Intrinsic Value Zions Bancorporation, National Association (ZIONP)

• Previous Close: $19.95
• Intrinsic Value: $48.45
• Upside potential: +143%

Stock Valuation Context

Business Model And Market Position

Zions Bancorporation, National Association operates as a regional bank primarily serving commercial and retail clients across the Western and Southwestern United States. The company generates revenue through a diversified mix of interest income from loans and securities, as well as fee-based services such as wealth management, treasury solutions, and payment processing. Its core markets include Utah, Idaho, Colorado, Arizona, Nevada, Texas, and California, where it maintains a strong regional presence with a focus on middle-market businesses and community banking. Zions differentiates itself through localized decision-making, specialized industry expertise in sectors like healthcare and technology, and a commitment to relationship banking. The bank holds a competitive position as a mid-sized regional player, balancing scale with personalized service in markets often dominated by larger national institutions. Its deposit base and loan portfolio reflect a deliberate emphasis on commercial clients, which typically yield higher margins than retail banking. While not a market leader in any single geography, Zions has cultivated niche strengths in several high-growth Western markets where demographic trends support long-term banking demand.

Revenue Profitability And Efficiency

For FY 2024, Zions reported $4.99 billion in revenue and $784 million in net income, translating to a diluted EPS of $4.95. The bank's operating cash flow of $1.15 billion and capital expenditures of -$97 million reflect efficient cash generation relative to its asset base. Net interest margin trends will be critical to monitor given the current rate environment's pressure on regional bank profitability.

Earnings Power And Capital Efficiency

With $350 million in cash equivalents against $4.37 billion of total debt, Zions maintains adequate liquidity buffers. The bank's earnings power appears stable, supported by its commercial-focused loan book, though rising funding costs may compress net interest margins. Capital efficiency metrics suggest disciplined balance sheet management, with risk-weighted assets aligned to its regional banking model.

Balance Sheet And Financial Health

Zions' balance sheet shows $3.5 billion in cash and equivalents against $4.37 billion of total debt, indicating manageable leverage for a regional bank of its size. The loan-to-deposit ratio and credit quality metrics (not provided) would offer further insight into asset quality. Regulatory capital ratios likely remain above required minimums given its operational profile.

Growth Trends And Dividend Policy

The bank's $1.51 per share dividend represents a payout ratio of approximately 30% based on 2024 EPS, suggesting capacity for gradual increases. Growth prospects are tied to Western U.S. economic trends, with commercial lending likely driving asset expansion. Share count stability at 147.21 million shares indicates no recent dilution events.

Valuation And Market Expectations

At current trading levels, ZIONP's valuation reflects market expectations for mid-single-digit earnings growth, in line with regional bank peers. The preferred equity structure implies a yield-focused investor base, with valuation sensitive to interest rate movements and credit cycle expectations in its core markets.

Strategic Advantages And Outlook

Zions' strategic advantages include deep regional expertise and a commercial banking focus in growth markets. Near-term challenges include navigating the rate environment and maintaining deposit costs. Long-term prospects depend on execution in technology investments and commercial client retention amid competitive pressures from both large banks and fintech entrants.

Sources

Company filings (CIK 0000109380), reported financial data for FY 2024