credit Losses The allowance for credit losses (“ACL”) is the combination of both the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”).
We are required to invest 4% of our FHLB borrowings in FHLB stock to maintain our borrowing capacity.
We are required to invest approximately 4% of our FHLB borrowings in FHLB activity stock to maintain our borrowing capacity.
Additionally, we utilize derivatives to manage interest rate risk. The following schedule presents derivatives that are designated in qualifying hedging relationships at December 31, 2022. Included are the average outstanding derivative notional amounts for each period presented and the weighted average fixed-rate paid or received for each category of cash flow and fair value hedge.
As noted previously, we utilize derivatives to manage interest rate risk. The following schedule presents derivatives that are designated in qualifying hedging relationships at December 31, 2023. Included are the average outstanding derivative notional amounts for each period presented and the weighted average fixed-rate paid or received for each category of cash flow and fair value hedge.
Management uses qualitative judgment to adjust standard probability weights to more closely reflect management’s assessments of current conditions and reasonable and supportable forecasts. If the ACL was evaluated on the baseline economic scenario rather than probability weighting multiple scenarios, the quantitatively determined amount of the ACL at December 31, 2022 would decrease by approximately $86 million.
Management uses qualitative judgment to adjust scenario weights to more closely reflect management’s assessments of current conditions and reasonable and supportable forecasts. If the ACL was evaluated on the baseline economic scenario rather than weighting multiple scenarios, the quantitatively determined amount of the ACL at December 31, 2023 would decrease by approximately $138 million.
For assets and liabilities measured at fair value, our policy is to maximize the use of observable inputs, when available, and minimize the use of unobservable inputs when developing fair value measurements.
For assets and liabilities measured at fair value, our policy is to maximize the use of observable inputs, when available, and minimize the use of unobservable inputs when estimating fair value.
Additional factors that may significantly affect the estimates include, among others, competitive forces, customer behaviors and attrition, loan losses, changes in growth trends, cost structures and technology, changes in equity market values and merger and acquisition valuations, and changes in industry conditions. During the fourth quarter of 2022, we performed our annual goodwill impairment evaluation, effective October 1, 2022.
Additional factors that may significantly affect the estimates include, among others, competitive forces, customer behaviors and attrition, loan losses, changes in growth trends, cost structures and technology, changes in equity market values and merger and acquisition valuations, and changes in industry conditions. We performed our annual goodwill impairment evaluation, effective October 1, 2023.
If the restructured loan performs for at least six months according to the modified terms, and an analysis of the customer’s financial condition indicates that we are reasonably assured of repayment of the modified principal and interest, the loan may be returned to accrual status.
If a modified loan is on nonaccrual and performs for at least six months according to the modified terms, and an analysis of the customer’s financial condition indicates that we are reasonably assured of repayment of the modified principal and interest, the loan may be returned to accrual status.
Latent interest rate sensitivity refers to future changes in net interest income based upon past rate movements that have yet to be fully recognized in revenue, but will be recognized over the near term. We expect latent sensitivity to reduce net interest income by approximately 1% at December 31, 2023, compared with December 31, 2022 (ex-PPP).
Latent interest rate sensitivity refers to future changes in net interest income based upon past rate movements that have yet to be fully recognized in revenue, but will be recognized over the near term. We expect latent sensitivity to increase net interest income by approximately 1% at December 31, 2024, compared with December 31, 2023.
We have instituted a number of measures to manage our operational risk, including, but not limited to: (1) transactional documentation requirements; (2) systems and procedures to monitor transactions and positions; (3) systems and procedures to detect and mitigate attempts to commit fraud, penetrate our systems or telecommunications, access customer data, or deny normal access to those systems to our legitimate customers; (4) 63 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES regulatory compliance reviews; and (5) periodic reviews by our Compliance Risk Management, Internal Audit, Operational Risk Management, and Credit Examination departments.
We have instituted a number of measures to manage our operational risk, including, but not limited to: (1) transactional documentation requirements; (2) systems and procedures to monitor transactions and positions; (3) systems and procedures to detect and mitigate attempts to commit fraud, penetrate our systems, access customer data, or deny normal access to those systems to our legitimate customers; (4) regulatory compliance reviews; and (5) periodic reviews by our Compliance Risk Management, Internal Audit, Operational Risk Management, and Credit Examination departments.
However, because most deposits come from household and business accounts, their duration is generally long, compared with the short duration of our loan portfolio. As such, we are naturally “asset-sensitive” — meaning that our assets are expected to reprice faster or more significantly than our liabilities.
Because most deposits come from household and business accounts, their duration is generally longer than the duration of our loan portfolio. As such, we are naturally “asset-sensitive” — meaning that our assets are expected to reprice faster or more significantly than our liabilities.
For more information regarding the average balances, associated revenue generated, and the respective yields of our interest-earning assets, see Schedule 6 on page 31. 41 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES AVERAGE OUTSTANDING LOANS AND DEPOSITS (at December 31) Investment Securities Portfolio We invest in securities to generate interest income and to actively manage liquidity and interest rate risk.
For more information regarding the average balances, associated revenue generated, and the respective yields of our interest-earning assets, see Schedule 6 on page 35. 45 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES AVERAGE NET LOANS, SECURITIES, AND MONEY MARKET INVESTMENTS (at December 31) Investment Securities Portfolio We invest in securities to actively manage liquidity and interest rate risk and to generate interest income.
In certain cases, when market observable inputs for model-based valuation techniques may not be readily available, we are required to make judgments about the assumptions market participants would use in estimating the fair value of the financial instrument. The models used to determine fair value adjustments are regularly evaluated by management for relevance under current facts and circumstances.
In certain cases, when market observable inputs for model-based valuation techniques may not be readily available, we are required to make judgments about the assumptions that we believe market participants would consider in estimating the fair value of financial instruments. The models used to estimate fair value are regularly evaluated by management for relevance under current facts and circumstances.
The borrower’s payment performance prior to and following the restructuring is taken into account to determine whether a loan is returned to accrual status.
The borrower’s payment performance prior to and following the modification is taken into account to determine whether a loan should be returned to accrual status.
In addition, we own equity securities in governmental entities and companies, e.g., Federal Reserve Bank and the FHLB, that are not publicly traded.
In addition, we own equity securities in governmental entities and companies, e.g., FRB and the FHLB, that are not publicly traded.
The provision for credit losses, which is the combination of both the provision for loan and lease losses and the provision for unfunded lending commitments, was $122 million in 2022, compared with $(276) million in 2021. The ACL was $636 million at December 31, 2022, compared with $553 million at December 31, 2021.
The provision for credit losses, which is the combination of both the provision for loan and lease losses and the provision for unfunded lending commitments, was $132 million in 2023, compared with $122 million in 2022. The ACL was $729 million at December 31, 2023, compared with $636 million at December 31, 2022.
Nonperforming assets decreased $1 million from the prior year. Deposits decreased 10% in 2022. BALANCE SHEET ANALYSIS Interest-earning Assets Interest-earning assets are assets that have associated interest rates or yields, and generally consist of money market investments, securities, loans, and leases. We strive to maintain a high level of interest-earning assets relative to total assets.
Nonperforming assets increased $8 million from the prior year. Total deposits decreased 23% in 2023. BALANCE SHEET ANALYSIS Interest-earning Assets Interest-earning assets have associated interest rates or yields, and generally consist of loans and leases, securities, and money market investments. We strive to maintain a high level of interest-earning assets relative to total assets.
Additionally, investments in technology initiatives, low-income housing, and municipal securities during 2022, 2021, and 2020, generated tax credits and nontaxable income that benefited the effective tax rate for each respective year. We had a net deferred tax asset (“DTA”) of $1.1 billion at December 31, 2022, compared with $0.1 billion at December 31, 2021.
Additionally, investments in technology initiatives, low-income housing, and municipal securities during 2023, 2022, and 2021, generated tax credits and nontaxable income that benefited the effective tax rate for each respective year. We had a net DTA of $1.0 billion and $1.1 billion at December 31, 2023 and 2022, respectively.
Our expected loss methodology also considers these sources of repayment. In general, we obtain and evaluate updated financial information for the guarantor as part of our determination to extend credit. The quality and frequency of financial reporting collected and analyzed varies depending on the contractual requirements for reporting, the size of the transaction, and the strength of the guarantor.
In general, we obtain and evaluate updated financial information for the guarantor as part of our determination to extend credit. The quality and frequency of financial reporting collected and analyzed varies depending on the contractual requirements for reporting, the size of the transaction, and the strength of the guarantor.
To determine the fair value of a reporting unit, we use (1) a market method that incorporates comparable publicly traded commercial banks along with data related to recent comparable merger and acquisition activity, and (2) an income method that consists of a discounted present value of management’s estimates of future cash flows.
To determine the fair value of a reporting unit, we use (1) a market value approach that incorporates comparable publicly traded commercial banks, and (2) an income method that consists of a discounted present value of management’s estimates of future cash flows.
At December 31, 2022 and 2021, the ratio of loans and leases to total assets was 62% and 55%, respectively. The largest loan category was commercial and industrial loans, which constituted 29% and 27% of our total loan portfolio for the same time periods.
At December 31, 2023 and December 31, 2022, the ratio of loans and leases to total assets was 66% and 62%, respectively. The largest loan category was commercial and industrial loans, which constituted 29% and 30% of our total loan portfolio for the same respective periods.
Market Risk — Fixed Income We underwrite municipal and corporate securities. We also trade municipal, agency, and U.S. Treasury securities. This underwriting and trading activity exposes us to a risk of loss arising from adverse changes in the prices of these fixed-income securities.
This includes market risk for trading securities and for interest rate swaps used to hedge interest rate risk. We underwrite municipal and corporate securities. We also trade municipal, agency, and treasury securities. This underwriting and trading activity exposes us to a risk of loss arising from adverse changes in the prices of these fixed-income securities.
For further discussion of the effects of market rates on net interest income and how we manage interest rate risk, refer to the “Interest Rate and Market Risk Management” section on page 13. For more information on how we manage liquidity risk, refer to the “Liquidity Risk Management” section on page 14.
For further discussion of the effects of market rates on net interest income and how we manage interest rate risk, refer to the “Interest Rate and Market Risk Management” section on page 63.
We enter into derivative contracts under which we are required either to receive or pay cash, depending on changes in interest rates. These contracts are measured at fair value on the balance sheet, reflecting the net present value of the expected future cash receipts and payments based on market interest rates.
We enter into derivative contracts that may require us to pay cash, depending on changes in interest rates. These contracts are measured at fair value on the balance sheet, reflecting the net present value of the expected future cash receipts and payments based on market interest rates.
The increase was due to a $10 million increase in net interest income, and a $1 million increase in noninterest income, partially offset by a $4 million increase in the provision for credit losses, and a $3 million increase in noninterest expense.
The decrease was due to a $3 million increase in noninterest expense, a $3 million decrease in net interest income, and a $1 million increase in the provision for credit losses.
An estimated CLTV ratio is the ratio of our loan plus any prior lien amounts divided by the estimated current collateral-value. At origination, underwriting standards for the HECL portfolio generally include a maximum 80% CLTV with high credit scores.
An estimated CLTV ratio is the ratio of our loan plus any prior lien amounts divided by the estimated current collateral value. At origination, underwriting standards for the HECL portfolio generally include a maximum 80% CLTV with a Fair Isaac Corporation (“FICO”) credit score greater than 700.
To increase consistency and comparability in fair value measurements, generally accepted accounting principles (“GAAP”) has established a three-level hierarchy to prioritize the valuation inputs among (1) observable inputs that reflect quoted prices in active markets, (2) inputs other than quoted prices with observable market data, and (3) unobservable data such as our own data.
To increase consistency and comparability in fair value measurements, we prioritize valuation inputs in accordance with a three-level hierarchy: (1) observable inputs that reflect quoted prices in active markets, (2) inputs other than quoted prices with observable market data, and (3) unobservable data such as our own data.
The loan portfolio increased $153 million during 2022, including increases of $89 million and $83 million in CRE and commercial loans, respectively, partially offset by a decrease of $19 million in consumer loans. The ratio of ACL to net loans and leases increased to 0.55% at December 31, 2022, compared with 0.51%.
The loan portfolio decreased $14 million during 2023, including a decrease of $83 million in commercial loans, partially offset by increases of $68 million and $1 million in CRE and consumer loans, respectively. The ratio of ACL to net loans and leases increased to 0.65% at December 31, 2023, compared with 0.55%.
The following schedule presents the interest rate composition of our loan and lease portfolio with a contractual maturity date over one year.
The following schedule presents the interest rate composition of our loan and lease portfolio with a contractual maturity date over one year, and does not include the effect of any interest rate swaps associated with the loan portfolio.
The decrease was due to a $101 million increase in the provision for credit losses, and an $18 million increase in noninterest expense, partially offset by a $51 million increase in net interest income and a $17 million increase in noninterest income.
The decrease was due to a $45 million decrease in net interest income and a $62 million increase in noninterest expense, partially offset by a $23 million decrease in the provision for credit losses and an $8 million increase in noninterest income.
The adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are presented in the following schedules. We consider these adjustments to be relevant to ongoing operating results and provide a meaningful basis for period-to-period comparisons. We use these non-GAAP financial measures to assess our performance and financial position.
NON-GAAP FINANCIAL MEASURES This Form 10-K presents non-GAAP financial measures in addition to GAAP financial measures. The adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are presented in the following schedules. We consider these adjustments to be relevant to ongoing operating results and provide a meaningful basis for period-to-period comparisons.
We believe these non-GAAP measures provide useful information about our use of shareholders’ equity and provide a basis for evaluating the performance of a business more consistently, whether acquired or developed internally.
Tangible Common Equity and Related Measures Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets and their related amortization. We believe these non-GAAP measures provide useful information about our use of shareholders’ equity and provide a basis for evaluating the performance of a business more consistently, whether acquired or developed internally.
Taxable-equivalent net interest income allows us to assess the comparability of revenue arising from both taxable and tax-exempt sources. 71 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Schedule 41 EFFICIENCY RATIO (NON-GAAP) AND ADJUSTED PRE-PROVISION NET REVENUE (NON-GAAP) (Dollar amounts in millions) 2022 2021 2020 Noninterest expense (GAAP) (a) $ 1,878 $ 1,741 $ 1,704 Adjustments: Severance costs 1 1 1 Other real estate expense, net 1 — 1 Amortization of core deposit and other intangibles 1 1 — Restructuring costs — — 1 Pension termination-related expense (income) 1 — (5) 28 SBIC investment success fee accrual 2 (1) 7 — Total adjustments (b) 2 4 31 Adjusted noninterest expense (non-GAAP) (a-b)=(c) $ 1,876 $ 1,737 $ 1,673 Net interest income (GAAP) (d) $ 2,520 $ 2,208 $ 2,216 Fully taxable-equivalent adjustments (e) 37 32 28 Taxable-equivalent net interest income (non-GAAP) (d+e)=(f) 2,557 2,240 2,244 Noninterest income (GAAP) (g) 632 703 574 Combined income (non-GAAP) (f+g)=(h) 3,189 2,943 2,818 Adjustments: Fair value and nonhedge derivative gain (loss) 16 14 (6) Securities gains, net (15) 71 7 Total adjustments (i) 1 85 1 Adjusted taxable-equivalent revenue (non-GAAP) (h-i)=(j) $ 3,188 $ 2,858 $ 2,817 Pre-provision net revenue (non-GAAP) (h)-(a) $ 1,311 $ 1,202 $ 1,114 Adjusted pre-provision net revenue (non-GAAP) (j-c) 1,312 1,121 1,144 Efficiency ratio (non-GAAP) (c/j) 58.8 % 60.8 % 59.4 % 1 Represents the expense incurred and a subsequent valuation adjustment related to termination of our defined benefit pension plan. 2 The success fee accrual is associated with the gains/(losses) from our SBIC investments.
Taxable-equivalent net interest income allows us to assess the comparability of revenue arising from both taxable and tax-exempt sources. 78 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Schedule 44 EFFICIENCY RATIO (NON-GAAP) AND ADJUSTED PRE-PROVISION NET REVENUE (NON-GAAP) (Dollar amounts in millions) 2023 2022 2021 Noninterest expense (GAAP) (a) $ 2,097 $ 1,878 $ 1,741 Adjustments: Severance costs 14 1 1 Other real estate expense, net — 1 — Amortization of core deposit and other intangibles 6 1 1 Restructuring costs 1 — — Pension termination-related expense (income) 1 — — (5) SBIC investment success fee accrual 2 — (1) 7 FDIC special assessment 90 — — Total adjustments (b) 111 2 4 Adjusted noninterest expense (non-GAAP) (a-b)=(c) $ 1,986 $ 1,876 $ 1,737 Net interest income (GAAP) (d) $ 2,438 $ 2,520 $ 2,208 Fully taxable-equivalent adjustments (e) 41 37 32 Taxable-equivalent net interest income (non-GAAP) (d+e)=(f) 2,479 2,557 2,240 Noninterest income (GAAP) (g) 677 632 703 Combined income (non-GAAP) (f+g)=(h) 3,156 3,189 2,943 Adjustments: Fair value and nonhedge derivative gain (loss) (4) 16 14 Securities gains (losses), net 4 (15) 71 Total adjustments (i) — 1 85 Adjusted taxable-equivalent revenue (non-GAAP) (h-i)=(j) $ 3,156 $ 3,188 $ 2,858 Pre-provision net revenue (non-GAAP) (h)-(a) $ 1,059 $ 1,311 $ 1,202 Adjusted pre-provision net revenue (non-GAAP) (j-c) 1,170 1,312 1,121 Efficiency ratio (non-GAAP) 3 (c/j) 62.9 % 58.8 % 60.8 % 1 Represents a subsequent valuation adjustment related to the termination of our defined benefit pension plan in 2020. 2 The success fee accrual is associated with the gains and losses from our SBIC investments, which are excluded from the efficiency ratio through securities gains (losses), net. 3 Including the one-time $90 million accrual associated with the FDIC special assessment recorded in deposit insurance and regulatory expense during the fourth quarter of 2023, the efficiency ratio for 2023 would have been 65.8%.
We hold both direct and indirect investments in predominantly pre-public companies, primarily through various SBIC venture capital funds as a strategy to provide beneficial financing, growth, and expansion opportunities to diverse businesses generally in communities within our geographic footprint. Our equity exposure to these investments was approximately $172 million and $179 million at December 31, 2022 and 2021, respectively.
We hold both direct and indirect investments in predominantly pre-public companies, primarily through various SBIC venture capital funds as a strategy to provide beneficial financing, growth, and expansion opportunities to diverse businesses generally in communities within our geographic footprint.
To facilitate the achievement of our growth and profitability objectives, we invest in the following five key areas, referred to as “strategic enablers”: • People and Empowerment — we invest in training our employees and providing them the tools and resources to build their capabilities, while promoting a diverse, inclusive, and equitable culture. • Technology — we invest in technologies that will make us more efficient and enable us to remain competitive while helping to insulate us from the risks of bank-disrupting technology companies. • Operational Excellence — we invest in and support ongoing improvements in how we safely and securely deliver value to our customers. • Risk Management — we invest in enhanced risk management practices to ensure prudent risk-taking and appropriate oversight. 24 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES • Data and Analytics — we invest in advanced enterprise data and analytics to support local execution and prudent decision making.
To facilitate the achievement of our growth and profitability objectives, we invest in the following five key areas, referred to as “strategic enablers”: • People and Empowerment — we invest in training our employees and providing them the tools and resources to build their capabilities; • Technology — we invest in innovative technologies that will make us more efficient and enable us to remain competitive; • Operational Excellence — we invest in and support ongoing improvements in how we safely and securely deliver value to our customers; • Risk Management — we engage in risk management practices to ensure prudent risk-taking and appropriate oversight; and • Data and Analytics — we invest in relevant enterprise data and analytic tools to support local execution and prudent decision making.
The increase was due to a $108 million increase in net interest income, partially offset by a $69 million increase in the provision for credit losses, a $31 million increase in noninterest expense, and a $1 million decrease in noninterest income.
The decrease was due to a $22 million increase in noninterest expense and an $8 million decrease in noninterest income, partially offset by a $19 million increase in net interest income and a $7 million decrease in the provision for credit losses.
The decrease was due to a $39 million increase in the provision for credit losses, a $9 million increase in noninterest expense, and a $2 million decrease in noninterest income, partially offset by a $37 million increase in net interest income.
The decrease was due to a $38 million increase in the provision for credit losses, a $20 million increase in noninterest expense, and a $3 million decrease in noninterest income, partially offset by an $8 million increase in net interest income.
Government agencies and corporations: Agency securities $ 100 $ 100 $ 93 $ — $ — $ — Agency guaranteed mortgage-backed securities 1 12,921 10,621 10,772 — — — Municipal securities 404 405 374 441 441 443 Total held-to-maturity 13,425 11,126 11,239 441 441 443 Available-for-sale U.S. Treasury securities 555 557 393 155 155 134 U.S.
Government agencies and corporations: Agency securities $ 93 $ 93 $ 87 $ 100 $ 100 $ 93 Agency guaranteed mortgage-backed securities 1 11,966 9,935 10,041 12,921 10,621 10,772 Municipal securities 354 354 338 404 405 374 Total held-to-maturity 12,413 10,382 10,466 13,425 11,126 11,239 Available-for-sale U.S. Treasury securities 585 585 492 555 557 393 U.S.
Schedule 37 CAPITAL DISTRIBUTIONS (In millions, except share data) 2022 2021 Capital distributions: Preferred dividends paid $ 29 $ 29 Bank preferred stock redeemed — 126 Total capital distributed to preferred shareholders 29 155 Common dividends paid 240 232 Bank common stock repurchased 1 202 800 Total capital distributed to common shareholders 442 1,032 Total capital distributed to preferred and common shareholders $ 471 $ 1,187 Weighted average diluted common shares outstanding (in thousands) 150,271 160,234 Common shares outstanding, at year-end (in thousands) 148,664 151,625 1 Includes amounts related to the common shares acquired from our publicly announced plans and those acquired in connection with our stock compensation plan.
Schedule 40 CAPITAL DISTRIBUTIONS (In millions, except share data) 2023 2022 Capital distributions: Preferred dividends paid $ 32 $ 29 Total capital distributed to preferred shareholders 32 29 Common dividends paid 245 240 Bank common stock repurchased 1 51 202 Total capital distributed to common shareholders 296 442 Total capital distributed to preferred and common shareholders $ 328 $ 471 Weighted average diluted common shares outstanding (in thousands) 147,756 150,271 Common shares outstanding, at year-end (in thousands) 148,153 148,664 1 Includes amounts related to the common shares acquired from our publicly announced plans and those acquired in connection with our stock compensation plan.
The Operational Risk Committee reports directly to the ROC. Key measures have been established in line with our Risk Management Framework to increase oversight by ERM and Operational Risk Management through the strengthening of new initiative reviews and enhancements to enterprise supply chain and vendor risk management.
Key measures have been established in line with our Risk Management Framework to increase oversight by ERM and Operational Risk Management through the strengthening of new initiative reviews and enhancements to enterprise supply chain and vendor risk management. We also continue to review and enhance our Enterprise Business Continuity and Enterprise Security programs.
Re-margining requirements (required equity infusions upon a decline in value or cash flow of the collateral) are often included in the loan agreement along with guarantees of the sponsor.
We generally require that the owner’s equity be injected prior to any advances. Re-margining requirements (required equity infusions upon a decline in value or cash flow of the collateral) are often included in the loan agreement along with guarantees of the sponsor.
On occasion, some of the companies within our SBIC investments may issue an initial public offering (“IPO”). In this case, the fund is generally subject to a lockout period before liquidating the investment, which can introduce additional market risk. See Note 3 of the Notes to Consolidated Financial Statements for additional information regarding the valuation of our SBIC investments.
In this case, the fund is generally subject to a lockout period before we can liquidate the investment, which can introduce additional market risk. See Note 3 of the Notes to Consolidated Financial Statements for additional information regarding the valuation of our SBIC investments.
Technology governance is also in place at the operational level within our Enterprise and Technology Operations (“ETO”) division to help ensure safety, soundness, operational resiliency, and compliance with our technology and cybersecurity policy requirements.
Technology governance exists at the operational level within our Enterprise and Technology Operations (“ETO”) division to help ensure safety, soundness, operational resiliency, and compliance with our technology policies.
The loan portfolio increased $1.0 billion during 2022, including increases of $759 million and $322 million in commercial and consumer loans, respectively, and a decrease of $46 million in CRE loans. The ratio of ACL to net loans and leases decreased to 1.01% at December 31, 2022, compared with 1.05%.
The loan portfolio increased $237 million during 2023, including increases of $171 million and $156 million in CRE and consumer loans, respectively, and a decrease of $90 million in commercial loans. The ratio of ACL to net loans and leases increased to 1.08% at December 31, 2023, compared with 1.01%.
The fourth bar represents loan portfolio changes, driven primarily by loan growth, as well as changes in portfolio mix, the aging of the portfolio, and other risk factors, all of which resulted in a $44 million increase in the ACL.
The fourth bar represents loan portfolio changes, driven primarily by changes in loan balances and composition, the aging of the portfolio, and other qualitative risk factors; all of which resulted in a $24 million decrease in the ACL.
Liquidity Risk Management Overview Liquidity refers to our ability to meet our cash, contractual, and collateral obligations, and to manage both expected and unexpected cash flows without adversely impacting our operations or financial strength.
Liquidity Risk Management Liquidity refers to our ability to meet our cash, contractual, and collateral obligations, and to manage both expected and unexpected cash flows without adversely impacting our operations or financial strength. We manage our liquidity to provide funds for our customers’ credit needs, our anticipated financial and contractual obligations, and other corporate activities.
If we have the intent to sell an identified security, or it is more likely than not we will be required to sell the security before recovery of its amortized cost basis, we first recognize an identified impairment.
AFS securities in an unrealized loss position are formally reviewed on a quarterly basis for the presence of credit impairment. If we have the intent to sell an identified security, or it is more likely than not we will be required to sell the security before recovery of its amortized cost basis, we first recognize an identified impairment.
Ratios are calculated based on amounts in thousands. 38 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Schedule 13 SELECTED SEGMENT INFORMATION (Dollar amounts in millions) Zions Bank CB&T Amegy 2022 2021 2020 2022 2021 2020 2022 2021 2020 KEY FINANCIAL INFORMATION Total average loans $ 13,277 $ 13,198 $ 13,845 $ 13,129 $ 12,892 $ 12,366 $ 12,110 $ 12,189 $ 13,114 Total average deposits 24,317 23,588 18,370 16,160 15,796 13,763 15,735 15,496 12,970 Income before income taxes 387 380 295 314 405 182 311 362 178 CREDIT QUALITY Provision for credit losses $ 43 $ (26) $ 67 $ 49 $ (78) $ 120 $ 5 $ (96) $ 111 Net loan and lease charge-offs (recoveries) 29 — 27 3 — 15 3 2 49 Ratio of net charge-offs to average loans and leases 0.22 % — % 0.20 % 0.02 % — % 0.12 % 0.02 % 0.02 % 0.37 % Allowance for credit losses $ 155 $ 142 $ 167 $ 122 $ 90 $ 158 $ 122 $ 128 $ 210 Ratio of allowance for credit losses to net loans and leases, at year-end 1.17 % 1.08 % 1.21 % 0.93 % 0.70 % 1.28 % 1.01 % 1.05 % 1.60 % Nonperforming assets $ 36 $ 84 $ 97 $ 25 $ 41 $ 56 $ 59 $ 90 $ 131 Ratio of nonperforming assets to net loans and leases and other real estate owned 0.26 % 0.65 % 0.70 % 0.18 % 0.32 % 0.43 % 0.46 % 0.77 % 1.03 % (Dollar amounts in millions) NBAZ NSB Vectra TCBW 2022 2021 2020 2022 2021 2020 2022 2021 2020 2022 2021 2020 KEY FINANCIAL INFORMATION Total average loans $ 4,911 $ 4,849 $ 5,099 $ 2,987 $ 3,015 $ 3,102 $ 3,632 $ 3,414 $ 3,401 $ 1,630 $ 1,569 $ 1,460 Total average deposits 8,035 7,288 5,771 7,436 6,691 5,427 4,109 4,386 3,637 1,571 1,537 1,256 Income before income taxes 111 126 75 76 89 11 55 67 24 45 41 28 CREDIT QUALITY Provision for credit losses $ 11 $ (27) $ 35 $ 4 $ (35) $ 37 $ 9 $ (12) $ 34 $ 1 $ (3) $ 7 Net loan and lease charge-offs (recoveries) (1) (1) 1 (2) 1 (1) 9 — 14 — 1 — Ratio of net charge-offs to average loans and leases (0.02) % (0.02) % 0.02 % (0.07) % 0.03 % (0.03) % 0.25 % — % 0.41 % — % 0.06 % — % Allowance for credit losses $ 40 $ 38 $ 60 $ 27 $ 26 $ 59 $ 36 $ 37 $ 47 $ 9 $ 8 $ 11 Ratio of allowance for credit losses to net loans and leases, at year-end 0.81% 0.79% 1.18% 0.90% 0.86% 1.90% 0.99% 1.08% 1.38% 0.55% 0.51% 0.75% Nonperforming assets $ 6 $ 11 $ 17 $ 9 $ 24 $ 40 $ 14 $ 18 $ 19 $ — $ 1 $ 8 Ratio of nonperforming assets to net loans and leases and other real estate owned 0.12% 0.24% 0.34% 0.27% 0.85% 1.24% 0.36% 0.53% 0.56% —% 0.06% 0.52% Zions Bank Zions Bank is headquartered in Salt Lake City, Utah, and conducts operations in Utah, Idaho, and Wyoming.
Ratios are calculated based on amounts in thousands. 42 Table of Contents ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES Schedule 13 SELECTED SEGMENT INFORMATION (Dollar amounts in millions) Zions Bank CB&T Amegy 2023 2022 2021 2023 2022 2021 2023 2022 2021 KEY FINANCIAL INFORMATION Total average loans $ 14,298 $ 13,277 $ 13,198 $ 14,128 $ 13,129 $ 12,892 $ 12,851 $ 12,110 $ 12,189 Total average deposits 20,233 24,317 23,588 14,253 16,160 15,796 13,569 15,735 15,496 Income before income taxes 311 387 380 282 314 405 218 311 362 CREDIT QUALITY Provision for credit losses $ 20 $ 43 $ (26) $ 44 $ 49 $ (78) $ 15 $ 5 $ (96) Net loan and lease charge-offs (recoveries) 19 29 — 10 3 — 5 3 2 Ratio of net charge-offs to average loans and leases 0.13 % 0.22 % — % 0.07 % 0.02 % — % 0.04 % 0.02 % 0.02 % Allowance for credit losses $ 157 $ 155 $ 142 $ 162 $ 122 $ 90 $ 139 $ 122 $ 128 Ratio of allowance for credit losses to net loans and leases, at year-end 1.10 % 1.17 % 1.08 % 1.15 % 0.93 % 0.70 % 1.08 % 1.01 % 1.05 % Nonperforming assets $ 26 $ 36 $ 84 $ 82 $ 25 $ 41 $ 35 $ 59 $ 90 Ratio of nonperforming assets to net loans and leases and other real estate owned 0.18 % 0.26 % 0.65 % 0.58 % 0.18 % 0.32 % 0.27 % 0.46 % 0.77 % (Dollar amounts in millions) NBAZ NSB Vectra TCBW 2023 2022 2021 2023 2022 2021 2023 2022 2021 2023 2022 2021 KEY FINANCIAL INFORMATION Total average loans $ 5,318 $ 4,911 $ 4,849 $ 3,392 $ 2,987 $ 3,015 $ 4,004 $ 3,632 $ 3,414 $ 1,705 $ 1,630 $ 1,569 Total average deposits 7,008 8,035 7,288 6,964 7,436 6,691 3,482 4,109 4,386 1,196 1,571 1,537 Income before income taxes 107 111 126 23 76 89 34 55 67 38 45 41 CREDIT QUALITY Provision for credit losses $ 4 $ 11 $ (27) $ 42 $ 4 $ (35) $ 7 $ 9 $ (12) $ 2 $ 1 $ (3) Net loan and lease charge-offs (recoveries) 1 (1) (1) 3 (2) 1 2 9 — — — 1 Ratio of net charge-offs to average loans and leases 0.02 % (0.02) % (0.02) % 0.09 % (0.07) % 0.03 % 0.05 % 0.25 % — % — % — % 0.06 % Allowance for credit losses $ 54 $ 40 $ 38 $ 66 $ 27 $ 26 $ 45 $ 36 $ 37 $ 11 $ 9 $ 8 Ratio of allowance for credit losses to net loans and leases, at year-end 1.02% 0.81% 0.79% 1.95% 0.90% 0.86% 1.12% 0.99% 1.08% 0.65% 0.55% 0.51% Nonperforming assets $ 12 $ 6 $ 11 $ 46 $ 9 $ 24 $ 16 $ 14 $ 18 $ 8 $ — $ 1 Ratio of nonperforming assets to net loans and leases and other real estate owned 0.21% 0.12% 0.24% 1.34% 0.27% 0.85% 0.40% 0.36% 0.53% 0.46% —% 0.06% All references below to domestic deposits by state are based on FDIC deposit market share data for full-service institutions with at least three branches at June 30, 2023.

… 345 more changes not shown on this page.

Other ZION 10-K year-over-year comparisons