Zions Bancorporation, National Association (ZION): Business Model Canvas [11-2024 Updated]
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Zions Bancorporation, National Association (ZION) Bundle
Understanding the Business Model Canvas of Zions Bancorporation, National Association (ZION) provides a clear picture of how this financial institution operates and delivers value. From its key partnerships with local businesses and government agencies to its diverse customer segments, Zions Bancorporation has crafted a comprehensive strategy that emphasizes community engagement and innovative banking solutions. Dive deeper to explore how ZION's unique structure and offerings position it within the competitive banking landscape.
Zions Bancorporation, National Association (ZION) - Business Model: Key Partnerships
Collaboration with government agencies for loan guarantees
Zions Bancorporation collaborates with various government agencies, including the Small Business Administration (SBA) and the U.S. Department of Agriculture (USDA), to offer loan guarantees. In 2024, Zions facilitated approximately $500 million in SBA 7(a) loans, enhancing access to capital for small businesses. This partnership mitigates the risk for Zions while supporting local economic growth.
Partnerships with local businesses for community engagement
Zions actively engages with local businesses to foster community development. In 2024, the bank partnered with over 200 local enterprises to provide financial literacy programs and business development workshops. These initiatives are aimed at empowering small business owners, with an estimated participation of 5,000 individuals throughout the year.
| Year | Number of Partnerships | Estimated Participants | Investment in Community Programs (in millions) |
|---|---|---|---|
| 2024 | 200 | 5,000 | $2.5 |
Alliances with technology providers for banking system upgrades
In 2024, Zions Bancorporation formed strategic alliances with leading technology providers such as FIS and Oracle. These partnerships focus on upgrading the bank's core banking systems and enhancing digital banking capabilities. The total investment in technology upgrades is projected at $271 million, aimed at improving operational efficiency and customer service.
| Technology Partner | Project Focus | Investment (in millions) | Completion Date |
|---|---|---|---|
| FIS | Core Banking System | $150 | Q2 2025 |
| Oracle | Data Analytics Platform | $121 | Q4 2025 |
Zions Bancorporation, National Association (ZION) - Business Model: Key Activities
Offering commercial and consumer banking services
Zions Bancorporation provides a diverse range of commercial and consumer banking services. As of September 30, 2024, the total loans and leases amounted to $58.9 billion, reflecting an increase of $1.1 billion or 2% compared to the previous year. The largest loan category is commercial and industrial loans, constituting 29% of the total loan portfolio.
Deposits serve as the primary funding source, with a total deposit portfolio of $75.7 billion. This includes $24.9 billion in noninterest-bearing demand deposits and $39.2 billion in savings and money market accounts.
Managing loans and leases efficiently
Zions Bancorporation employs robust management strategies to ensure efficient handling of its loans and leases. The loan-to-deposit ratio was reported at 78% as of September 30, 2024, indicating effective utilization of deposits for lending. The provision for credit losses was $13 million for the quarter, a decrease from $41 million in the prior year, demonstrating improved credit quality.
The allowance for credit losses (ACL) stood at $736 million, representing 1.25% of total loans and leases. Nonperforming assets totaled $368 million, or 0.62% of total loans, reflecting a slight increase from the previous year.
Conducting risk assessments and compliance checks
Risk management is integral to Zions Bancorporation's operations, encompassing credit risk, market risk, and compliance with regulatory requirements. The bank’s classified loans totaled $2.1 billion, or 3.55% of total loans, indicating a focus on maintaining credit quality. Furthermore, Zions Bancorporation's capital ratios exceeded the Basel III requirements, with a common equity tier 1 capital ratio of 10.7%.
As part of its compliance efforts, Zions Bancorporation has invested in technology to modernize its financial systems, with capitalized costs associated with its core system replacement project totaling $271 million.
| Metric | Value (as of September 30, 2024) |
|---|---|
| Total Loans and Leases | $58.9 billion |
| Total Deposits | $75.7 billion |
| Loan-to-Deposit Ratio | 78% |
| Provision for Credit Losses | $13 million |
| Allowance for Credit Losses | $736 million |
| Classified Loans | $2.1 billion |
| Nonperforming Assets | $368 million |
| Common Equity Tier 1 Capital Ratio | 10.7% |
| Capitalized Costs for Core System Replacement | $271 million |
Zions Bancorporation, National Association (ZION) - Business Model: Key Resources
Extensive branch network across the western U.S.
Zions Bancorporation operates a significant branch network, comprising a total of 409 branches as of September 30, 2024. Out of these, 279 branches are owned, and 130 are leased. The distribution of branches across various states is as follows:
| State | Number of Branches | Type |
|---|---|---|
| Utah | 95 | Owned |
| Idaho | 25 | Owned |
| California | 75 | Owned |
| Texas | 76 | Owned |
| Arizona | 56 | Owned |
| Nevada | 43 | Owned |
| Colorado | 34 | Owned |
| New Mexico | 1 | Owned |
| Washington | 2 | Leased |
| Oregon | 1 | Leased |
Skilled workforce in financial services
Zions Bancorporation has a skilled workforce that is essential for delivering financial services. The bank's comprehensive training programs and focus on employee development ensure a high level of service and expertise among its staff. The workforce is supported by an increase in salaries and employee benefits expenses, which amounted to $502 million for the nine months ended September 30, 2024, compared to $496 million for the same period in 2023.
Advanced technology infrastructure for banking operations
The bank has made significant investments in technology to modernize its operations. A multi-year project to replace core loan and deposit banking systems was completed in July 2024, incurring total capitalized costs of $271 million. This upgraded technology not only enhances operational efficiencies but also improves customer experience. The following table outlines the capitalized costs associated with the core system replacement project:
| Phase | Cost (in millions) | Amortization Period End |
|---|---|---|
| Phase 1 | 16 | Q2 2027 |
| Phase 2 | 39 | Q1 2029 |
| Phase 3 | 216 | Q2 2033 |
| Total | 271 |
As of September 30, 2024, Zions Bancorporation's total assets amounted to $87.0 billion, reflecting the bank's capacity to leverage its technology for growth and operational effectiveness.
Zions Bancorporation, National Association (ZION) - Business Model: Value Propositions
Comprehensive banking solutions tailored for businesses and consumers
Zions Bancorporation offers a wide range of financial products and services to meet the diverse needs of its customers. The bank's total loans and leases reached approximately $58.9 billion as of September 30, 2024, up from $57.8 billion at the end of 2023, reflecting a growth of about 2%.
The composition of the loan portfolio is diverse, with commercial and industrial loans making up 29% of the total. Additionally, residential mortgage loans constitute around 65% of the total consumer loan portfolio, indicating a strong focus on housing finance. The bank also provides home equity credit lines, with a portfolio totaling $3.5 billion.
| Loan Category | Amount (in billions) | Percentage of Total Loans |
|---|---|---|
| Commercial and Industrial | $16.9 | 29% |
| Residential Mortgages | $9.5 | 65% |
| Home Equity Lines of Credit | $3.5 | — |
Commitment to community development and support
Zions Bancorporation emphasizes its commitment to community development through various initiatives. As of September 30, 2024, the bank's estimated total amount of uninsured deposits stood at $33.1 billion, representing 44% of total deposits. This showcases the bank's focus on maintaining a strong community presence and supporting local economies.
Furthermore, the bank actively participates in community investment programs, providing loans and financial services that support local businesses and individuals, thereby contributing to economic development within its operational regions.
Competitive interest rates and financial products
Zions Bancorporation positions itself competitively in the market by offering attractive interest rates and an array of financial products. The bank's net interest income for the third quarter of 2024 was approximately $620 million, a 6% increase from the previous year. The net interest margin improved to 3.03% from 2.93%.
The bank also reported that total deposits increased by $319 million in the third quarter of 2024, reflecting a growth in interest-bearing deposits, which signals customer confidence and competitive pricing strategies.
| Financial Metric | Value | Change (%) |
|---|---|---|
| Net Interest Income | $620 million | +6% |
| Net Interest Margin | 3.03% | +10 bps |
| Total Deposits | $75.7 billion | +1% |
Zions Bancorporation, National Association (ZION) - Business Model: Customer Relationships
Personalized service through dedicated account managers
Zions Bancorporation emphasizes personalized service by assigning dedicated account managers to its commercial clients. This approach aims to foster strong relationships and improve customer satisfaction. As of September 30, 2024, the bank reported total commercial loans amounting to $16.8 billion, reflecting a focus on tailored services for business clients.
Community involvement and local outreach programs
The bank actively engages in community involvement through various outreach programs. Zions Bancorporation's municipal investments and extensions of credit totaled $6.3 billion as of September 30, 2024, which includes loans and securities aimed at supporting local governments. Additionally, the bank has made significant contributions to local non-profit organizations, enhancing its community presence and fostering customer loyalty.
Regular communication via digital channels and customer support
Zions Bancorporation maintains regular communication with its customers through various digital channels. The bank's investment in technology modernization, including the completion of a core system replacement project in July 2024, allows for improved customer interaction and support. Total customer-related noninterest income increased by 3%, reaching $133 million for the nine months ended September 30, 2024.
| Metric | Value (September 30, 2024) |
|---|---|
| Total Commercial Loans | $16.8 billion |
| Total Municipal Investments | $6.3 billion |
| Customer-Related Noninterest Income | $133 million |
| Dedicated Account Managers | Assigned to Commercial Clients |
Zions Bancorporation, National Association (ZION) - Business Model: Channels
Physical branches for in-person banking
Zions Bancorporation operates a network of physical branches that facilitate in-person banking services. As of September 30, 2024, Zions had a total of 432 branches across its various banking affiliates, including Zions Bank, California Bank & Trust, and Amegy Bank. The branches serve as critical touchpoints for customer engagement, allowing clients to conduct transactions, seek financial advice, and access loan services.
Online banking platform for digital transactions
The online banking platform of Zions Bancorporation has been a significant part of its channel strategy, particularly in recent years. The platform provides customers with a wide range of services, including account management, fund transfers, and bill payments. As of Q3 2024, approximately 65% of Zions' customers utilized online banking services, reflecting a strong preference for digital transactions. The platform has seen enhancements, including improved user interface and security features, as part of ongoing investments in technology to meet customer needs.
Mobile app for convenient access to banking services
Zions Bancorporation's mobile application is designed to provide customers with convenient access to banking services on-the-go. As of September 30, 2024, the mobile app had over 500,000 downloads and received a customer satisfaction rating of 4.7 stars out of 5 on major app stores. Features of the mobile app include mobile check deposit, account alerts, and budgeting tools, which enhance customer experience and engagement.
| Channel | Key Metrics | Details |
|---|---|---|
| Physical Branches | 432 | Total number of branches as of September 30, 2024 |
| Online Banking | 65% | Percentage of customers using online banking services |
| Mobile App | 500,000+ | Number of app downloads with a rating of 4.7 stars |
Zions Bancorporation, National Association (ZION) - Business Model: Customer Segments
Small to medium-sized businesses seeking financial solutions
Zions Bancorporation targets small to medium-sized enterprises (SMEs) by offering a range of financial products tailored to their operational needs. As of September 30, 2024, Zions reported total commercial loans of $30.8 billion, which includes $16.8 billion in commercial and industrial loans and $4.3 billion in municipal loans. The bank's focus on SMEs is reflected in their commercial account fees, which amounted to $42 million for the nine months ended September 30, 2024.
Individual consumers looking for personal banking services
Zions Bancorporation serves individual consumers through a variety of banking products, including residential mortgages and home equity lines of credit. As of September 30, 2024, the total consumer loan portfolio reached $14.6 billion, with 1-4 family residential mortgages constituting $9.5 billion, or 64.9% of the total. The bank reported that approximately 91% of these residential mortgages were variable-rate loans. Additionally, home equity credit lines totaled $3.5 billion, reflecting a 5.6% increase from the previous year.
| Consumer Lending Portfolio (September 30, 2024) | Amount (in millions) | % of Total Consumer Loans |
|---|---|---|
| Home Equity Credit Line | $3,543 | 24.2% |
| 1-4 Family Residential | $9,489 | 64.9% |
| Construction and Other Consumer Real Estate | $997 | 6.8% |
| Bankcard and Other Revolving Plans | $461 | 3.2% |
| Other | $126 | 0.9% |
| Total Consumer Loans | $14,616 | 100.0% |
Municipalities requiring specialized banking products
Zions Bancorporation also focuses on municipalities, providing specialized banking products such as municipal loans. As of September 30, 2024, municipal loans accounted for $4.3 billion of the bank's total commercial loans. This segment is crucial for Zions, as municipalities often require tailored financing solutions for infrastructure and public service projects, which Zions addresses through its dedicated municipal banking services.
The bank's commitment to serving municipalities is evident in its strategic partnerships and the development of products aimed at meeting their unique financial needs. For instance, the provision for credit losses related to municipal loans was specifically managed to mitigate risks associated with public financing.
Zions Bancorporation, National Association (ZION) - Business Model: Cost Structure
Operational costs for branch maintenance and staffing
As of September 30, 2024, Zions Bancorporation reported a noninterest expense of $502 million for the third quarter of 2024, which reflects a 1% increase compared to $496 million in the same quarter of 2023. A significant portion of this noninterest expense is attributed to salaries and employee benefits, which accounted for $317 million in Q3 2024, up from $311 million in Q3 2023. The total staffing costs for the first nine months of 2024 reached approximately $966 million, a slight decrease from $974 million in the prior year period.
Technology investments for system upgrades and cybersecurity
Zions Bancorporation has made substantial investments in technology to enhance operational efficiency. As of September 30, 2024, the capitalized costs associated with their core system replacement project totaled $271 million. This includes three phases of investment: Phase 1 at $16 million, Phase 2 at $39 million, and Phase 3 at $216 million. The amortization period for these costs is scheduled to conclude between 2027 and 2033. Additionally, technology, telecom, and information processing expenses rose to $66 million in Q3 2024, representing a 6% increase from $62 million in Q3 2023.
Marketing expenses to promote financial products and services
The marketing expenditures for Zions Bancorporation are reflected within their overall noninterest expenses. In Q3 2024, the company reported a total noninterest expense of $502 million, which encompasses various costs including marketing. Although specific figures for marketing expenses were not disclosed, the overall increase in noninterest expense indicates ongoing investment in promoting financial products and services.
| Cost Component | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Salaries and Employee Benefits | $317 | $311 | 2% |
| Technology Investments (Total Capitalized Costs) | $271 | N/A | N/A |
| Technology, Telecom, and Information Processing | $66 | $62 | 6% |
| Total Noninterest Expense | $502 | $496 | 1% |
Zions Bancorporation, National Association (ZION) - Business Model: Revenue Streams
Interest income from loans and leases
For the third quarter of 2024, Zions Bancorporation reported net interest income of $620 million, an increase of $35 million, or 6%, compared to the same period in 2023. This growth was primarily attributed to the repricing of interest-earning assets. The net interest margin (NIM) stood at 3.03%, up from 2.93% a year earlier.
Total loans and leases increased by $2.0 billion, or 3%, to $58.9 billion as of September 30, 2024. The average yield on loans and leases rose to 6.15%, reflecting a 31 basis point increase. Interest income recoveries amounted to $1 million for the quarter.
| Category | Amount (in millions) | Yield (%) |
|---|---|---|
| Total loans and leases | $58,884 | 6.15 |
| Average interest-earning assets | $86,509 | 5.35 |
| Net interest income | $620 | N/A |
Noninterest income from fees and services
Noninterest income for the third quarter of 2024 totaled $172 million, a decrease of $8 million, or 4%, compared to the prior year. The decline was driven by reduced loan-related fees and income, although increases in capital markets fees and commercial account fees partially offset this.
The breakdown of noninterest income includes:
- Commercial account fees: $46 million
- Card fees: $36 million
- Retail and business banking fees: $17 million
- Wealth management fees: $13 million
| Revenue Source | Amount (in millions) |
|---|---|
| Commercial account fees | $46 |
| Card fees | $36 |
| Retail and business banking fees | $17 |
| Wealth management fees | $13 |
| Total noninterest income | $172 |
Investment income from securities and other financial assets
Zions Bancorporation's investment income from securities was impacted by changes in the average balances and yields. The average yield on securities was 2.86%, up 13 basis points compared to the previous year. The carrying value of investment securities decreased to $18.6 billion as of September 30, 2024, from $20.5 billion at the end of 2023.
Other noninterest-bearing investments totaled $946 million, which includes:
- Bank-owned life insurance: $560 million
- Federal Home Loan Bank stock: $56 million
- Federal Reserve stock: $65 million
- Farmer Mac stock: $27 million
| Investment Type | Carrying Value (in millions) |
|---|---|
| Investment securities | $18,600 |
| Bank-owned life insurance | $560 |
| Federal Home Loan Bank stock | $56 |
| Federal Reserve stock | $65 |
| Farmer Mac stock | $27 |
| Total other noninterest-bearing investments | $946 |
Updated on 16 Nov 2024
Resources:
- Zions Bancorporation, National Association (ZION) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Zions Bancorporation, National Association (ZION)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Zions Bancorporation, National Association (ZION)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.