Zions Bancorporation N.A.

Greetings and welcome to the Zions Bank Corporation Q3 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I'll now turn the conference over to your host, Shannon Trage. Thank you. You may begin.

Thank you, Matt, and good evening. We welcome you to this conference call to discuss our 2024 third quarter earnings. My name is Shannon Drage, Senior 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, Ryan Richards, our Chief Financial Officer, will review our financial results. Also with us today are Scott McClain, President and Chief Operating Officer, Derek Stewart, Chief Credit Officer, and Chris Kyriakakis, Chief Risk 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. We're generally quite pleased with the results for the quarter, which reflect improvement in our financial performance. We continue to benefit from the strength of our credit risk management, our valuable deposit franchise, and expense discipline, while investing in and growing the business. We expect performance will continue to improve as we carefully manage funding costs despite ongoing uncertainty around interest rates and the economy in the face of what we expect to be moderate headwinds from the refinancing of real estate assets. We concluded the quarter with the announcement that we reached an agreement with First Bank to acquire four of their branches in the Coachella Valley of California with approximately $730 million in deposits and $420 million in loans. This deal, still subject to regulatory approval, will strengthen our competitive position in that market at about 15,000 new customers and provide us with a team of accomplished bankers with strong ties to their community. Looking further at specific results for the quarter, beginning on slide three are some key metrics. Net earnings for the quarter were $204 million, improving by $14 million due to higher revenues and lower expenses. Customer deposits increased one and a half percentage point-to-point for the quarter, and it reflects stabilization in non-interest-bearing demand deposits, which increased 1% point-to-point. Net interest margin continued to expand, up five basis points in the quarter, as earning asset yields increased while the cost of funding remained flat. Our net interest margin improved 10 basis points against the year-ago quarter. The timing and magnitude of future rate changes, along with both pricing and the behavior of deposits, will impact net interest income in a falling rate environment, as Ryan will speak to further in the presentation. Loan growth was modest at under 1% for the quarter. Anecdotally, we believe customer optimism improved in light of the recent reduction in benchmark interest rates and the expectation that downward rate movements could continue in the near term. Demand for our SBA loan product continues to grow in the communities we serve. Application counts and strong pipelines for this product are also aided by the launch of new digital application technology, which provides a more intuitive user experience, fewer incomplete applications, and simplified document upload capabilities. We're pleased with the continued low level of losses experienced in the loan portfolio. Net charge-offs were just two basis points annualized as a percentage of average loans for the quarter. Classified loan balances increased $829 million. The downgrades were largely in the multifamily portfolio due to weaker performance, particularly for 2021 and 2022 construction loan vintages that have been more acutely impacted by higher interest rates and higher than expected rent concessions during the lease-up period. The increase in classified loans is also a function of a change in approach to grading, which places more emphasis on current cash flow, which is the primary source of repayment, and less emphasis on the adequacy of collateral values and the strength of guarantors and sponsors. We continue to believe that realized losses over the next few quarters will be quite manageable due to strong underwriting practices, high borrower equity in the deals, and strong sponsor support. Our common equity Tier 1 ratio was 10.7% compared to 10.6% in the second quarter and 10.2% a year ago, while the tangible common equity ratio also improved by 50 basis points to 5.7%. Moving to slide 4, diluted earnings per share of $1.37 was up 9 cents or 7% from the prior quarter and 21% from the year-ago period. It was a very clean quarter, and there were no notable items impacting earnings per share during the quarter. On slide five, our second quarter adjusted pre-provision net revenue was $299 million, up from $278 million in the second quarter. The linked quarter increase was attributable to improvement in several important underlying measures, including growth in net interest income, strong customer-related fee income, particularly in our capital markets division, which had a record quarter and decreases in adjusted non-interest expense across multiple categories. With that high-level overview, I'm going to ask Ryan Richards, our Chief Financial Officer, to provide additional details related to our financial performance. Ryan?