Zions Bancorp falls as deposit competition weighs on interest income
ZION•Stock performance
As of last close, ZION stock was up 22.8% year to date.
Analysts focus on deposit costs and funding mix
Net interest margin, a key measure of banking profitability, has come into sharper focus recently as Wall Street debates whether deposit costs could rise in the second half of 2026 as banks look to fund accelerating loan growth.
"The competition is certainly there," ZION CFO Ryan Richards told analysts.
Modest pace of net deposit growth generation at ZION combined with an $837 million jump in short-term borrowings sequentially raises questions about ZION’s ability to support loan growth without relying more heavily on higher-cost wholesale funding, Evercore analyst John Pancari said.
"After two straight disappointing NII quarters, ZION needs to demonstrate the deposit initiatives are working and/or loan growth is accelerating meaningfully before investors give full credit to the reiterated guide," Morgan Stanley analyst Manan Gosalia said.
Shares fall after weaker quarterly interest income
Regional lender Zions Bancorp's ZION.O shares fell 5% to $67.95 in premarket trading.
ZION late on Monday posted second-quarter net interest income below market consensus as deposit competition weighed on margins.
