zions-20201231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

COMMISSION FILE NUMBER 001-12307

ZIONS BANCORPORATION, NATIONAL ASSOCIATION

(Exact name of registrant as specified in its charter)


United States of America			87-0189025
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification Number)
One South Main
Salt Lake City, Utah			84133-1109
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (801) 844-7637

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbols	Name of Each Exchange on Which Registered
Common Stock, par value $0.001	ZION	The NASDAQ Stock Market LLC
Depositary Shares each representing a 1/40th ownership interest in a share of:
Series A Floating-Rate Non-Cumulative Perpetual Preferred Stock	ZIONP	The NASDAQ Stock Market LLC
Series G Fixed/Floating-Rate Non-Cumulative Perpetual Preferred Stock	ZIONO	The NASDAQ Stock Market LLC
Series H 5.75% Non-Cumulative Perpetual Preferred Stock	ZIONN	The NASDAQ Stock Market LLC
6.95% Fixed-to-Floating Rate Subordinated Notes due September 15, 2028	ZIONL	The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ☐ Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

Aggregate Market Value of Common Stock Held by Non-affiliates at June 30, 2020 $5,470,950,404

Number of Common Shares Outstanding at February 8, 2021 164,214,100 shares

Documents Incorporated by Reference: Part III of this Annual Report on Form 10-K incorporates by reference specified portions of Zions Bancorporation, National Association's Proxy Statement for its 2021 Annual Meeting of Shareholders, which the registrant anticipates will be filed with the Securities and Exchange Commission approximately March 18, 2021.

ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

FORM 10-K TABLE OF CONTENTS


		Page
PART I
Item 1.	Business	4
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	24
Item 2.	Properties	24
Item 3.	Legal Proceedings	24
Item 4.	Mine Safety Disclosures	24

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
Item 6.	Selected Financial Data	27
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	82
Item 8.	Financial Statements and Supplementary Data	82
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	154
Item 9A.	Controls and Procedures	155
Item 9B.	Other Information	155

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	155
Item 11.	Executive Compensation	155
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	155
Item 13.	Certain Relationships and Related Transactions, and Director Independence	155
Item 14.	Principal Accounting Fees and Services	156

PART IV
Item 15.	Exhibits, Financial Statement Schedules	156
Signatures		162

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PART I

FORWARD-LOOKING INFORMATION

This annual report on Form 10-K includes “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and assumptions regarding future events or determinations, all of which are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, market trends, industry results or regulatory outcomes to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements include, among others:

•statements with respect to the beliefs, plans, objectives, goals, targets, commitments, designs, guidelines, expectations, anticipations, and future financial condition, results of operations and performance of Zions Bancorporation, National Association and its subsidiaries (collectively “Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”); and

•statements preceded by, followed by, or that include the words “may,” “might,” “can,” “continue,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “forecasts,” “expect,” “intend,” “target,” “commit,” “design,” “plan,” “projects,” “will,” and the negative thereof and similar words and expressions.

These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. Actual results and outcomes may differ materially from those presented, either expressed or implied, due to various factors including, but not limited to, those presented in Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and Risk Factors in this Form 10-K.

Although there can be no assurance that any list of risks and uncertainties is complete, important factors that may cause such material differences are often related to changes in general economic, regulatory, and industry conditions; changes and uncertainties in fiscal, monetary, regulatory, trade and tax policies and legislative and regulatory changes, including the broad changes that often occur as a result of a new presidential administration; changes in interest rates and uncertainty regarding the transition away from the London Interbank Offered Rate (“LIBOR”) toward other alternative reference rates; the quality and composition of our loan and securities portfolios; competitive pressures and other factors that may affect aspects of our business, such as pricing and demand for our products and services; our ability to execute our strategic plans, manage our risks, and achieve our business objectives; our ability to develop and maintain information security systems and controls designed to guard against fraud, cyber and privacy risks; and the effects of the COVID-19 pandemic and similar outbreaks that may occur in the future and governmental responses to such matters.

We caution against undue reliance on forward-looking statements, which reflect our views only as of the date they are made. Except to the extent required by law, we specifically disclaim any obligation to update any factors or to publicly announce the revisions to any of the forward-looking statements included herein to reflect future events or developments.

GLOSSARY OF ACRONYMS AND ABBREVIATIONS


ACL	Allowance for Credit Losses	Basel Committee	Basel Committee on Banking Supervision
AFS	Available-for-Sale	BOLI	Bank-Owned Life Insurance
ALCO	Asset/Liability Committee	bps	basis points
ALLL	Allowance for Loan and Lease Losses	CB&T	California Bank & Trust, a division of Zions Bancorporation, National Association
ALM	Asset Liability Management	CCAR	Comprehensive Capital Analysis
Amegy	Amegy Bank, a division of Zions Bancorporation, National Association	CECL	Current Expected Credit Loss
AOCI	Accumulated Other Comprehensive Income	CET1	Common Equity Tier 1 (Basel III)
ASC	Accounting Standards Codification	CFPB	Consumer Financial Protection Bureau
ASU	Accounting Standards Update	CLTV	Combined Loan-to-Value Ratio
ATM	Automated Teller Machine	CMC	Capital Management Committee

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COSO	Committee of Sponsoring Organizations of the Treadway Commission	Municipalities	State and Local Governments
CRA	Community Reinvestment Act	NASDAQ	National Association of Securities Dealers Automated Quotations
Crapo Bill	Economic Growth, Regulatory Relief, and Consumer Protection Act	NAV	Net Asset Value
CRE	Commercial Real Estate	NBAZ	National Bank of Arizona, a division of Zions Bancorporation, National Association
CSA	Credit Support Annex	NIM	Net Interest Margin
CSV	Cash Surrender Value	NSB	Nevada State Bank, a division of Zions Bancorporation, National Association
CVA	Credit Valuation Adjustment	OCC	Office of the Comptroller of the Currency
Dodd-Frank Act	Dodd-Frank Wall Street Reform and Consumer Protection Act	OCI	Other Comprehensive Income
DTA	Deferred Tax Asset	OREO	Other Real Estate Owned
DTL	Deferred Tax Liability	PCAOB	Public Company Accounting Oversight Board
EaR	Earnings at Risk	PEI	Private Equity Investment
ERM	Enterprise Risk Management	PPNR	Pre-provision Net Revenue
ERMC	Enterprise Risk Management Committee	PPP	Paycheck Protection Program
EVE	Economic Value of Equity at Risk	PPPLF	Payroll Protection Program Liquidity Facility
FAMC	Federal Agricultural Mortgage Corporation, or “Farmer Mac”	ROC	Risk Oversight Committee
FASB	Financial Accounting Standards Board	ROU	Right-of-Use
FDIC	Federal Deposit Insurance Corporation	RULC	Reserve for Unfunded Lending Commitments
FDICIA	Federal Deposit Insurance Corporation Improvement Act	S&P	Standard and Poor's
FHLB	Federal Home Loan Bank	SBA	Small Business Administration
FINRA	Financial Industry Regulatory Authority	SBIC	Small Business Investment Company
FSOC	Financial Stability Oversight Council	SEC	Securities and Exchange Commission
FTP	Funds Transfer Pricing	SIFI	Systemically Important Financial Institution
GAAP	Generally Accepted Accounting Principles	SOFR	Secured Overnight Financing Rate
HECL	Home Equity Credit Line	TCBW	The Commerce Bank of Washington, a division of Zions Bancorporation, National Association
HTM	Held-to-Maturity	TDR	Troubled Debt Restructuring
IMG	International Manufacturing Group	Tier 1	Common Equity Tier 1 (Basel III) and Additional Tier 1 Capital
ISDA	International Swaps and Derivative Association	U.S.	United States
LCR	Liquidity Coverage Ratio	Vectra	Vectra Bank Colorado, a division of Zions Bancorporation, National Association
LIBOR	London Interbank Offered Rate	VIE	Variable Interest Entity
MD&A	Management’s Discussion and Analysis	Zions Bank	Zions Bank, a division of Zions Bancorporation, National Association

ITEM 1. BUSINESS

DESCRIPTION OF BUSINESS

Zions Bancorporation, National Association and its subsidiaries (collectively “Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”) together comprise a bank headquartered in Salt Lake City, Utah with assets of $81 billion at December 31, 2020, and annual net revenue of $2.8 billion for the year 2020. We provide a wide range of banking products and related services, primarily in the states of Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. We have over one million customers, served by our 422

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branches at year-end 2020. We had 9,678 full-time equivalent employees at December 31, 2020. At year end, we had a strong capital position, with a Common Equity Tier 1 (“CET1”) capital to total risk-weighted assets ratio of 10.8%. When combined with our allowance for credit losses (“ACL”), this ratio was one of the highest among peer banks.

We conduct our operations primarily through seven separately managed “affiliates,” or “affiliate banks,” each with its own local branding and management team. These affiliate banks comprise our primary business segments as referred to throughout this document. We emphasize local authority and responsibility, local pricing, and customization of certain products (as applicable), designed to maximize customer satisfaction and strengthen community relations. For further information about our segments, see “Business Segment Results” on page 46 in MD&A and Note 22 of the Notes to Consolidated Financial Statements.

We are focused on the communities in our geographic footprint, as well as providing banking services to businesses and their owners and executives in those communities with whom relationships are particularly important. Our experienced bankers develop long-lasting relationships with our customers by providing valuable advice and award-winning service. Such relationships are further enhanced by many of the high-quality digital products we offer. Building such relationships is essential to maintaining and improving upon our high-quality deposit franchise. Currently, we have one of the lowest costs of deposits and one of the highest proportions of noninterest-bearing demand deposits among peer banks.

PRODUCTS AND SERVICES

We provide the following banking products and services:

•corporate banking;

•commercial banking, including a focus on small- and medium-sized businesses;

•commercial real estate banking;

•municipal and public finance services;

•retail banking, including residential mortgages;

•trust services;

•wealth management and private client banking; and

•capital markets products and services.

COMPETITION

We operate in a highly competitive environment. Our most direct competition for loans and deposits comes from other commercial banks, credit unions, and thrifts, including financial institutions that do not have a physical presence in our market footprint, but solicit business via the Internet and other means. In addition, we compete with finance companies, mutual fund companies, insurance companies, brokerage firms, securities dealers, investment banking companies, financial technology and other nontraditional lending and banking companies, and a variety of other types of companies. These companies may have fewer regulatory constraints, and some have lower cost structures or tax burdens.

The primary components of our business that we believe differentiate us from our competitors are the quality of service delivered, our local community knowledge, convenience of office locations, online banking functionality and other delivery methods, range of products offered, pricing, and the overall relationship with our clients. We strive to compete effectively in all of these areas to remain successful.

SUPERVISION AND REGULATION

This section describes the material elements of selected laws and regulations applicable to us. The descriptions are not intended to be complete and are qualified in their entirety by reference to the full text of the statutes and

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regulations described. Changes in applicable laws or regulations, and in their application by regulatory agencies cannot be predicted; however, they may have a material effect on our business and results.

On September 30, 2018, we completed the merger of Zions Bancorporation, our former holding company, with and into Zions Bancorporation, N.A., sometimes referred to herein as the “restructuring.” More information about the restructuring and its effects can be found in the proxy statement filed by Zions Bancorporation with the SEC on July 24, 2018. In connection with completing the restructuring, we also received approval of an application filed with the Financial Stability Oversight Council (“FSOC”) seeking a determination that we are not “systemically important” as defined by provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”).

The banking and financial services business in which we engage is highly regulated. Such regulation is intended to improve the stability of banking and financial companies and to protect the interests of customers and taxpayers. These regulations are not generally intended to protect the interests of our shareholders or creditors, and may have the consequence of reducing returns to our shareholders. Banking laws and regulations have given financial regulators expanded powers over many aspects of the financial services industry, which have reduced, and may continue to reduce, returns earned by shareholders.

Legislative changes to laws governing the financial industry occur frequently. Some of this legislation materially affects the manner in which we and other financial institutions operate, including increasing the costs and other burdens of conducting our businesses. In addition, the banking agencies regularly promulgate new regulations or modify existing regulations, which also have significant impact on the financial industry. The content and impact of such regulatory changes cannot presently be determined. We are committed to both satisfying regulatory expectations and providing attractive shareholder returns. However, given the ever-evolving regulatory environment, the results of these efforts cannot yet be known.

General

We are subject to the provisions of the National Bank Act and other statutes governing national banks, as well as the rules and regulations of the OCC, the CFPB, and the FDIC. We are also subject to examination and supervision by the OCC and examination by the CFPB in respect of federal consumer financial regulations. We, as well as some of our subsidiaries, are also subject to regulation by other federal and state agencies. These regulatory agencies may exert considerable influence over our activities through their supervisory and examination roles. Our brokerage and investment advisory subsidiaries are regulated by the SEC, Financial Industry Regulatory Authority (“FINRA”), and state securities regulators.

The National Bank Act

Prior to the restructuring, Zions Bancorporation’s corporate affairs were governed by Utah state law, and securities law matters were governed by the federal securities laws, including the Securities Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1934 (“Exchange Act”), as administered by the SEC. Each of these legal frameworks is well-developed and used widely by public companies.

Following the restructuring, our corporate affairs are governed by the National Bank Act and related regulations administered by the OCC. With respect to securities matters, we are not subject to the Securities Act, but are subject to OCC regulations governing securities offerings. Our common stock and certain other securities are registered, or deemed registered, under the Exchange Act, which vests the OCC with the power to administer and enforce certain sections of the Exchange Act applicable to banks, though we continue to make filings required by the Exchange Act with the SEC as a voluntary filer. These statutory and regulatory frameworks are not as well-developed as the corporate and securities law frameworks applicable to many other publicly held corporations.

The Dodd-Frank Act

The Dodd-Frank Act and related regulations broadly affect the financial services industry. Among other things, the Dodd-Frank Act involves mandatory divestiture of certain equity investments, increased regulation of executive and incentive-based compensation, increased bank fees to regulatory agencies, and numerous other provisions aimed at strengthening the sound operation of the financial services sector. Regulations promulgated under the Dodd-Frank

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Act require many banks to maintain greater levels of capital and liquid assets and adhere to the annual Comprehensive Capital Analysis (“CCAR”) process administered by the Federal Reserve Bank (“FRB”). As a result of the restructuring and FSOC approval, we are no longer subject to these capital and CCAR requirements. However, we continue to conduct internal stress testing and capital management measures that are similar to CCAR requirements, and remain subject to other regulatory requirements that may reduce our flexibility to return capital to shareholders and respond to other market developments and opportunities. These regulatory requirements include the OCC’s heightened standard guidelines, which establish minimum standards for certain large insured financial institutions, such as us, for the design and implementation of a risk governance framework and for board oversight of such framework’s design and implementation.

We also remain subject to the Dodd-Frank Act’s provisions and related regulations that affect the fees we must pay to regulatory agencies and the pricing of certain products and services, including debit card interchange fees and the assessment base for federal deposit insurance, among others.

The Dodd-Frank Act also created the CFPB, which is responsible for promulgating regulations designed to protect consumers’ financial interests and examining large financial institutions for compliance with, and enforcing, those regulations. The Dodd-Frank Act adds prohibitions on unfair, deceptive or abusive acts and practices to the scope of consumer protection regulations overseen and enforced by the CFPB. The Dodd-Frank Act subjected national banks to the possibility of further regulation by restricting the preemption of state laws by federal laws. Restricting the scope of federal preemption could burden national banks with the requirement that they also comply with certain state laws covering matters already covered by federal law. In addition, the Dodd-Frank Act gives greater power to state attorneys general to pursue legal actions against banking organizations for violations of federal law.

We, and other companies subject to the Dodd-Frank Act, must adhere to requirements regarding the time, manner, and form of compensation given to key executives and other personnel receiving incentive compensation. These restrictions include documentation and governance, deferral, risk-balancing, and clawback requirements. Any deficiencies in compensation practices may be incorporated into the organization’s supervisory ratings, which can affect its ability to make acquisitions or engage in other activities, or could result in regulatory enforcement actions.

Capital Standards – Basel Framework

The Basel III capital rules define the components of capital and address other issues affecting the numerator in banking institutions’ regulatory capital ratios and also address risk weights and other issues affecting the denominator in banking institutions’ regulatory capital ratios. The Basel III capital rules, among other things, (1) introduced a new capital measure called “Common Equity Tier 1” (“CET1”), (2) specified that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting specified requirements, (3) applied most deductions/adjustments to regulatory capital measures to CET1 and not to the other components of capital, thus potentially requiring higher levels of CET1 in order to meet minimum ratios, and (4) expanded the scope of the deductions/adjustments from capital, as compared with prior regulations.

Under the Basel III capital rules, the minimum capital ratio requirements are as follows:

•4.5% CET1 to risk-weighted assets;

•6.0% Tier 1 capital (i.e., CET1 plus Additional Tier 1) to risk-weighted assets;

•8.0% Total capital (i.e., Tier 1 plus Tier 2) to risk-weighted assets; and

•4.0% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”).

The Basel III capital rules also require us to maintain a 2.5% “capital conservation buffer” designed to absorb losses during periods of economic stress, composed entirely of CET1, on top of the minimum risk-weighted asset ratios, effectively resulting in minimum ratios of (1) CET1 to risk-weighted assets of at least 7.0%, (2) Tier 1 capital to risk-weighted assets of at least 8.5%, and (3) Total capital to risk-weighted assets of at least 10.5%. Banking institutions with a ratio of CET1 to risk-weighted assets above the minimum but below the capital conservation buffer face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall.

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The severity of the constraint depends on the amount of the shortfall and the institution’s “eligible retained income” (that is four quarter trailing net income, net of distributions and tax effect not reflected in net income).

The Basel III capital rules also prescribed a standardized approach for calculating risk-weighted assets that expanded the risk-weighting categories from Basel I-derived categories (0%, 20%, 50%, and 100%) to a much larger and more risk-sensitive number of categories, depending on the nature of the assets, generally ranging from 0% for U.S. government and agency securities, to 600% for certain equity exposures, to 1,250% for certain securitization exposures, and resulting in higher risk weights for a variety of asset categories. In addition, the Basel III capital rules provided more advantageous risk weights for derivatives and repurchase-style transactions cleared through a qualifying central counterparty and increased the scope of eligible guarantors and eligible collateral for purposes of credit risk mitigation.

On July 9, 2019, the federal banking agencies issued a final rule to simplify certain aspects of the regulatory capital rules for “nonadvanced approach” banking organizations. The final rule simplifies the regulatory capital requirements for mortgage servicing assets, certain deferred tax assets arising from temporary differences, and investments in the capital of unconsolidated financial institutions. The final rule replaces multiple deduction thresholds with a single 25% deduction threshold for each of these categories and requires that a 250% risk weight be applied to mortgage servicing assets and deferred tax assets that are not deducted from capital.

As allowed under the Basel III capital rules, we made a one-time permanent election as of January 1, 2015 to exclude the effects of accumulated other comprehensive income (“AOCI”) items in determining regulatory capital and capital ratios.

Basel III also required additional regulatory capital disclosures to be made that are commonly referred to as “Pillar 3” disclosures. These disclosures require us to make prescribed regulatory disclosures on a quarterly basis regarding our capital structure adequacy and risk-weighted assets. We began publishing these Pillar 3 disclosures in 2015, and such disclosures are available on our website.

The Basel Committee has issued a series of updates that propose other changes to capital regulations. In one of these, the Basel Committee finalized a revised framework for calculating minimum capital requirements for market risk, with an effective date for reporting under the revised framework for market risk capital of January 1, 2022. We are currently not subject to the market risk capital rules as we do not engage in substantial trading activity. The U.S. federal bank regulatory agencies have not yet proposed rules implementing these revisions for U.S. banking organizations. We met all capital adequacy requirements under the Basel III capital rules as of December 31, 2020.

Capital Planning and Stress Testing

We continue to utilize stress testing as an important mechanism to inform our decisions on the appropriate level of capital, based upon actual and hypothetically stressed economic conditions. The stress test results reflect a set of forward-looking stress tests based upon hypothetical economic scenarios generated in conjunction with Moody's Analytics. Moody’s Protracted Slump scenario, a downside 4% scenario, is the primary stress scenario we considered for our internal stress scenario, certain variables of which we adjusted to test certain idiosyncrasies that may be unique to us. Detailed disclosure of our historical internal stress test results can be found on our website. The 2020 internal stress test included hypothetical scenarios reflective of the ongoing economic impact of the COVID-19 pandemic. The results of the stress test indicated that we would maintain capital ratios at levels adequate for our risk profile throughout the nine-quarter horizon for the hypothetical stress test.

Liquidity

Historically, regulation and monitoring of bank liquidity has been addressed as a supervisory matter, both in the U.S. and internationally, without required formulaic measures. However, in January 2016, the FRB and other banking regulators enacted final rules (“Final Liquidity Coverage Ratio (“LCR”) Rule”) implementing a U.S. version of the Basel Committee’s LCR requirement. The LCR is intended to ensure that banks hold sufficient amounts of securities and other liquid assets to cover the anticipated net cash outflows during a hypothetical acute 30-day stress scenario. The Final LCR Rule applies to large, internationally active banking organizations (those

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with at least $250 billion in total assets or at least $10 billion in on-balance sheet foreign exposure). While the Final LCR Rule does not apply to us, we manage liquidity in accordance with the Basel III liquidity requirements. Furthermore, we utilize internal liquidity stress tests as our primary tool for establishing and managing liquidity guidelines including, but not limited to, holdings of investment securities and other liquid assets, maintaining levels of readily available contingency funding, concentrations of funding sources, and maturity profile of liabilities.

Financial Privacy and Cyber Security

The federal banking regulators have enacted rules that limit the ability of banks and other financial institutions to disclose nonpublic information about consumers to nonaffiliated third parties, including provisions of the Gramm-Leach-Bliley Act, which require financial institutions to disclose privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a nonaffiliated third party. These regulations affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors. In addition, consumers may also prevent disclosure of certain information among affiliated companies that is assembled or used to determine eligibility for a product or service, such as that shown on consumer credit reports and asset and income information from applications. Consumers also have the option to direct banks and other financial institutions not to share information about transactions and experiences with affiliated companies for the purpose of marketing products or services. Federal law makes it a criminal offense, except in limited circumstances, to obtain or attempt to obtain customer information of a financial nature by fraudulent or deceptive means.

In October 2016, the federal banking regulators jointly issued an advance notice of proposed rulemaking on enhanced cyber risk management standards that is intended to increase the operational resilience of large and interconnected entities under their supervision. Although the joint proposal was withdrawn in early 2020, cybersecurity remains a regulatory priority and is likely to be the subject of future rulemaking.

State regulators have been increasingly active in implementing privacy and cybersecurity standards and regulations. Recently, several states have enacted regulations requiring certain financial institutions to implement cybersecurity programs and providing detailed requirements with respect to these programs, including data encryption requirements. Many states have also recently implemented or modified their data breach notification and data privacy requirements. In June 2018, the California legislature passed the California Consumer Privacy Act of 2018 (the “CCPA”), which took effect on January 1, 2020. On November 3, 2020, the CCPA was amended and expanded by the approval of California ballot initiative, Proposition 24, known as the California Privacy Rights Act (the “CPRA”). The CCPA, as amended, covers businesses that obtain or access personal information on California residents, grants them enhanced privacy rights and control over their personal information, and imposes significant requirements on covered companies with respect to individual data privacy rights. Some of the rights afforded to California residents also extend to California employees, though the CPRA amendments now exempt certain employee information and employer usage from some of the CPRA provisions until at least January 1, 2023. Other states have implemented, or are considering, similar privacy laws. We expect this trend of state-level activity to continue and are continually monitoring developments in the states in which we operate.

In May 2018, the General Data Protection Regulation (the “GDPR”) established new requirements regarding the handling of personal data of European Union (“EU”) residents. We believe the applicability of the GDPR to us is minimal as we do not offer goods or services to EU residents or monitor their behaviors. Data and cybersecurity laws and regulations are evolving rapidly, remain a focus of state and federal regulators, and will continue to have a significant impact on our risk management practices.

Prompt Corrective Action

The Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) requires each federal banking agency to take prompt corrective action to resolve the problems of insured depository institutions, including but not limited to those that fall below one or more prescribed minimum capital ratios. Pursuant to FDICIA, the FDIC promulgated regulations defining the following five categories in which an insured depository institution will be placed, based on the level of its capital ratios: well-capitalized, adequately capitalized, undercapitalized, significantly under-capitalized, and critically under-capitalized. Under the prompt corrective action provisions of FDICIA as modified

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by the Basel III capital rules, an insured depository institution will generally be classified as well-capitalized if it has a CET1 ratio of at least 6.5%, a Tier 1 risk-based capital ratio of at least 8%, a total capital ratio of at least 10% and a Tier 1 leverage ratio of at least 5%. In addition, an insured depository institution will generally be classified as under-capitalized if its CET1 ratio is under 4.5%, its total risk-based capital ratio is less than 8%, its Tier 1 risk-based capital ratio is less than 6%, or its Tier 1 leverage ratio is less than 4%. An institution that, based upon its capital levels, is classified as “well-capitalized,” “adequately capitalized,” or “under-capitalized,” may be treated as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition or an unsafe or unsound practice warrants such treatment. At each successive lower capital category, an insured depository institution is subject to more restrictions and prohibitions, including restrictions on growth, restrictions on interest rates paid on deposits, restrictions or prohibitions on payment of dividends and restrictions on the acceptance of brokered deposits. Furthermore, if a bank is classified in one of the under-capitalized categories, it is required to submit a capital restoration plan to the federal bank regulator.

Other Regulations

We are subject to a wide range of other requirements and restrictions contained in both the laws of the U.S. and the states in which we and our subsidiaries operate. These regulations include but are not limited to the following:

•Limitations on dividends payable to shareholders. Our ability to pay dividends on both our common and preferred stock is subject to regulatory restrictions. See Note 15 of the Notes to Consolidated Financial Statements for additional information.

•Safety and soundness standards prescribed in the FDICIA, including standards related to internal controls, information systems, internal audit, loan documentation, credit underwriting, interest rate exposure, asset growth and compensation, as well as other operational and management standards deemed appropriate by the federal banking agencies. The safety and soundness requirements give bank regulatory agencies significant latitude in their supervisory authority over us.

•Requirements for approval of acquisitions and activities and restrictions on other activities. The National Bank Act requires regulatory and shareholder approval of all mergers between a national bank and another national or state bank and do not allow for the direct merger into a national bank of a nonaffiliated nonbank. See discussion under “Risk Factors.” Other laws and regulations governing national banks contain similar provisions concerning acquisitions and activities.

•Limits on bank organization activities, which are more limited than activities that can be conducted by bank holding company organizations.

•Limitations on the amount of loans to a borrower and its affiliates.

•Limitations on transactions with affiliates, as expanded by the Dodd-Frank Act.

•Restrictions on the nature and amount of any investments and ability to underwrite certain securities.

•Requirements for opening of branches and the acquisition of other financial entities.

•Fair lending and truth in lending requirements to provide equal access to credit and to protect consumers in credit transactions.

•Broker-dealer and investment advisory regulations. One of our subsidiaries is a broker-dealer that is authorized to engage in securities underwriting and other broker-dealer activities. This company is registered with the SEC and is a member of FINRA. Another subsidiary is a registered investment adviser under the Investment Advisers Act of 1940, as amended, and as such, is supervised by the SEC. Certain of our subsidiaries are also subject to various U.S. federal and state laws and regulations. These laws and regulations generally grant supervisory agencies broad administrative powers, including the power to limit or restrict the carrying on of business for failure to comply with such laws.

•Community Reinvestment Act (“CRA”) requirements. The CRA requires banks to help serve the credit needs in their communities, including providing credit to low- and moderate-income individuals. If we fail to adequately serve our communities, penalties may be imposed including denials of applications to add branches, relocate, add subsidiaries and affiliates, and merge with or purchase other financial institutions.

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•Anti-money laundering regulations. The Bank Secrecy Act, Title III of the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA Patriot Act”), and other federal laws require financial institutions to assist U.S. government agencies in detecting and preventing money laundering and other illegal acts by maintaining policies, procedures and controls designed to detect and report money laundering, terrorist financing, and other suspicious activity.

We are subject to the Sarbanes-Oxley Act of 2002, certain provisions of the Dodd-Frank Act, and other federal and state laws and regulations which address, among other issues, corporate governance, auditing and accounting, executive compensation, and enhanced and timely disclosure of corporate information. The National Association of Securities Dealers Automated Quotations (“NASDAQ”) has also enacted corporate governance rules, which are intended to allow shareholders and investors to more easily and efficiently monitor the performance of companies and their directors.

Our Board of Directors has overseen management’s establishment of a comprehensive system of corporate governance and risk practices. This system includes policies and guidelines such as Corporate Governance Guidelines; a Code of Business Conduct and Ethics for Employees; a Directors Code of Conduct; a Related Party Transaction Policy; Stock Ownership and Retention Guidelines; a Compensation Clawback Policy; an insider trading policy including provisions prohibiting hedging and placing restrictions on the pledging of bank stock by insiders; and charters for the Executive, Audit, Risk Oversight, Compensation, and Nominating and Corporate Governance Committees. More information on our corporate governance practices is available on our website at www.zionsbancorporation.com. Our website is not part of this Annual Report on Form 10-K.

We have adopted policies, procedures and controls to address compliance with the requirements of the banking, securities, and other laws and regulations described above or otherwise applicable to us. Management monitors these laws and regulations and regularly reviews and updates its policies, procedures and controls in anticipation of industry and regulatory changes.

Regulators, Congress, state legislatures, and international consultative bodies continue to enact rules, laws, and policies to regulate the financial services industry and public companies and to protect consumers and investors. The nature of these laws and regulations and the effect of such policies on our future business and earnings results cannot be predicted.

GOVERNMENT MONETARY AND FISCAL POLICIES AND ACTIONS

Our business and earnings results are affected not only by general economic conditions, but also by policies enacted by various governmental authorities. We are particularly affected by the monetary and fiscal policies of the FRB, including the current low level of both short-term and long-term interest rates and the national supply of bank credit. We are also affected by the actions of various governmental authorities in response to the economic effects of terrorism or other geopolitical instabilities, natural disasters, severe weather conditions, and public health emergencies, such as the economic stimulus programs included in the 2020 Coronavirus Aid, Relief, and Economic Security (“CARES”) Act resulting from the COVID-19 pandemic.

In view of the changing conditions in the economy and the effect of such policies, it is difficult to predict future changes in loan demand, deposit levels and interest rates, or their effect on our business and earnings. Monetary, fiscal, and other policy initiatives and actions have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future.

HUMAN CAPITAL MANAGEMENT

We are proud of our employees who bring their unique, diverse talents to work each day. Our management and Board value our employees and are committed to identifying, recognizing, and creating fulfilling opportunities for people within our organization, and rewarding them for their contributions to our success.

COVID-19 has had a significant impact on how we work and the work we perform. At the outset of the pandemic, we quickly transitioned more than 70% of our employees to working remotely and implemented safety procedures

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and policies to keep our branch employees as safe as possible while they performed essential in-person services. We were also heavily involved in supporting customers with PPP loans, rewarding employees directly involved in the effort with meaningful incentives, and paying $1,000 bonuses to all our employees with salaries less than $150,000 for supporting this important effort.

Our total full-time equivalent employees at December 31, 2020 was 9,678, a decrease of 5% from the prior year period. The following schedule describes certain demographic attributes of our employees.

Schedule 1


	Women		Minorities
Employee Roles
Management	51	%	27	%
Non-management	60	%	37	%
Overall	58	%	35	%

We have an exceptional team of women senior leaders that was recognized as one of five “Top Teams” for 2020 in American Banker magazine’s issue of the “Most Powerful Women in Banking and Finance.” This year marks the fifth time we have been honored as a Top Team. Additionally, in the November 2020 issue of American Banker magazine, we were honored among 85 of the “Best Banks to Work For in 2020,” and we ranked sixth among large banks with assets greater than $10 billion. We have been recognized on this list for all eight years of its existence.

We manage our human capital through the following programs and initiatives:

Cultivating a diverse, equitable, and inclusive environment for our customers and our employees

We believe in an environment where people are respected and valued, regardless of their differences, along with a talented workforce that reflects our diverse communities. We also believe that our performance is stronger when we are able to draw upon the talents and experience of a diverse team of employees.

Our 2020 Corporate Responsibility Report highlights several achievements in this area. For example, our Banker Development Program, College Internship Program, and Mentor Program have significant participation from women and minorities.

Throughout the organization, employee business resource groups foster a sense of community and enable greater connectivity and support among employees through forum meetings and discussions. This includes groups for African Americans, Hispanic/Latinx, LGBTQIA, and women, among others. These groups are open to all employees and offer networking and initiatives that support our commitment to diversity, both internally and externally.

Attracting and developing talent for long-term success

We are committed to recruiting and retaining the most qualified individuals who reflect the diversity of the markets we serve, to helping our employees grow in their careers, and to actively developing talent for future leadership opportunities. As we attract and hire talent, we proactively consider the demand for competencies that will be needed within the workforce of the future.

We are proud to offer more than 2,000 learning options for employees to create tailored learning plans for personal and professional development. We make available new manager programs, tuition reimbursement, education sponsorship opportunities, job shadowing, coaching, and formal mentoring programs. Our talent development program and individual development plans focus on education, experience, and exposure to help create well-rounded, successful employees.

Recognizing, engaging, and rewarding our employees

We support a culture of integrity, engagement, and achievement through comprehensive rewards and recognition. Our programs are designed to enhance the employee experience, drive retention, promote recognition, and reward

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high performance. We provide meaningful upside opportunities for those who take accountability for business objectives that help us deliver superior results while reducing risk.

We routinely assess pay equity among employees across our organization by analyzing potential disparities in pay based on gender, minority status, and other factors. These actions help us compensate employees fairly. During 2020, we enlisted the services of an independent third party who found that after adjusting for relevant variables such as education, experience, and geography, women are paid, on average, approximately 99% of what men are paid, and minorities are paid approximately 98% of what non-minorities are paid. In a relatively few cases, we identified outlier situations that have been subsequently addressed.

Our employees provide regular feedback through our robust listening strategy, which includes quarterly leadership calls, biannual employee opinion surveys, and targeted focus groups. These forums for employee input continue to help strengthen working relationships with managers, improve clarity of organizational purpose and goals, and reinforce our guiding principles and code of business conduct and ethics.

Finally, we value work-life balance and strive to create a work environment that supports our employees with mental, physical, social, and financial wellness. Some of our key benefits include the following:

•Corporate match for our 401(k) plan of 4.5% of earnings, plus annual profit-sharing contributions;

•Health care plan options including behavioral health, wellness, and autism spectrum disorder services;

•Preventive prescription drug coverage not subject to deductibles;

•Paid parental program allowing time off for mothers, fathers, and domestic partners;

•Adoption assistance program; and

•Company paid time off for charitable contributions to our giving campaign and volunteer opportunities.

ITEM 1A. RISK FACTORS

Our growth strategy is driven by key factors while adhering to defined risk parameters. The key elements of our strategy reflect our prudent risk-taking philosophy. We generate revenue by taking prudent and appropriately priced risks. These factors are outlined in our Risk Management Framework.

Our Board of Directors has established an Audit Committee, a Compensation Committee, and a Risk Oversight Committee of the Board, approved a Risk Management Framework, and appointed an Enterprise Risk Management Committee (“ERMC”) to oversee and implement the Risk Management Framework. The ERMC is comprised of senior management and is chaired by the Chief Risk Officer. Our most material risk exposure has traditionally come from the acceptance of credit risk inherent in extensions of credit to relationship customers. In addition to credit risk, these committees also monitor the following level one risk areas: market and interest rate risk; liquidity risk; strategic and business risk; operational risk; technology risk; cyber risk; capital/financial reporting risk; legal/compliance risk (including regulatory risk); and reputational risk, as outlined in our risk taxonomy. Although not a specific risk identified in our risk taxonomy, an additional risk factor related to the COVID-19 pandemic has been added below. Additional governance and oversight include Board-approved policies and management committees with direct focus on these specific risk categories.

Although not comprehensive, the following describes several risk factors that are material to us:

Credit Risk

Credit quality has adversely affected us in the past and may adversely affect us in the future.

Credit risk is one of our most significant risks. A decline in the strength of the U.S. economy in general or the local economies in which we conduct operations could result in, among other things, deterioration in credit quality and/or reduced demand for credit, including a resultant adverse effect on the income from our loan portfolio, an increase in charge-offs, and an increase in the ACL.

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We have concentrations of risk in our loan portfolio, including loans secured by real estate, oil and gas-related lending, and leveraged and enterprise value lending, which may have unique risk characteristics that may adversely affect our results.

Concentration or counterparty risk could adversely affect us. Concentration risk across our loan and investment portfolios could pose significant additional credit risk to us due to exposures which perform in a similar fashion. Counterparty risk could also pose additional credit risk.

We engage in commercial term real estate lending, as well as construction and land acquisition and development lending, primarily in our Western states footprint. We also have a concentration in oil and gas-related lending, primarily in Texas. Both commercial real estate (“CRE”) and oil and gas-related lending are subject to specific risks, including volatility and potential significant and prolonged declines in collateral values and activity levels. Because our real estate lending is concentrated in the Western states, collateral values in that area may behave differently than in other parts of the U.S. We may have other unidentified concentrated or correlated risks in our loan portfolio.

Our business is highly correlated to local economic conditions in a specific geographic region of the U.S.

We provide a wide range of banking products and related services through our local management teams and unique brands in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. Approximately 74% of our total net interest income relates to our banking operations in Utah/Idaho, Texas, and California for both of the years ended December 31, 2020 and December 31, 2019, respectively. As a result of this geographic concentration, our financial results depend largely upon economic conditions in these market areas. Accordingly, adverse economic conditions affecting these three states in particular could significantly affect our consolidated operations and financial results. For example, our credit risk could be elevated to the extent that our lending practices in these three states focus on borrowers or groups of borrowers with similar economic characteristics, which are similarly affected by the same adverse economic events. At December 31, 2020, loan balances associated with our banking operations in Utah/Idaho, Texas, and California comprised 76% of our commercial lending portfolio, 73% of the CRE lending portfolio, and 70% of the consumer lending portfolio.

We could be negatively affected by adverse economic conditions.

Adverse economic conditions negatively affect our business, including our loan and securities portfolios, capital levels, results of operations, and financial condition. Most recently, the COVID-19 pandemic has created significant uncertainties and disruptions in the U.S. and global economies, including widespread effects on our customers, business, financial results, and overall condition. These conditions have adversely affected, and may continue to affect, some of our customer's ability to make timely payments on obligations, particularly in industries hard hit by the pandemic, such as hospitality, retail, and commercial real estate. Pandemic conditions have also reduced certain types of fee income due to reduced loan origination activity and credit card spending. Government stimulus and other programs designed to support the U.S. and global economies during the pandemic, which have provided additional liquidity to individuals and small businesses, and have contributed to increased deposits, may be discontinued or may not be sufficient to improve these conditions. Any sustained weakness or further weakening in economic conditions would adversely affect us.

For information about how we manage credit risk, see “Credit Risk Management” on page 55 in MD&A.

Market and Interest Rate Risk

Failure to effectively manage our interest rate risk and prolonged periods of low interest rates could adversely affect our results.

Net interest income is the largest component of our revenue. A prolonged period of low interest rates, such as the one that exists today, has a materially adverse impact on our net interest income and results in declining net interest margins. Interest rate risk is managed by the Asset Liability Management Committee. Factors beyond our control can significantly influence the interest rate environment and increase our risk. These factors include competitive pricing pressures for our loans and deposits, adverse shifts in the mix of deposits and other funding sources, and volatile market interest rates resulting from general economic conditions and the policies of governmental and

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regulatory agencies, in particular the FRB. As interest rates on earning assets decline, our cost of funds may not decline commensurately.

Some components of our balance sheet are very sensitive to rising and falling rates. On an ongoing basis, we use various strategies to manage our interest rate risk, such as entering into interest rate swaps, caps and floors.

Interest rates on our financial instruments might be subject to change based on developments related to LIBOR, which could adversely impact our revenue, expenses, and value of those financial instruments.

In July 2017, the Financial Conduct Authority, the authority regulating LIBOR, along with various other regulatory bodies, announced that LIBOR would likely be discontinued at the end of 2021. LIBOR makes up the most liquid and common interest rate index in the world and is commonly referenced in financial instruments. We have exposure to LIBOR in a variety of our financial contracts. Instruments that may be impacted include loans, securities, and derivatives, among other financial contracts indexed to LIBOR and that mature after December 31, 2021.

While there is no consensus on what reference rate or rates may become acceptable alternatives to LIBOR, in May 2018, the Alternative Reference Rates Committee, a steering committee comprised of U.S. financial market participants, selected by the Federal Reserve Bank of New York, started to publish the Secured Overnight Financing Rate (“SOFR”) as an alternative to LIBOR. SOFR is a broad measure of the cost of overnight borrowings collateralized by Treasury securities that was selected by the Alternative Reference Rates Committee due to the depth and robustness of the U.S. Treasury repurchase market. At this time, it is not certain whether SOFR will become an accepted alternative to LIBOR, especially for the types of commercial loans that constitute a major portion of our loan portfolio.

The market transition away from LIBOR to an alternative reference rate, such as SOFR, is complex and could have a range of adverse effects on our business, financial condition, and results of operations. In particular, any such transition could:

•adversely affect the interest rates paid or received on, and the value of, our floating-rate obligations, loans, deposits, derivatives, and other financial instruments indexed to LIBOR, or other securities or financial arrangements given LIBOR’s dominant role in determining market interest rates globally;

•result in a replacement rate for LIBOR that does not adjust for changes in the credit environment and does not have a term structure;

•prompt inquiries or other actions from regulators with respect to our preparation and readiness for the replacement of LIBOR with an alternative reference rate;

•result in disputes, litigation or other actions with counterparties regarding the interpretation and enforceability of certain fallback language in LIBOR-based loans and securities; and

•require the transition to, or development of, appropriate systems and analytics to effectively transition our risk management processes from LIBOR-based products to those based on the applicable alternative pricing benchmark, such as SOFR.

The manner and impact of this transition, as well as the effect of these developments on our funding costs, loan and investment and trading securities portfolios, asset-liability management, and business, is uncertain.

For further information about how we manage LIBOR, market and interest rate risk, see “Interest Rate and Market Risk Management” on page 67 in MD&A.

Liquidity Risk

We and the holders of our securities could be adversely affected by unfavorable rating actions from rating agencies.

Our ability to access the capital markets is important to our overall funding profile. This access is affected by the ratings assigned to us by rating agencies and particular classes of securities that we issue. The rates we pay on our securities are also influenced by, among other things, the credit ratings that we and our securities receive from

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recognized rating agencies. Ratings downgrades to us or our securities coul