Zions Bancorporation (ZION) Goldman Sachs 2024 U.S. Financial Services Conference summary

Strategic positioning and market outlook

• Completed a decade-long overhaul of core systems, resulting in a modern technology platform and improved data governance, positioning for future growth and AI adoption.

• Focused on growing markets and expects a more business-friendly regulatory environment to enable external growth initiatives.

• Small business optimism is rising post-election, with expectations of increased risk-taking and government support.

• Loan growth is expected to improve as economic certainty increases, with a soft landing and stable rates seen as more important than minor rate changes.

• Commercial real estate growth will be slow, with refinancing as a headwind, but deals are well-structured and expected to perform well.

Financial performance and balance sheet management

• Net interest margin is expected to recover toward the mid-3% range over the next few years, supported by balance sheet remixing and a focus on C&I lending.

• Deposit growth has stabilized, with a focus on building a granular, low-cost core deposit base and managing deposit costs through local pricing and internal competition.

• Fee income growth is driven by strong performance in capital markets and wealth management, with further investments planned in these areas.

• Operating leverage is expected through 2025, with ongoing cost control and increased marketing spend to support external growth.

• Efficiency improvements are targeted, with cost-saving initiatives and potential outsourcing to maintain top-quartile expense growth.

Regulatory and capital considerations

• Crossing the $100 billion asset threshold is not a major concern, as regulatory changes are expected to be more pro-growth and less costly than previously anticipated.

• Capital priorities include maintaining strong capital levels, with a focus on returns on risk-weighted assets rather than return on equity.

• AOCI is expected to return to capital calculations, with tangible book value per share growing strongly.

• No aggressive capital distributions are planned for 2025, with a more favorable outlook for 2026 if loan growth improves.

• M&A activity will be selective, focused on fit and strengthening the deposit franchise, with no large deals anticipated.