Zions Bancorporation, National Association Q3 2022 Earnings Call Transcript

Quartr
Provided by Quartr
October 24, 2022

There are 11 speakers on the call.

Operator

Welcome to the Zions Bancorp Third Quarter Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to Ryan Richards, Corporate Controller.

Operator

Thank you. You may begin.

Speaker 1

Thank you, Sherry, and good evening. We welcome you to this conference call to discuss our 2022 Third Quarter Earnings. My name is Ryan Richards, and I am the Corporate Controller. We would like to excuse James Abbott from the call today as he attends to some family I would like to remind you that during this call, we will be making forward looking statements, although actual results may differ materially. We encourage you to review the disclaimer in the press release or the slide deck on Slide 2 dealing with forward looking information and the presentation of non GAAP measures, which applies equally to statements made during this call.

Speaker 1

A copy of the earnings release as well as a slide deck are available at zionsbancorporation .com. For our agenda today, Chairman and Chief Executive Officer, Harris Simmons, will provide opening remarks, followed by a brief review of our financial results by Paul Burdes, our Chief Financial Officer. With us also today are Scott McLane, President and Chief Operating Officer Keith Mio, Chief Risk Officer and Michael Morris, Chief Credit Officer. After our prepared remarks, we will hold a 30 minute question and answer session. I will now turn the time over to Harris Simmons.

Speaker 2

Thank you very much, Brian, and thank you and welcome to all of you to our call. Beginning on Slide 3, we've laid out some themes that are particularly applicable to Zions in recent quarters as well as those that are likely to be prominent over the Near term horizon. First, as Paul will discuss in greater detail, our asset sensitive balance sheet is benefiting from rising rates and we're seeing that in our Net interest income. As you know, the futures market is pricing in a Fed funds upper target rate of about 5% by the spring of 2023 An increase of about 175 basis points. Our funding costs during the quarter increased modestly.

Speaker 2

However, it remains among the lowest of banks within our peer group. As rates have risen and downside Increases, we've been moderating our asset sensitivity, primarily through swaps and allowing more highly rate sensitive deposits to a TRIT. Exclusive of PPP, period end loans increased $1,800,000,000 or 3.4 percent unannualized during the quarter. We've achieved strong loan growth while maintaining the same underwriting standards that have allowed Zions to outperform most of our peers in some important credit metrics over the past decade. We've restrained growth in categories that can become riskier in a recessionary environment, in particular, Commercial Real Estate, excluding owner occupied properties, has grown at less than half the rate of the remainder of our portfolio over past 5 years and at a rate much slower than that of our peers.

Speaker 2

Although loan growth has been stronger than we expected over the last several quarters, we believe that effects Higher rates and likely a slowing economy will slow portfolio growth over the next few quarters. The next theme is balance sheet flexibility. During the pandemic, we experienced somewhat greater deposit growth than most of our peers and the industry in general. We positioned the balance sheet to manage the eventual outflow of these surge deposits. We have a low loan to deposit ratio at 71%, whereas prior to the pandemic, we were running in the 85% to 90% range.

Speaker 2

Our securities portfolio has been structured to provide a more predictable rate of cash flow than simple 30 year mortgage backed pass through securities, and that cash flow was used this quarter to fund a substantial portion of our loan growth. Exiting the pandemic, our strong liquidity position allowed us The luxury of being able to prioritize the quality of deposits over quantity. And this is reflected in our total cost of deposits, which 10 basis points this quarter is among the very best of our peers. We believe we are well Prepared and positioned for any recession that may materialize with stronger pre provision net revenue as a result of higher interest rates and capital that is strong relative to the risk profile of our balance sheet, particularly given the fact that much of our loan growth in recent years has been concentrated in loan types that are less prone to loss. Turning to Slide 4, we're generally Pleased with the quarterly financial results, which are summarized on this slide.

Speaker 2

Circled there, you'll see that adjusted Taxable equivalent revenue, net of interest expense, increased about 9% relative to the prior quarter. And if excluding PPP income, the increase was about 10%. Adjusted pre provision net revenue increased 17%, And if excluding PPP, it was a 21% increase. Those growth rates are not annualized. Our credit metrics are quite clean.

Speaker 2

And as previously noted, loan growth was strong when adjusted for PPP forgiveness. While deposits And most particularly, more rate sensitive deposits attributable to very large relationships experienced some additional attrition. Moving to Slide 5, diluted earnings per share was $1.40 Comparing the Q3 to the Q2, the single most Significant difference was the improvement in revenue driven by the effect of interest rate changes on earning assets and continued strong performance from customer related non interest income. The provision for credit loss contributed a $0.15 per share negative variance, as can be seen on the bottom left chart, As we added to the loss reserve to reflect the increased probability of an economic slowdown, Interest income from PPP loans is now a much less significant contributor at $0.03 per share, down from $0.07 per share in the 2nd quarter. Other items that affected earnings per share are noted on the right side of the page.

Speaker 2

Turning to Slide 6. Our Q3 adjusted pre provision net revenue was $351,000,000 The adjustments, which most Notably eliminate the gain or loss on securities are shown in the latter pages of the press release and this slide deck. Within the PPNR chart, the top portion of each column denotes the revenue we've received from PPP loans, net of direct external professional services expense. These loans contributed only $6,000,000 to PPNR in the 2nd quarter. Exclusive of PPP income, We experienced an increase in adjusted PPNR of 53% over the year ago period.

Speaker 2

With that high level overview, I'm going to ask Paul Burdiss, our Chief Financial Officer, to provide additional detail related to our financial performance. Paul?

Speaker 3

Thank you, Harris, and good evening, everyone. I'll begin on Slide 7. A significant highlight for us this quarter was the strong performance in average loan growth. Average non PPP loans increased $1,500,000,000 or 2.9 percent when compared to the 2nd quarter. Areas of strength including commercial and industrial residential mortgage and both commercial and consumer construction as can be seen in the appendix on Slide 30.

Speaker 3

The yield on average loans increased 50 basis points from the prior quarter, which is primarily attributable to increases in interest rates. Average PPP loans declined $393,000,000 to $408,000,000 Excluding PPP loans, The loan yield improved 55 basis points to 4.16 percent from 3.61 percent. Deposit costs increased during the quarter, but remain low. Shown on the right, our cost of deposits rose From 3 to 10 basis points in the 3rd quarter, that's cost of total deposits. Our average deposits declined $3,400,000,000 or 4.2 percent linked quarter.

Speaker 3

For deeper insight into deposit volume changes, please turn to slide 8, where we break down our deposits by size. As shown here, the majority of our deposits come from relationships holding less than $10,000,000 on our balance sheet. Digging deeper into deposit runoff, you can see on this chart that the 2022 decline in deposits Has come from large balance, low activity accounts. In our experience, these deposits are the most rate sensitive. Therefore, the faster than expected increase in rates and the widening differential in our deposit rates paid when compared to other investment products Has created an incentive for some of these large less operationally active dollars to move off of our balance sheet.

Speaker 3

Where possible, we have actively managed these funds into off balance sheet products, maintaining the relationship with the customer, while keeping deposit costs and well managed. Contrary to the trends, in large balance deposits, deposit relationships with clients holding under $10,000,000 with us and have generally been stable since the beginning of the year. Combined with the Q3's loan growth, our loan to deposit ratio remains a very comfortable 71%, which is still about 15 basis points below the level just prior to the pandemic. Moving to slide 9, we show driven by an adjustment to the fair value, no new security purchases and repayments of about $900,000,000 The combination of securities and money market investments is now 34% of total earning assets at period end, which remains above our pre pandemic average of 26%. Excluding fair value marks, we anticipate that money market and investment securities balances combined will continue to decline over the near term.

Speaker 3

Our revenue is primarily balance sheet driven. This quarter 80% of our revenue comes from net interest income. Slide 10 is an overview of net interest income and the net interest margin. The chart on the left shows the recent 5 quarter trend for both. Net interest income on the bars reflects both loan growth and higher interest rates, while the net interest margin The white boxes also reflects a remixing of earning assets in the last two quarters toward higher yielding assets.

Speaker 3

We attempt to quantify the impact of these trends on the net interest margin on the right hand side of that page. Slide 11 provides information about our interest rate sensitivity. Due to the rapidly changing environment, recall that last quarter, we introduced the terms Latent interest rate sensitivity and emergent interest rate sensitivity. Regarding latent sensitivity, rate Changes that were in place as of September 30, we'll work through our balance sheet and income statement over the near term and should add approximately 10% to our net interest income in the Q3 of 2023 when compared to the Q3 of 2022. Regarding emergent sensitivity, if the forward path of interest rates were to materialize, we would expect an additional 3% In net interest income in the Q3 of 2023 when compared to the Q3 of 2022, in addition to the 10% increase from Latent Sensitivity.

Speaker 3

The forward path is defined as the forward yield curve as of September 30, which at that time included about another 150 basis point increase in the Fed Funds target rate. Both measures assume that earning assets will remain flat and that non specific maturity deposits will move and reprice in accordance with our interest rate risk modeling assumptions. In other words and for example, loan growth would be expected to add to net interest income beyond the latent and emergent sensitivity estimates, which consider only changes in interest rates, while the investment portfolio attrition would be expected to narrow these figures. With respect to our traditional interest rate risk disclosures, our estimated interest rate sensitivity to a 100 basis point Parallel interest rate shock has declined by 2 percentage points from the 2nd quarter and about 8 percentage points from the beginning of the year. This change reflects the recent decline in deposits and increase in our interest rate swaps portfolio and a higher net interest income denominator.

Speaker 3

In summary, we expect latent and emergent interest rate sensitivity combined with continued loan growth and manageable changes in deposit volume and pricing to continue to increase net interest income over the coming year. Moving on to non interest income and total revenue on slide 12, Customer related non interest income was $156,000,000 an increase of 1% over the prior quarter and 3% over the prior year. As we noted in July, we have modified our non sufficient funds and overdraft fee practices near the beginning of the 3rd quarter, which reduced our non interest income by about $2,000,000 in the quarter. Improvements in customer related fee income are fairly broad based and when Combined with the changes in revenues associated with our deposit products produces an outlook for customer related non interest income In the Q3 of 2023, it's slightly increasing compared to the current quarter, up from the prior quarter's outlook of stable. The right side of the slide, revenue shows the sum of net interest income and customer related non interest income.

Speaker 3

Revenue grew by 16% from a year ago when excluding PPP income grew by 26% over the same period. We expect client activity and the positive impact of higher interest rates to continue to improve this measure over the coming quarters. Non interest expense on Slide 13 increased 3% from the prior quarter to $479,000,000 Salaries and benefits grew by $5,000,000 The primary drivers include the additional staffing and an extra day in the quarter compared to the 2nd quarter. We continue to feel the impact of inflation, which is showing in smaller but numerous increases in several other expense categories. Our outlook for adjusted non interest expense is to moderately increase by the Q3 of 2023 when compared to the Q3 of 2022.

Speaker 3

Another highlight for the quarter was the continued strong credit quality across the loan portfolio as illustrated on Slide 14. Relative to the prior quarter, we saw continued improvement in the balance of criticized and classified loans. Net charge offs to average loans for the quarter With 21 basis points of average non PPP loans compared to a loss rate of only 7 basis points in the prior quarter. Credit losses this quarter could best be described as unique situations rather than systemic or common theme losses. Notably, our nonperforming asset ratio and classified loan ratio continue to improve and are at very healthy levels.

Speaker 3

Slide 15 details the recent trend in our allowance for credit losses or ACL over the past several quarters. At the end of the third quarter, The ACL was $590,000,000 a $44,000,000 increase from the 2nd quarter. A little over half The linked quarter ACL increase can be ascribed to the buildup of reserves on existing non PPP loans up from 5 basis points I'm sorry, up 5 basis points from the prior quarter to 1.10 percent. With the remaining increase attributable to growth in the loan portfolio. Our ACL will continue to reflect the size and composition of our loan portfolio and evolving macroeconomic Our loss absorbing capital position is shown on Slide 16.

Speaker 3

We believe that our capital position is aligned with the balance sheet and operating risk of the bank. The CET1 ratio fell in the 3rd quarter to 9.6% as strong loan growth outpaced retained earnings. We repurchased $50,000,000 of common stock in the Q3. As a reminder, share repurchase and dividend decisions are made by our Board of Directors and as such, we expect to announce Any capital actions for the Q4 in conjunction with our regularly scheduled Board meeting this coming Friday. Our goal continues to be that the CET1 capital ratio will remain at or slightly above peer median, while managing to a below average risk profile.

Speaker 3

Slide 17 summarizes the financial outlook provided over the course of this presentation. As a reminder, this outlook represents our best current estimate for the financial performance in the Q3 of 2023 as compared to the actual results reported for the Q3 of 2022. The

Operator

Before pressing the star keys. Our first question is from John Pancari with Evercore ISI. Please proceed.

Speaker 4

Good afternoon.

Speaker 3

Hey, John. Hey, John.

Speaker 4

On the NII outlook, I guess, Paul, if you could just I just want to make sure I understood it correctly. I believe you made a comment that with emergent and And considering emergent and latent sensitivity as well as your balance sheet growth expectations that you expect NII To increase in the coming year, did I get it right or can you clarify if not?

Speaker 3

You did hear that correctly. And specifically, I said, just due to the effects of Latent and emergent sensitivity combined, we would expect net interest income in the quarter a year from now to be approximately 13% higher than the current quarter.

Speaker 4

Okay. All right. Great. Thank you. That helps.

Speaker 4

And then

Speaker 3

in terms of

Speaker 2

Excludes the impact of any balance sheet growth.

Speaker 3

Yes, loan growth would add to that. That's correct.

Speaker 4

Would add to that.

Speaker 3

Yes, got it.

Speaker 4

Okay. And on that exact on the loan growth topic, I know you indicated in your prepared remarks that you expect loan growth to slow Over the next few quarters, could you maybe help us think about how we should think about growth in 2023 versus 2022? And In what areas do you see that moderation developing?

Speaker 2

Well, I'll take a stab at that. I mean, Clearly, 1 to 4 family residential originations are slowing. We expect that to be down in a higher rate environment. I would We're going to see slowing in commercial real estate as well. So far, we're not and we're still seeing pretty Healthy activity in terms of commercial loan growth.

Speaker 2

But just depending on How and when the economy slows, we just we think that that's going to be the natural outcome is that in a higher rate environment that you'll see You'll see loan demand there as well. So I those are just a couple of thoughts. It's directional. I don't think we really have any good fix on exactly how it plays out.

Speaker 5

John, I would just this is Scott. I would just add to that that We're coming off of 2 or 3 of the biggest quarters in our history in terms of loan growth, all in areas that are you know Have been really focal points for our lending. And so that Any decrease will look like a decrease, but it's coming off of sort of record highs. I would just say also that For years you've heard us say that we focus on trying to create mid single digit loan growth and that our model works well on that basis and I think that we would still feel pretty comfortable with that kind of concept barring a really serious recession.

Speaker 4

Right. Okay, great. Thanks, Scott.

Operator

Our next question is from Ebrahim Poonwala with Bank of America. Please proceed.

Speaker 6

Good afternoon. I guess maybe Paul just following up in terms of thinking about the NII outlooks of positive 13% year over year, But talk to us in terms of as we think about the trajectory of NII in NIM as we think about 23, do you think it's drifting higher as you think about All of 23 or when do you see that as speaking within your sort of assumptions? And what's the terminal beta that you're thinking about that you expect?

Speaker 3

Yes. So with respect to the net interest margin, I'm going to choose my words really carefully there because there are so many things that sort of go into that, including The composition of earning assets. So focusing on net interest income, sort of our expectation and modeling would indicate that even with An acceleration of deposit betas from where they're at. As has been noted, our deposit all in cost of deposits remained exceptionally low. So even with a little pickup in deposit rates, we are expecting this latent and emergent overall sensitivity To be really driven by earning asset repricing.

Speaker 3

And as such, particularly if we combine that with loan growth, We would expect net interest income to continue to improve. Now our outlook only goes out 4 quarters through the Q3 of next year, But I think you can get a pretty good indication of where we think next year will fall based on that outlook of continued growth.

Speaker 6

Understood. And just tied to that, I think you mentioned obviously a fair amount of liquidity. What's your expectation in terms of deposit growth and the speed at which some of these surge deposits you referenced might exit the balance sheet?

Speaker 3

Well, we don't really use the term surge deposits. As a reminder, we do, however, monitor The operating nature of the deposits on our balance sheet and we measure something called the churn, which is the sort of The activity within the accounts and if we look at the lowest churn accounts, those have grown from about Meaning the most rate sensitive when I say lowest churn, sort of the most rate sensitive account. Those have grown from about 31 Pre pandemic to close to 40% at the high watermark. Those are back down to sort of high 30s, call it 37%. If And this is a sort of a somewhat speculative comment, but in response to your question, I'll try to provide some insight.

Speaker 3

If those Sort of, more rate sensitive deposits were to fall to the place that they were prior to the pandemic, so that's 2 years ago. You would be looking at probably another $5,000,000,000 of deposit outflow. That would all of things equal, that would take our loan to deposit ratio to About 76%, which from a profitability and a liquidity perspective is a very, very comfortable place from my perspective.

Speaker 6

Thank you.

Speaker 7

Thank you.

Operator

Our next question is from Dave Rochester with Compass Point. Please proceed.

Speaker 4

Hey, good afternoon, guys.

Speaker 3

Hey, Dave.

Speaker 4

On the hedging plan from here, where do you guys want to end up Asset sensitivity and we wrap that up using swaps or go about it another way?

Speaker 3

Yes. So this is Paul. I'll take that. We have The ALCO committee began a hedging program earlier this year, several quarters ago actually. As interest rates start to rise, we're trying to protect against the downside.

Speaker 3

So we remain asset sensitive. We'll continue to put swaps on, but the biggest determinant of our asset sensitivity, continues to be the behavior of our deposits. And so, my expectation is that, that, asset sensitivity will continue to fall a little bit. But at the end of the day, The behavior of our deposits will ultimately determine whether or not we're net sort of modestly asset sensitive or modestly liability sensitive. I think we will get a little closer to neutral from here.

Speaker 3

But again, it's going to be highly dependent on behavior of our deposits.

Speaker 4

Yes. Okay. Appreciate that. And then just a follow-up. Any concerns about the TCE ratio here following the reduction this quarter?

Speaker 4

Anything you need to do differently or maybe you are doing differently to Perhaps reduce the impact from higher rates on that going forward. And does the level of TCE or the TCE ratio impact your decision on buybacks at all?

Speaker 3

With respect to buyback, I'll take the last question first. With respect to the buyback, we really managed the regulatory capital. We managed stress test results Relative to the risk in the portfolio, I would say, I believe and I think the organization believes that, that TCE ratio does not reflect Balance sheet value, and that is because of the asymmetrical nature of the accounting, which we've talked about previously, but only marking one Small part of the balance sheet to market when the rest we manage the balance sheet in its entirety. We cannot manage it in individual small components. So, because the TCE ratio does not really reflect balance sheet value, it's not our highest priority.

Speaker 3

However, all of that being said, This is kind of an accounting related artifact. And as such, anything we any action we take to mitigate that Would also be probably accounting friendly in nature.

Speaker 4

Great. Thanks.

Speaker 3

Okay. Thank you.

Operator

Our next question is from Ken Usdin with Jefferies. Please proceed.

Speaker 8

Thanks. Good afternoon. Guys, I just want to ask on the expense side. So looking on your adjusted basis, you're up 10% year over year and Make the call outs about salaries and incentives. I'm just wondering, can you help us just understand The magnitude is there, both sequentially and year over year kind of like where the growth is coming from and as you look forward to another moderate increase, Just help us understand like how much of that is the incentive comp for higher corporate earnings versus just hires and inflation.

Speaker 8

Any breakout I think would be helpful to understand magnitude of the expense growth?

Speaker 3

Yes. So The 2 thirds of our expense are driven by employees. And so, Some of this is employee benefits, some of it's in salaries, a little bit incentive comp, that is probably not the largest part of it. So over time, my expectation, that the 2 largest factors to pay attention to are the total number of employees And then the expense or the inflation pressures we're feeling overall on expense. So all that being said, We are potentially going into a kind of a slowing environment, but we it's important to us that we continue to invest in the businesses, which is why you're You need to see somewhat modest, but some growth in our overall level of employees.

Speaker 8

I guess as a follow-up, it just seems to be a rather high expense growth rate relative to many peers. So are there offsets you can find? I know you're going to continue to invest, But just in terms of funding some of the increments or is it just you have the NII to spend more, so this is the outcome that the company needs to do for its future?

Speaker 4

One of

Speaker 3

the things that

Speaker 2

I would just add to what Paul has said is, one of the places that we've been adding, Not all FTE for full time equivalents are created equal. We've been building The Capital Markets business, we're really starting to ramp that up with a particular focus on commercial real estate, which over time, We've had more opportunity to do business there than we've had balance sheet to accommodate. And we've had some we've had A variety of hires in that area. We've been ramping up in cybersecurity where we're up. I mean, our staffing Costs there are up about 25% over the last year.

Speaker 2

So there I mean, there's some pockets of areas like that. I don't expect we're going to continue to see that kind of pace of growth in these areas. And So and I think that's going to be helpful going forward. But I also it remains a very competitive environment out there in terms of compensation, Particularly for more senior people, experienced technicians, People like that. So that's what we're thinking going into this next year.

Speaker 2

It's still we're still seeing a lot of inflation pressure

Operator

And our next question is from Brad Milsaps with Piper Sandler. Please proceed.

Speaker 9

Hey, good afternoon.

Speaker 3

Hey, Brad.

Speaker 9

Just to follow-up on Ken's question, I guess expenses have been up the last two quarters, 10% or so, you stuck with kind of the moderately increasing nomenclature. Just kind of curious, is that still the right Kind of level to think about as we look into next year. It just I don't want to go down the path of kind of what moderate means, but That 10% number does kind of stick out kind of visavis for that the moderate label?

Speaker 2

Yes. I think we don't expect to see Another 10% year over year as we get out into next year. I expect it to be on the high side of kind of the mid single digits, But it's I wouldn't expect it to be what it has been this past year.

Speaker 5

And that Harris' comment would be inclusive of The fact that as our future core final release goes live, we'll have an increase in costs related to that and that's built into what he's Thank

Speaker 9

you. That's very helpful. And just as my follow-up, just Maybe on asset quality, can you guys talk a little bit about kind of where you're sort of tilting, kind of how you're viewing the world in terms of your CECL model and your economic forecasting? Just Love to get an update on kind of how you guys are viewing things.

Speaker 3

Well, As has been previously described and I'm sure you've heard our CECL based allowance for credit loss, It's kind of based on the prevailing credit trends within the portfolio and then the macroeconomic outlook. Our I think it's fair to say that we are tilting toward a less moderate, I. E, potentially more severe outcome, I. E, we expect things to deteriorate modestly from where they're at. I think that's kind of a key driver of our allowance for credit losses today.

Speaker 3

Over time, however, those macroeconomic forecasts will absolutely impact the allowance for credit loss at the point in time At the end of quarter.

Speaker 9

Great. Thanks for taking my questions.

Speaker 3

Yes. Thank you.

Operator

Our next question is from Jennifer Demba with Truist Securities. Please proceed. Thank you. Good afternoon. I'm just curious if I missed this from the monologue, I apologize, but can you give us some more detail on the 2 credits That increased your net charge off level during the Q3?

Operator

Yes.

Speaker 2

I think we have Michael Morris, our Chief Credit Officer on. Michael, do you want to talk about those couple

Speaker 10

Sure, Harris. Hi, Jennifer. We didn't find really anything Thematic, there are a couple of one offs. And I would say If you're going to categorize them, you'd probably call them in the $5,000,000 to $10,000,000 range unsecured Cash flow type loans on the commercial side. You could argue there were some loss drivers that came out of COVID and supply chain issues On both of them, in different ways, but there's nothing systemic or thematic in our loss book.

Speaker 2

And to be I mean, specifically, one was what, 10 and one was about 7, I think, something like that.

Speaker 5

Right, Right.

Operator

Thanks so much. Our next question is from Chris McGratty with KBW. Please proceed.

Speaker 7

Great. Paul, a question on the investment portfolio. Could you remind us what type of monthly cash flow comes off that? I think you said you're not buying anything, but just trying to get a sense of where that portfolio will bottom and how much cash it will throw off. And also The yields of the stuff that's rolling off compared to your book yield, I mean, I thought I would have thought that the yield went up a little bit more this quarter, but Any color there would be great.

Speaker 7

Thanks.

Speaker 3

Yes. The as it relates to the cash flow, we present that In terms of quarterly cash flows and this portfolio was specifically designed to deal with The possibility of extension risk, that is to say the extension risk was is to kind of deliberately limited. And so, the cash flow coming off the portfolio has been relatively

Speaker 7

Okay. And then as a follow-up, could you provide the rate and duration of the borrowings You had and also I think Ebrahim had asked about the full cycle beta. Could you just remind us what you're assuming? Thanks.

Speaker 3

So, yes, as it relates to the I think you're asking about funding. The duration of the funding remains relatively short. It's we've got it's generally repos and some other things. But On the short side, I think is what you're asking. And you can because of that, you can see the yield is pretty transparent On the face of the financial statement.

Speaker 7

Okay, great. And did you have the full cycle deposit beta that you were assuming for?

Speaker 3

All right. Sorry, sorry. Yes, that's that is actually, I think it was 13%. On our slide, I need to pull it up.

Speaker 2

13% using the late model, 14% using kind of that emerging volume. Yes. And 13%, 14% should be Certainly, north of where it's been so far. Right. Suggest a pickup.

Speaker 7

But have you just sorry to drill in here, but Did you have you disclose what you're assuming over the full cycle? Obviously, it's been really low so far.

Speaker 2

No, we haven't I think we've not shown that over the full cycle. We're only projecting out kind of next 12 months given the forward curve.

Speaker 3

Yes. I would encourage you to look at the footnote on Slide 11 of the earnings presentation where there's some incremental disclosures around that.

Speaker 7

Thank you. Thank you.

Operator

That concludes our question I would like to turn the conference back over to Ryan for closing comments.

Speaker 1

Thank you, Sherry, and thank you all for joining us today. If you have additional questions, please contact us at Email or phone number listed on our website. We look forward to connecting with you throughout the coming months. Thank you for your interest in Zions Bank Corporation.

Powered by Quartr
Earnings Conference Call
Zions Bancorporation, National Association Q3 2022
00:00 / 00:00