Zions Bancorporation N.A.

Greetings and welcome to the Zion Bancorp Q3 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Shannon Draves, Interim Director of Investments. Thank you, Shannon. You may begin.

Thank you, Alicia, and good evening. We welcome you to this conference call to discuss our 2023 third quarter earnings. My name is Shannon Drage, interim director of investor relations. 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 slide two of the presentation dealing with forward-looking information and the presentation of non-GAAP measures. which applies equally to statements made during this call. A copy of the earnings release as well as the presentation are available at zionsbankcorporation.com. For our agenda today, Chairman and Chief Executive Officer Harris Simmons will provide opening remarks. Following Harris's comments, Paul Burtis, our Chief Financial Officer, will review our financial results. Also with us today are Scott McLean, President and Chief Operating Officer, Keith Mayo, Chief Risk Officer, and Derek Stewart, Chief Credit Officer. After our prepared remarks, we will hold a question and answer session. This call is scheduled for one hour. I will now turn the time over to Harris Simmons.

Thanks very much, Shannon, and we want to welcome all of you to our call this evening. Zions Bank Corporation recently celebrated the 150th anniversary of what we think of as its ancestral bank, which was Zions Savings Bank and Trust Company. which opened for business in October of 1873. I'd like to think that this is a bank that's been built the right way, steadily and prudently over many decades, with a persistent focus on developing deep roots in the communities we serve and helping customers develop their own strong financial foundations. As one of the West's most prominent pioneer institutions, we look forward to a great future building on this history and demonstrating a continued commitment to the values that has served us so well over these many years. One other thing that I want to comment on before we get into the numbers, during this past quarter, Michael Morris, who has very capably served as our chief credit officer for the past decade, retired from the role due to some recent health challenges that led Michael and his family to conclude that he should reduce his workload somewhat. I'm very pleased that Michael will continue with us in a role focused on affordable housing and related projects where I know he'll add a great deal of value. Michael's close and very capable associate over the past decade, Derek Stewart, has assumed the chief credit officer role, and as Shannon noted, he's with us on the call today, and we welcome Derek into this really important position in the company. So going into the slides, financial performance for the quarter was marked by sustained stabilization of our net interest margin as well as significant customer deposit growth. both of which have been very encouraging. On slide three, you'll see some of the themes that are particularly applicable designs this quarter, and these remain fairly consistent with our messaging from the prior quarter. Customer deposits grew $3 billion during the quarter and resulted in reduced reliance on both short-term borrowings and broker deposits. We continue to actively manage our balance sheet at our hedging in response to changes in our interest rate risk profile. We've had a pretty dynamic and proactive response to changing conditions, and this has contributed to the stabilization of the net interest margin and net interest income. We recognized $14 million in net charge-offs during the quarter, which is in line with the prior quarter. Loss-absorbing capital increased with common equity Tier 1 capital up 7% compared to the prior year. Capital levels remain healthy, particularly relative to our risk profile. Turning to slide four, we've included some key financial performance highlights for the quarter. Circled on the slide, we reported total deposit costs of 192 basis points for the quarter, compared with 127 basis points in the second quarter. Period end customer deposits increased 5%. Broker deposits declined 22%, bringing total deposit growth to 1%. over quarter. Period end loans were flat for the prior quarter as we observed softening loan demand in the third quarter. Moving to slide five, diluted earnings per share was up two cents over the second quarter to $1.13 on net income of $168 million as lower expenses offset slightly lower revenue. Turning to slide six, our third quarter adjusted pre-provision net revenue was $272 million, down from $296 million. The linked quarter decline was attributable to lower non-interest revenue, while adjusted non-interest expenses were flat. Versus the year-ago quarter, PPNR was down 23% as the increase in the cost of funds exceeded the increase in earning asset yields. With that high-level overview, I'm going to ask Paul Burtis, our Chief Financial Officer, to provide some additional detail related to our financial performance. Paul?