0000109380us-gaap:ConsumerPortfolioSegmentMemberzions:FinancingReceivableNonaccruingMemberzions:OneThroughFourFamilyResidentialMemberzions:MultipleModificationTypesMember2021-01-012021-12-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

~~(Mark One)~~

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended ~~June 30, 2021~~March 31, 2022 OR

☐ 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)			(I.R.S. Employer Identification No.)
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
6.95% Fixed-to-Floating Rate Subordinated Notes due September 15, 2028	ZIONL	The NASDAQ Stock Market LLC

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Number of common shares outstanding at ~~July 30, 2021 162,070,463~~April 29, 2022 151,358,748 shares

ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

~~Table of Contents~~

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

GLOSSARY OF ACRONYMS AND ABBREVIATIONS


ACL	Allowance for Credit Losses	~~HTM~~IMG	~~Held-to-Maturity~~International Manufacturing Group
AFS	Available-for-Sale	~~IMG~~IPO	~~International Manufacturing Group~~
~~ALCO~~	~~Asset/Liability Committee~~	~~IOSCO~~	~~International Organization of Securities Commissions~~Initial Public Offering
ALLL	Allowance for Loan and Lease Losses	~~IPO~~IRS	~~Initial Public Offering~~
~~ALM~~	~~Asset Liability Management~~	~~LIBOR~~	~~London Interbank Offered Rate~~Internal Revenue Service
Amegy	Amegy Bank, a division of Zions Bancorporation, National Association	~~MD&A~~LIBOR	~~Management’s Discussion~~London Interbank Offered Rate
AMERIBOR	American Interbank Offered Rate	Municipalities	State and ~~Analysis~~Local Governments
AOCI	Accumulated Other Comprehensive Income	~~Municipalities~~NAICS	~~State and Local Governments~~North American Industry Classification System
ASC	Accounting Standards Codification	NASDAQ	National Association of Securities Dealers Automated Quotations
ASU	Accounting Standards Update	NBAZ	National Bank of Arizona, a division of Zions Bancorporation, National Association
~~bps~~BOLI	~~basis points~~Bank-Owned Life Insurance	NIM	Net Interest Margin
bps	Basis Points	NM	Not Meaningful
BSBY	Bloomberg Short-Term Bank Yield ~~Index~~	NSB	Nevada State Bank, a division of Zions Bancorporation, National Association
CB&T	California Bank & Trust, a division of Zions Bancorporation, National Association	OCC	Office of the Comptroller of the Currency
CCPA	California Consumer Privacy Act of 2018	OCI	Other Comprehensive Income
CECL	Current Expected Credit Loss	OREO	Other Real Estate Owned
~~CET1~~CLTV	~~Common Equity Tier 1 (Basel III)~~Combined Loan-to-Value Ratio	PEI	Private Equity Investment
~~CFPB~~CMT	~~Consumer Financial Protection Bureau~~Constant Maturity Treasury	PPNR	Pre-provision Net Revenue
~~CLTV~~CRE	~~Combined Loan-to-Value Ratio~~Commercial Real Estate	PPP	Paycheck Protection Program
~~COSO~~CVA	~~Committee of Sponsoring Organizations of the Treadway Commission~~	~~ROC~~	~~Risk Oversight Committee~~
~~CRE~~	~~Commercial Real Estate~~Credit Valuation Adjustment	ROU	Right-of-Use
~~CVA~~DTA	~~Credit Valuation Adjustment~~Deferred Tax Asset	RULC	Reserve for Unfunded Lending Commitments
~~Dodd-Frank Act~~EaR	~~Dodd-Frank Wall Street Reform and Consumer Protection Act~~Earnings at Risk	S&P	Standard and Poor's
~~DTA~~EPS	~~Deferred Tax Asset~~Earnings per Share	SBA	U.S. Small Business Administration
~~DTL~~EVE	~~Deferred Tax Liability~~Economic Value of Equity	SBIC	Small Business Investment Company
~~EaR~~FASB	~~Earnings at Risk~~Financial Accounting Standards Board	SEC	Securities and Exchange Commission
~~ERM~~FDIC	~~Enterprise Risk Management~~Federal Deposit Insurance Corporation	SOFR	Secured Overnight Financing Rate
~~EVE~~FHLB	~~Economic Value of Equity at Risk~~Federal Home Loan Bank	TCBW	The Commerce Bank of Washington, a division of Zions Bancorporation, National Association
~~FASB~~FRB	~~Financial Accounting Standards~~Federal Reserve Board	TDR	Troubled Debt Restructuring
~~FCA~~FTP	~~Financial Conduct Authority~~Funds Transfer Pricing	~~Tier 1~~U.K.	~~Common Equity Tier 1 (Basel III) and Additional Tier 1 Capital~~United Kingdom
~~FDIC~~GAAP	~~Federal Deposit Insurance Corporation~~Generally Accepted Accounting Principles	U.S.	United States
~~FDICIA~~HECL	~~Federal Deposit Insurance Corporation Improvement Act~~Home Equity Credit Line	Vectra	Vectra Bank Colorado, a division of Zions Bancorporation, National Association
~~FHLB~~HTM	~~Federal Home Loan Bank~~	~~Zions Bancorporation, N.A.~~	~~Zions Bancorporation, National Association~~
~~FTP~~	~~Funds Transfer Pricing~~Held-to-Maturity	Zions Bank	Zions Bank, a division of Zions Bancorporation, National Association
~~GAAP~~	~~Generally Accepted Accounting Principles~~
~~HECL~~	~~Home Equity Credit Line~~

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING INFORMATION

This quarterly report 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, industry trends, and results or regulatory outcomes to differ materially from those expressed or implied. 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 or 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, 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.

Although this list is not comprehensive, important factors that may cause ~~such~~ material differences include changes in general industry and economic ~~and industry conditions;~~conditions, including inflation; changes and uncertainties in legislation and fiscal, monetary, regulatory, trade, and tax policies; changes in interest ~~rates~~ and ~~uncertainty regarding the transition away from the London Interbank Offered Rate (“LIBOR”) toward other~~ reference rates; the quality and composition of our loan and securities portfolios; our ability to recruit and retain talent, including increased competition for qualified candidates as a result of expanded remote-work opportunities and increased compensation expenses; 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 or(including variants) and associated actions that may affect our business, employees, and communities; other local, national, or international disasters, crises, or conflicts that may occur in the ~~future~~future; and governmental and social responses to ~~such matters.~~environmental issues and climate change. These factors, risks, and uncertainties, among others, are discussed in our ~~2020~~2021 Form 10-K and subsequent filings with the Securities and Exchange ~~Commission.~~Commission (“SEC”).

We caution against the 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.

GAAP to NON-GAAP RECONCILIATIONS

This Form 10-Q presents non-GAAP financial measures, in addition to ~~GAAP~~generally accepted accounting principles (“GAAP”) financial measures, to provide investors with additional information. The adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are presented in the following schedules. We consider these adjustments to be relevant to ongoing operating results and to provide a meaningful base for period-to-period and company-to-company comparisons. We use these non-GAAP financial measures to assess our performance, financial position, and for presentations of our performance to investors. We believe that presenting these non-GAAP financial measures permits investors to assess our performance on the same basis as that applied by our management and the financial services industry.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION

Non-GAAP financial measures have inherent limitations and are not necessarily comparable to similar ~~capital~~financial measures that may be presented by other financial services companies. Although non-GAAP financial measures are frequently used by stakeholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.

~~Table of Contents~~

~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

Tangible Common Equity and Related Measures

Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets and their related amortization. We believe these non-GAAP measures provide useful information about our use of shareholders’ equity and provide a basis for evaluating the performance of a business more consistently, whether acquired or developed internally.

RETURN ON AVERAGE TANGIBLE COMMON EQUITY (NON-GAAP)
Three Months Ended
(Dollar amounts in millions) June 30,
2021 March 31,
2021 June 30,
2020
Net earnings applicable to common shareholders, net of tax (a) $ 345 $ 314 $ 57
Average common equity (GAAP) $ 7,436 $ 7,333 $ 7,030
Average goodwill and intangibles (1,015) (1,016) (1,014)
Average tangible common equity (non-GAAP) (b) $ 6,421 $ 6,317 $ 6,016
Number of days in quarter (c) 91 90 91
Number of days in year (d) 365 365 366
Return on average tangible common equity (non-GAAP) (a/b/c)*d 21.6 % 20.2 % 3.8 %


		Three Months Ended
(Dollar amounts in millions)		March 31, 2022			December 31, 2021			March 31, 2021





Net earnings applicable to common shareholders, net of tax	(a)	$	195		$	207		$	314
Average common equity (GAAP)		$	6,700		$	7,146		$	7,333
Average goodwill and intangibles		(1,015)			(1,015)			(1,016)
Average tangible common equity (non-GAAP)	(b)	$	5,685		$	6,131		$	6,317
Number of days in quarter	(c)	90			92			90
Number of days in year	(d)	365			365			365
Return on average tangible common equity (non-GAAP)	(a/b/c)*d	13.9		%	13.4		%	20.2		%

TANGIBLE EQUITY RATIO, TANGIBLE COMMON EQUITY RATIO, AND TANGIBLE BOOK VALUE PER COMMON SHARE (ALL NON-GAAP MEASURES)


(Dollar amounts in millions, except per share amounts)	(Dollar amounts in millions, except per share amounts)		June 30, 2021			March 31, 2021			June 30, 2020			(Dollar amounts in millions, except per share amounts)		March 31, 2022			December 31, 2021			March 31, 2021

Total shareholders’ equity (GAAP)	Total shareholders’ equity (GAAP)		$	8,033		$	7,933		$	7,575		Total shareholders’ equity (GAAP)		$	6,294		$	7,463		$	7,933
Goodwill and intangibles	Goodwill and intangibles		(1,015)			(1,016)			(1,014)			Goodwill and intangibles		(1,015)			(1,015)			(1,016)
Tangible equity (non-GAAP)	Tangible equity (non-GAAP)	(a)	7,018			6,917			6,561			Tangible equity (non-GAAP)	(a)	5,279			6,448			6,917
Preferred stock	Preferred stock		(440)			(566)			(566)			Preferred stock		(440)			(440)			(566)
Tangible common equity (non-GAAP)	Tangible common equity (non-GAAP)	(b)	$	6,578		$	6,351		$	5,995		Tangible common equity (non-GAAP)	(b)	$	4,839		$	6,008		$	6,351
Total assets (GAAP)	Total assets (GAAP)		$	87,208		$	85,121		$	76,447		Total assets (GAAP)		$	91,126		$	93,200		$	85,121
Goodwill and intangibles	Goodwill and intangibles		(1,015)			(1,016)			(1,014)			Goodwill and intangibles		(1,015)			(1,015)			(1,016)
Tangible assets (non-GAAP)	Tangible assets (non-GAAP)	(c)	$	86,193		$	84,105		$	75,433		Tangible assets (non-GAAP)	(c)	$	90,111		$	92,185		$	84,105
Common shares outstanding (thousands)	Common shares outstanding (thousands)	(d)	162,248			163,800			163,978			Common shares outstanding (thousands)	(d)	151,348			151,625			163,800
Tangible equity ratio (non-GAAP)	Tangible equity ratio (non-GAAP)	(a/c)	8.1		%	8.2		%	8.7		%	Tangible equity ratio (non-GAAP)	(a/c)	5.9		%	7.0		%	8.2		%
Tangible common equity ratio (non-GAAP)	Tangible common equity ratio (non-GAAP)	(b/c)	7.6		%	7.6		%	7.9		%	Tangible common equity ratio (non-GAAP)	(b/c)	5.4		%	6.5		%	7.6		%
Tangible book value per common share (non-GAAP)	Tangible book value per common share (non-GAAP)	(b/d)	$	40.54		$	38.77		$	36.56		Tangible book value per common share (non-GAAP)	(b/d)	$	31.97		$	39.62		$	38.77

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION

Efficiency Ratio and Adjusted Pre-Provision Net Revenue

The efficiency ratio is a measure of operating expense relative to revenue. We believe the efficiency ratio provides useful information regarding the cost of generating revenue. The methodology of determining the efficiency ratio may differ among companies. We make adjustments to exclude certain items that are not generally expected to recur frequently, as identified in the subsequent schedule, which we believe allow for more consistent comparability ~~among~~across periods. Adjusted noninterest expense provides a measure as to how well we are managing our expenses; adjusted pre-provision net revenue (“PPNR”) enables management and others to assess our ability to generate ~~capital to cover credit losses through a credit cycle.~~capital. Taxable-equivalent net interest income allows us to assess the comparability of revenue arising from both taxable and tax-exempt sources.

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~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

EFFICIENCY RATIO (NON-GAAP) AND ADJUSTED PRE-PROVISION NET REVENUE (NON-GAAP)


			Three Months Ended									Six Months Ended						Year Ended					Three Months Ended									Year Ended
(Dollar amounts in millions)	(Dollar amounts in millions)		June 30, 2021			March 31, 2021			June 30, 2020			June 30, 2021			June 30, 2020			December 31, 2020			(Dollar amounts in millions)		March 31, 2022			December 31, 2021			March 31, 2021				December 31, 2021

Noninterest expense (GAAP)	Noninterest expense (GAAP)	(a)	$	428		$	435		$	430		$	863		$	837		$	1,704		Noninterest expense (GAAP)	(a)	$	464		$	449		$	435			$	1,741
Adjustments:	Adjustments:																				Adjustments:
Severance costs	Severance costs		—			—			—			—			—			1			Severance costs		—			—			—				1
Other real estate expense, net	Other real estate expense, net		—			—			—			—			—			1			Other real estate expense, net		1			—			—				—

Amortization of core deposit and other intangibles																					Amortization of core deposit and other intangibles		—			1			—				1

Restructuring costs			—			—			—			—			1			1
Pension termination-related (income) expense			—			(5)			28			(5)			28			28
SBIC investment success fee accrual 1			9			—			—			9			—			—
Pension termination-related (income) expense 1																					Pension termination-related (income) expense 1		—			—			(5)				(5)
SBIC investment success fee accrual 2																					SBIC investment success fee accrual 2		(1)			2			—				7
Total adjustments	Total adjustments	(b)	9			(5)			28			4			29			31			Total adjustments	(b)	—			3			(5)				4
Adjusted noninterest expense (non-GAAP)	Adjusted noninterest expense (non-GAAP)	(a-b)=(c)	$	419		$	440		$	402		$	859		$	808		$	1,673		Adjusted noninterest expense (non-GAAP)	(a-b)=(c)	$	464		$	446		$	440			$	1,737
Net interest income (GAAP)	Net interest income (GAAP)	(d)	$	555		$	545		$	563		$	1,100		$	1,111		$	2,216		Net interest income (GAAP)	(d)	$	544		$	553		$	545			$	2,208
Fully taxable-equivalent adjustments	Fully taxable-equivalent adjustments	(e)	7			8			6			15			13			27			Fully taxable-equivalent adjustments	(e)	8			10			8				32
Taxable-equivalent net interest income (non-GAAP)	Taxable-equivalent net interest income (non-GAAP)	(d+e)=f	562			553			569			1,115			1,124			2,243			Taxable-equivalent net interest income (non-GAAP)	(d+e)=f	552			563			553				2,240
Noninterest income (GAAP)	Noninterest income (GAAP)	g	205			169			117			374			250			574			Noninterest income (GAAP)	g	142			190			169				703
Combined income (non-GAAP)	Combined income (non-GAAP)	(f+g)=(h)	767			722			686			1,489			1,374			2,817			Combined income (non-GAAP)	(f+g)=(h)	694			753			722				2,943
Adjustments:	Adjustments:																				Adjustments:
Fair value and nonhedge derivative gain (loss)	Fair value and nonhedge derivative gain (loss)		(5)			18			(12)			13			(23)			(6)			Fair value and nonhedge derivative gain (loss)		6			(1)			18				14
Securities gains (losses), net 1			63			11			(4)			74			(9)			7
Securities gains (losses), net 2																					Securities gains (losses), net 2		(17)			20			11				71
Total adjustments	Total adjustments	(i)	58			29			(16)			87			(32)			1			Total adjustments	(i)	(11)			19			29				85
Adjusted taxable-equivalent revenue (non-GAAP)	Adjusted taxable-equivalent revenue (non-GAAP)	(h-i)=(j)	$	709		$	693		$	702		$	1,402		$	1,406		$	2,816		Adjusted taxable-equivalent revenue (non-GAAP)	(h-i)=(j)	$	705		$	734		$	693			$	2,858
Pre-provision net revenue (PPNR) (non-GAAP)		(h)-(a)	$	339		$	287		$	256		$	626		$	537		$	1,113
Pre-provision net revenue (non-GAAP)																					Pre-provision net revenue (non-GAAP)	(h)-(a)	$	230		$	304		$	287			$	1,202
Adjusted PPNR (non-GAAP)	Adjusted PPNR (non-GAAP)	(j)-(c)	290			253			300			543			598			1,143			Adjusted PPNR (non-GAAP)	(j)-(c)	241			288			253				1,121
Efficiency ratio (non-GAAP)		(c/j)	59.1		%	63.5		%	57.3		%	61.3		%	57.5		%	59.4		%
Efficiency ratio (non-GAAP) 3																					Efficiency ratio (non-GAAP) 3	(c/j)	65.8		%	60.8		%	63.5		%		60.8		%

1 ~~The $9 million expense relates~~Represents a valuation adjustment related to the ~~accrual~~termination of aour defined benefit pension plan.

2 The success fee accrual is associated with the ~~$63 million unrealized gain~~gains/(losses) from ~~the IPO of~~ our SBIC ~~investment in Recursion Pharmaceuticals, Inc.~~investments. The ~~$63 million unrealized gain will be marked-to-market until we fully divest of our shares. Both~~gains/(losses) related to these investments are excluded from the efficiency ratio ~~calculation~~through securities gains, net.

3 Results for the ~~periods ended June 30, 2021.~~first quarter of 2022 benefited from a one-time adjustment of approximately $6 million in commercial account fees. Excluding the $6 million adjustment, the efficiency ratio for the first quarter of 2022 would have been 66.4%.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

Comparisons noted below are calculated for the current quarter versus the same prior-year period unless otherwise specified. Growth rates of 100% or more are considered not meaningful (“NM”) as they generally reflect a low starting point.

RESULTS OF OPERATIONS

Executive Summary

~~The~~Our financial ~~performance~~results in the ~~second~~first quarter of ~~2021~~2022 reflected strong non-PPP loan growth, solid credit performance, ~~as evidenced by a $123 million release of our allowance for credit losses~~ and ~~modest net recoveries on loans.~~improving customer-related noninterest income. Diluted earnings per share (“EPS”) decreased to $1.27, compared with $1.90 in ~~second~~the first quarter of ~~2021 increased to $2.08, compared with $0.34 in the second quarter of 2020.~~2021.

Net interest income ~~decreased $8 million, or 1%, to $555~~remained relatively stable at $544 million, as ~~the adverse impact~~significant growth of ~~lower interest rates~~$7.8 billion in average interest-earning assets was partially offset by net interest margin (“NIM”) compression arising from an increased concentration in cash and securities and the low interest rate environment. The NIM was 2.60% in the first quarter of 2022, compared with 2.86%.

Our results benefited from a negative $33 million provision for credit losses, reflecting improvements in economic forecasts and strong credit quality. This compares with a negative $132 million provision for credit losses in the first quarter of 2021. Net loan and lease charge-offs were $6 million, or 0.05% of average ~~interest-earning asset growth~~loans (ex-PPP), compared with net charge-offs of ~~$10.0 billion. Average money market investments increased $8.6 billion, and~~$8 million, or 0.07% of average ~~investment securities increased $2.9 billion from~~loans (ex-PPP), in the prior year quarter.

Total customer-related noninterest income increased ~~$88~~$18 million, or ~~75%~~14%, primarily due to improved card, retail and business banking, and wealth management activity. Total noninterest income decreased $27 million, or 16%, largely ~~as a result~~due to $17 million of ~~a $63 million unrealized gain related~~negative mark-to-market adjustments during the quarter primarily relating to ~~the completion of an initial public offering (“IPO”) of one of~~ our Small Business Investment Company (“SBIC”) ~~investments. Customer-related fee income~~investment in Recursion Pharmaceuticals, Inc.

Total noninterest expense increased $9$29 million, or 7%, primarily due to improved customer transaction volume and new client activity. Total noninterest expense decreased $2 million, or 0.5%, primarily due to the $28 million pension plan termination-related expense recognized during the second quarter of 2020, which. The increase was ~~partially offset~~largely driven by a ~~$9 million success fee accrual related to the IPO of the SBIC investment, as well as a $7~~$24 million increase in ~~technology-related professional~~salaries and ~~legal services~~benefits expense, which was impacted by (1) inflationary and competitive labor market pressures on wages and (2) increases in ~~the current quarter.~~

~~Net loan and lease recoveries~~incentive compensation accruals arising from improvements in anticipated full-year profitability. Our efficiency ratio was 65.8%, compared with 63.5% for the first quarter ~~were $2 million, or 0.02%~~ of 2021.

The growth in average ~~loans (excluding U.S. Small Business Administration~~interest-earning assets was driven by a $9.4 billion increase in average available-for-sale (“~~SBA”~~AFS”) investment securities and a $1.2 billion increase in average money market investments. Over the past year, we actively deployed excess liquidity into medium-duration assets, as we sought to balance competing objectives of increasing current income, maintaining asset sensitivity to benefit from rising rates, and maintaining sufficient liquidity for loan growth and changes in deposit trends.

Excluding Paycheck Protection Program (“PPP”) ~~loans).~~

~~Total deposits~~loans, total loans and leases increased ~~$10.4~~$3.2 billion, or ~~16%~~7%, ~~mainly due~~ to ~~a $7.4 billion increase~~$50.2 billion. The increases were primarily in ~~noninterest-bearing deposits.~~the commercial and industrial, commercial owner-occupied, municipal, and home equity credit line portfolios. Total loans and leases decreased ~~$3.7~~$2.2 billion, or 7%4%, from the prior year quarter, primarily due to the forgiveness of PPP loans and a ~~decrease~~decline in 1-4 family residential mortgage ~~loans related to continued refinancing activity. Excluding PPP loans, total loans and leases decreased $1.5~~loans.

Total deposits increased $8.5 billion, or 3%12%, ~~as economic uncertainty and an abundance of liquidity~~from the prior year quarter, primarily due to a $6.1 billion increase in the marketplace continued to adversely impact loan demand. We continue to evaluate opportunities to deploy excess cash arising from strong deposit growth, including increasing our investment securities portfolio, remaining mindful of market risk, and prioritizing high-quality, liquid securities.

~~SBA Paycheck Protection Program~~

During the second quarter of 2021, we continued to provide assistance to small businesses through the PPP. Designed to address the effects of the COVID-19 pandemic, this program provided small businesses with funds to be used for specific expenses, such as payroll, as defined by the SBA. Since the inception of the program in the first quarter of 2020, we processed more than $10 billion of PPP loans for approximately 77,000 customers, which included more than 20,000 new customers. We continue to deepen our relationships with these new customers, helping them meet their financial needs, which has resulted in increased revenue generating services. At June 30, 2021, we ranked as the tenth largest originator of PPP loans by dollar volume, as disclosed by the SBA. The following schedule presents additional information related to our PPP loans.

~~PPP LOANS~~

Three Months Ended Year Ended
June 30, 2021 March 31, 2021 December 31, 2020 Total
(In billions)
Balance of loan originations during the period $ 0.3 $ 2.6 $ 7.3 $ 10.2
Balance of loans forgiven by the SBA during the period 2.3 1.6 1.3 5.2
(In millions)
Interest and amortization of fees 32 29 120 181
Accelerated recognition of unamortized net origination fees 1
36 31 26 93
Total interest income related to PPP loans $ 68 $ 60 $ 146 $ 274
Total unamortized net origination fees, at period end $ 137 $ 168 $ 102
Loan yield 4.56 % 3.98 % 3.22 %

1 When a PPP loan is paid off or forgiven by the SBA prior to its maturity date, the remaining net unamortized deferred fees are accelerated and recognized into interest income at that time, impacting the PPP loan portfolio yield in that period.noninterest-bearing deposits.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

~~Second~~First Quarter ~~2021~~2022 Financial Performance

Net Earnings Applicable to Common Shareholders
(in millions)

Diluted EPS

Adjusted PPNR
(in millions)

Efficiency ~~ratio~~Ratio

Net earnings applicable to common shareholders ~~increased~~decreased from the ~~second~~first quarter of ~~2020, primarily due to~~2021. The prior year quarter benefited from a negative ~~$123~~$132 million provision for credit losses, ~~and a $63~~compared with negative $33 million ~~unrealized gain on an SBIC investment.~~in the first quarter of 2022.

Diluted earnings per share ~~significantly increased~~declined from the ~~second~~first quarter of ~~2020~~2021 as a result of ~~increased~~decreased net earnings, ~~and~~the effect of which was partially offset by a ~~1.4~~12.2 million decrease in average diluted shares, primarily due to share repurchases.

Adjusted PPNR ~~declined $10~~decreased $12 million from the ~~second~~first quarter of ~~2020, mainly~~2021, primarily due to ~~a decrease~~the increase in ~~net interest income,~~adjusted noninterest expense, driven by ~~lower interest rates~~increases in salaries and ~~reduced loan balances. The decrease was~~benefits expense, partially offset by ~~a $9 million increase~~increases in customer-related fee income. ~~Adjusted noninterest expense increased $17 million, largely due to higher salaries and benefits, and professional and legal services expenses.~~

The ~~increase in our~~ efficiency ratio increased from the prior year quarter, is primarily ~~a result of an increase~~as growth in adjusted noninterest expense ~~which outpaced~~due to the increase in salaries and benefits expense exceeded growth in adjusted ~~taxable equivalent~~ revenue.

Net Interest Income and Net Interest Margin

Net interest income ~~which~~ is the difference between interest earned on interest-earning assets and interest paid on interest-bearing liabilities, and was approximately ~~73%~~79% of our net revenue (net interest income plus noninterest income) for the quarter. ~~Net~~The net interest ~~income~~margin is derived from both the amount of interest-earning assets and interest-bearing liabilities and their respective yields and rates.

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NET INTEREST INCOME AND NET INTEREST MARGIN


		Three Months Ended June 30,						Amount change					Percent change			Three Months Ended March 31,									Amount change			Percent change
(Dollar amounts in millions)	(Dollar amounts in millions)	2021			2020					(Dollar amounts in millions)		2022					2021

Interest and fees on loans	Interest and fees on loans	$	492		$	514				$	(22)					(4)		%	Interest and fees on loans	$	437			$	488		$	(51)		(10)	%
Interest on money market investments	Interest on money market investments	4			1			3					NM		Interest on money market investments	6					3				3			NM
Interest on securities	Interest on securities	74			80			(6)					(8)		Interest on securities	112					71				41			58
Total interest income	Total interest income	570			595			(25)					(4)		Total interest income	555					562				(7)			(1)
Interest on deposits	Interest on deposits	7			23			(16)					(70)		Interest on deposits	6					9				(3)			(33)
Interest on short- and long-term borrowings	Interest on short- and long-term borrowings	8			9			(1)					(11)		Interest on short- and long-term borrowings	5					8				(3)			(38)
Total interest expense	Total interest expense	15			32			(17)					(53)		Total interest expense	11					17				(6)			(35)
Net interest income	Net interest income	$	555		$	563		$	(8)				(1)	%	Net interest income	$	544				$	545			$	(1)		—	%

Average interest-earning assets	Average interest-earning assets	$	80,916		$	70,912		$	10,004				14	%	Average interest-earning assets	$	86,093				$	78,294			$	7,799		10	%
Average interest-bearing liabilities	Average interest-bearing liabilities	$	40,232		$	37,913		$	2,319				6	%	Average interest-bearing liabilities	$	42,136				$	40,157			$	1,979		5	%
								bps																	bps
Yield on interest-earning assets1	Yield on interest-earning assets1	2.86		%	3.41		%	(55)							Yield on interest-earning assets 1	2.65		%			2.95		%		(30)
Rate paid on total deposits and interest-bearing liabilities1	Rate paid on total deposits and interest-bearing liabilities1	0.08		%	0.19		%	(11)							Rate paid on total deposits and interest-bearing liabilities1	0.06		%			0.09		%		(3)
Cost of total deposits1	Cost of total deposits1	0.04		%	0.15		%	(11)							Cost of total deposits 1	0.03		%			0.05		%		(2)
Net interest margin1	Net interest margin1	2.79		%	3.23		%	(44)							Net interest margin 1	2.60		%			2.86		%		(26)

1Rates are calculated using amounts in ~~thousands and~~thousands; taxable-equivalent rates are used where applicable.

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Net interest income ~~decreased $8~~remained relatively stable at $544 million ~~or 1%,~~during the first quarter of 2022, as ~~a $25 million, or 4%, decline~~significant growth in ~~interest income~~average interest-earning assets was partially offset by ~~a $17 million, or 53%, decrease~~NIM compression arising from an increased concentration in ~~interest expense. Interest~~cash and ~~fees on loans declined $22 million~~securities and ~~interest on securities declined $6 million, both primarily due to~~ the ~~lower~~low interest rate environment. ~~Interest paid on deposits decreased $16 million~~

Average interest-earning assets increased $7.8 billion, or 10%, driven by growth of $9.4 billion in AFS securities, $2.3 billion in commercial loans (ex-PPP), and ~~interest paid on reduced balances~~$1.2 billion in money market investments. These increases were partially offset by a $4.7 billion decline in average PPP loans. Average securities increased to 30% of ~~short- and long-term borrowings decreased $1 million.~~average interest-earning assets, compared with 21%, as we actively deployed excess liquidity into medium duration assets.

The ~~net interest margin compressed to 2.79% in the second quarter of 2021,~~NIM was 2.60%, compared with ~~3.23% in the same prior year period.~~2.86%. The yield on average interest-earning assets was ~~2.86%,~~2.65% in the first quarter of 2022, a decrease of ~~55 bps. Approximately 32 bps of the decrease was~~30 basis points (“bps”), primarily due to ~~growth~~a decrease in ~~low-yielding money market investments. Yields~~the yield on ~~loans and securities~~loans. The average rate paid on interest-bearing liabilities decreased 6 bps ~~and 49 bps, respectively, while rates paid on interest-bearing deposits decreased 19 bps. The impact of lower interest rates was partially offset by a shift in liability balances from borrowed funds~~ to ~~lower-cost deposits.~~0.11%.

Average ~~interest-earning assets~~loans and leases (ex-PPP) increased ~~$10.0~~$1.9 billion, or ~~14%~~4%, and included $5.9 billion of PPP loans. Average money market investments, including short-term deposits held at the Federal Reserve, increased $8.6 billion to equal 13% of average interest-earning assets, compared with 2%primarily in the ~~same prior year quarter. The increase~~commercial and industrial loan portfolio. Total average loans and leases decreased $2.8 billion, or 5%, from $53.7 billion in ~~average money market investments is~~the first quarter of 2021, primarily due to ~~growth in deposits exceeding growth in~~the forgiveness of PPP loans and ~~securities.~~a decrease in 1-4 family residential mortgage loans. The decline in our mortgage loan portfolio is partly due to refinancing activity. We generally originate residential mortgage loans and sell them to government-sponsored entities as part of our interest rate risk management efforts to limit our balance sheet exposure to long-term assets.

The yield on total loans decreased 21 basis points to 3.52%. The yield on non-PPP loans decreased 26 basis points, primarily driven by (1) lower yields on loans originated during the past year, compared with yields on loans maturing and amortizing during the same period, and (2) promotional rates on commercial owner-occupied loans and home equity credit lines.

During the first quarter of 2022 and 2021, PPP loans totaling $0.8 billion and $1.6 billion, respectively, were forgiven by the Small Business Administration (“SBA”). PPP loans contributed $24 million and $60 million in interest income during the same time periods. The yield on these loans was 6.64% and 3.98% for the first quarter of 2022 and 2021, respectively, and was positively impacted by accelerated amortization of deferred fees on paid off or forgiven PPP loans. At March 31, 2022 and 2021, the remaining unamortized net deferred fees on these loans totaled $24 million and $168 million, respectively.

Average total deposits increased $10.2 billion to $81.6 billion at an average cost of 0.03%, from $71.4 billion at an average cost of 0.05% in the first quarter of 2021. Average interest-bearing liabilities increased $2.0 billion, or 5%.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

Average loans and leases decreased $1.5 billion, or 3%, from $54.3 billion in the second quarter of 2020, primarily due to reduced commercial loan demand and a decrease in 1-4 family residential mortgage loans related to continued refinancing activity. We continue to manage the balance sheet effect of mortgage refinance activity in the context of our interest rate risk profile. The yield on loans and leases decreased 6 bps from the prior year quarter, or 23 bps when excluding PPP loans. These decreases were primarily due to lower benchmark interest rates, but also reflected continued pricing pressure due to surplus market liquidity. The yield on non-PPP loans originated during the second quarter of 2021 was moderately less than the yield on loans maturing or otherwise paying down.

Average available-for-sale (“AFS”) securities balances increased $2.9 billion, or 21%, to $17.0 billion, from $14.1 billion in the second quarter of 2020. The yield on securities decreased 49 bps from the same prior year period, primarily from lower yields on investments purchased in previous quarters. We purchased $2.6 billion of AFS securities during the second quarter of 2021 with an average yield of 1.65%, and the principal repayment volume on AFS securities during the quarter was $1.1 billion. Given our current excess liquidity, we anticipate investment security purchases to exceed runoff over the next few quarters.

Average total deposits were $74.6 billion at an average cost of 0.04%, compared with $63.0 billion at an average cost of 0.15% for the second quarter of 2020. Average interest-bearing liabilities increased $2.3 billion, or 6%, and the average rate paid on interest-bearing liabilities decreased 19 bps to 0.15% from the prior year quarter. The rate paid on total deposits and interest-bearing liabilities was ~~0.08%~~0.06%, a decrease from ~~0.19%~~0.09% during the ~~second~~first quarter of ~~2020. This decline~~2021, which was primarily due to low interest-bearing deposit rates and strong noninterest-bearing deposit ~~growth and lower rates paid on interest-bearing deposits.~~growth.

Average ~~interest-bearing deposits were $38.1 billion at an average cost of 0.08%, compared with $33.9 billion at an average cost of 0.27% for the same prior year period. Average noninterest-bearing deposits~~AFS securities balances increased ~~$7.5~~$9.3 billion, or ~~26%~~59%, from ~~the prior year quarter, and comprised 49% and 46% of average total deposits for the second quarter of 2021 and 2020, respectively.~~$15.9 billion, mainly due to an increase in our mortgage-backed securities portfolio. The ~~net positive impact of noninterest-bearing sources of funds~~yield on ~~the NIM was 0.08%, compared with 0.16% during the second quarter of 2020.~~

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~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

securities remained relatively stable at 1.78%.

Average borrowed funds decreased ~~$1.9~~$1.0 billion, or 42%, from ~~the second quarter of 2020,~~$2.4 billion, with both average short-term borrowings ~~decreasing $1.4 billion,~~ and average long-term borrowings decreasing $0.5 ~~billion from the same prior year period, reflecting less reliance on borrowed funds due to strong deposit growth.~~billion. The average rate paid on short-term borrowings ~~decreased 5 bps;~~remained stable at 0.08%, while the rate paid on long-term debt increased 3836 bps from the prior year quarter, primarily due to lower-yielding senior debt that was ~~retired~~redeemed or matured over the past few quarters. The decrease in overall borrowed funds continues to reflect strong deposit growth.

For further discussion of the ~~prior year.~~

~~The spread~~effects of market rates on ~~average interest-bearing funds was 2.71%, compared with 3.07% for the second quarter of 2020,~~net interest income and was affected by the same factors that impacted the NIM. Interest rate spreads and margins are impacted by the composition of our loan and securities portfolios and the type of funding used. For information regarding how we manage interest rate risk, ~~see~~refer to the “Interest Rate and Market Risk Management” section on page ~~28.~~27. For more information on how we manage liquidity risk, refer to the “Liquidity Risk Management” section on page 31.

The following schedule summarizes the average balances, the amount of interest earned or paid, and the applicable yields for interest-earning assets and the costs of interest-bearing ~~liabilities that generate taxable-equivalent net interest income.~~liabilities.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES


(Unaudited)	(Unaudited)	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020						(Unaudited)	Three Months Ended March 31, 2022						Three Months Ended March 31, 2021
(Dollar amounts in millions)	(Dollar amounts in millions)	Average balance		Amount of interest 1		Average yield/rate		Average balance		Amount of interest 1		Average yield/rate		(Dollar amounts in millions)	Average balance		Amount of interest		Average yield/rate 1		Average balance		Amount of interest 1		Average yield/rate 1
ASSETS	ASSETS													ASSETS
Money market investments		$	10,253	$	4	0.17	%	$	1,610	$	1	0.35	%
Money market investments:														Money market investments:
Interest-bearing deposits														Interest-bearing deposits	$	6,735	$	3	0.19	%	$	4,592	$	1	0.11	%
Federal funds sold and security resell agreements														Federal funds sold and security resell agreements	2,300		3		0.52		3,199		2		0.24
Total money market investments														Total money market investments	9,035		6		0.27		7,791		3		0.16
Securities:	Securities:													Securities:
Held-to-maturity	Held-to-maturity	579		4		2.91		632		6		3.58		Held-to-maturity	438		3		3.12		663		5		2.98
Available-for-sale	Available-for-sale	17,041		69		1.63		14,128		74		2.12		Available-for-sale	25,246		106		1.71		15,876		66		1.69
Trading account	Trading account	211		3		4.43		149		2		4.29		Trading account	384		5		4.76		231		2		3.96
Total securities 2	Total securities 2	17,831		76		1.71		14,909		82		2.20		Total securities 2	26,068		114		1.78		16,770		73		1.77
Loans held for sale	Loans held for sale	62		1		2.50		125		2		5.02		Loans held for sale	57		—		1.92		68		—		2.81
Loans and leases 3	Loans and leases 3													Loans and leases 3
Commercial - excluding PPP loans	Commercial - excluding PPP loans	24,560		236		3.85		25,773		259		4.05		Commercial - excluding PPP loans	27,037		236		3.54		24,732		234		3.83
Commercial - PPP loans	Commercial - PPP loans	5,945		68		4.56		5,016		39		3.14		Commercial - PPP loans	1,459		24		6.64		6,135		60		3.98
Commercial real estate	Commercial real estate	12,037		103		3.46		11,866		112		3.81		Commercial real estate	12,171		101		3.37		12,133		105		3.50
Consumer	Consumer	10,228		89		3.51		11,613		106		3.66		Consumer	10,266		82		3.23		10,665		95		3.59
Total loans and leases	Total loans and leases	52,770		496		3.77		54,268		516		3.83		Total loans and leases	50,933		443		3.52		53,665		494		3.73
Total interest-earning assets	Total interest-earning assets	80,916		577		2.86		70,912		601		3.41		Total interest-earning assets	86,093		563		2.65		78,294		570		2.95
Cash and due from banks	Cash and due from banks	579						617						Cash and due from banks	625						614
Allowance for credit losses on loans and debt securities	Allowance for credit losses on loans and debt securities	(647)						(724)						Allowance for credit losses on loans and debt securities	(515)						(774)
Goodwill and intangibles	Goodwill and intangibles	1,015						1,014						Goodwill and intangibles	1,015						1,016
Other assets	Other assets	4,094						4,095						Other assets	4,211						3,930
Total assets	Total assets	$	85,957					$	75,914					Total assets	$	91,429					$	83,080
LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY													LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:	Interest-bearing deposits:													Interest-bearing deposits:
Savings and money market	Savings and money market	$	35,987	$	5	0.06	%	$	30,094	$	10	0.13	%	Savings and money market	$	39,132	$	5	0.05	%	$	35,232	$	6	0.07	%
Time	Time	2,108		2		0.42		3,853		13		1.35		Time	1,587		1		0.26		2,491		3		0.55

Total interest-bearing deposits	Total interest-bearing deposits	38,095		7		0.08		33,947		23		0.27		Total interest-bearing deposits	40,719		6		0.06		37,723		9		0.10
Borrowed funds:	Borrowed funds:													Borrowed funds:
Federal funds purchased and other short-term borrowings	Federal funds purchased and other short-term borrowings	834		1		0.06		2,230		1		0.11		Federal funds purchased and other short-term borrowings	594		—		0.08		1,110		—		0.07
Long-term debt	Long-term debt	1,303		7		2.31		1,736		8		1.93		Long-term debt	823		5		2.66		1,324		8		2.30
Total borrowed funds	Total borrowed funds	2,137		8		1.43		3,966		9		0.91		Total borrowed funds	1,417		5		1.58		2,434		8		1.28
Total interest-bearing liabilities	Total interest-bearing liabilities	40,232		15		0.15		37,913		32		0.34		Total interest-bearing liabilities	42,136		11		0.11		40,157		17		0.17
Noninterest-bearing demand deposits	Noninterest-bearing demand deposits	36,545						29,053						Noninterest-bearing demand deposits	40,886						33,723
Other liabilities	Other liabilities	1,200						1,352						Other liabilities	1,267						1,301
Total liabilities	Total liabilities	77,977						68,318						Total liabilities	84,289						75,181
Shareholders’ equity:	Shareholders’ equity:													Shareholders’ equity:
Preferred equity	Preferred equity	544						566						Preferred equity	440						566
Common equity	Common equity	7,436						7,030						Common equity	6,700						7,333
Total shareholders’ equity	Total shareholders’ equity	7,980						7,596						Total shareholders’ equity	7,140						7,899
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	85,957					$	75,914					Total liabilities and shareholders’ equity	$	91,429					$	83,080
Spread on average interest-bearing funds	Spread on average interest-bearing funds					2.71	%					3.07	%	Spread on average interest-bearing funds					2.54	%					2.78	%
Net impact of noninterest-bearing sources of funds	Net impact of noninterest-bearing sources of funds					0.08	%					0.16	%	Net impact of noninterest-bearing sources of funds					0.06	%					0.08	%
Net interest margin	Net interest margin			$	562	2.79	%			$	569	3.23	%	Net interest margin			$	552	2.60	%			$	553	2.86	%
Memo: total loans and leases, excluding PPP loans	Memo: total loans and leases, excluding PPP loans	$	46,825	428		3.67	%	$	49,252	477		3.90	%	Memo: total loans and leases, excluding PPP loans	$	49,474	419		3.43	%	$	47,530	434		3.69	%

Memo: total cost of deposits	Memo: total cost of deposits					0.04	%					0.15	%	Memo: total cost of deposits					0.03	%					0.05	%
Memo: total deposits and interest-bearing liabilities	Memo: total deposits and interest-bearing liabilities	76,777		15		0.08	%	66,966		32		0.19	%	Memo: total deposits and interest-bearing liabilities	83,022		11		0.06	%	73,880		17		0.09	%

1 Rates are calculated using amounts in thousands and a tax rate of 21% for the periods presented. The taxable-equivalent rates used are the rates that were applicable at the time of each respective reporting period.

2 Interest on total securities includes ~~$29~~$28 million and ~~$25 million of taxable-equivalent premium amortization for the second quarters of 2021 and 2020, respectively.~~

3 ~~Net of unamortized purchase premiums, discounts, and deferred loan fees and costs.~~
Six Months Ended
June 30, 2021 Six Months Ended
June 30, 2020
(Dollar amounts in millions) Average
balance
Amount of
interest 1
Average
yield/rate Average
balance
Amount of
interest 1
Average
yield/rate
ASSETS
Money market investments $ 9,029 $ 7 0.17 % $ 1,812 $ 9 1.00 %
Securities:
Held-to-maturity 620 9 2.95 612 11 3.65
Available-for-sale 16,462 135 1.66 13,907 151 2.19
Trading account 221 5 4.18 157 3 4.28
Total securities 2
17,303 149 1.74 14,676 165 2.27
Loans held for sale 65 1 2.66 117 2 4.15
Loans and leases 3
Commercial - excluding PPP loans 24,646 470 3.84 25,645 545 4.27
Commercial - PPP loans 6,039 128 4.26 2,506 41 3.29
Commercial real estate 12,085 208 3.48 11,706 245 4.21
Consumer 10,445 184 3.55 11,675 222 3.83
Total loans and leases 53,215 990 3.75 51,532 1,053 4.11
Total interest-earning assets 79,612 1,147 2.90 68,137 1,229 3.63
Cash and due from banks 597 646
Allowance for loan losses (710) (611)
Goodwill and intangibles 1,015 1,014
Other assets 4,012 3,873
Total assets $ 84,526 $ 73,059
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
Savings and money market $ 35,611 $ 11 0.06 % $ 29,475 $ 43 0.30 %
Time 2,299 5 0.49 4,153 31 1.49
Total interest-bearing deposits 37,910 16 0.09 33,628 74 0.44
Borrowed funds:
Federal funds purchased and other short-term borrowings 971 1 0.06 2,576 9 0.72
Long-term debt 1,314 15 2.31 1,742 22 2.57
Total borrowed funds 2,285 16 1.35 4,318 31 1.47
Total interest-bearing liabilities 40,195 32 0.16 37,946 105 0.56
Noninterest-bearing demand deposits 35,142 26,326
Other liabilities 1,249 1,244
Total liabilities 76,586 65,516
Shareholders’ equity:
Preferred equity 555 566
Common equity 7,385 6,977
Total shareholders’ equity 7,940 7,543
Total liabilities and shareholders’ equity $ 84,526 $ 73,059
Spread on average interest-bearing funds 2.74 % 3.07 %
Net impact of noninterest-bearing sources of funds 0.08 % 0.25 %
Net interest margin $ 1,115 2.82 % $ 1,124 3.32 %
Memo: total loans and leases, excluding PPP loans $ 47,176 862 3.68 % $ 49,026 1,012 4.15 %
Memo: total cost of deposits 0.05 % 0.25 %
Memo: total deposits and interest-bearing liabilities 75,337 32 0.08 % 64,272 105 0.60 %

2 ~~Interest on total securities includes $59 million and $54~~$30 million of taxable-equivalent premium amortization for the first ~~six months~~quarters of ~~2021~~2022 and ~~2020,~~2021, respectively.

3 Net of unamortized purchase premiums, discounts, and deferred loan fees and costs.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

Provision for Credit Losses

The allowance for credit losses (“ACL”) is the combination of both the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”). The ALLL represents the estimated current expected credit losses related to the loan and lease portfolio as of the balance sheet date. The RULC represents the estimated reserve for current expected credit losses associated with off-balance sheet commitments. Changes in the ALLL and RULC, ~~including changes in~~ net of charge-offs orand recoveries, are recorded as the provision for loan and lease losses and the provision for unfunded lending commitments, respectively, in the income statement. The ACL for debt securities is estimated separately from loans.

The provision for credit losses, which is the combination of both the provision for loan and lease losses and the provision for unfunded lending commitments, was a negative ~~$123~~$33 million, compared with negative $132 million in the first quarter of ~~2021, and a positive $168 million in the second quarter of 2020.~~2021. The ACL was ~~$574~~$514 million at ~~June 30, 2021,~~March 31, 2022, compared with $695 million at March 31, 2021, and $914 million at June 30, 2020. The year-over-year decrease in the ACL was primarily due to an improvement in the economic outlook, compared with the more stressed economic outlook in the prior year due to the COVID-19 pandemic.2021. The ratio of ~~allowance for credit losses~~ACL to net loans and leases ~~(excluding PPP loans)~~(ex-PPP) was ~~1.22%,~~1.02% and 1.48%~~, and 1.88%~~ at ~~June 30, 2021,~~ March 31, 2022 and 2021, ~~and June 30, 2020,~~ respectively.

~~Net loan and lease recoveries were $2~~ The provision for securities losses was less than $1 million ~~or 0.02% of average loans (excluding PPP loans), in~~during the ~~second~~first quarter of ~~2021, compared with net charge-offs of $31 million, or 0.25% of average loans (excluding PPP loans), in the prior year quarter.~~2022 and 2021.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

The total ACL was ~~$574~~$514 million at ~~June 30, 2021,~~March 31, 2022, compared with $695 million at March 31, 2021. The bar chart above illustrates the broad categories of change in the ACL ~~during~~from the ~~quarter.~~prior year period. The second bar represents ~~the change~~changes in economic ~~forecasts. The $103~~forecasts and current economic conditions, which decreased the ACL by $141 million ~~decrease~~ from the prior year quarter ~~is our estimate of the change in expected credit losses~~ due to improvements in both realized economic results and forecasts, partially offset by economic ~~forecasts.~~ uncertainty caused by inflation, supply chain disruptions, and the conflict in Eastern Europe.

The third bar represents changes in credit quality factors and includes risk-grade migration and specific reserves against loans, which, when combined, decreased the ACL by $2$16 million, indicating ~~improved~~improvements in credit quality. Net charge-offs were $6 million, or 0.05% annualized of average loans (ex-PPP), in the first quarter of 2022, compared with net charge-offs of $8 million, or 0.07% annualized of average loans (ex-PPP), in the prior year quarter.

The fourth bar represents loan portfolio changes, driven by changes in portfolio mix, the aging of the portfolio, and other ~~similar~~risk factors; all of which resulted in a ~~$16~~$24 million reduction in the ACL.

~~For~~See “Credit Risk Management” on page 20 and Note 6 of the Notes to Consolidated Financial Statements in our 2021 Form 10-K for more information on how we determine the appropriate level of the ~~ACL, see “Credit Risk Management” on page 21~~ALLL and ~~Note 6 of our 2020 Form 10-K.~~the RULC.

Noninterest Income

Noninterest income represents revenue we earn from products and services that generally have no associated interest rate or yield and is classified as either customer-related or ~~noncustomer-related income.~~noncustomer-related. Customer-related ~~fees exclude~~noninterest income excludes items such as securities gains and losses, dividends, insurance-related income, and mark-to-market adjustments on certain ~~derivatives; dividends; insurance-related income; and securities gains and losses.~~derivatives.

Total noninterest income ~~increased $88~~decreased $27 million, or ~~75%~~16%, ~~to $205~~from $169 million ~~from $117 million for~~during the prior year quarter. Noninterest income accounted for ~~27%~~21% and ~~17%~~24% of net revenue during the ~~second~~first quarter of ~~2021~~2022 and ~~2020,~~2021, respectively. The following schedule presents a comparison of the major components of noninterest income.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

NONINTEREST INCOME


		Three Months Ended June 30,				Amount change				Percent change				Six Months Ended June 30,								Amount change		Percent change			Three Months Ended March 31,							Amount change		Percent change
(Dollar amount in millions)		2021		2020								2021				2020
(Dollar amounts in millions)																										(Dollar amounts in millions)	2022			2021									Amount change			Percent change

Commercial account fees	Commercial account fees	$	34	$	30			$	4			13	%			$	66			$	61							$	5		8	%	Commercial account fees	$	41	$	32			$	9		28	%
Card fees	Card fees	24		19		5				26				45				39				6		15		Card fees	25			21				4		19
Retail and business banking fees	Retail and business banking fees	18		15		3				20				35				33				2		6		Retail and business banking fees	20			17				3		18
Loan-related fees and income	Loan-related fees and income	21		27		(6)				(22)				46				53				(7)		(13)		Loan-related fees and income	22			25				(3)		(12)
Capital markets and foreign exchange fees	Capital markets and foreign exchange fees	17		18		(1)				(6)				32				42				(10)		(24)		Capital markets and foreign exchange fees	15			15				—		—
Wealth management fees	Wealth management fees	12		9		3				33				24				21				3		14		Wealth management fees	14			12				2		17
Other customer-related fees	Other customer-related fees	13		12		1				8				24				22				2		9		Other customer-related fees	14			11				3		27
Customer-related fees		139		130		9				7				272				271				1		—
Fair value and nonhedge derivative income (loss)		(5)		(12)		7				(58)				13				(23)				36		(157)
Customer-related noninterest income																										Customer-related noninterest income	151			133				18		14
Fair value and nonhedge derivative income																										Fair value and nonhedge derivative income	6			18				(12)		(67)
Dividends and other income	Dividends and other income	8		3		5				167				15				11				4		36		Dividends and other income	2			7				(5)		(71)
Securities gains (losses), net	Securities gains (losses), net	63		(4)		67				NM				74				(9)				83		NM		Securities gains (losses), net	(17)			11				(28)		NM
Noncustomer-related noninterest income																										Noncustomer-related noninterest income	(9)			36				(45)		NM
Total noninterest income	Total noninterest income	$	205	$	117	$	88			75	%			$	374			$	250			$	124	50	%	Total noninterest income	$	142		$	169			$	(27)	(16)		%

Customer-related ~~fees~~

Total customer-related ~~fees~~noninterest income increased $18 million, or 14%, mainly due to ~~$139 million from $130 million for the second quarter of 2020. Card fees~~ increased ~~$5 million, commercial account fees increased $4 million, and wealth management and~~card, retail and business banking, and wealth management activity, partially offset by a decrease in loan-related fees ~~both increased $3~~and income. Results for the first quarter of 2022 benefited from a one-time adjustment of approximately $6 million ~~all primarily~~in commercial account fees.

Retail and business banking fees include overdraft and non-sufficient funds fees. Beginning in the third quarter of 2022, we expect to reduce the rate and frequency with which such fees are assessed, specifically to consumer accounts. Relative to current activity levels, we expect this will reduce our customer-related noninterest income by approximately $5 million per quarter.

Noncustomer-related

Total noncustomer-related noninterest income decreased $45 million, relative to the prior year quarter. Net securities gains and losses decreased $28 million, due to ~~improved customer transaction volume~~$17 million of negative mark-to-market adjustments primarily related to our SBIC investment in Recursion Pharmaceuticals, Inc., and ~~new client activity. Loan-related fees~~an $11 million gain on the sale of Farmer Mac Class C stock recognized during the prior year period.

Fair value and nonhedge derivative income decreased ~~$6 million, primarily due to a decline in our residential mortgage originations held for sale.~~

~~Noncustomer-related fees~~

~~Securities gains increased $67~~$12 million from the second quarter of 2020, largely as a result of a $63 million unrealized gain related to the successful completion of an IPO of one of our SBIC investments, Recursion Pharmaceuticals, Inc. This investment will be marked-to-market until we fully divest of our shares, which are subject to a minimum 180-day lock-up period from the initial offering. An associated $9 million accrued success fee will also be adjusted based on the mark-to-market value of the investment.

prior year period. We ~~also~~ recognized a $5$6 million ~~loss~~gain during the quarter related to a credit valuation adjustment (“CVA”) on client-related interest rate swaps, compared with ~~a $12~~an $18 million CVA ~~loss~~gain in the ~~second quarter of 2020.~~prior year period. The CVA ~~loss for~~may fluctuate from period-to-period based on the ~~current quarter was primarily due to a decline~~credit quality of our clients and changes in interest rates, which ~~increased~~impacts the value of, and our credit exposure to, the client-related interest rate swaps.

Noninterest Expense

~~Noninterest expense decreased $2 million, or less than 1%, to $428 million from~~During the ~~second~~first quarter of ~~2020. Adjusted~~2022, we made certain financial reporting reclassifications to noninterest expense ~~increased $17 million, or 4%,~~in our Consolidated Statements of Income, primarily to ~~$419 million, from~~improve the ~~same prior year quarter. The following schedule presents the major components~~presentation and disclosure of ~~noninterest expense.~~certain expenses related to our ongoing technology initiatives and investments and to provide a more relevant presentation of our business and operations. Other expense line items were also impacted by these reclassifications, which were adopted retrospectively to January 1, 2020.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

The following schedule presents a comparison of the major components of noninterest expense.

NONINTEREST EXPENSE


		Three Months Ended June 30,				Amount change				Percent change				Six Months Ended June 30,								Amount change		Percent change			Three Months Ended March 31,							Amount change		Percent change
(Dollar amount in millions)		2021		2020								2021				2020
(Dollar amounts in millions)																										(Dollar amounts in millions)	2022			2021									Amount change			Percent change

Salaries and employee benefits	Salaries and employee benefits	$	272	$	267			$	5			2	%			$	560			$	540							$	20		4	%	Salaries and employee benefits	$	312	$	288			$	24		8	%
Occupancy, net		33		32		1				3				66				65				1		2
Furniture, equipment and software, net		32		32		—				—				64				64				—		—

Technology, telecom, and information processing																										Technology, telecom, and information processing	52			49				3		6
Occupancy and equipment, net																										Occupancy and equipment, net	38			39				(1)		(3)
Professional and legal services																										Professional and legal services	14			21				(7)		(33)
Marketing and business development																										Marketing and business development	8			7				1		14
Deposit insurance and regulatory expense																										Deposit insurance and regulatory expense	10			10				—		—
Credit-related expense	Credit-related expense	6		6		—				—				12				10				2		20		Credit-related expense	7			6				1		17
Professional and legal services		17		10		7				70				37				22				15		68
Advertising		4		3		1				33				9				6				3		50
FDIC premiums		6		7		(1)				(14)				13				12				1		8
Other real estate expense, net																										Other real estate expense, net	1			—				1		NM
Other	Other	58		73		(15)				(21)				102				118				(16)		(14)		Other	22			15				7		47
Total noninterest expense	Total noninterest expense	$	428	$	430	$	(2)			—	%			$	863			$	837			$	26	3	%	Total noninterest expense	$	464		$	435			$	29	7		%
Adjusted noninterest expense 1	Adjusted noninterest expense 1	$	419	$	402	$	17			4	%			$	859			$	808			$	51	6	%	Adjusted noninterest expense 1	$	464		$	440			$	24	5		%

1 For information on non-GAAP financial measures, see “GAAP to Non-GAAP Reconciliations” on page 4.

~~The $2 million decrease in~~Total noninterest expense ~~was largely attributable to a $15~~increased $29 million, ~~decrease in other noninterest expense, which was primarily due~~or 7%, relative to the $28 million pension plan termination-related expense recognized during the second quarter of 2020, and partially offset by a $9 million success fee accrual related to the IPO of the SBIC investment previously discussed.prior year quarter. Salaries and benefits expense increased $24 million, or 8%, due to (1) the impact of inflationary and competitive labor market pressures on wages, (2) increases in commissions, (3) increases in incentive compensation accruals arising from improvements in anticipated full-year profitability, and (4) declines in deferred salaries primarily associated with PPP loans originated in the prior year period.

Other noninterest expense increased $7 million, or 47%, primarily due to lower expenses in the prior year period, which benefited from a $5 million ~~or 2%, mainly due~~valuation adjustment related to ~~higher profit sharing as a result~~the termination of ~~improved profitability.~~our defined benefit pension plan. Professional and legal services expense ~~increased~~decreased $7 million, or ~~70%~~33%, ~~primarily~~ due to third-party assistance associated with PPP loan forgiveness as well as various technology-related and other outsourced ~~services.~~services incurred in the prior year period.

Adjusted noninterest expense ~~was $419~~increased $24 million, or 5%, to $464 million, compared with ~~$402~~$440 million for the ~~same~~ prior year ~~quarter,~~period, driven primarily ~~due to~~by the ~~increases~~increase in salaries and benefits expense described previously. The efficiency ratio was 65.8%, compared with 63.5%. Given the seasonality associated with employee benefits, the efficiency ratio is generally elevated in the first quarter of the year. This effect was more pronounced in the first quarter of 2022 due to the aforementioned increases in incentive compensation accruals arising from improvements in anticipated full-year profitability. For information on non-GAAP financial measures, including differences between noninterest expense and ~~professional and legal services expenses previously discussed.~~adjusted noninterest expense, see page 4.

Income Taxes

The following schedule summarizes the income tax expense and effective tax rates for the periods presented:

INCOME TAXES


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
(Dollar amounts in millions)	(Dollar amounts in millions)	2021			2020			2021			2020			(Dollar amounts in millions)	2022			2021

Income before income taxes	Income before income taxes	$	455		$	82		$	866		$	98		Income before income taxes	$	255		$	411
Income tax expense	Income tax expense	101			16			190			18			Income tax expense	52			89
Effective tax rate	Effective tax rate	22.2		%	19.5		%	21.9		%	18.4		%	Effective tax rate	20.4		%	21.7		%

See Note 12 of the Notes to Consolidated Financial Statements for more information about the factors that influenced the income tax rates as well as information about deferred income tax assets and liabilities.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION

Preferred Stock Dividends

Preferred stock dividends ~~were $9~~totaled $8 million for both the ~~second~~first quarter of ~~2021~~2022 and ~~2020.~~2021.

Technology Spend

As the banking industry continues to move toward information technology-based products and services, we recognize there are disparate ways of discussing expenditures associated with technology-related investments and operations. We generally describe these expenditures as total technology spend, which includes current period expenses reported on our consolidated statement of income, and capitalized investments, net of related amortization and depreciation, reported on our consolidated balance sheet. We believe these disclosures provide more relevant presentation and discussion regarding our technology-related investments and operations.

The following schedule provides information related to our technology spend:

TECHNOLOGY SPEND


	Three Months Ended March 31,
(In millions)	2022		2021

Technology, telecom, and information processing expense	$	52	$	49
Other technology-related expenses	49		44
Technology investments	22		28
Less: related amortization and depreciation	(14)		(13)
Total technology spend	$	109	$	108

Total technology spend represents expenditures for technology systems and infrastructure and is reported as a combination of the following:

•Technology, telecom, and information processing expense — includes expenses related to application software licensing and maintenance, related amortization, telecommunications, and data processing;

•Other technology-related expenses — includes related noncapitalized salaries and employee benefits, occupancy and equipment, and professional and legal services; and

•Technology investments — includes capitalized technology infrastructure equipment, hardware, and purchased or internally developed software, less related amortization or depreciation.

BALANCE SHEET ANALYSIS

Interest-Earning Assets

Interest-earning assets are ~~those~~ assets that have associated interest rates or yields, and generally consist of money market investments, securities, loans, and leases. We strive to maintain a high level of interest-earning assets relative to total assets.

For more information regarding the average balances, associated revenue generated, and the respective yields of our interest-earning assets, ~~the amount of revenue generated by them, and their respective yields,~~ see the Consolidated Average Balance Sheet on page ~~12.~~11.

Investment Securities Portfolio

We invest in securities to generate interest income and to actively manage liquidity, interest rate, and credit risk. Refer to the “Liquidity Risk Management” section on page 31 for additional information about how we manage our liquidity risk. See Note 3 and Note 5of the Notes to Consolidated Financial Statements for more information on fair value measurements and the accounting for our investment securities portfolio.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

~~Investment Securities Portfolio~~

We invest in securities to manage liquidity and interest rate risk, in addition to generating revenue. Refer to the “Liquidity Risk Management” section on page 33 for additional information on management of liquidity and funding. The following schedule presents the components of our investment securities portfolio. The amortized cost amounts represent the original cost of the investments, adjusted for related accumulated amortization or accretion of any yield adjustments, and for any impairment losses, including credit-related impairment. The estimated fair value measurement levels and methodology are discussed in Note 3~~of our 2020 Form 10-K.~~

INVESTMENT SECURITIES PORTFOLIO


		June 30, 2021				December 31, 2020						March 31, 2022						December 31, 2021
(In millions)	(In millions)	Par value		Amortized cost		Estimated fair value		Par value		Amortized cost			Estimated fair value		(In millions)	Par value		Amortized cost		Estimated fair value		Par value		Amortized cost		Estimated fair value
Held-to-maturity	Held-to-maturity														Held-to-maturity
Municipal securities	Municipal securities	$	620	$	620	$	622	$	636	$	636		$	640	Municipal securities	$	438	$	439	$	414	$	441	$	441	$	443

Available-for-sale	Available-for-sale														Available-for-sale
U.S. Treasury securities	U.S. Treasury securities	155		155		128		205		205			192		U.S. Treasury securities	555		557		503		155		155		134
U.S. Government agencies and corporations:	U.S. Government agencies and corporations:														U.S. Government agencies and corporations:
Agency securities	Agency securities	991		991		1,022		1,051		1,051			1,091		Agency securities	802		802		792		833		833		845
Agency guaranteed mortgage-backed securities	Agency guaranteed mortgage-backed securities	14,042		14,233		14,323		11,259		11,439			11,693		Agency guaranteed mortgage-backed securities	23,441		23,626		22,082		20,340		20,549		20,387
Small Business Administration loan-backed securities	Small Business Administration loan-backed securities	994		1,076		1,048		1,103		1,195			1,160		Small Business Administration loan-backed securities	884		950		925		867		938		912
Municipal securities	Municipal securities	1,380		1,522		1,574		1,237		1,352			1,420		Municipal securities	1,645		1,828		1,768		1,489		1,652		1,694
Other debt securities	Other debt securities	75		75		75		175		175			175		Other debt securities	75		75		75		75		75		76

Total available-for-sale	Total available-for-sale	17,637		18,052		18,170		15,030		15,417			15,731		Total available-for-sale	27,402		27,838		26,145		23,759		24,202		24,048
Total investment securities		$	18,257	$	18,672	$	18,792	$	15,666	$	16,053		$	16,371
Total HTM and AFS investment securities															Total HTM and AFS investment securities	$	27,840	$	28,277	$	26,559	$	24,200	$	24,643	$	24,491

The amortized cost of total held-to-maturity (“HTM”) and AFS investment securities increased ~~16%~~$3.6 billion, or 15%, from December 31, ~~2020,~~2021. Approximately 9% and ~~approximately 18%~~11% of the total HTM and AFS investment securities ~~are~~portfolio were floating rate at ~~June 30, 2021, compared with 23% at~~March 31, 2022 and December 31, ~~2020.~~2021, respectively.

The investment securities portfolio includes ~~$415~~$437 million of net premium that is distributed across various ~~security~~asset classes. ~~Tax-equivalent~~Total premium amortization for our investment securities was $26 million for the ~~second~~first quarter of ~~2021 was $29 million,~~2022, compared with ~~$25~~$28 million for the same prior year period. Refer to the “Capital Management” section on page 32 and Note 5 of the Notes to Consolidated Financial Statements for more discussion on our investment securities portfolio and related unrealized gains/losses.

At ~~June 30, 2021, in accordance with~~March 31, 2022, based on the GAAP fair value hierarchy, ~~0.7%~~1.9% and 98.1% of the ~~$18.2~~$26.1 billion ~~fair value~~AFS securities portfolio was valued at Level 1 and Level 2, respectively, compared with 0.6% and 99.4% at December 31, 2021. None of the AFS securities portfolio was valued at Level ~~1, and 99.3% was valued at Level 2. This compares with 1.2% and 98.8%, respectively, at December 31, 2020. There were no Level~~ 3 ~~AFS securities~~ for either period. See Note 3 of ~~our 2020 Form 10-K~~the Notes to Consolidated Financial Statements for further discussion of fair value accounting.

~~Exposure to~~ Municipalities

We provide ~~multiple~~ products and services to state and local governments (referred to collectively as “municipalities”), including deposit services, loans, and investment banking services. We also invest in securities issued by municipalities. The following schedule summarizes our exposure to state and local municipalities:

EXPOSURE TO MUNICIPALITIES


(In millions)	(In millions)	June 30, 2021		December 31, 2020		(In millions)	March 31, 2022		December 31, 2021

Loans and leases	Loans and leases	$	3,215	$	2,951	Loans and leases	$	3,944	$	3,658
Held-to-maturity – municipal securities	Held-to-maturity – municipal securities	620		636		Held-to-maturity – municipal securities	439		441
Available-for-sale – municipal securities	Available-for-sale – municipal securities	1,574		1,420		Available-for-sale – municipal securities	1,768		1,694

Trading account – municipal securities	Trading account – municipal securities	162		149		Trading account – municipal securities	364		355
Unfunded lending commitments	Unfunded lending commitments	378		359		Unfunded lending commitments	341		280
Total direct exposure to municipalities	Total direct exposure to municipalities	$	5,949	$	5,515	Total direct exposure to municipalities	$	6,856	$	6,428

The municipal loan and lease portfolio is primarily secured by general obligations of municipal entities. Other types of collateral also include real estate, revenue pledges, or equipment. Our municipal loans and securities primarily relate to municipalities located within our geographic footprint.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

The municipal loan and lease portfolio is generally secured by real estate, equipment, or is a general obligation of a municipal entity. Our municipal loans and securities primarily relate to municipalities located within our geographic footprint. At ~~June 30, 2021,~~March 31, 2022, no municipal loans were on nonaccrual. Municipal securities are internally graded, similar to loans, using risk-grading systems which vary based on the size and type of credit risk exposure. The internal risk grades assigned to our municipal securities follow our definitions of Pass, Special Mention, and Substandard, which are consistent with published definitions of regulatory risk classifications. At ~~June 30, 2021, approximately $1 million of our~~March 31, 2022, all municipal securities were ~~classified as Substandard, and the remaining amount of our municipal securities portfolio were classified~~graded as Pass. See Notes 5 and 6 of the Notes to Consolidated Financial Statements for additional information about the credit quality of these municipal loans and securities.

Loan and Lease Portfolio

At ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the ratio of loans and leases to total assets was ~~59%~~56% and ~~66%~~55%, respectively. The largest loan category was commercial and industrial loans, which constituted ~~25%~~28% and 27% of our total loan portfolio for the same ~~time~~ periods. The following schedule presents our loans and leases according to major portfolio segment, specific loan class, and percentage of total loans:

LOAN AND LEASE PORTFOLIO


		June 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(Dollar amounts in millions)	(Dollar amounts in millions)	Amount		% of total loans		Amount		% of total loans		(Dollar amounts in millions)	Amount		% of total loans		Amount		% of total loans
Commercial:	Commercial:									Commercial:
Commercial and industrial	Commercial and industrial	$	12,947	25.2	%	$	13,444	25.1	%	Commercial and industrial	$	14,356	28.0	%	$	13,867	27.3	%
PPP	PPP	4,461		8.7		5,572		10.5		PPP	1,081		2.1		1,855		3.6
Leasing	Leasing	307		0.6		320		0.6		Leasing	318		0.6		327		0.6
Owner-occupied	Owner-occupied	8,231		16.0		8,185		15.3		Owner-occupied	9,026		17.6		8,733		17.2
Municipal	Municipal	3,215		6.3		2,951		5.5		Municipal	3,944		7.7		3,658		7.2
Total commercial	Total commercial	29,161		56.8		30,472		57.0		Total commercial	28,725		56.0		28,440		55.9
Commercial real estate:	Commercial real estate:									Commercial real estate:
Construction and land development	Construction and land development	2,576		5.0		2,345		4.4		Construction and land development	2,769		5.4		2,757		5.4
Term	Term	9,532		18.6		9,759		18.2		Term	9,325		18.2		9,441		18.6
Total commercial real estate	Total commercial real estate	12,108		23.6		12,104		22.6		Total commercial real estate	12,094		23.6		12,198		24.0
Consumer:	Consumer:									Consumer:
Home equity credit line	Home equity credit line	2,727		5.3		2,745		5.2		Home equity credit line	3,089		6.0		3,016		5.9
1-4 family residential	1-4 family residential	6,269		12.2		6,969		13.0		1-4 family residential	6,122		12.0		6,050		11.9
Construction and other consumer real estate	Construction and other consumer real estate	593		1.1		630		1.2		Construction and other consumer real estate	692		1.4		638		1.3
Bankcard and other revolving plans	Bankcard and other revolving plans	415		0.8		432		0.8		Bankcard and other revolving plans	410		0.8		396		0.8
Other	Other	125		0.2		124		0.2		Other	110		0.2		113		0.2
Total consumer	Total consumer	10,129		19.6		10,900		20.4		Total consumer	10,423		20.4		10,213		20.1
Total net loans and leases	Total net loans and leases	$	51,398	100.0	%	$	53,476	100.0	%	Total net loans and leases	$	51,242	100.0	%	$	50,851	100.0	%

The loan and lease portfolio ~~decreased $2.1 billion~~increased $391 million from December 31, ~~2020, primarily due to the forgiveness of PPP loans.~~2021. Excluding PPP loans, commercial loans ~~decreased $200 million, as economic uncertainty and an abundance of liquidity in the marketplace continued to adversely impact loan demand. Within commercial loans, a $497 million decrease~~increased $1.1 billion, or 4%, driven largely by increases in commercial and industrial loans, ~~was partially offset by a $264~~owner-occupied loans, and municipal loans of $489 million, ~~increase in municipal loans. Term commercial real estate loans decreased $227~~$293 million, ~~while commercial real estate construction~~ and ~~land development~~$286 million, respectively. Consumer loans increased ~~$231 million. Consumer loans decreased $771~~$210 million, primarily due to ~~a decline~~increases in home equity credit lines, 1-4 family residential ~~mortgage~~ loans, ~~related to continued refinancing activity. We continue to manage the balance sheet effect of mortgage refinance activity in the context of our interest rate risk profile.~~and construction and other consumer real estate loans.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

Other Noninterest-Bearing Investments

Other noninterest-bearing investments are equity investments that ~~do not generally provide interest income, but~~ are held primarily for capital appreciation, dividends, or for certain regulatory requirements. The following schedule summarizes our ~~other noninterest-bearing~~related investments:

OTHER NONINTEREST-BEARING INVESTMENTS


(Dollar amounts in millions)	(Dollar amounts in millions)	June 30, 2021		December 31, 2020		Amount change		Percent change		(Dollar amounts in millions)	March 31, 2022		December 31, 2021		Amount change		Percent change

Bank-owned life insurance	Bank-owned life insurance	$	535	$	532	$	3	1	%	Bank-owned life insurance	$	538	$	537	$	1	—	%
Federal Home Loan Bank stock	Federal Home Loan Bank stock	11		11		—		—		Federal Home Loan Bank stock	11		11		—		—
Federal Reserve stock	Federal Reserve stock	97		98		(1)		(1)		Federal Reserve stock	71		81		(10)		(12)
Farmer Mac stock	Farmer Mac stock	19		28		(9)		(32)		Farmer Mac stock	19		19		—		—
SBIC investments	SBIC investments	209		135		74		55		SBIC investments	165		179		(14)		(8)
Other	Other	24		13		11		85		Other	25		24		1		4
Total other noninterest-bearing investments	Total other noninterest-bearing investments	$	895	$	817	$	78	10	%	Total other noninterest-bearing investments	$	829	$	851	$	(22)	(3)	%

Total other noninterest-bearing investments ~~increased $78~~decreased $22 million, or ~~10%~~3%, during the first ~~six~~three months of ~~2021,~~2022, primarily due to a ~~$74~~$14 million ~~increase~~decrease in the value of our SBIC investments. This ~~increase~~decrease was driven largely ~~due to a $63~~by $17 million ~~unrealized gain~~of negative mark-to-market adjustments primarily related to our investment in Recursion Pharmaceuticals, Inc. ~~This investment will be marked-to-market until we fully divest of our shares, which are subject to a minimum 180-day lock-up period from the initial public offering.~~

Premises, Equipment, and Software

Net premises, equipment, and software increased ~~$30~~$27 million, or 2%, from December 31, ~~2020.~~ 2021, primarily due to capitalized costs related to the construction of a new corporate technology center in Midvale, Utah and a new corporate center for Vectra in Denver, Colorado. Both facilities are expected to be completed in mid- to late-2022.

We are also in the final phase of a three-phase project to replace our core loan and deposit banking systems, and are ~~well underway~~on track to convert our deposit servicing system byin 2023. ~~The total~~Capitalized costs associated with the core system replacement project ~~spend amount is comprised of both capitalized amounts and amounts that are expensed as incurred. The~~generally carry a useful life ~~for most~~ of ten years, and are summarized in the ~~capitalized costs is 10 years. The~~ following ~~schedule summarizes the total amount of capitalized costs, less accumulated depreciation, by phase, for the core system replacement project.~~schedule.

CAPITALIZED COSTS ASSOCIATED WITH THE CORE SYSTEM REPLACEMENT PROJECT


		June 30, 2021									March 31, 2022
(In millions)	(In millions)	Phase 1		Phase 2		Phase 3		Total		(In millions)	Phase 1		Phase 2		Phase 3		Total

Total amount of capitalized costs, less accumulated depreciation	Total amount of capitalized costs, less accumulated depreciation	$	42	$	69	$	127	$	238	Total amount of capitalized costs, less accumulated depreciation	$	36	$	62	$	166	$	264

Deposits

Deposits are ~~our~~a primary funding source. The following schedule presents our deposits by category and percentage of total deposits:

DEPOSITS


		June 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(Dollar amounts in millions)	(Dollar amounts in millions)	Amount		% of total deposits		Amount		% of total deposits		(Dollar amounts in millions)	Amount		% of total deposits		Amount		% of total deposits

Noninterest-bearing demand	Noninterest-bearing demand	$	38,128	50.1	%	$	32,494	46.7	%	Noninterest-bearing demand	$	41,937	50.9	%	$	41,053	49.6	%
Interest-bearing:	Interest-bearing:									Interest-bearing:
Savings and money market	Savings and money market	36,037		47.4		34,571		49.6		Savings and money market	38,864		47.2		40,114		48.4
Time	Time	1,940		2.5		2,588		3.7		Time	1,550		1.9		1,622		2.0
Total deposits	Total deposits	$	76,105	100.0	%	$	69,653	100.0	%	Total deposits	$	82,351	100.0	%	$	82,789	100.0	%

Total deposits ~~increased $6.5~~decreased $0.4 billion, or 9%1%, from December 31, ~~2020,~~2021, primarily due to a ~~$5.6~~$1.3 billion decrease in interest-bearing deposits, partially offset by a $0.9 billion increase in noninterest-bearing deposits. ~~When combined, savings~~Total deposits included $377 million and ~~money market~~$381 million of brokered deposits for March 31, 2022 and ~~noninterest-bearing deposits~~December 31, 2021,

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

~~comprised 97% and 96% of total deposits at June 30, 2021 and December 31, 2020,~~ respectively. ~~Total deposits included $207 million and $813 million of brokered deposits for the same periods.~~ See “Liquidity Risk Management” on page 3331 for additional information on funding and borrowed funds.

Total U.S. time deposits that exceed the current Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000 were $526 million and $563 million at March 31, 2022 and December 31, 2021, respectively. The estimated total amount of uninsured deposits, including related interest accrued and unpaid, was $48 billion and $49 billion at March 31, 2022 and December 31, 2021, respectively.

RISK MANAGEMENT

Risk management is an integral part of our operations and is a key determinant of our overall performance. We ~~apply~~employ various strategies to ~~mitigate~~reduce the risks to which our operations are exposed, including credit risk, market and interest rate ~~and market~~ risk, liquidity risk, strategic and business risk, ~~business and corporate governance~~operational risk, ~~operational/~~technology risk, cyber risk, capital/financial reporting risk, legal/compliance risk (including regulatory risk), and reputational risk. These risks are overseen by the various management committees of which the Enterprise Risk Management Committee is the focal ~~point for the monitoring and review of enterprise risk.~~point. For a more comprehensive discussion of these risks, see “Risk Factors” in our ~~2020~~2021 Form 10-K.

In support of management's efforts, the Board of Directors has appointed a Risk Oversight Committee (“ROC”) that consists of appointed Board members who oversee our risk management processes. The ROC meets on a regular basis to monitor and review Enterprise Risk Management (“ERM”) activities. As required by its charter, the ROC performs oversight for various ERM activities and approves ERM policies and activities as detailed in the ROC charter.

Credit Risk Management

Credit risk is the possibility of loss from the failure of a borrower, guarantor, or another obligor to fully perform under the terms of a credit-related contract. Credit risk arises primarily from our lending activities, as well as from off-balance sheet credit instruments. For a more comprehensive discussion of our credit risk management, see “Credit Risk Management” in our ~~2020~~2021 Form 10-K.

U.S. Government Agency Guaranteed Loans

We participate in various guaranteed lending programs sponsored by U.S. government agencies, such as the SBA, Federal Housing Authority, ~~Veterans’ Administration,~~U.S. Department of Veterans Affairs, Export-Import Bank of the U.S., and the U.S. Department of Agriculture. At ~~June 30, 2021, the principal balance of these loans was $5.0~~March 31, 2022, $1.5 billion of ~~which $4.9 billion was~~related loans were guaranteed, ~~(mostly~~primarily by the ~~SBA).~~SBA, and include $1.1 billion of PPP loans. The following schedule presents the composition of U.S. government agency guaranteed ~~loans and includes $4.5 billion of the previously mentioned PPP~~ loans.

U.S. GOVERNMENT ~~GUARANTEES~~AGENCY GUARANTEED LOANS


(Dollar amounts in millions)	(Dollar amounts in millions)	June 30, 2021		Percent guaranteed		December 31, 2020		Percent guaranteed		(Dollar amounts in millions)	March 31, 2022		Percent guaranteed		December 31, 2021		Percent guaranteed

Commercial	Commercial	$	5,013	97	%	$	6,116	98	%	Commercial	$	1,630	92	%	$	2,410	95	%
Commercial real estate	Commercial real estate	19		74		18		72		Commercial real estate	22		73		22		73
Consumer	Consumer	5		100		5		100		Consumer	4		100		5		100
Total loans	Total loans	$	5,037	97	%	$	6,139	98	%	Total loans	$	1,656	92	%	$	2,437	94	%

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

Commercial Lending

The following schedule provides ~~selected~~ information regarding lending ~~concentrations~~exposures to certain industries in our commercial lending portfolio.

COMMERCIAL LENDING BY INDUSTRY GROUP1


		June 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(Dollar amounts in millions)	(Dollar amounts in millions)	Amount		Percent		Amount		Percent		(Dollar amounts in millions)	Amount		Percent		Amount		Percent

Retail trade	Retail trade	$	2,578	8.9	%	$	2,736	9.0	%	Retail trade	$	2,604	9.1	%	$	2,412	8.5	%
Real estate, rental and leasing										Real estate, rental and leasing	2,550		8.9		2,536		8.9
Finance and insurance										Finance and insurance	2,407		8.4		2,303		8.1
Manufacturing										Manufacturing	2,369		8.2		2,374		8.3
Healthcare and social assistance	Healthcare and social assistance	2,521		8.6		2,686		8.8		Healthcare and social assistance	2,362		8.2		2,349		8.2
Real estate, rental, and leasing		2,447		8.4		2,408		7.9
Manufacturing		2,436		8.4		2,480		8.1
Finance and insurance		2,064		7.1		2,115		6.9
Public Administration										Public Administration	2,203		7.7		1,959		6.9
Wholesale trade										Wholesale trade	1,777		6.2		1,701		6.0
Utilities 2										Utilities 2	1,462		5.1		1,446		5.1
Construction	Construction	1,701		5.8		2,001		6.6		Construction	1,404		4.9		1,456		5.1
Hospitality and food services	Hospitality and food services	1,701		5.8		1,545		5.1		Hospitality and food services	1,262		4.4		1,353		4.8
Public administration		1,640		5.6		1,512		5.0
Wholesale trade		1,619		5.6		1,735		5.7
Utilities 1		1,425		4.9		1,507		4.9
Transportation and warehousing										Transportation and warehousing	1,229		4.3		1,273		4.5
Other Services (except Public Administration)										Other Services (except Public Administration)	1,190		4.1		1,213		4.2
Educational services										Educational services	1,155		4.0		1,163		4.1
Mining, quarrying, and oil and gas extraction										Mining, quarrying, and oil and gas extraction	1,141		4.0		1,185		4.2
Professional, scientific, and technical services	Professional, scientific, and technical services	1,396		4.8		1,598		5.2		Professional, scientific, and technical services	1,059		3.7		1,084		3.8
Transportation and warehousing		1,341		4.6		1,526		5.0
Other services (except public administration)		1,178		4.0		1,207		4.0
Educational services		1,170		4.0		1,181		3.9
Other 2		3,944		13.5		4,235		13.9
Other 3										Other 3	2,551		8.8		2,633		9.3
Total	Total	$	29,161	100.0	%	$	30,472	100.0	%	Total	$	28,725	100.0	%	$	28,440	100.0	%

1 Industry groups are determined by North American Industry Classification System (NAICS) codes.

2 Includes primarily utilities, power, and renewable energy.

23 No other industry group exceeds ~~3.9%~~2.6%.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

Commercial Real Estate Loans

~~Select~~The following schedule presents credit quality information ~~regarding~~for our ~~CRE~~commercial real estate (“CRE”) loan portfolio ~~is presented in the following schedule.~~segmented by real estate category and collateral location.

COMMERCIAL REAL ESTATE PORTFOLIO BY LOAN TYPE AND COLLATERAL LOCATION


(Dollar amounts in millions)	(Dollar amounts in millions)		Collateral Location																															(Dollar amounts in millions)						Collateral Location
Loan type	Loan type	As of date	Arizona			California			Colorado			Nevada			Texas			Utah/ Idaho			Wash-ington			Other 1			Total				% of total CRE			Loan type		As of date				Arizona					California					Colorado					Nevada					Texas					Utah/ Idaho					Wash-ington					Other 1					Total				% of total CRE
Commercial term	Commercial term																																	Commercial term
Balance outstanding	Balance outstanding	6/30/2021	$	1,128		$	3,185		$	567		$	676		$	1,615		$	1,407		$	484		$	470		$	9,532			78.7		%	Balance outstanding		3/31/2022				$	1,109				$	3,069				$	479				$	675				$	1,601				$	1,544				$	492				$	356				$	9,325			77.1	%
% of loan type	% of loan type		11.8		%	33.4		%	6.0		%	7.1		%	16.9		%	14.8		%	5.1		%	4.9		%	100.0		%					% of loan type						11.9		%			32.9		%			5.1		%			7.2		%			17.2		%			16.6		%			5.3		%			3.8		%			100.0		%
Delinquency rates 2:	Delinquency rates 2:																															Delinquency rates 2:
30-89 days	30-89 days	6/30/2021	—		%	—		%	—		%	—		%	—		%	—		%	—		%	0.2		%	—		%					30-89 days		3/31/2022				—		%			—		%			—		%			—		%			—		%			—		%			—		%			—		%			—		%
		12/31/2020	0.7		%	1.1		%	—		%	—		%	0.7		%	—		%	—		%	0.2		%	0.6		%							12/31/2021				—		%			0.2		%			0.2		%			—		%			—		%			0.1		%			—		%			—		%			0.1		%
≥ 90 days	≥ 90 days	6/30/2021	—		%	0.1		%	—		%	—		%	0.2		%	0.2		%	—		%	—		%	0.1		%					≥ 90 days		3/31/2022				—		%			—		%			—		%			—		%			0.2		%			—		%			—		%			0.3		%			—		%
		12/31/2020	0.1		%	0.2		%	—		%	—		%	—		%	0.2		%	—		%	0.2		%	0.1		%							12/31/2021				—		%			0.1		%			—		%			—		%			0.2		%			—		%			—		%			—		%			0.1		%
Accruing loans past due 90 days or more	Accruing loans past due 90 days or more	6/30/2021	$	—		$	—		$	—		$	—		$	2		$	—		$	—		$	—		$	2						Accruing loans past due 90 days or more		3/31/2022				$	—				$	—				$	—				$	—				$	—				$	—				$	—				$	1				$	1
		12/31/2020	—			4			—			—			—			—			—			—			4									12/31/2021				—					—					—					—					—					—					—					—					—
Nonaccrual loans	Nonaccrual loans	6/30/2021	$	—		$	5		$	—		$	—		$	17		$	4		$	—		$	2		$	28						Nonaccrual loans		3/31/2022				$	—				$	4				$	—				$	—				$	16				$	—				$	—				$	—				$	20
		12/31/2020	1			5			—			—			18			6			—			1			31									12/31/2021				—					3					—					—					17					—					—					—					20
Commercial construction and land development																														Commercial construction and land development
Balance outstanding																														Balance outstanding					3/31/2022		$	224				$	456				$	108				$	119				$	463				$	518				$	174				$	42				$	2,104				17.4	%
% of loan type																														% of loan type							10.7		%			21.7		%			5.2		%			5.7		%			21.9		%			24.6		%			8.3		%			1.9		%			100.0		%
Delinquency rates 2:																														Delinquency rates 2:
30-89 days																														30-89 days					3/31/2022		—		%			0.2		%			—		%			—		%			—		%			—		%			—		%			—		%			—		%
																																			12/31/2021		—		%			—		%			—		%			—		%			—		%			—		%			13.2		%			—		%			0.9		%

Residential construction and land development 3	Residential construction and land development 3																																	Residential construction and land development 3
Balance outstanding	Balance outstanding	6/30/2021	$	63		$	110		$	43		$	—		$	177		$	138		$	9		$	25		$	565			4.7		%	Balance outstanding		3/31/2022				$	55				$	146				$	34				$	3				$	199				$	181				$	9				$	38				$	665			5.5	%
% of loan type	% of loan type		11.2		%	19.4		%	7.7		%	—		%	31.3		%	24.4		%	1.7		%	4.3		%	100.0		%					% of loan type						8.3		%			21.9		%			5.2		%			0.4		%			30.0		%			27.2		%			1.3		%			5.7		%			100.0		%

Commercial construction and land development
Balance outstanding		6/30/2021	$	167		$	390		$	81		$	95		$	518		$	588		$	158		$	14		$	2,011			16.6		%
% of loan type			8.3		%	19.4		%	4.1		%	4.7		%	25.8		%	29.2		%	7.8		%	0.7		%	100.0		%
Delinquency rates 2:

≥ 90 days		6/30/2021	—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%
		12/31/2020	—		%	—		%	—		%	—		%	—		%	—		%	3.9		%	—		%	0.2		%
Accruing loans past due 90 days or more		6/30/2021	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
		12/31/2020	—			—			—			—			—			—			4			—			4

Total construction and land development	Total construction and land development	6/30/2021	$	230		$	500		$	124		$	95		$	695		$	726		$	167		$	39		$	2,576						Total construction and land development		3/31/2022				$	279				$	602				$	142				$	122				$	662				$	699				$	183				$	80				$	2,769
Total commercial real estate	Total commercial real estate	6/30/2021	$	1,358		$	3,685		$	691		$	771		$	2,310		$	2,133		$	651		$	509		$	12,108			100.0		%	Total commercial real estate		3/31/2022				$	1,388				$	3,671				$	621				$	797				$	2,263				$	2,243				$	675				$	436				$	12,094			100.0	%

1 No other geography exceeds ~~$53~~$62 million for all three loan types.

2 Delinquency rates include nonaccrual loans.

3At ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, there was no meaningful delinquency or nonaccrual activity for residential construction and land development loans.

At ~~June 30, 2021,~~March 31, 2022, our CRE construction and land development and term loan portfolios ~~represent~~represented approximately 24% of the total loan portfolio. The majority of our CRE loans are secured by real estate, which is primarily located within our geographic footprint. Approximately ~~22%~~21% of the CRE loan portfolio matures in the next 12 months. Construction and land development loans generally mature in 18 to 36 months and contain full or partial recourse guarantee structures with one- to five-year extension options or roll-to-perm options that often result in term debt. Term CRE loans generally mature within a three- to seven-year period and consist of full, partial, and non-recourse guarantee structures. Typical term CRE loan structures include annually tested operating covenants that require loan rebalancing based on minimum debt service coverage, debt yield, or loan-to-value tests.

Approximately ~~$171~~$176 million, or 7%6%, of the commercial construction and land development portfolio at ~~June 30, 2021~~March 31, 2022 consists of ~~land~~ acquisition and development loans. Most of these land acquisition and development loans are secured by specific retail, apartment, office, or other projects. For a more comprehensive discussion of CRE loans, see the “Commercial Real Estate Loans” section in our ~~2020~~2021 Form 10-K.

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Consumer Loans

We generally originate ~~first and second-lien~~first-lien residential home mortgages ~~generally~~ considered to be of prime quality. We generally hold variable-rate loans in our portfolio and sell “conforming” fixed-rate loans to third parties, including Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, for which we make representations and warranties that the loans meet certain underwriting and collateral documentation standards.

We also originate home equity credit lines (“HECL”). At ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, our HECL portfolio totaled ~~$2.7 billion.~~$3.1 billion and $3.0 billion, respectively. The following schedule presents the composition of our HECL portfolio by lien status.

HECL PORTFOLIO BY LIEN STATUS


(In millions)	(In millions)	June 30, 2021		December 31, 2020		(In millions)	March 31, 2022		December 31, 2021

Secured by first liens	Secured by first liens	$	1,384	$	1,354	Secured by first liens	$	1,497	$	1,503
Secured by second (or junior) liens	Secured by second (or junior) liens	1,343		1,391		Secured by second (or junior) liens	1,592		1,513
Total	Total	$	2,727	$	2,745	Total	$	3,089	$	3,016

At ~~June 30, 2021,~~March 31, 2022, loans representing less than 1% of the outstanding balance in the HECL portfolio were estimated to have combined loan-to-value ~~ratios~~ (“CLTV”) ratios above 100%. An estimated CLTV ratio is the ratio of our loan plus any prior lien amounts divided by the estimated current collateral value. At origination, underwriting standards for the HECL portfolio generally include a maximum 80% CLTV with high credit scores.

Approximately 91% of our HECL portfolio is still in the draw period, and approximately ~~15%~~18% of those loans are scheduled to begin amortizing within the next five years. We believe the risk of loss and borrower default in the event of a loan becoming fully amortizing and the ~~risk~~effect of ~~higher~~significant interest ~~rates~~rate changes is ~~minimal in the current economic environment.~~minimal. The ~~annualized~~ ratio of HECL net charge-offs for the trailing twelve months to average balances ~~for the second quarter of~~at March 31, 2022 and December 31, 2021 was 0.00% and ~~2020 for the HECL portfolio was (0.04)~~(0.01)% ~~and 0.00%~~, respectively. See Note 6 of the Notes to Consolidated Financial Statements for additional information on the credit quality of ~~this~~the HECL portfolio.

Nonperforming Assets

Nonperforming assets as a percentage of loans and leases and other real estate owned (“OREO”) decreased to ~~0.60%~~0.49% at ~~June 30, 2021,~~March 31, 2022, compared with ~~0.69%~~0.53% at December 31, ~~2020.~~2021.

Total nonaccrual loans at ~~June 30, 2021~~March 31, 2022 decreased to ~~$307~~$252 million from ~~$367~~$271 million at December 31, ~~2020, primarily in the commercial and industrial~~2021, reflecting credit quality improvements across most of our loan ~~portfolio.~~portfolios.

The balance of nonaccrual loans can decrease due to paydowns, charge-offs, and the return of loans to accrual status under certain conditions. If a nonaccrual loan is refinanced or restructured, the new note is immediately placed on nonaccrual. If a restructured loan performs under the new terms for at least a period of six months, the loan can be considered for return to accrual status. See “Restructured Loans” ~~following for more information. See also~~and Note 6 of the Notes to Consolidated Financial Statements for more information on nonaccrual loans.

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The following schedule presents our nonperforming assets:

NONPERFORMING ASSETS


(Dollar amounts in millions)	(Dollar amounts in millions)	June 30, 2021			December 31, 2020			(Dollar amounts in millions)	March 31, 2022			December 31, 2021

Nonaccrual loans 1	Nonaccrual loans 1	$	307		$	367		Nonaccrual loans 1	$	252		$	271
Other real estate owned 2	Other real estate owned 2	1			4			Other real estate owned 2	—			1
Total nonperforming assets	Total nonperforming assets	$	308		$	371		Total nonperforming assets	$	252		$	272
Ratio of nonperforming assets to net loans and leases1 and other real estate owned		0.60		%	0.69		%
Ratio of nonperforming assets to net loans and leases1 and other real estate owned 2								Ratio of nonperforming assets to net loans and leases1 and other real estate owned 2	0.49		%	0.53		%
Accruing loans past due 90 days or more	Accruing loans past due 90 days or more	$	6		$	12		Accruing loans past due 90 days or more	$	3		$	8
Ratio of accruing loans past due 90 days or more to loans and leases 1	Ratio of accruing loans past due 90 days or more to loans and leases 1	0.01		%	0.02		%	Ratio of accruing loans past due 90 days or more to loans and leases 1	0.01		%	0.02		%
Nonaccrual loans and accruing loans past due 90 days or more	Nonaccrual loans and accruing loans past due 90 days or more	$	313		$	379		Nonaccrual loans and accruing loans past due 90 days or more	$	255		$	279
Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans and leases 1		0.61		%	0.71		%
Accruing loans past due 30-89 days		$	29		$	112
Ratio of nonperforming assets1 and accruing loans past due 90 days or more to loans and leases1 and other real estate owned 2								Ratio of nonperforming assets1 and accruing loans past due 90 days or more to loans and leases1 and other real estate owned 2	0.50		%	0.55		%
Accruing loans past due 30-89 days 3								Accruing loans past due 30-89 days 3	$	93		$	70
Nonaccrual loans1 current as to principal and interest payments	Nonaccrual loans1 current as to principal and interest payments	64.8		%	58.3		%	Nonaccrual loans1 current as to principal and interest payments	70.2		%	67.2		%

1 Includes loans held for sale.

2 Does not include banking premises held for sale.

3 Includes $26 million and $35 million of PPP loans at March 31, 2022 and December 31, 2021, respectively, which we expect will be paid in full by either the borrower or the SBA.

Troubled Debt Restructured Loans

Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral position. Loan modifications and restructurings may also occur when the borrower experiences financial difficulty and needs temporary or permanent relief from the original contractual terms of the loan. Loans that have been modified to accommodate a borrower who is experiencing financial difficulties, and for which we have granted a concession that we would not otherwise consider, are ~~deemed~~classified as troubled debt restructurings (“TDRs”).

~~Consistent~~ TDRs totaled $316 million at March 31, 2022, compared with ~~recent~~$326 million at December 31, 2021. Modifications that qualified for applicable accounting and regulatory ~~guidance, loan modifications provided to~~exemption for borrowers experiencing financial difficulties exclusively related to the COVID-19 pandemic ~~for which we provide certain short-term modifications or payment deferrals, are~~were not classified and reported as TDRs. ~~Other loan modifications above and beyond these short-term modifications or payment deferrals were assessed for TDR classification.~~

TDRs totaled $458 million at June 30, 2021, compared with $311 million at December 31, 2020. The increase was primarily due to borrowers experiencing financial difficulty as a result of the COVID-19 pandemic. Commercial loans may be modified to provide the borrower more time to complete the project, to achieve a higher lease-up percentage, to sell the property, or for other reasons. Consumer loan TDRs represent loan modifications in which a concession has been granted to the borrower who is unable to refinance the loan with another lender, or who is experiencing economic hardship. Such consumer loan TDRs may include first-lien residential mortgage loans and home equity loans.

If the restructured loan performs for at least six months according to the modified terms, and an analysis of the customer’s financial condition indicates that we are reasonably assured of repayment of the modified principal and interest, the loan may be returned to accrual status. The borrower’s payment performance prior to and following the restructuring is taken into account to determine whether a loan should be returned to accrual status.

ACCRUING AND NONACCRUING TROUBLED DEBT RESTRUCTURED LOANS

(In millions) June 30,
2021 December 31,
2020
Restructured loans – accruing $ 330 $ 198
Restructured loans – nonaccruing 128 113
Total $ 458 $ 311

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(In millions)	March 31, 2022		December 31, 2021

Restructured loans – accruing	$	216	$	221
Restructured loans – nonaccruing	100		105
Total	$	316	$	326

In the periods following the calendar year in which a loan was restructured, a loan may no longer be reported as a TDR if it is on accrual, is in compliance with its modified terms, and yields a market rate (as determined and documented at the time of the modification or restructure). See Note 6 of the Notes to Consolidated Financial Statements for additional information regarding TDRs.

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TROUBLED DEBT RESTRUCTURED LOANS ROLLFORWARD
Three Months Ended
June 30, Six Months Ended
June 30,
(In millions) 2021 2020 2021 2020
Balance at beginning of period $ 414 $ 167 $ 311 $ 153
New identified TDRs and principal increases 63 145 183 172
Payments and payoffs (17) (12) (31) (22)
Charge-offs (1) (15) (3) (15)
No longer reported as TDRs — — — (2)
Sales and other (1) — (2) (1)
Balance at end of period $ 458 $ 285 $ 458 $ 285


	Three Months Ended March 31,
(In millions)	2022		2021

Balance at beginning of period	$	326	$	311
New identified TDRs and principal increases	12		120
Payments and payoffs	(20)		(14)
Charge-offs	(1)		(2)
No longer reported as TDRs	—		—
Sales and other	(1)		(1)
Balance at end of period	$	316	$	414

Allowance for Credit Losses

The ACL includes the ALLL and the RULC. The ACL represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date. ~~We determine our ACL as the best estimate within a range of estimated current expected losses.~~ To determine the adequacy of the allowance, ~~we segment~~ our loan and lease portfolio is segmented based on loan type.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

The following schedule shows the changes in the ACL and a summary of credit loss experience:

SUMMARY OF CREDIT LOSS EXPERIENCE


(Dollar amounts in millions)	(Dollar amounts in millions)	Six Months Ended June 30, 2021			Twelve Months Ended December 31, 2020			Six Months Ended June 30, 2020			(Dollar amounts in millions)	Three Months Ended March 31, 2022			Twelve Months Ended December 31, 2021			Three Months Ended March 31, 2021

Loans and leases outstanding (net of unearned income)		$	51,398		$	53,476		$	55,129
Average loans and leases outstanding (net of unearned income)		$	53,215		$	53,016		$	51,532
Allowance for loan losses:
Loans and leases outstanding											Loans and leases outstanding	$	51,242		$	50,851		$	53,472
Average loans and leases outstanding:											Average loans and leases outstanding:
Commercial - excluding PPP loans											Commercial - excluding PPP loans	27,037			25,014			24,732
Commercial - PPP loans											Commercial - PPP loans	1,459			4,566			6,135
Commercial real estate											Commercial real estate	12,171			12,136			12,133
Consumer											Consumer	10,266			10,267			10,665
Total average loans and leases outstanding											Total average loans and leases outstanding	$	50,933		$	51,983		$	53,665
Allowance for loan and lease losses:											Allowance for loan and lease losses:
Balance at beginning of period	Balance at beginning of period	$	777		$	497		$	497		Balance at beginning of period	$	513		$	777		$	777
Provision for loan losses	Provision for loan losses	(236)			385			401			Provision for loan losses	(29)			(258)			(123)
Charge-offs:	Charge-offs:										Charge-offs:
Commercial	Commercial	23			113			41			Commercial	13			35			18
Commercial real estate	Commercial real estate	—			1			—			Commercial real estate	—			—			—
Consumer	Consumer	6			14			8			Consumer	4			13			3
Total	Total	29			128			49			Total	17			48			21
Recoveries:	Recoveries:										Recoveries:
Commercial	Commercial	17			14			7			Commercial	8			29			10
Commercial real estate	Commercial real estate	—			—			—			Commercial real estate	—			3			—
Consumer	Consumer	6			9			4			Consumer	3			10			3
Total	Total	23			23			11			Total	11			42			13
Net loan and lease charge-offs	Net loan and lease charge-offs	6			105			38			Net loan and lease charge-offs	6			6			8
Balance at end of period	Balance at end of period	$	535		$	777		$	860		Balance at end of period	$	478		$	513		$	646

Reserve for unfunded lending commitments:	Reserve for unfunded lending commitments:										Reserve for unfunded lending commitments:
Balance at beginning of period	Balance at beginning of period	$	58		$	29		$	29		Balance at beginning of period	$	40		$	58		$	58
Provision for unfunded lending commitments	Provision for unfunded lending commitments	(19)			29			25			Provision for unfunded lending commitments	(4)			(18)			(9)
Balance at end of period	Balance at end of period	$	39		$	58		$	54		Balance at end of period	$	36		$	40		$	49

Total allowance for credit losses:	Total allowance for credit losses:										Total allowance for credit losses:
Allowance for loan losses		$	535		$	777		$	860
Allowance for loan and lease losses											Allowance for loan and lease losses	$	478		$	513		$	646
Reserve for unfunded lending commitments	Reserve for unfunded lending commitments	39			58			54			Reserve for unfunded lending commitments	36			40			49
Total allowance for credit losses	Total allowance for credit losses	$	574		$	835		$	914		Total allowance for credit losses	$	514		$	553		$	695

Annualized ratio of net charge-offs to average loans and leases 1		0.02		%	0.20		%	0.15		%
Ratio of allowance for credit losses to net loans and leases, at period end 2		1.12		%	1.56		%	1.66		%
Ratio of allowance for credit losses to net loans and leases, at period end 1											Ratio of allowance for credit losses to net loans and leases, at period end 1	1.00		%	1.09		%	1.30		%
Ratio of allowance for credit losses to nonaccrual loans, at period end	Ratio of allowance for credit losses to nonaccrual loans, at period end	188		%	228		%	270		%	Ratio of allowance for credit losses to nonaccrual loans, at period end	204		%	204		%	215		%
Ratio of allowance for credit losses to nonaccrual loans and accruing loans past due 90 days or more, at period end	Ratio of allowance for credit losses to nonaccrual loans and accruing loans past due 90 days or more, at period end	183		%	220		%	257		%	Ratio of allowance for credit losses to nonaccrual loans and accruing loans past due 90 days or more, at period end	202		%	198		%	209		%
Ratio of total net charge-offs to average loans and leases 2, 3											Ratio of total net charge-offs to average loans and leases 2, 3	0.05		%	0.01		%	0.06		%
Ratio of commercial net charge-offs to average commercial loans 3											Ratio of commercial net charge-offs to average commercial loans 3	0.07		%	0.02		%	0.10		%
Ratio of commercial real estate net charge-offs to average commercial real estate loans 3											Ratio of commercial real estate net charge-offs to average commercial real estate loans 3	—		%	(0.02)		%	—		%
Ratio of consumer net charge-offs to average consumer loans 3											Ratio of consumer net charge-offs to average consumer loans 3	0.04		%	0.03		%	—		%

1The ratio of allowance for credit losses to net loans and leases (excluding PPP loans) was 1.02% at March 31, 2022, 1.13% at December 31, 2021, and 1.48% at March 31, 2021.

2 The annualized ratio of net charge-offs to average loans and leases (excluding PPP loans) was ~~0.03% and 0.22%~~0.05% at ~~June 30,~~March 31, 2022, 0.01% at December 31, 2021, and ~~December~~0.07% at March 31, ~~2020, respectively.~~2021.

3 Ratios are annualized for the periods presented except for the period representing the full twelve months.

~~The ratio~~Table of ~~allowance for credit losses to net loans and leases (excluding PPP loans) was 1.24% and 1.74% at June 30, 2021 and December 31, 2020, respectively.~~Contents

ZIONS BANCORPORATION, NATIONAL ASSOCIATION

The total ACL decreased to $514 million during the first ~~six~~three months of ~~2021 by $261 million,~~2022, primarily due to ~~an improvement~~improvements in economic forecasts and overall credit quality, partially offset by economic uncertainty caused by inflation, supply chain disruptions, and the ~~economic outlook, compared with the more stressed economic outlook~~conflict in ~~the prior year due to the COVID-19 pandemic.~~Eastern Europe.

The RULC represents a reserve for potential losses associated with off-balance sheet commitments and standby letters of ~~credit.~~credit, and decreased $4 million during the first quarter of 2022. The reserve is separately ~~shown~~recorded on the consolidated balance sheet in ~~the balance sheet~~“Other liabilities,” and any related increases or decreases in the reserve are ~~shown separately~~recorded on the consolidated income statement in ~~the income statement. At June 30, 2021, the reserve was $39 million, compared with $58 million and $54 million at December 31, 2020 and June 30, 2020, respectively.~~

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“Provision for unfunded lending commitments.”

See Note 6 of the Notes to Consolidated Financial Statements for additional information related to the ACL and credit ~~quality of~~trends experienced in each ~~loan~~ portfolio segment.

Interest Rate and Market Risk Management

Interest rate risk is the potential for reduced net interest income and other rate-sensitive income resulting from adverse changes in the level of interest rates. Market risk is the potential for loss arising from adverse changes in the fair value of fixed-income securities, equity securities, other earning assets, and derivative financial instruments as a result of changes in interest rates or other factors. As a financial institution that engages in transactions involving various financial products, we are exposed to both interest rate risk and market risk. For a more comprehensive discussion of our interest rate and market risk management, see “Interest Rate and Market Risk Management” in our ~~2020~~2021 Form 10-K.

Interest Rate Risk

Average total deposits increased ~~18%~~$10.2 billion, or 14%, from ~~June 30, 2020,~~March 31, 2021, and a significant portion of the deposits were invested in ~~money market investments,~~fixed-rate AFS securities, resulting in ~~increased~~decreased asset sensitivity to rising rates. The ~~higher~~lower asset sensitivity to rising rates is dependent upon the assumptions we used for deposit runoff and repricing behavior, which is more uncertain given the higher level of new deposits. We are less asset-sensitive to declining rates than rising rates due to the limited amount that the spread between the cost of deposits and the yield on money market investments could compress. ~~Due to our concentration in noninterest-bearing deposits and the low interest rates paid on our interest-bearing deposits, there is reduced opportunity to lower the cost of deposits.~~

The following schedule presents derivatives utilized in our asset-liability management ~~(“ALM”)~~ activities that are designated in qualifying hedging relationships ~~as defined by GAAP~~ at ~~June 30, 2021 and December~~March 31, ~~2020. The schedule includes~~2022. Included are the average outstanding derivative notional ~~amount, fair value,~~amounts for each period presented and the weighted average fixed-rate paid or received for each category of ~~interest rate derivatives. The following schedules present~~ cash flow and fair value ~~hedges by their contractual maturities.~~hedge. See Note 7 of the Notes to Consolidated Financial Statements for additional information regarding the impact of these hedging relationships on interest income and expense.

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~~ASSET LIABILITY MANAGEMENT DERIVATIVE POSITIONS~~DERIVATIVES DESIGNATED IN QUALIFYING HEDGING RELATIONSHIPS
June 30, 2021
Contractual Maturity
(Dollar amounts in millions) Total 2021 2022 2023 2024 2025 Thereafter Matured in 2021
Cash flow hedges
Cash flow asset hedges
Net fair value 1
$ 67 $ — $ 33 $ 11 $ 21 $ — $ 2 $ —
Total notional amount 3,950 50 2,400 300 400 — 800 —
Weighted average fixed-rate 1.91 % 1.81 % 2.06 % 2.35 % 2.35 % — % 1.08 % — %
Fair value hedges 2025 2030 2035 2040 2050 Thereafter
Fair value debt hedges 2
Net fair value1
$ 14 $ — $ 14 $ — $ — $ — $ — $ —
Total notional amount 500 — 500 — — — — —
Weighted average fixed-rate 1.70 % — % 1.70 % — % — % — % — % — %
Fair value asset hedges 2, 3
Net fair value 1
$ 44 $ — $ — $ 18 $ — $ 26 $ — $ —
Total notional amount 384 — — 229 — 155 — —
Weighted average fixed-rate 1.05 % — % — % 1.05 % — % 1.04 % — % — %
Total ALM fair value hedges
Net fair value 1
$ 58 $ — $ 14 $ 18 $ — $ 26 $ — $ —
Total notional amount 884 — 500 229 — 155 — —

December 31, 2020
Contractual Maturity
(Dollar amounts in millions) Total 2021 2022 2023 2024 2025 Thereafter Matured in 2020
Cash flow hedges
Cash flow asset hedges
Net fair value 1
$ 98 $ — $ 56 $ 14 $ 28 $ — $ — $ —
Total notional amount 3,150 50 2,400 300 400 — — 438
Weighted average fixed-rate 2.12 % 1.81 % 2.06 % 2.35 % 2.35 % — % — % 1.41 %
Fair value hedges 2025 2030 2035 2040 2050 Thereafter
Fair value debt hedges 2
Net fair value 1
$ 37 $ — $ 37 $ — $ — $ — $ — $ —
Total notional amount 500 — 500 — — — — —
Weighted average fixed-rate 1.70 % — % 1.70 % — % — % — % — % — %
Fair value asset hedges 2, 3
Net fair value 1
$ 21 $ — $ — $ 7 $ — $ 14 $ — $ —
Total notional amount 383 — — 228 — 155 — —
Weighted average fixed-rate 1.05 % — % — % 1.05 % — % 1.04 % — % — %
Total ALM fair value hedges
Net fair value 1
$ 58 $ — $ 37 $ 7 $ — $ 14 $ — $ —
Total notional amount 883 — 500 228 — 155 — —


	2022									2023												2024			2Q24 - 1Q25			2Q25 - 1Q26
(Dollar amounts in millions)	Second Quarter			Third Quarter			Fourth Quarter			First Quarter			Second Quarter			Third Quarter			Fourth Quarter			First Quarter
Cash flow hedges
Cash flow asset hedges 1
Average outstanding notional	$	3,378		$	4,183		$	4,916		$	4,850		$	4,683		$	4,383		$	4,383		$	4,250		$	3,604		$	2,150
Weighted-average fixed-rate received	1.33		%	1.30		%	1.31		%	1.31		%	1.29		%	1.18		%	1.18		%	1.14		%	1.08		%	1.14		%
	2022 4			2023			2024			2025			2026			2027			2028			2029			2030			2031
Fair value hedges
Fair value debt hedges 2
Average outstanding notional	$	500		$	500		$	500		$	500		$	500		$	500		$	500		$	500		$	—		$	—
Weighted-average fixed-rate received	1.70		%	1.70		%	1.70		%	1.70		%	1.70		%	1.70		%	1.70		%	1.70		%	—		%	—		%
Fair value asset hedges 3
Average outstanding notional	$	590		$	589		$	863		$	978		$	985		$	983		$	981		$	978		$	976		$	972
Weighted-average fixed-rate paid	1.32		%	1.32		%	1.50		%	1.56		%	1.57		%	1.57		%	1.57		%	1.57		%	1.57		%	1.57		%

1 ~~Fair values shown~~Cash flow hedges consist of receive-fixed swaps hedging pools of floating-rate loans. Increases in the ~~schedule above~~average outstanding notional are ~~presented net and exclude the effects of collateral settlements for centrally cleared derivatives.~~due to forward-starting interest rate swaps.

2 Fair value debt hedges consist of ~~both our~~receive-fixed swaps hedging fixed-rate debt. The $500 million fair value debt ~~and AFS securities are longer dated than traditional cash flow hedges. Consequently, the maturity schedule above aggregates trades maturing in each column to include all trades maturing after~~hedge matures at the end of ~~year of the previous column and prior to or during the year of the column the amounts are contained within.~~July 2029.

3 Fair value ~~asset~~assets hedges consist of pay-fixed swaps hedging AFS fixed-rate securities.

Increases in average outstanding notional are due to forward-starting interest rate swaps.

~~Table~~4 Represents the remaining three quarters of ~~Contents~~2022.

~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

Under most rising interest rate environments, we expect some customers to move balances from demand deposits to interest-bearing accounts such as money market, savings, or certificates of deposit. ~~The~~Our models are particularly sensitive to the assumption about the rate of such migration.

In addition, we assume ~~certain~~a correlation, ~~rates,~~ often referred to as a “deposit beta,” ofwith respect to interest-bearing deposits, wherein the rates paid to customers change at a different pace when compared with changes in average benchmark interest rates. Generally, certificates of deposit are assumed to have a high correlation, ~~rate,~~ while interest-on-checking accounts are assumed to have a lower ~~correlation rate.~~correlation. Actual results may differ materially due to factors including the shape of the yield curve, competitive pricing, money supply, our credit worthiness, and so forth; however, we use our historical experience as well as industry data to inform our assumptions.

~~We used~~The migration and correlation assumptions previously discussed result in deposit durations presented in the following ~~deposit behavioral assumptions in our interest risk assessment for the period presented.~~schedule:

DEPOSIT ASSUMPTIONS


		June 30, 2021					March 31, 2022
Product	Product	Effective duration (unchanged)		Effective duration (+200 bps)		Product	Effective duration (unchanged)		Effective duration (+200 bps)

Demand deposits	Demand deposits	3.6	%	2.9	%	Demand deposits	2.8	%	2.9	%
Money market	Money market	2.2	%	1.8	%	Money market	1.8	%	1.8	%
Savings and interest-on-checking	Savings and interest-on-checking	2.6	%	2.4	%	Savings and interest-on-checking	2.6	%	2.4	%

~~For~~With interest rates forecast to rise more, the ~~periods presented and incorporating~~effective duration of deposits has shortened due to higher expected runoff and/or migration to more rate-sensitive deposit products.

Incorporating the assumptions previously ~~described,~~discussed, the following schedule ~~shows EaR,~~presents earnings at risk (“EaR”), or percentage change in net interest income, and our estimated percentage change in economic value of equity

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION

(“EVE”); both EaR and EVE are based on a static balance sheet size ~~in the first year after the~~under parallel interest rate ~~change if interest rates were to sustain immediate parallel~~ changes ranging from -100 bps to +300 bps.

INCOME SIMULATION – CHANGE IN NET INTEREST INCOME AND CHANGE IN ECONOMIC VALUE OF EQUITY


		June 30, 2021										December 31, 2020											March 31, 2022										December 31, 2021
		Parallel shift in rates (in bps)1										Parallel shift in rates (in bps)1											Parallel shift in rates (in bps)1										Parallel shift in rates (in bps)1
Repricing scenario	Repricing scenario	-100		0		+100		+200		+300		-100		0		+100		+200		+300		Repricing scenario	-100		0		+100		+200		+300		-100		0		+100		+200		+300

Earnings at Risk (EaR)	Earnings at Risk (EaR)	(4.7)	%	—	%	11.7	%	23.8	%	35.4	%	(2.9)	%	—	%	9.2	%	18.0	%	26.4	%	Earnings at Risk (EaR)	(4.8)	%	—	%	7.9	%	15.9	%	23.7	%	(5.2)	%	—	%	11.2	%	22.7	%	33.6	%
Economic Value of Equity (EVE)																						Economic Value of Equity (EVE)	8.7	%	—	%	(3.4)	%	(5.5)	%	(7.0)	%	20.9	%	—	%	0.8	%	(0.5)	%	(1.2)	%

1 Assumes rates cannot go below zero in the negative rate shift.

For ~~non-maturity~~ interest-bearing deposits with indeterminate maturity, the weighted average modeled beta is 26%. If the weighted average deposit beta were to increase ~~11%~~to 37%, the EaR in the +100 bps rate shock would change from ~~11.7%~~7.9% to ~~9.7%~~6.0%.

The asset sensitivity, as measured by EaR, ~~increased~~decreased during the first quarter of 2022, primarily due to ~~growth~~(1) an increase in ~~money market investments,~~fixed-rate investment securities and receive-fixed interest rate swaps, (2) model tuning, and (3) a higher level of “base-case” net interest income, which reduced the percentage change for the same modeled dollar change in net interest income.

Our base-case net interest income simulation for the first quarter of 2023 indicates a 15% increase in net interest income, compared with the results for the first quarter of 2022 (ex-PPP). This base-case simulation assumes a static balance sheet and an unchanged interest rate curve at March 31, 2022. The modeled increase is notably larger than it was ~~funded~~at December 31, 2021, primarily due to active balance sheet management during the first quarter of 2022, as well as a steeper yield curve at March 31, 2022, when compared with December 31, 2021.

We disclose asset sensitivity to parallel rate shocks, but interest rates rarely change in a parallel fashion. During the first quarter of 2022, medium- to long-term rates moved significantly, whereas short-term rate movements were muted. Net interest income in the base-case simulation benefited from longer-term rate increases, and if short-term rates increase as implied by ~~deposit growth.~~forward rates, we anticipate corresponding increases in net interest income from the base case.

~~The~~As described previously, the EaR analysis focuses on parallel rate ~~ramps~~shocks across the term structure of benchmark interest rates. ~~The yield curve typically does not move in~~In a ~~parallel manner. If we consider a steepener~~non-parallel rate ~~ramp~~scenario where the ~~short-term~~overnight rate ~~declines to zero~~increases 200 bps, but the ten-year rate ~~moves to +200~~increases only 30 bps, the increase in EaR is ~~64% less over 24 months compared~~modeled to be approximately two-thirds of the change associated with the parallel +200 bps rate ~~ramp.~~change.

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~~CHANGES IN ECONOMIC VALUE OF EQUITY~~

~~For the periods presented, the following schedule shows our estimated percentage change in EVE under parallel interest rate changes ranging from -100 bps to +300 bps.~~

June 30, 2021 December 31, 2020
Parallel shift in rates (in bps)1
Parallel shift in rates (in bps)1
Repricing scenario -100 0 +100 +200 +300 -100 0 +100 +200 +300
Economic Value of Equity
(EVE)
16.5 % — % 3.4 % 5.0 % 6.6 % 13.0 % — % 12.0 % 14.4 % 16.1 %

1 ~~Assumes rates cannot go below zero in the negative rate shift.~~

For non-maturity interest-bearing deposits, the weighted average modeled beta is 26%. If the weighted average deposit beta were to increase 11%, it would change the EVE in the +100 bps rate shock from 3.4% to 2.1%. In the -100 bps rate shock, ~~the~~our models indicate that EVE would increase because we cap the value of our indeterminate deposits at their par value, or equivalently, we assume no premium would be required to dispose of these liabilities ~~given that~~because depositors could be repaid at par. Since our assets increase in value as rates fall, and the majority of our liabilities are ~~comprised of indeterminate-maturity~~indeterminate deposits, EVE ~~increases~~would increase disproportionately.

The changes in EVE measures from December 31, 2020 are primarily driven by the behavior of the deposit models. For non-maturity deposits, the deposit premium (or discount below par value) is floored at zero in a low-rate environment.

Our focus on business banking also plays a significant role in determining the nature of our asset-liability management posture. At ~~June 30, 2021, $21~~March 31, 2022, $23 billion of ~~variable-rate~~our commercial lending and CRE loan balances were scheduled to reprice in the next six ~~months, and~~months. Of these variable-rate loans, approximately 99% are tied to either the prime rate, ~~LIBOR,~~London Interbank Offered Rate (“LIBOR”), Secured Overnight Financing Rate (“SOFR”), or ~~AMERIBOR.~~American Interbank Offered Rate (“AMERIBOR”). For these variable-rate loans, we have executed ~~$3.2~~$3.3 billion of cash flow hedges by receiving fixed rates on interest rate swaps. Additionally, asset sensitivity is reduced due to $5 billion of variable-rate commercial and CRE loans being priced at floored rates at ~~June 30, 2021,~~March 31, 2022, which were above the “index plus spread” rate by an average of 6542 bps. At ~~June 30, 2021,~~March 31, 2022, we also had $3 billion of variable-rate consumer loans scheduled to reprice in the next six months, and approximately $1 billion were priced at floored

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rates, which were above the “index plus spread” rate by an average of 3229 bps.

See Notes 3 and 7 of the Notes to Consolidated Financial Statements for additional information regarding derivative instruments.

LIBOR Exposure

~~In July 2017, the Financial Conduct Authority (“FCA”), the authority regulating~~ LIBOR along with various other regulatory bodies, announced that LIBOR would likely be discontinued at the end of 2021. In November 2020, the FCA announced that many tenors of LIBOR would continue to be published through June 2023. Bankis being phased out globally, and U.S. banking regulators ~~including the OCC, have~~ instructed banks to ~~discontinue~~cease entering into new ~~originations referencing~~lending arrangements using LIBOR ~~as soon as possible, but~~ no later than December ~~2021. We plan~~31, 2021, and migrate to ~~eliminate all originations referencing LIBOR by the end of 2021.~~alternative reference rates no later than June 2023. To facilitate the transition process, we ~~have~~ instituted an enterprise-wide program to identify, assess, and monitor risks associated with the expected discontinuance or unavailability of LIBOR, which includes active engagement with industry working groups and regulators. This program also includes active involvement of senior management with regular engagement from the Enterprise Risk Management Committee, and seeks to minimize client and internal business operational impacts, while providing reporting transparency, consistency, and a central governance model that aligns with ~~FASB, IRS,~~accounting and ~~other~~ regulatory guidance.

We ~~focus on operational readiness, and~~ have ~~instituted~~implemented processes, procedures, and systems to ~~validate that~~ensure contract risk is ~~clearly identified and understood.~~sufficiently mitigated. New originations, and any modifications or renewals of LIBOR-based contracts, contain fallback language to ~~assist in an orderly~~facilitate transition to an alternative reference rate. For our contracts that ~~reference~~referenced LIBOR and ~~have~~had a duration beyond December 31, 2021, all fallback provisions and variations ~~are currently being~~were identified and ~~sorted into classifications~~classified based upon those provisions. ~~Upon classification,~~By the ~~contracts will be~~

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remediated and monitored through defined workflow paths. We strive to clearly understand fallback provisions by loan and to have the entire portfolio in a state that simplifies ultimate conversion to a replacement index.2021, we had discontinued substantially all new originations referencing LIBOR.

We have a significant number of assets and liabilities that reference LIBOR. At ~~June 30, 2021,~~March 31, 2022, we had approximately ~~$37~~$30 billion ofin loans (mainly commercial loans), unfunded lending commitments, and securities referencing LIBOR. The amount of borrowed funds referencing LIBOR at ~~June 30, 2021~~March 31, 2022 was less than $1 billion. These amounts exclude derivative assets and liabilities on ~~our~~the consolidated balance sheet. At ~~June 30, 2021,~~March 31, 2022, the notional amount of our LIBOR-referenced interest rate derivative contracts was more than ~~$18~~$13 billion, of which more than ~~$11~~$12 billion related to contracts with central counterparty clearinghouses.

In April 2021, we announced our intent to adopt AMERIBOR as our preferred replacement index for LIBOR. AMERIBOR is an index created by the American Financial Exchange. It represents the volume-weighted actual borrowing costsThe adoption of thousands of banks across the United States and is compliant with International Organization of Securities Commissions (“IOSCO”) standards. We are beginning to adopt AMERIBOR in many of our new lending contracts. Amending certain outstanding contracts indexed to LIBOR may require consent from the counterparties, which could be difficult and costly to obtain. Each of the LIBOR-referenced amounts discussed above will vary in future periods as current contracts expire with potential replacement contracts using AMERIBOR or an alternative reference ~~rate. While AMERIBOR will be our preferred index for lending agreements, we~~rates continues to evolve in the marketplace. We are positioned to ~~accommodate several~~support our customers’ needs by accommodating multiple alternative reference rates, ~~and anticipate that a variety of indices,~~ including the ~~Secured Overnight Financing Rate~~Constant Maturity Treasury rate (“~~SOFR”~~CMT”), the Federal Home Loan Bank (“FHLB”) rate, AMERIBOR, SOFR, and the Bloomberg ~~Short-Term~~Short Term Bank Yield Index (“BSBY”)~~, may~~. During the first quarter of 2022, we began to prompt our customers to either voluntarily modify their contracts and migrate to a reference rate other than LIBOR no later than June 2023, or be ~~used~~subject to the fallback provisions in their contracts. Voluntary modifications are expected to qualify for the available Tax Safe-Harbor provisions as allowed by ~~other lenders.~~Internal Revenue Service (“IRS”) guidance.

We expect that customers who voluntarily migrate to an alternative reference rate will do so by the end of this year, and we expect the remaining customers to move to an alternative rate index in accordance with the relevant fallback provisions in their contracts prior to June 2023. For more information on the transition from LIBOR, see Risk Factors in our ~~2020~~2021 Form 10-K.

Market Risk – Fixed Income

We underwrite municipal and corporate securities. We also trade municipal, agency, and treasury securities. This underwriting and trading activity exposes us to a risk of loss arising from adverse changes in the prices of these fixed-income securities.

At ~~June 30, 2021,~~March 31, 2022, we had ~~$181~~$382 million of trading assets and ~~$62~~$101 million of securities sold, not yet purchased, compared with ~~$266~~$372 million and ~~$61~~$254 million at December 31, ~~2020,~~2021, respectively.

We are exposed to market risk through changes in fair value. ~~We are also exposed to~~This includes market risk for interest rate swaps used to hedge interest rate risk. Changes in the fair value of AFS securities and in interest rate swaps that qualify as cash flow hedges are included in accumulated other comprehensive income (“AOCI”) for each financial reporting period. During the ~~second~~first quarter of ~~2021,~~2022, the after-tax change in AOCI attributable to AFS securities ~~increased~~decreased by ~~$34 million,~~$1.1 billion, due largely to changes in the interest rate environment, compared with a ~~$94~~$164 million ~~increase~~decrease in the ~~same~~ prior year period.

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Market Risk – Equity Investments

We hold both direct and indirect investments in predominantly pre-public companies, primarily through various SBIC venture capital ~~funds.~~funds as a strategy to provide beneficial financing, growth, and expansion opportunities to diverse businesses generally in communities within our geographic footprint. Our equity exposure to these investments was ~~$209~~$165 million and ~~$135~~$179 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. On occasion, some of the companies within our SBIC ~~investments~~investment may issue an ~~IPO.~~initial public offering (“IPO”). In this case, the fund is generally subject to a ~~lock-up~~lockout period before liquidating the investment, which can introduce additional market risk. During the second quarter of 2021, one of our SBIC investments, Recursion Pharmaceuticals, Inc., completed an IPO. This investment will be marked-to-market until we fully divest of our shares, which are subject to a minimum 180-day lock-up period from the initial offering. See Note 3 of ~~the Notes to Consolidated Financial Statements~~our 2021 Form 10-K for additional information regarding the valuation of our SBIC investments.

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Liquidity Risk Management

Overview

Liquidity refers to our ~~capacity~~ability to meet our cash, contractual, and collateral obligations, and to manage both expected and unexpected cash flows without adversely impacting our operations or financial strength. Sources of liquidity include deposits, borrowings, equity, and unencumbered assets, such as marketable loans and investment securities. For a more comprehensive discussion of our liquidity risk management, see “Liquidity Risk Management” in our ~~2020~~2021 Form 10-K.

Strong deposit growth over the past ~~several quarters~~year has contributed to ~~the increase in our~~a solid overall liquidity position. At ~~June 30, 2021,~~March 31, 2022, our investment securities portfolio of ~~$19.0~~$27.0 billion and cash and money market investments of ~~$12.3~~$8.1 billion, collectively comprised ~~36%~~39% of total assets, compared with ~~$16.6~~$24.9 billion of investment securities, and ~~$7.4~~$13.0 billion of cash and money market investments, collectively comprising ~~29%~~41% of total assets at December 31, ~~2020.~~2021. Given our investment securities portfolio is predominantly comprised of securities for which a strong repurchase market exists, we believe we can readily convert securities to cash to support loan growth through repurchase agreements rather than sales.

Liquidity Management Actions

During the ~~second~~first quarter of ~~2021,~~2022, the primary sources of cash ~~were~~came from ~~increases~~a significant decrease in ~~deposits~~money market investments, and net cash provided by operating activities. Uses of cash during the ~~same period~~quarter included primarily ~~(1)~~ an increase in investment securities, ~~(2)~~redemption of long-term debt, and a decrease in short-term ~~borrowings, (3) dividends on common and preferred stock, and (4) repurchases of our common stock.~~borrowings. Cash payments for interest, reflected in operating expenses, were ~~$43~~$11 million and $22 million for the first ~~six~~three months of 2022 and 2021, ~~compared with $123 million for the first six months of 2020.~~respectively.

Total deposits were ~~$76.1~~$82.4 billion at ~~June 30, 2021,~~March 31, 2022, compared with ~~$69.7~~$82.8 billion at December 31, ~~2020.~~2021. The ~~growth~~decrease in deposits was primarily due to a ~~$5.6~~$1.3 billion decrease in savings and money market deposits, partially offset by a $0.9 billion increase in noninterest-bearing demand ~~deposits and $1.5 billion increase in savings and money market~~ deposits. ~~The funding of PPP loan proceeds into customer deposit accounts contributed meaningfully to overall deposit growth.~~ Our core deposits, consisting of noninterest-bearing demand deposits, savings and money market deposits, and time deposits under $250,000, were ~~$75.0~~$81.5 billion at ~~June 30, 2021,~~March 31, 2022, compared with ~~$68.2~~$81.9 billion at December 31, ~~2020. Our~~2021. At March 31, 2022, our loan to total deposit ratio ~~was 68%~~remained relatively stable at ~~June 30, 2021,~~62%, compared with ~~77%~~61% at December 31, ~~2020, reflecting higher deposit growth relative to loan growth.~~2021.

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Our credit ratings ~~for the second quarter of 2021~~ are presented in the following ~~schedule, which reflects an upgrade on outlook from S&P and Fitch, from Negative to Stable.~~schedule:

CREDIT RATINGS

as of ~~July 31, 2021:~~April 30, 2022:

Rating agency

Outlook

Long-term issuer/senior
debt rating

Subordinated debt rating

Short-term debt rating

Kroll

~~Stable~~Positive

A-

BBB+

S&P

Stable

BBB+

BBB

Fitch

Stable

BBB+

BBB

Moody's

Stable

~~Baa2~~Baa1

The ~~Federal Home Loan Bank (“FHLB”)~~FHLB system and Federal Reserve Banks have been, and continue to be, a significant source of back-up liquidity and funding. ~~Zions Bancorporation, N.A., is~~We are a member of the FHLB of Des ~~Moines. The FHLB~~Moines, which allows member banks to borrow against their eligible loans and securities to satisfy liquidity and funding requirements. We are required to invest in FHLB and Federal Reserve stock to maintain our borrowing capacity. At ~~June 30, 2021,~~March 31, 2022, our total investment in FHLB and Federal Reserve stock was $11 million and ~~$97~~$71 million, respectively, compared with $11 million and ~~$98~~$81 million at December 31, ~~2020.~~2021.

The amount available for additional FHLB and Federal Reserve borrowings was ~~$15.0~~$18.6 billion at ~~June 30, 2021,~~March 31, 2022, compared with ~~$17.1~~$18.3 billion at December 31, ~~2020, primarily due to the decline in non-PPP loan balances.~~2021. Loans with a carrying value of approximately ~~$23.1~~$26.8 billion at ~~June 30,~~both March 31, 2022 and December 31, 2021, ~~have been~~were pledged at the FHLB and the

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Federal Reserve as collateral for potential ~~borrowings, compared with $24.7 billion at December 31, 2020.~~borrowings. At both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we had no FHLB or Federal Reserve borrowings outstanding.

~~We regularly manage our short-term funding needs through secured borrowing with securities pledged as collateral.~~ Our AFS investment securities are primarily held as a source of contingent liquidity. ~~During the second quarter of 2021, our AFS securities balances increased by $1.5 billion.~~ We target securities that can be easily ~~monetized~~turned into cash through repurchase agreements or sales, and whose liquidity value remains relatively stable during market disruptions. We manage our short-term funding needs through secured borrowing with the securities pledged as collateral. During the first quarter of 2022, our AFS securities balances increased $2.1 billion.

~~We may, at times, rely on more expensive wholesale funding sources to support loan growth when other lower cost sources of funding are not sufficient or readily available. Our use of~~Total borrowed funds ~~(both short- and long-term)~~ decreased ~~by $859~~$588 million during the first ~~six months~~quarter of ~~2021, as~~2022, primarily due to the redemption of $290 million of the 4-year, 3.35% senior notes. The decrease in overall borrowed funds continues to reflect strong deposit growth exceeded loan demand. We used surplus deposit funding to increase money market investments and investment securities, which increased $5.0 billion and $2.3 billion, respectively, from December 31, 2020.growth.

We may, ~~also,~~ from time to time, issue additional preferred stock, senior or subordinated notes, or other forms of capital or debt instruments, depending on our capital, funding, asset-liability management, or other needs as market conditions ~~warrant and~~warrant. These additional issuances may be subject to ~~any~~ required regulatory approvals. We believe that ~~the~~our sources of available liquidity are adequate to meet all reasonably foreseeable ~~short-term~~short- and intermediate-term demands.

Capital Management

Overview

A strong capital position is vital to the achievement of our key corporate objectives, our continued profitability, and to promoting depositor and investor confidence. ~~We strive to~~Our capital management objectives include: (1) consistently ~~improve~~improving risk-adjusted returns on our ~~shareholders’~~shareholders' capital ~~by allocating~~and appropriately managing capital distributions, (2) maintaining sufficient capital to ~~our highest return~~support the current needs and ~~growing~~growth of our businesses, and ~~through the prudent return of capital~~(3) fulfilling responsibilities to ~~shareholders by means of dividends~~depositors and share repurchases. We entered the economic downturn in 2020 with a strong capital position and have improved our position during the last several quarters. Our common equity tier 1 capital increased to 11.3% at June 30, 2021, compared with 10.2% at June 30, 2020.bondholders.

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, which are comparable in severity to the scenarios published by the ~~FRB.~~Federal Reserve Board (“FRB”). The timing and amount of capital actions are subject to various factors, including our financial performance, business needs, prevailing and anticipated economic conditions, and the results of our internal stress testing, as well as Board and ~~OCC~~Office of the Comptroller of the Currency (“OCC”) approval. Shares may be repurchased occasionally in the open market or through privately

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negotiated transactions. For a more comprehensive discussion of our capital risk management, see “Capital Management” in our ~~2020~~2021 Form 10-K.

SHAREHOLDERS' EQUITY


(Dollar amounts in millions)		June 30, 2021		December 31, 2020		Amount change		Percent change
(In millions, except share data)										(In millions, except share data)	March 31, 2022		December 31, 2021		Amount change		Percent change
Shareholders’ equity:	Shareholders’ equity:									Shareholders’ equity:
Preferred stock	Preferred stock	$	440	$	566	$	(126)	(22)	%	Preferred stock	$	440	$	440	$	—	—	%
Common stock and additional paid-in capital	Common stock and additional paid-in capital	2,565		2,686		(121)		(5)		Common stock and additional paid-in capital	1,889		1,928		(39)		(2)
Retained earnings	Retained earnings	4,853		4,309		544		13		Retained earnings	5,311		5,175		136		3
Accumulated other comprehensive income		175		325		(150)		(46)
Accumulated other comprehensive income (loss)										Accumulated other comprehensive income (loss)	(1,346)		(80)		(1,266)		NM
Total shareholders' equity	Total shareholders' equity	$	8,033	$	7,886	$	147	2	%	Total shareholders' equity	$	6,294	$	7,463	$	(1,169)	(16)	%

Total shareholders’ equity ~~was $8.0~~decreased $1.2 billion, or 16%, to $6.3 billion at ~~June 30, 2021,~~March 31, 2022, compared with ~~$7.9~~$7.5 billion at December 31, 2020. A $544 million increase in retained earnings was partially offset by decreases in AOCI, preferred stock, and common stock and additional paid-in-capital. AOCI decreased $150 million, primarily from an increase in unrealized losses on AFS securities, due largely to changes in the interest rate environment. During the quarter, we redeemed the outstanding shares of our 5.75% Series H Non-Cumulative Perpetual Preferred Stock at par value, resulting in a $126 million decrease of preferred stock.2021. Common stock and additional paid-in capital decreased ~~$121~~$39 million, primarily due to common stock repurchases.

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~~Capital Management Actions~~$1.3 billion, primarily due to decreases in the fair value of fixed-rate AFS securities as a result of changes in interest rates. These unrealized losses will not be recognized unless we sell the securities. We have not initiated any sales of AFS securities, nor do we currently intend to sell any identified securities with unrealized losses. Additionally, changes in AOCI do not impact our regulatory capital ratios. Refer to Note 5 of the Notes to Consolidated Financial Statements for more discussion on our investment securities portfolio and their unrealized gains/losses.

Weighted average diluted shares outstanding decreased ~~0.8~~12.2 million from the ~~first quarter of 2021,~~same prior year period, primarily due to common stock repurchases. During the ~~second~~first quarter of ~~2021,~~2022, we repurchased ~~1.7~~0.8 million common shares outstanding for ~~$100 million at an average price of $57.95 per share.~~$50 million. In ~~July 2021,~~April 2022, the Board approved a plan to repurchase up to ~~$125~~$50 million of common shares outstanding during the ~~third~~second quarter of ~~2021.~~2022.

CAPITAL DISTRIBUTIONS


(In millions)		June 30, 2021		March 31, 2021		Year-to-date 2021
(In millions, except share data)								(In millions, except share data)	March 31, 2022		March 31, 2021
Capital distributions:	Capital distributions:							Capital distributions:
Preferred dividends paid	Preferred dividends paid	$	9	$	8	$	17	Preferred dividends paid	$	8	$	8
Bank preferred stock redeemed	Bank preferred stock redeemed	126		—		126		Bank preferred stock redeemed	—		—
Total capital distributed to preferred shareholders	Total capital distributed to preferred shareholders	135		8		143		Total capital distributed to preferred shareholders	8		8

Common dividends paid	Common dividends paid	56		56		112		Common dividends paid	58		56
Bank common stock repurchased		100		50		150
Bank common stock repurchased 1								Bank common stock repurchased 1	51		50
Total capital distributed to common shareholders	Total capital distributed to common shareholders	156		106		262		Total capital distributed to common shareholders	109		106
Total capital distributed to preferred and common shareholders	Total capital distributed to preferred and common shareholders	$	291	$	114	$	405	Total capital distributed to preferred and common shareholders	$	117	$	114

Weighted average diluted common shares outstanding (in thousands)								Weighted average diluted common shares outstanding (in thousands)	151,687		163,887
Common shares outstanding, at period end (in thousands)								Common shares outstanding, at period end (in thousands)	151,348		163,800

1 Includes amounts related to the common shares acquired from our publicly announced plans and those acquired in connection with our stock compensation plan. Shares were acquired from employees to pay for their payroll taxes and stock option exercise cost upon the exercise of stock options.

Under the OCC’s “Earnings Limitation Rule,” our dividend payments are restricted to an amount equal to the sum of the total of (1) our net income for that year, and (2) retained earnings for the preceding two years, unless the OCC approves the declaration and payment of dividends in excess of such amount. At ~~June 30, 2021,~~March 31, 2022, we had ~~$1.4~~$1.3 billion of retained net profits available for distribution.

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We paid common dividends of ~~$56~~$58 million, or ~~$0.34~~$0.38 per share, during the ~~second~~first quarter of ~~2021.~~2022. In ~~July 2021,~~April 2022, the Board declared a regular quarterly dividend of $0.38 per common share, payable on ~~August 19, 2021,~~May 26, 2022, to shareholders of record on ~~August 12, 2021.~~May 19, 2022. We also paid dividends on preferred stock of $9$8 million during the ~~second~~first quarter of ~~2021.~~2022. See Note 9 for additional information about our capital management actions.

~~CECL~~

We elected to phase-in the regulatory capital effects of the adoption of CECL, as allowed by federal bank agencies, and as described in Note 15 of the Notes to Consolidated Financial Statements of our 2020 Form 10-K. At June 30, 2021, the application of these provisions had no impact on our CET1, Tier 1 risk-based, Total risk-based capital, and Tier 1 leverage capital ratios.

Basel III

We are subject to Basel III capital requirements to maintain adequate levels of capital as measured by several regulatory capital ratios. At ~~June 30, 2021,~~March 31, 2022, we met all capital adequacy requirements under the Basel III ~~Capital Rules.~~capital rules. Based on our internal stress testing and other assessments of capital adequacy, we believe we hold capital sufficiently in excess of internal and regulatory requirements for well-capitalized banks. The following schedule presents our capital and ~~certain~~ other performance ratios.

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CAPITAL RATIOS


		June 30, 2021		December 31, 2020		June 30, 2020			March 31, 2022		December 31, 2021		March 31, 2021

Tangible common equity ratio1	Tangible common equity ratio1	7.6	%	7.8	%	7.9	%	Tangible common equity ratio 1	5.4	%	6.5	%	7.6	%
Tangible equity ratio 1	Tangible equity ratio 1	8.1		8.5		8.7		Tangible equity ratio 1	5.9		7.0		8.2
Average equity to average assets (three months ended)	Average equity to average assets (three months ended)	9.3		9.7		10.0		Average equity to average assets (three months ended)	7.8		8.3		9.5
Basel III risk-based capital ratios 2:
Basel III risk-based capital ratios:								Basel III risk-based capital ratios:
Common equity tier 1 capital	Common equity tier 1 capital	11.3		10.8		10.2		Common equity tier 1 capital	10.0		10.2		11.2
Tier 1 leverage	Tier 1 leverage	8.0		8.3		8.4		Tier 1 leverage	7.3		7.2		8.3
Tier 1 risk-based	Tier 1 risk-based	12.1		11.8		11.2		Tier 1 risk-based	10.8		10.9		12.2
Total risk-based	Total risk-based	14.2		14.1		13.5		Total risk-based	12.5		12.8		14.5
Return on average common equity (three months ended)	Return on average common equity (three months ended)	18.6		15.3		3.3		Return on average common equity (three months ended)	11.8		11.5		17.4
Return on average tangible common equity (three months ended) 1	Return on average tangible common equity (three months ended) 1	21.6		17.8		3.8		Return on average tangible common equity (three months ended) 1	13.9		13.4		20.2

1 See “GAAP to Non-GAAP Reconciliations” on page 4 for more information regarding these ratios.

2~~Based on the applicable phase-in periods.~~

Our ~~Basel III~~ regulatory tier 1 risk-based capital and total risk-based capital was ~~$6.8 billion and $8.0 billion at June 30, 2021, compared with~~ $6.6 billion and ~~$7.9~~$7.7 billion at March 31, 2022, compared with $6.5 billion and $7.7 billion, respectively, at December 31, ~~2020.~~2021. See the “Supervision and Regulation” section ~~of our 2020 Form 10-K~~ and Note 15 of the Notes to Consolidated Financial Statements of our 2021 Form 10-K for more information about our compliance with the Basel III capital requirements.

Deposit-driven balance sheet growth over the past year has resulted in a modest reduction in our risk-weighted regulatory capital ratios, and a larger reduction in our Tier 1 leverage ratio, as the denominator for this ratio is not adjusted for risk. As a result, our Tier 1 leverage ratio declined to 7.3% at March 31, 2022, from 8.3% at March 31, 2021.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION

ITEM 1. FINANCIAL STATEMENTS (Unaudited)

CONSOLIDATED BALANCE SHEETS


(In millions, shares in thousands)	March 31, 2022		December 31, 2021
	(Unaudited)
ASSETS
Cash and due from banks	$	700	$	595
Money market investments:
Interest-bearing deposits	5,093		10,283
Federal funds sold and security resell agreements	2,345		2,133
Investment securities:
Held-to-maturity, at amortized cost (included $414 and $443 at fair value )	439		441
Available-for-sale, at fair value	26,145		24,048
Trading account, at fair value	382		372

Total securities	26,966		24,861
Loans held for sale	43		83
Loans and leases, net of unearned income and fees	51,242		50,851
Less allowance for loan and lease losses	478		513
Loans held for investment, net of allowance	50,764		50,338
Other noninterest-bearing investments	829		851
Premises, equipment and software, net	1,346		1,319
Goodwill and intangibles	1,015		1,015
Other real estate owned	4		8
Other assets	2,021		1,714
Total assets	$	91,126	$	93,200
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	41,937	$	41,053
Interest-bearing:
Savings and money market	38,864		40,114
Time	1,550		1,622

Total deposits	82,351		82,789
Federal funds purchased and other short-term borrowings	638		903
Long-term debt	689		1,012
Reserve for unfunded lending commitments	36		40
Other liabilities	1,118		993
Total liabilities	84,832		85,737
Shareholders’ equity:
Preferred stock, without par value; authorized 4,400 shares	440		440
Common stock ($0.001 par value; authorized 350,000 shares; issued and outstanding 151,348 and 151,625 shares) and additional paid-in capital	1,889		1,928
Retained earnings	5,311		5,175
Accumulated other comprehensive income (loss)	(1,346)		(80)


Total shareholders’ equity	6,294		7,463
Total liabilities and shareholders’ equity	$	91,126	$	93,200

See accompanying notes to consolidated financial statements.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

~~ITEM 1. FINANCIAL~~CONSOLIDATED STATEMENTS ~~(Unaudited)~~OF INCOME

~~CONSOLIDATED BALANCE SHEETS~~
(In millions, shares in thousands) June 30,
2021 December 31,
2020
(Unaudited)
ASSETS
Cash and due from banks $ 525 $ 543
Money market investments:
Interest-bearing deposits 10,086 1,074
Federal funds sold and security resell agreements 1,714 5,765
Investment securities:
Held-to-maturity, at amortized cost (included $622 and $640 at fair value ) 620 636
Available-for-sale, at fair value 18,170 15,731
Trading account, at fair value 181 266
Total securities 18,971 16,633
Loans held for sale 66 81
Loans and leases, net of unearned income and fees 51,398 53,476
Less allowance for loan losses 535 777
Loans held for investment, net of allowance 50,863 52,699
Other noninterest-bearing investments 895 817
Premises, equipment and software, net 1,239 1,209
Goodwill and intangibles 1,015 1,016
Other real estate owned 23 4
Other assets 1,811 1,638
Total Assets $ 87,208 $ 81,479
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand $ 38,128 $ 32,494
Interest-bearing:
Savings and money market 36,037 34,571
Time 1,940 2,588
Total deposits 76,105 69,653
Federal funds purchased and other short-term borrowings 741 1,572
Long-term debt 1,308 1,336
Reserve for unfunded lending commitments 39 58
Other liabilities 982 974
Total liabilities 79,175 73,593
Shareholders’ equity:
Preferred stock, without par value; authorized 4,400 shares 440 566
Common stock ($0.001 par value; authorized 350,000 shares; issued and outstanding 162,248 and 164,090 shares) and additional paid-in capital 2,565 2,686
Retained earnings 4,853 4,309
Accumulated other comprehensive income (loss) 175 325
Total shareholders’ equity 8,033 7,886
Total liabilities and shareholders’ equity $ 87,208 $ 81,479


(Unaudited)	Three Months Ended March 31,
(In millions, except shares and per share amounts)	2022		2021
Interest income:
Interest and fees on loans	$	437	$	488
Interest on money market investments	6		3
Interest on securities	112		71
Total interest income	555		562
Interest expense:
Interest on deposits	6		9
Interest on short- and long-term borrowings	5		8
Total interest expense	11		17
Net interest income	544		545
Provision for credit losses:
Provision for loan and lease losses	(29)		(123)
Provision for unfunded lending commitments	(4)		(9)

Total provision for credit losses	(33)		(132)
Net interest income after provision for credit losses	577		677
Noninterest income:
Commercial account fees	41		32
Card fees	25		21
Retail and business banking fees	20		17
Loan-related fees and income	22		25
Capital markets and foreign exchange fees	15		15
Wealth management fees	14		12
Other customer-related fees	14		11
Customer-related noninterest income	151		133
Fair value and nonhedge derivative gain	6		18
Dividends and other investment income	2		7
Securities gains (losses), net	(17)		11
Total noninterest income	142		169
Noninterest expense:
Salaries and employee benefits	312		288
Technology, telecom, and information processing	52		49
Occupancy and equipment, net	38		39
Professional and legal services	14		21
Marketing and business development	8		7
Deposit insurance and regulatory expense	10		10
Credit-related expense	7		6
Other real estate expense, net	1		—
Other	22		15
Total noninterest expense	464		435
Income before income taxes	255		411
Income taxes	52		89
Net income	203		322


Preferred stock dividends	(8)		(8)

Net earnings applicable to common shareholders	$	195	$	314
Weighted average common shares outstanding during the period:
Basic shares (in thousands)	151,285		163,551
Diluted shares (in thousands)	151,687		163,887
Net earnings per common share:
Basic	$	1.27	$	1.90
Diluted	1.27		1.90

See accompanying notes to consolidated financial statements.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF INCOME~~
(Unaudited) Three Months Ended
June 30, Six Months Ended
June 30,
(In millions, except shares and per share amounts) 2021 2020 2021 2020
Interest income:
Interest and fees on loans $ 492 $ 514 $ 980 $ 1,046
Interest on money market investments 4 1 7 9
Interest on securities 74 80 145 161
Total interest income 570 595 1,132 1,216
Interest expense:
Interest on deposits 7 23 16 74
Interest on short- and long-term borrowings 8 9 16 31
Total interest expense 15 32 32 105
Net interest income 555 563 1,100 1,111
Provision for credit losses:
Provision for loan losses (113) 161 (236) 401
Provision for unfunded lending commitments (10) 7 (19) 25
Total provision for credit losses (123) 168 (255) 426
Net interest income after provision for credit losses 678 395 1,355 685
Noninterest income:
Commercial account fees 34 30 66 61
Card fees 24 19 45 39
Retail and business banking fees 18 15 35 33
Loan-related fees and income 21 27 46 53
Capital markets and foreign exchange fees 17 18 32 42
Wealth management fees 12 9 24 21
Other customer-related fees 13 12 24 22
Customer-related fees 139 130 272 271
Fair value and nonhedge derivative gain (loss) (5) (12) 13 (23)
Dividends and other investment income 8 3 15 11
Securities gains (losses), net 63 (4) 74 (9)
Total noninterest income 205 117 374 250
Noninterest expense:
Salaries and employee benefits 272 267 560 540
Occupancy, net 33 32 66 65
Furniture, equipment and software, net 32 32 64 64
Other real estate expense, net 0 0 0 0
Credit-related expense 6 6 12 10
Professional and legal services 17 10 37 22
Advertising 4 3 9 6
FDIC premiums 6 7 13 12
Other 58 73 102 118
Total noninterest expense 428 430 863 837
Income before income taxes 455 82 866 98
Income taxes 101 16 190 18
Net income 354 66 676 80
Preferred stock dividends (9) (9) (17) (17)
Net earnings applicable to common shareholders $ 345 $ 57 $ 659 $ 63
Weighted average common shares outstanding during the period:
Basic shares (in thousands) 162,742 163,542 163,144 163,843
Diluted shares (in thousands) 163,054 164,425 163,468 168,132
Net earnings per common share:
Basic $ 2.08 $ 0.34 $ 3.98 $ 0.38
Diluted 2.08 0.34 3.98 0.37

~~See accompanying notes to consolidated financial statements.~~

~~Table of Contents~~

~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

Three Months Ended
June 30, Six Months Ended
June 30,
(In millions) 2021 2020 2021 2020
Net income for the period $ 354 $ 66 $ 676 $ 80
Other comprehensive income (loss), net of tax:
Net unrealized holding gains (losses) on investment securities 34 94 (130) 242
Net unrealized gains (losses) on other noninterest-bearing investments 1 (8) 3 (6)
Net unrealized holding gains on derivative instruments 3 7 0 76
Reclassification adjustment for increase in interest income recognized in earnings on derivative instruments (11) (10) (23) (13)
Reclassification to earnings for termination of pension plan 0 13 0 13
Other comprehensive income (loss) 27 96 (150) 312
Comprehensive income $ 381 $ 162 $ 526 $ 392


	Three Months Ended March 31,
(In millions)	2022		2021

Net income for the period	$	203	$	322
Other comprehensive income (loss), net of tax:
Net unrealized holding losses on investment securities	(1,121)		(164)





Net unrealized gains on other noninterest-bearing investments	—		2
Net unrealized holding losses on derivative instruments	(135)		(4)
Reclassification adjustment for increase in interest income recognized in earnings on derivative instruments	(10)		(11)

Other comprehensive loss	(1,266)		(177)
Comprehensive income (loss)	$	(1,063)	$	145

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)
(In millions, except shares
and per share amounts) Preferred
stock Common stock Accumulated paid-in capital Retained earnings Accumulated other
comprehensive income (loss) Total
shareholders’ equity
Shares
(in thousands)
Amount
Balance at March 31, 2021 $ 566 163,800 $ 0 $ 2,653 $ 4,566 $ 148 $ 7,933
Net income for the period 354 354
Other comprehensive income, net of tax 27 27
Preferred stock redemption (126) 3 (3) (126)
Bank common stock repurchased (1,735) (101) (101)
Net activity under employee plans and related tax benefits 183 10 10
Dividends on preferred stock (9) (9)
Dividends on common stock, $0.34
  per share
(56) (56)
Change in deferred compensation 1 1
Balance at June 30, 2021 $ 440 162,248 $ 0 $ 2,565 $ 4,853 $ 175 $ 8,033
Balance at March 31, 2020 $ 566 163,852 $ 0 $ 2,668 $ 3,979 $ 259 $ 7,472
Net income for the period 66 66
Other comprehensive income, net of tax 96 96
Bank common stock repurchased (11) —
Net activity under employee plans and related tax benefits 137 7 7
Dividends on preferred stock (9) (9)
Dividends on common stock, $0.34
  per share
(56) (56)
Change in deferred compensation (1) (1)
Balance at June 30, 2020 $ 566 163,978 $ 0 $ 2,675 $ 3,979 $ 355 $ 7,575
(In millions, except shares
and per share amounts) Preferred
stock Common stock Accumulated paid-in capital Retained earnings Accumulated other
comprehensive income (loss) Total
shareholders’ equity
Shares
(in thousands)
Amount
Balance at December 31, 2020 $ 566 164,090 $ 0 $ 2,686 $ 4,309 $ 325 $ 7,886
Net income for the period 676 676
Other comprehensive loss, net of tax (150) (150)
Preferred stock redemption (126) 3 (3) (126)
Bank common stock repurchased (2,747) (151) (151)
Net activity under employee plans and related tax benefits 905 27 27
Dividends on preferred stock (17) (17)
Dividends on common stock, $0.68
  per share
(113) (113)
Change in deferred compensation 1 1
Balance at June 30, 2021 $ 440 162,248 $ 0 $ 2,565 $ 4,853 $ 175 $ 8,033
Balance at December 31, 2019 $ 566 165,057 $ 0 $ 2,735 $ 4,009 $ 43 $ 7,353
Net income for the period 80 80
Other comprehensive income, net of tax 312 312
Cumulative effect adjustment, adoption of ASU 2016-13, Credit Losses: Measurement of Credit Losses on Financial Instruments
20 20
Bank common stock repurchased (1,680) (75) (75)
Net shares issued from stock warrant exercises 1
Net activity under employee plans and related tax benefits 600 15 15
Dividends on preferred stock (17) (17)
Dividends on common stock, $0.68
  per share
(112) (112)
Change in deferred compensation (1) (1)
Balance at June 30, 2020 $ 566 163,978 $ 0 $ 2,675 $ 3,979 $ 355 $ 7,575


(In millions, except shares and per share amounts)	Preferred stock		Common stock			Accumulated paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)			Total shareholders’ equity
			Shares (in thousands)	Amount

Balance at December 31, 2021	$	440	151,625	$	—	$	1,928	$	5,175		$	(80)	$	7,463
Net income for the period								203					203
Other comprehensive loss, net of tax											(1,266)		(1,266)

Bank common stock repurchased			(778)			(51)							(51)

Net activity under employee plans and related tax benefits			501			12							12
Dividends on preferred stock								(8)					(8)
Dividends on common stock, $0.38 per share								(58)					(58)
Change in deferred compensation								(1)					(1)
Balance at March 31, 2022	$	440	151,348	$	—	$	1,889	$	5,311		$	(1,346)	$	6,294

Balance at December 31, 2020	$	566	164,090	$	—	$	2,686	$	4,309		$	325	$	7,886
Net income for the period								322					322
Other comprehensive loss, net of tax											(177)		(177)

Bank common stock repurchased			(1,012)			(50)							(50)

Net activity under employee plans and related tax benefits			722			17							17
Dividends on preferred stock								(8)					(8)
Dividends on common stock, $0.34 per share								(57)					(57)

Balance at March 31, 2021	$	566	163,800	$	—	$	2,653	$	4,566		$	148	$	7,933

See accompanying notes to consolidated financial statements.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION ~~AND SUBSIDIARIES~~

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(In millions)	(In millions)	Six Months Ended June 30,			(In millions)			Three Months Ended March 31,
			2021			2020			(In millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the period	Net income for the period		$	676		$	80		Net income for the period	$	203	$	322
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:								Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses	Provision for credit losses		(255)			426			Provision for credit losses	(33)		(132)
Depreciation and amortization	Depreciation and amortization		(11)			63			Depreciation and amortization	19		(3)
Share-based compensation	Share-based compensation		19			18			Share-based compensation	17		14
Deferred income tax expense (benefit)			108			(94)
Net decrease in trading securities			85			22
Deferred income tax expense									Deferred income tax expense	39		70
Net decrease (increase) in trading securities									Net decrease (increase) in trading securities	(10)		76
Net decrease (increase) in loans held for sale	Net decrease (increase) in loans held for sale		6			(13)			Net decrease (increase) in loans held for sale	29		(3)
Change in other liabilities	Change in other liabilities		(1)			33			Change in other liabilities	127		(54)
Change in other assets	Change in other assets		(259)			(129)			Change in other assets	(116)		212
Other, net	Other, net		(85)			(8)			Other, net	13		(18)
Net cash provided by operating activities	Net cash provided by operating activities		283			398			Net cash provided by operating activities	288		484
CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES								CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in money market investments			(4,961)			(618)
Net decrease (increase) in money market investments									Net decrease (increase) in money market investments	4,979		(2,903)
Proceeds from maturities and paydowns of investment securities held-to-maturity	Proceeds from maturities and paydowns of investment securities held-to-maturity		272			73			Proceeds from maturities and paydowns of investment securities held-to-maturity	20		167
Purchases of investment securities held-to-maturity	Purchases of investment securities held-to-maturity		(256)			(169)			Purchases of investment securities held-to-maturity	(17)		(114)
Proceeds from sales, maturities and paydowns of investment securities available-for-sale	Proceeds from sales, maturities and paydowns of investment securities available-for-sale		2,485			1,795			Proceeds from sales, maturities and paydowns of investment securities available-for-sale	1,018		1,370
Purchases of investment securities available-for-sale	Purchases of investment securities available-for-sale		(5,170)			(2,011)			Purchases of investment securities available-for-sale	(4,673)		(2,546)
Net change in loans and leases	Net change in loans and leases		2,177			(6,381)			Net change in loans and leases	(355)		56
Purchases and sales of other noninterest-bearing investments	Purchases and sales of other noninterest-bearing investments		4			59			Purchases and sales of other noninterest-bearing investments	8		12
Purchases of premises and equipment	Purchases of premises and equipment		(84)			(82)			Purchases of premises and equipment	(53)		(53)

Other, net	Other, net		10			33			Other, net	4		13
Net cash used in investing activities			(5,523)			(7,301)
Net cash provided by (used in) investing activities									Net cash provided by (used in) investing activities	931		(3,998)
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES								CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits			6,452			8,599
Net increase (decrease) in deposits									Net increase (decrease) in deposits	(439)		4,200
Net change in short-term funds borrowed	Net change in short-term funds borrowed		(831)			(1,194)			Net change in short-term funds borrowed	(264)		(540)

Cash paid for preferred stock redemption			(126)			0

Redemption of long-term debt	Redemption of long-term debt		0			(429)			Redemption of long-term debt	(290)		—

Proceeds from the issuance of common stock	Proceeds from the issuance of common stock		16			5			Proceeds from the issuance of common stock	6		11
Dividends paid on common and preferred stock	Dividends paid on common and preferred stock		(129)			(130)			Dividends paid on common and preferred stock	(66)		(66)
Bank common stock repurchased	Bank common stock repurchased		(151)			(76)			Bank common stock repurchased	(51)		(50)
Other, net	Other, net		(9)			(7)			Other, net	(10)		(8)
Net cash provided by financing activities			5,222			6,768
Net decrease in cash and due from banks			(18)			(135)
Net cash provided by (used in) financing activities									Net cash provided by (used in) financing activities	(1,114)		3,547
Net increase in cash and due from banks									Net increase in cash and due from banks	105		33
Cash and due from banks at beginning of period	Cash and due from banks at beginning of period		543			705			Cash and due from banks at beginning of period	595		543
Cash and due from banks at end of period	Cash and due from banks at end of period		$	525		$	570		Cash and due from banks at end of period	$	700	$	576
Cash paid for interest	Cash paid for interest		$	43		$	123		Cash paid for interest	$	11	$	22
Net cash paid for income taxes			427			17
Net refunds received for income taxes									Net refunds received for income taxes	(1)		—
Noncash activities are summarized as follows:	Noncash activities are summarized as follows:								Noncash activities are summarized as follows:
Loans held for investment transferred to other real estate owned	Loans held for investment transferred to other real estate owned		1			1			Loans held for investment transferred to other real estate owned	—		1
Loans held for investment reclassified to loans held for sale, net	Loans held for investment reclassified to loans held for sale, net		27			22			Loans held for investment reclassified to loans held for sale, net	34		(7)

See accompanying notes to consolidated financial statements.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~June 30, 2021~~March 31, 2022

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Zions Bancorporation, National Association and its majority-owned subsidiaries (collectively “Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”) have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. References to GAAP, including standards promulgated by the Financial Accounting Standards Board (“FASB”), are made according to sections of the Accounting Standards Codification (“ASC”). ~~Changes to the ASC are made with Accounting Standards Updates (“ASU”) that include consensus issues~~

The results of ~~the Emerging Issues Task Force.~~

~~Operating results~~operations for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ are not necessarily indicative of the results that may be expected in future periods. In preparing the consolidated financial statements, we are required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated balance sheet at December 31, 2020 is from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and accompanying footnotes included in our ~~2020~~2021 Form 10-K. Certain prior period amounts have been reclassified to conform with the current period ~~presentation.~~presentation, where applicable. These reclassifications did not affect net income or shareholders’ equity.

Effective for the first quarter of 2022, we made certain financial reporting changes and reclassifications to noninterest expense in our Consolidated Statements of Income. These financial reporting changes were made primarily to improve the presentation and disclosure of certain expenses related to our ongoing technology initiatives. Other noninterest expense line items were impacted by these changes and reclassifications. These changes and reclassifications (1) were adopted retrospectively to January 1, 2020, (2) reflect changes only to noninterest expense in the Consolidated Statements of Income, and (3) do not impact net income, net interest income, or noninterest income.

Zions Bancorporation, N.A. is a commercial bank headquartered in Salt Lake City, Utah. We provide a wide range of banking products and related services in 11 Western and Southwestern states through 7 separately managed bank divisions, which we refer to as “affiliates,” or “affiliate banks,” each with its own local branding and management ~~team, including~~team. These include Zions Bank, in Utah, Idaho, and Wyoming; Amegy Bank (“Amegy”), in Texas; California Bank & Trust (“CB&T”); National Bank of Arizona (“NBAZ”); Nevada State Bank (“NSB”); Vectra Bank Colorado (“Vectra”), in Colorado and New Mexico; and The Commerce Bank of Washington (“TCBW”) which operates under that name in Washington and under the name The Commerce Bank of Oregon in Oregon.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

2. RECENT ACCOUNTING PRONOUNCEMENTS ~~AND DEVELOPMENTS~~

There have been no significant changes to recent accounting pronouncements and developments and their potential impact to our financial statements or operations. For more information, see Note 2 of our 2020 Form 10-K.

Standard

Description

Date of adoption

Effect on the financial statements or other significant matters

Standards not yet adopted by the Bank

ASU 2022-02,

Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures

This accounting standards update (“ASU”) eliminates the recognition and measurement guidance on troubled debt restructurings (“TDRs”) for creditors that have adopted ASC 326 (“CECL”), and eliminates certain existing TDR disclosures while requiring enhanced disclosures about loan modifications for borrowers experiencing financial difficulty.

The new guidance also requires public companies to present current-period gross write-offs (on a current year-to-date basis for interim-period disclosures) by year of origination in their vintage disclosures.

The new guidance is effective for calendar year-end public companies beginning January 1, 2023, with early adoption permitted.

Periods beginning after December 15, 2022

We have established an implementation team to ensure that the necessary data is captured in order to comply with the new disclosure requirements. The overall effect of the guidance is not expected to have a material impact on our financial statements.

We do not plan to early adopt this new guidance.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

3. FAIR VALUE

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For more information about our valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 3 of our ~~2020~~2021 Form 10-K.

Quantitative Disclosure by Fair Value Hierarchy

Assets and liabilities measured at fair value by class on a recurring basis are summarized as follows:


(In millions)	(In millions)	June 30, 2021								(In millions)	March 31, 2022
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
ASSETS	ASSETS									ASSETS
Available-for-sale securities:	Available-for-sale securities:									Available-for-sale securities:
U.S. Treasury, agencies and corporations	U.S. Treasury, agencies and corporations	$	128	$	16,393	$	0	$	16,521	U.S. Treasury, agencies and corporations	$	503	$	23,799	$	—	$	24,302
Municipal securities	Municipal securities			1,574				1,574		Municipal securities	0		1,768		0		1,768

Other debt securities	Other debt securities			75				75		Other debt securities	0		75		0		75
Total available-for-sale	Total available-for-sale	128		18,042		0		18,170		Total available-for-sale	503		25,642		—		26,145
Trading account	Trading account	15		166				181		Trading account	15		367		0		382
Other noninterest-bearing investments:	Other noninterest-bearing investments:									Other noninterest-bearing investments:
Bank-owned life insurance	Bank-owned life insurance			535				535		Bank-owned life insurance	0		538		0		538
Private equity investments 1	Private equity investments 1	77				72		149		Private equity investments 1	13		0		74		87
Other assets:	Other assets:									Other assets:
Agriculture loan servicing and interest-only strips	Agriculture loan servicing and interest-only strips					15		15		Agriculture loan servicing and interest-only strips	0		0		12		12
Deferred compensation plan assets	Deferred compensation plan assets	135						135		Deferred compensation plan assets	131		0		0		131
Derivatives:	Derivatives:									Derivatives:
Derivatives designated as hedges	Derivatives designated as hedges			9				9		Derivatives designated as hedges	0		29		0		29
Derivatives not designated as hedges:
Interest rate				272				272
Foreign exchange		4						4
Total Assets		$	359	$	19,024	$	87	$	19,470
Derivatives not designated as hedges										Derivatives not designated as hedges	0		90		0		90
Total assets										Total assets	$	662	$	26,666	$	86	$	27,414
LIABILITIES	LIABILITIES									LIABILITIES
Securities sold, not yet purchased	Securities sold, not yet purchased	$	62	$	0	$	0	$	62	Securities sold, not yet purchased	$	101	$	—	$	—	$	101
Other liabilities:	Other liabilities:									Other liabilities:
Derivatives:	Derivatives:									Derivatives:

Derivatives not designated as hedges:
Interest rate				40				40
Foreign exchange		4						4

Total Liabilities		$	66	$	40	$	0	$	106
Derivatives not designated as hedges										Derivatives not designated as hedges	0		179		0		179
Total liabilities										Total liabilities	$	101	$	179	$	—	$	280

1The Level 1 private equity investments (“PEIs”) relate to the portion of our ~~SBIC~~Small Business Investment Company (“SBIC”) investments that are now publicly traded.

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(In millions)	(In millions)	December 31, 2020								(In millions)	December 31, 2021
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
ASSETS	ASSETS									ASSETS
Available-for-sale securities:	Available-for-sale securities:									Available-for-sale securities:
U.S. Treasury, agencies and corporations	U.S. Treasury, agencies and corporations	$	192	$	13,944	$	0	$	14,136	U.S. Treasury, agencies and corporations	$	134	$	22,144	$	—	$	22,278
Municipal securities	Municipal securities			1,420				1,420		Municipal securities	0		1,694				1,694

Other debt securities	Other debt securities			175				175		Other debt securities	0		76		0		76

Total available-for-sale	Total available-for-sale	192		15,539		0		15,731		Total available-for-sale	134		23,914		—		24,048
Trading account	Trading account	111		155				266		Trading account	14		358		0		372
Other noninterest-bearing investments:	Other noninterest-bearing investments:									Other noninterest-bearing investments:
Bank-owned life insurance	Bank-owned life insurance			532				532		Bank-owned life insurance	0		537		0		537
Private equity investments						80		80
Private equity investments 1										Private equity investments 1	35		0		66		101
Other assets:	Other assets:									Other assets:
Agriculture loan servicing and interest-only strips	Agriculture loan servicing and interest-only strips					16		16		Agriculture loan servicing and interest-only strips	0		0		12		12
Deferred compensation plan assets	Deferred compensation plan assets	120						120		Deferred compensation plan assets	138		0		0		138
Derivatives:	Derivatives:									Derivatives:
Derivatives designated as hedges	Derivatives designated as hedges			3				3		Derivatives designated as hedges	0		10		0		10
Derivatives not designated as hedges:
Interest rate				411				411
Foreign exchange		4						4
Total Assets		$	427	$	16,640	$	96	$	17,163
Derivatives not designated as hedges										Derivatives not designated as hedges	0		209		0		209
Total assets										Total assets	$	321	$	25,028	$	78	$	25,427
LIABILITIES	LIABILITIES									LIABILITIES
Securities sold, not yet purchased	Securities sold, not yet purchased	$	61	$	0	$	0	$	61	Securities sold, not yet purchased	$	254	$	—	$	—	$	254
Other liabilities:	Other liabilities:									Other liabilities:
Derivatives:	Derivatives:									Derivatives:

Derivatives not designated as hedges:
Interest rate				34				34
Foreign exchange		4						4

Total Liabilities		$	65	$	34	$	0	$	99
Derivatives not designated as hedges										Derivatives not designated as hedges	0		51		0		51
Total liabilities										Total liabilities	$	254	$	51	$	—	$	305

1 The Level 1 private equity investments (“PEIs”) relate to the portion of our Small Business Investment Company (“SBIC”) investments that are now publicly traded.

Level 3 Valuations

Our Level 3 holdings include ~~private equity investments (“PEIs”),~~PEIs, agriculture loan servicing, and interest-only strips. For additional information regarding ~~the~~our Level 3 financial instruments, ~~measured under Level 3,~~ including the methods and significant assumptions used to estimate their fair value, see Note 3 of our ~~2020~~2021 Form 10-K.

During the second quarter of 2021, one of our SBIC investments measured under Level 3, Recursion Pharmaceuticals, Inc., completed an initial public offering (“IPO”), and as a result, we recognized a $63 million unrealized gain. This investment will be marked-to-market until we fully divest of our shares, which are subject to a minimum 180-day lock-up period from the IPO.

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Rollforward of Level 3 Fair Value Measurements

The following schedule presents ~~the changes to the~~a rollforward of assets and liabilities that are measured at fair value ~~by class~~ on a recurring basis using Level 3 inputs:


		Level 3 Instruments										Level 3 Instruments
		Three Months Ended								Six Months Ended							Three Months Ended
		June 30, 2021				June 30, 2020					June 30, 2021		June 30, 2020									March 31, 2022	March 31, 2021
(In millions)	(In millions)	Private equity investments		Ag loan svcg and int-only strips		Private equity investments		Ag loan svcg and int-only strips					Private equity investments		Ag loan svcg and int-only strips			Private equity investments		Ag loan svcg and int-only strips				(In millions)	Private equity investments		Ag loan servicing & interest only strips		Private equity investments		Ag loan servicing & interest only strips

Balance at beginning of period	Balance at beginning of period	$	83	$	15	$	79	$	17				$	80	$	16		$	107	$	18			Balance at beginning of period	$	66	$	12	$	80	$	16

Unrealized securities gains (losses), net	Unrealized securities gains (losses), net	68		0		(4)		0					69		0			(24)		0				Unrealized securities gains (losses), net	5		—		1		—
Other noninterest income (expense)	Other noninterest income (expense)	0		0		0		0					0		(1)			0		(1)				Other noninterest income (expense)	—		—		—		(1)
Purchases	Purchases	2		0		2		0					6		0			3		0				Purchases	6		—		4		—
Cost of investments sold	Cost of investments sold	(4)		0		0		0					(6)		0			(9)		0				Cost of investments sold	(3)		—		(2)		—
Redemptions and paydowns		0		0		0		0					0		0			0		0
Transfers out 1		(77)		0		0		0					(77)		0			0		0

Balance at end of period	Balance at end of period	$	72	$	15	$	77	$	17				$	72	$	15		$	77	$	17			Balance at end of period	$	74	$	12	$	83	$	15

1Table of Contents ~~Represents~~

ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

During the ~~transfer~~three months ended March 31, 2022 and 2021, there were no transfers of ~~the SBIC investment in Recursion Pharmaceuticals, Inc.~~assets or liabilities recorded at fair value on a recurring basis into or out ~~of Level 3 to Level 1.~~

~~The rollforward~~ of Level 3 fair value ~~measurements~~measurements.

The rollforward Level 3 instruments includes the following realized gains and losses recognized in securities gains (losses) on the consolidated statement of income ~~statement:~~

(In millions) Three Months Ended Six Months Ended
June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Securities gains (losses), net $ (4) $ 0 $ (5) $ 15
for the periods presented:


(In millions)	Three Months Ended
	March 31, 2022		March 31, 2021


Securities gains (losses), net	$	(2)	$	(1)

Nonrecurring Fair Value Measurements

~~The following schedule presents~~Certain assets and liabilities may be recorded at fair value on a nonrecurring basis, including impaired loans that have been measured based on the ~~balances~~fair value of the underlying collateral, other real estate owned (“OREO”), and nonmarketable equity securities. Nonrecurring fair value adjustments typically involve write-downs of individual assets ~~at period end~~or the application of lower of cost or fair value accounting. At March 31, 2022, we had no assets or liabilities that had fair value changes measured on a nonrecurring ~~basis:~~
(In millions) Fair value at June 30, 2021 Fair value at December 31, 2020
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
ASSETS
Private equity investments $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1 $ 1
Collateral-dependent loans 0 9 0 9 0 14 0 14
Other real estate owned 0 0 0 0 0 1 0 1
Total $ 0 $ 9 $ 0 $ 9 $ 0 $ 15 $ 1 $ 16

basis. At December 31, 2021, we had $2 million of collateral-dependent loans valued as level 2 measurements, and recognized $3 million of losses from fair value changes related to these loans. The previous fair values may not be current as of the ~~periods presented,~~dates indicated, but rather as of the most recent date the fair value change ~~occurred, such as a charge for impairment. Accordingly, carrying values may not equal current fair value. During~~occurred. For additional information regarding the ~~three and six months ended June 30, 2021 and 2020, we had less than $1 million~~measurement of ~~gains or losses from~~ fair value ~~changes.~~for impaired loans, collateral-dependent loans, and OREO, see Note 3 of our 2021 Form 10-K.

During the three and six months ended June 30, we recognized less than $1 million of net gains in 2021 and 2020 from the sale of other real estate owned (“OREO”) properties that had a carrying value, at the time of sale, of $2 million and $3 million during these same periods. Prior to their sale, we recognized 0 impairment on these properties during the three and six months ended June 30, 2021 and less than $1 million during the same periods in 2020.

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Private equity investments (“PEIs”) carried at cost were measured at fair value for impairment purposes according to the methodology previously discussed for these investments. Amounts of PEIs carried at cost were $16 million at June 30, 2021 and $8 million at December 31, 2020. Amounts of other noninterest-bearing investments carried at cost were $108 million at June 30, 2021 and $109 million at December 31, 2020, which were comprised of Federal Reserve and FHLB stock. Private equity investments accounted for using the equity method were $66 million at June 30, 2021 and $61 million at December 31, 2020.

Loans that are collateral-dependent were measured at the lower of amortized cost or the fair value of the collateral. OREO was measured initially at fair value based on collateral appraisals at the time of transfer and subsequently at the lower of cost or fair value. For additional information regarding the measurement of fair value for impaired loans, collateral-dependent loans, and OREO, see Note 3 of our 2020 Form 10-K.

Fair Value of Certain Financial Instruments

~~Following is a summary~~The following schedule summarizes of the carrying values and estimated fair values of certain financial instruments:


		June 30, 2021					December 31, 2020						March 31, 2022					December 31, 2021
(In millions)	(In millions)	Carrying value		Estimated fair value		Level	Carrying value		Estimated fair value		Level	(In millions)	Carrying value		Fair value		Level	Carrying value		Fair value		Level
Financial assets:	Financial assets:											Financial assets:
HTM investment securities	HTM investment securities	$	620	$	622	2	$	636	$	640	2	HTM investment securities	$	439	$	414	2	$	441	$	443	2
Loans and leases (including loans held for sale), net of allowance	Loans and leases (including loans held for sale), net of allowance	50,929		51,436		3	52,780		53,221		3	Loans and leases (including loans held for sale), net of allowance	50,807		49,837		3	50,421		50,619		3
Financial liabilities:	Financial liabilities:											Financial liabilities:
Time deposits	Time deposits	1,940		1,949		2	2,588		2,603		2	Time deposits	1,550		1,538		2	1,622		1,624		2

Long-term debt	Long-term debt	1,308		1,338		2	1,336		1,346		2	Long-term debt	689		699		2	1,012		1,034		2

This summary excludes financial assets and liabilities for which carrying value approximates fair value and financial instruments that are recorded at fair value on a recurring basis. For additional information regarding the financial instruments within the scope of this disclosure, and the methods and significant assumptions used to estimate their fair value, see Note 3 of our ~~2020~~2021 Form 10-K.

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4. OFFSETTING ASSETS AND LIABILITIES

Gross and net information for selected financial instruments in the balance sheet is as follows:
June 30, 2021
(In millions) Gross amounts not offset in the balance sheet
Description Gross amounts recognized Gross amounts offset in the balance sheet Net amounts presented in the balance sheet Financial instruments Cash collateral received/pledged Net amount
Assets:
Federal funds sold and security resell agreements $ 1,714 $ 0 $ 1,714 $ 0 $ 0 $ 1,714
Derivatives (included in other assets) 285 0 285 (15) (2) 268
Total assets $ 1,999 $ 0 $ 1,999 $ (15) $ (2) $ 1,982
Liabilities:
Federal funds purchased and other short-term borrowings $ 741 $ 0 $ 741 $ 0 $ 0 $ 741
Derivatives (included in other liabilities) 44 0 44 (15) (6) 23
Total liabilities $ 785 $ 0 $ 785 $ (15) $ (6) $ 764
December 31, 2020
(In millions) Gross amounts not offset in the balance sheet
Description Gross amounts recognized Gross amounts offset in the balance sheet Net amounts presented in the balance sheet Financial instruments Cash collateral received/pledged Net amount
Assets:
Federal funds sold and security resell agreements $ 6,457 $ (692) $ 5,765 $ 0 $ 0 $ 5,765
Derivatives (included in other assets) 418 0 418 (4) (3) 411
Total assets $ 6,875 $ (692) $ 6,183 $ (4) $ (3) $ 6,176
Liabilities:
Federal funds purchased and other short-term borrowings $ 2,264 $ (692) $ 1,572 $ 0 $ 0 $ 1,572
Derivatives (included in other liabilities) 38 0 38 (4) (26) 8
Total liabilities $ 2,302 $ (692) $ 1,610 $ (4) $ (26) $ 1,580


	March 31, 2022
							Gross amounts not offset in the balance sheet
(In millions)	Gross amounts recognized		Gross amounts offset in the balance sheet		Net amounts presented in the balance sheet		Financial instruments		Cash collateral received/pledged		Net amount
Assets:
Federal funds sold and security resell agreements	$	2,345	$	—	$	2,345	$	—	$	—	$	2,345
Derivatives (included in other assets)	119		—		119		(8)		(65)		46
Total assets	$	2,464	$	—	$	2,464	$	(8)	$	(65)	$	2,391
Liabilities:
Federal funds purchased and other short-term borrowings	$	638	$	—	$	638	$	—	$	—	$	638
Derivatives (included in other liabilities)	179		—		179		(8)		—		171
Total liabilities	$	817	$	—	$	817	$	(8)	$	—	$	809


	December 31, 2021
							Gross amounts not offset in the balance sheet
(In millions)	Gross amounts recognized		Gross amounts offset in the balance sheet		Net amounts presented in the balance sheet		Financial instruments		Cash collateral received/pledged		Net amount
Assets:
Federal funds sold and security resell agreements	$	2,133	$	—	$	2,133	$	—	$	—	$	2,133
Derivatives (included in other assets)	219		—		219		(16)		(7)		196
Total assets	$	2,352	$	—	$	2,352	$	(16)	$	(7)	$	2,329
Liabilities:
Federal funds purchased and other short-term borrowings	$	903	$	—	$	903	$	—	$	—	$	903
Derivatives (included in other liabilities)	51		—		51		(16)		(1)		34
Total liabilities	$	954	$	—	$	954	$	(16)	$	(1)	$	937

Security repurchase and reverse repurchase (“resell”) agreements are offset, when applicable, in the balance sheet according to master netting agreements. Security repurchase agreements are included with “Federal funds ~~purchased~~ and other short-term borrowings.” Derivative instruments may be offset under their master netting agreements; however, for accounting purposes, we present these items on a gross basis in our balance sheet. See Note 7 for further information regarding derivative instruments.

5. INVESTMENTS

Investment Securities

Investment securities are classified as ~~HTM, AFS,~~held-to-maturity (“HTM”), available-for sale (“AFS”), or trading. HTM securities, which management has the intent and ability to hold until maturity, are carried at amortized cost. The amortized cost amounts represent the original cost of the investments, adjusted for related amortization or accretion of any purchase premiums or discounts, and for any impairment losses, including credit-related impairment. AFS securities are carried at fair value and ~~unrealized~~changes in fair value (unrealized gains and ~~losses~~losses) are reported as net increases or decreases to accumulated other comprehensive income (“AOCI”)., net of related taxes. Trading securities are carried at fair value with gains and losses recognized in current period earnings. The carrying values of our securities do not include accrued interest receivables of ~~$55~~$71 million and ~~$54~~$65 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. These receivables are presented on the consolidated balance sheet in ~~the Consolidated Balance Sheet within the~~ “Other Assets” line item. See Note 5 of our 2020 Form 10-K for more information related to our accounting for investment securities. See also Note 3 of our 2020 Form 10-K for discussion on our process to estimate fair value for investment securities.
June 30, 2021
(In millions) Amortized
cost Gross unrealized gains Gross unrealized losses Estimated
fair value
Held-to-maturity
Municipal securities $ 620 $ 4 $ 2 $ 622
Available-for-sale
U.S. Treasury securities 155 0 27 128
U.S. Government agencies and corporations:
Agency securities 991 31 0 1,022
Agency guaranteed mortgage-backed securities 14,233 186 96 14,323
Small Business Administration loan-backed securities 1,076 3 31 1,048
Municipal securities 1,522 55 3 1,574
Other debt securities 75 0 0 75
Total available-for-sale 18,052 275 157 18,170
Total investment securities $ 18,672 $ 279 $ 159 $ 18,792

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December 31, 2020
(In millions) Amortized
cost Gross unrealized gains Gross unrealized losses Estimated
fair value
Held-to-maturity
Municipal securities $ 636 $ 5 $ 1 $ 640
Available-for-sale
U.S. Treasury securities 205 0 13 192
U.S. Government agencies and corporations:
Agency securities 1,051 40 0 1,091
Agency guaranteed mortgage-backed securities 11,439 262 8 11,693
Small Business Administration loan-backed securities 1,195 0 35 1,160
Municipal securities 1,352 68 0 1,420
Other debt securities 175 0 0 175
Total available-for-sale 15,417 370 56 15,731
Total investment securities $ 16,053 $ 375 $ 57 $ 16,371
assets.” See Note 5 of our 2021 Form 10-K for more information related to our accounting for investment securities, and see Note 3 of our 2021 Form 10-K for description of our process to estimate fair value for investment securities.

The following schedule summarizes the amortized cost and estimated fair values of our HTM and AFS securities:


	March 31, 2022
(In millions)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Held-to-maturity
Municipal securities	$	439	$	—	$	25	$	414
Available-for-sale
U.S. Treasury securities	557		—		54		503
U.S. Government agencies and corporations:
Agency securities	802		—		10		792
Agency guaranteed mortgage-backed securities	23,626		9		1,553		22,082
Small Business Administration loan-backed securities	950		2		27		925
Municipal securities	1,828		6		66		1,768
Other debt securities	75		—		—		75
Total available-for-sale	27,838		17		1,710		26,145
Total HTM and AFS investment securities	$	28,277	$	17	$	1,735	$	26,559


	December 31, 2021
(In millions)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Held-to-maturity
Municipal securities	$	441	$	4	$	2	$	443
Available-for-sale
U.S. Treasury securities	155		—		21		134
U.S. Government agencies and corporations:
Agency securities	833		13		1		845
Agency guaranteed mortgage-backed securities	20,549		108		270		20,387
Small Business Administration loan-backed securities	938		2		28		912
Municipal securities	1,652		46		4		1,694
Other debt securities	75		1		—		76
Total available-for-sale	24,202		170		324		24,048


Total HTM and AFS investment securities	$	24,643	$	174	$	326	$	24,491

Maturities

The following schedule shows the amortized cost and weighted average yields of ~~investment~~ debt securities by contractual maturity of principal payments at ~~June 30, 2021.~~March 31, 2022. Actual principal payments may differ from contractual or expected principal payments because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
June 30, 2021
Total debt investment securities Due in one year or less Due after one year through five years Due after five years through ten years Due after ten years
(Dollar amounts in millions) Amortized cost Avg yield Amortized cost Avg yield Amortized cost Avg yield Amortized cost Avg yield Amortized cost Avg yield
Held-to-maturity
Municipal securities 1
$ 620 2.75 % $ 171 1.67 % $ 160 3.37 % $ 172 2.81 % $ 117 3.36 %
Available-for-sale
U.S. Treasury securities 155 1.28 0 0 0 0 0 0 155 1.28
U.S. Government agencies and corporations:
Agency securities 991 2.12 0 0 361 1.36 267 2.52 363 2.59
Agency guaranteed mortgage-backed securities 14,233 1.65 0 0 391 1.41 725 1.63 13,117 1.66
Small Business Administration loan-backed securities 1,076 1.37 0 0 53 1.42 133 1.56 890 1.34
Municipal securities 1
1,522 2.33 104 1.92 643 2.43 506 2.30 269 2.31
Other debt securities 75 2.15 0 0 0 0 60 1.96 15 2.90
Total available-for-sale securities 18,052 1.72 104 1.92 1,448 1.85 1,691 1.98 14,809 1.67
Total investment securities $ 18,672 1.75 % $ 275 1.76 % $ 1,608 2.00 % $ 1,863 2.05 % $ 14,926 1.68 %

1 ~~The yields on tax-exempt securities are calculated on a tax-equivalent basis.~~

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	March 31, 2022
	Total debt securities				Due in one year or less				Due after one year through five years				Due after five years through ten years				Due after ten years
(Dollar amounts in millions)	Amortized cost		Average yield		Amortized cost		Average yield		Amortized cost		Average yield		Amortized cost		Average yield		Amortized cost		Average yield
Held-to-maturity
Municipal securities 1	$	439	3.02	%	$	29	2.71	%	$	139	3.19	%	$	176	2.71	%	$	95	3.41	%
Available-for-sale
U.S. Treasury securities	557		2.05		—		—		—		—		—		—		557		2.05
U.S. Government agencies and corporations:
Agency securities	802		2.06		31		0.84		317		1.50		292		2.37		162		2.83
Agency guaranteed mortgage-backed securities	23,626		1.70		—		—		442		1.49		1,824		1.84		21,360		1.69
Small Business Administration loan-backed securities	950		1.38		—		—		47		1.30		184		2.18		719		1.18
Municipal securities 1	1,828		2.37		106		2.18		683		2.59		638		2.10		401		2.47
Other debt securities	75		2.17		—		—		—		—		60		1.99		15		2.91
Total available-for-sale securities	27,838		1.75		137		1.88		1,489		1.99		2,998		1.97		23,214		1.70
Total HTM and AFS investment securities	$	28,277	1.77	%	$	166	2.02	%	$	1,628	2.09	%	$	3,174	2.01	%	$	23,309	1.71	%

1 The yields on tax-exempt securities are calculated on a tax-equivalent basis.

The following schedule summarizes the amount of gross unrealized losses for debt securities and the estimated fair value by length of time the securities have been in an unrealized loss position:
June 30, 2021
Less than 12 months 12 months or more Total
(In millions) Gross
unrealized
losses Estimated
fair
value Gross
unrealized
losses Estimated
fair
value Gross
unrealized
losses Estimated
fair
value
Held-to-maturity
Municipal securities $ 2 $ 149 $ 0 $ 14 $ 2 $ 163
Available-for-sale
U.S. Treasury securities 27 128 0 0 27 128
U.S. Government agencies and corporations:
Agency securities 0 105 0 1 0 106
Agency guaranteed mortgage-backed securities 95 6,353 1 125 96 6,478
Small Business Administration loan-backed securities 0 0 31 860 31 860
Municipal securities 3 217 0 0 3 217
Other 0 0 0 0 0 0
Total available-for-sale 125 6,803 32 986 157 7,789
Total investment securities $ 127 $ 6,952 $ 32 $ 1,000 $ 159 $ 7,952


		December 31, 2020													March 31, 2022
		Less than 12 months				12 months or more				Total					Less than 12 months				12 months or more				Total
(In millions)	(In millions)	Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value		(In millions)	Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value
Held-to-maturity	Held-to-maturity													Held-to-maturity
Municipal securities	Municipal securities	$	1	$	96	$	0	$	12	$	1	$	108	Municipal securities	$	12	$	224	$	13	$	92	$	25	$	316

Available-for-sale	Available-for-sale													Available-for-sale
U.S. Treasury securities	U.S. Treasury securities	13		142		0		0		13		142		U.S. Treasury securities	15		386		39		117		54		503
U.S. Government agencies and corporations:	U.S. Government agencies and corporations:													U.S. Government agencies and corporations:
Agency securities	Agency securities	0		6		0		2		0		8		Agency securities	10		660		—		—		10		660
Agency guaranteed mortgage-backed securities	Agency guaranteed mortgage-backed securities	7		1,197		1		179		8		1,376		Agency guaranteed mortgage-backed securities	1,152		17,185		401		3,874		1,553		21,059
Small Business Administration loan-backed securities	Small Business Administration loan-backed securities	0		15		35		1,068		35		1,083		Small Business Administration loan-backed securities	—		27		27		693		27		720
Municipal securities	Municipal securities	0		19		0		0		0		19		Municipal securities	55		1,067		11		89		66		1,156
Other	Other	0		150		0		0		0		150		Other	—		15		—		—		—		15

Total available-for-sale	Total available-for-sale	20		1,529		36		1,249		56		2,778		Total available-for-sale	1,232		19,340		478		4,773		1,710		24,113

Total investment securities		$	21	$	1,625	$	36	$	1,261	$	57	$	2,886
Total HTM and AFS investment securities														Total HTM and AFS investment securities	$	1,244	$	19,564	$	491	$	4,865	$	1,735	$	24,429

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	December 31, 2021
	Less than 12 months				12 months or more				Total
(In millions)	Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value
Held-to-maturity
Municipal securities	$	1	$	88	$	1	$	68	$	2	$	156




Available-for-sale
U.S. Treasury securities	—		—		21		134		21		134
U.S. Government agencies and corporations:
Agency securities	1		121		—		1		1		122
Agency guaranteed mortgage-backed securities	231		13,574		39		942		270		14,516
Small Business Administration loan-backed securities	—		27		28		749		28		776
Municipal securities	4		327		—		8		4		335
Other	—		—		—		—		—		—





Total available-for-sale	236		14,049		88		1,834		324		15,883


Total HTM and AFS investment securities	$	237	$	14,137	$	89	$	1,902	$	326	$	16,039

Approximately ~~148~~455 and ~~119~~137 HTM and ~~960~~3,059 and ~~549~~1,302 AFS investment securities were in an unrealized loss position at ~~June 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, respectively.

Impairment

We review investment securities quarterly on an individual security basis for the presence of impairment. For additional information on our policy and impairment evaluation process for investment securities, see Note 5 of our ~~2020~~2021 Form 10-K.

AFS Impairment ~~Conclusions~~

We did not recognize any impairment on our AFS investment securities portfolio during the first ~~six~~three months of ~~2021.~~2022. Unrealized losses primarily relate to changes in interest rates subsequent to purchase and are not attributable to credit. At ~~June 30, 2021,~~March 31, 2022, we had not initiated any sales of AFS securities, nor did we have an intent to sell any identified securities with unrealized losses. We do not believe it is more likely than not that we would be required to sell such securities before recovery of their amortized cost basis.

HTM Impairment

For HTM securities, the allowance for credit losses (“ACL”) is assessed consistent with the approach described in Note 6 for loans and leases carried at amortized cost. The ACL on HTM securities was less than $1 million at March 31, 2022. All HTM securities were risk-graded as "Pass" in terms of credit quality and none were past due at March 31, 2022. The amortized cost basis of HTM securities categorized by year acquired is summarized in the following schedule:


	March 31, 2022
	Amortized cost basis by year acquired
(In millions)	2022		2021		2020		2019		2018		Prior		Total Securities

Held-to-maturity	$	17	$	101	$	122	$	10	$	—	$	189	$	439

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~~HTM Impairment Conclusions~~

For HTM securities, the ACL is estimated consistent with the approach described in Note 6 for loans carried at amortized cost. The ACL on HTM securities was less than $1 million at June 30, 2021. No HTM securities were past due at June 30, 2021. The amortized cost basis of HTM securities categorized by year of issuance and risk grade is summarized as follows:
June 30, 2021
Amortized cost basis by year of issuance
(In millions) 2021 2020 2019 2018 2017 Prior Total Securities
Held-to-maturity:
Pass $ 209 $ 124 $ 10 $ 0 $ 8 $ 268 $ 619
Accruing substandard 0 0 0 0 0 1 1
Total held-to-maturity $ 209 $ 124 $ 10 $ 0 $ 8 $ 269 $ 620

Securities Gains and Losses Recognized in Income

The following schedule summarizes securities gains and losses recognized in ~~income:~~
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(In millions) Gross gains Gross losses Gross gains Gross losses Gross gains Gross losses Gross gains Gross losses
Other noninterest-bearing investments $ 66 $ 3 $ 3 $ 7 $ 80 $ 6 $ 8 $ 17
Net gains (losses) 1
$ 63 $ (4) $ 74 $ (9)
the income statement:


	Three Months Ended March 31,
	2022				2021
(In millions)	Gross gains		Gross losses		Gross gains		Gross losses




Other noninterest-bearing investments	$	3	$	20	$	14	$	3

Net gains (losses) 1			$	(17)			$	11

1 Net gains (losses) were recognized in securities gains (losses) in the income statement.

~~Interest~~The following schedule presents interest income by ~~investment~~ security ~~type is as follows:~~
Three Months Ended June 30,
2021 2020
(In millions) Taxable Nontaxable Total Taxable Nontaxable Total
Investment securities:
Held-to-maturity $ 2 $ 1 $ 3 $ 3 $ 2 $ 5
Available-for-sale 61 7 68 67 7 74
Trading 0 3 3 0 1 1
Total securities $ 63 $ 11 $ 74 $ 70 $ 10 $ 80
type:


		Six Months Ended June 30,													Three Months Ended March 31,
		2021						2020							2022						2021
(In millions)	(In millions)	Taxable		Nontaxable		Total		Taxable		Nontaxable		Total		(In millions)	Taxable		Nontaxable		Total		Taxable		Nontaxable		Total
Investment securities:	Investment securities:													Investment securities:
Held-to-maturity	Held-to-maturity	$	5	$	3	$	8	$	5	$	5	$	10	Held-to-maturity	$	2	$	1	$	3	$	3	$	2	$	5
Available-for-sale	Available-for-sale	118		14		132		135		13		148		Available-for-sale	96		8		104		57		7		64
Trading	Trading	0		5		5		0		3		3		Trading	—		5		5		—		2		2
Total		$	123	$	22	$	145	$	140	$	21	$	161
Total securities														Total securities	$	98	$	14	$	112	$	60	$	11	$	71

~~Investment~~

At March 31, 2022 and December 31, 2021, investment securities with a carrying value of approximately ~~$1.9~~$3.0 billion and ~~$2.3~~$3.1 billion, ~~at June 30, 2021 andDecember 31, 2020,~~ respectively, were pledged to secure public and trust deposits, advances, and for other purposes as required by law. Securities are also pledged as collateral for security repurchase agreements.

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6. LOANS, LEASES, AND ALLOWANCE FOR CREDIT LOSSES

Loans, Leases, and Loans Held for Sale

Loans and leases are summarized as follows according to major portfolio segment and specific loan class:
(In millions) June 30,
2021 December 31,
2020
Loans held for sale $ 66 $ 81
Commercial:
Commercial and industrial $ 12,947 $ 13,444
PPP 4,461 5,572
Leasing 307 320
Owner-occupied 8,231 8,185
Municipal 3,215 2,951
Total commercial 29,161 30,472
Commercial real estate:
Construction and land development 2,576 2,345
Term 9,532 9,759
Total commercial real estate 12,108 12,104
Consumer:
Home equity credit line 2,727 2,745
1-4 family residential 6,269 6,969
Construction and other consumer real estate 593 630
Bankcard and other revolving plans 415 432
Other 125 124
Total consumer 10,129 10,900
Total loans and leases $ 51,398 $ 53,476


(In millions)	March 31, 2022		December 31, 2021

Loans held for sale	$	43	$	83
Commercial:
Commercial and industrial	$	14,356	$	13,867
PPP	1,081		1,855
Leasing	318		327
Owner-occupied	9,026		8,733
Municipal	3,944		3,658
Total commercial	28,725		28,440
Commercial real estate:
Construction and land development	2,769		2,757
Term	9,325		9,441
Total commercial real estate	12,094		12,198
Consumer:
Home equity credit line	3,089		3,016
1-4 family residential	6,122		6,050
Construction and other consumer real estate	692		638
Bankcard and other revolving plans	410		396
Other	110		113
Total consumer	10,423		10,213

Total loans and leases	$	51,242	$	50,851

Loans and leases are presented at their amortized cost basis, which includes net unamortized purchase premiums, discounts, and deferred loan fees and costs totaling ~~$176~~$59 million and ~~$149~~$83 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. Amortized cost basis does not include accrued interest receivables of ~~$180~~$157 million and ~~$200~~$161 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. These receivables are presented in the Consolidated Balance Sheet within the “Other ~~Assets”~~assets” line item.

Municipal loans generally include loans to state and local governments (“municipalities”) with the debt service being repaid from general funds or pledged revenues of the municipal entity, or to private commercial entities or 501(c)(3) not-for-profit entities utilizing a pass-through municipal entity to achieve favorable tax treatment.

Land acquisition and development loans included in the construction and land development loan portfolio were ~~$171~~$176 million at ~~June 30, 2021~~March 31, 2022 and ~~$156~~$160 million at December 31, ~~2020.~~2021.

Loans with a carrying value of ~~$23.1~~$26.8 billion at ~~June 30, 2021~~both March 31, 2022 and ~~$24.7 billion at~~ December 31, ~~2020~~2021 have been pledged at the Federal Reserve and the ~~FHLB~~Federal Home Loan Bank (“FHLB”) of Des Moines as collateral for potential borrowings.

We sold loans totaling ~~$436 million and $859~~$336 million for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022, and ~~$608 million and $907~~$423 million for the three ~~and six~~ months ended ~~June 30, 2020, respectively,~~March 31, 2021, that were classified as loans held for sale. The sold loans were derecognized from the balance sheet. Loans classified as loans held for sale primarily consist of conforming residential mortgages and the guaranteed portion of ~~SBA~~Small Business Administration (“SBA”) loans that are primarily sold to U.S. government agencies or participated to third parties. They do not consist of loans from the SBA's Paycheck Protection ~~Program.~~Program (“PPP”). At times, we have continuing involvement in the sold loans in the form of servicing rights or ~~a guarantee from the respective issuer.~~guarantees. Amounts added to loans held for sale during these same periods were ~~$428~~$297 million and ~~$855~~$426 million, ~~for the three and six months ended June 30, 2021 and $602 million and $917 million for the three and six months ended June 30, 2020,~~respectively. See Note 5 for further information regarding guaranteed securities.

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The principal balance of sold loans for which we retain servicing was approximately ~~$3.0~~$3.5 billion at ~~June 30, 2021,~~March 31, 2022, and ~~$2.7~~$3.3 billion at December 31, ~~2020.~~2021. Income from loans sold, excluding servicing, was $7$6 million and ~~$18~~$11 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022, and 2021, ~~and $13 million and $26 million for the three and six months ended June 30, 2020,~~ respectively.

Allowance for Credit Losses

The allowance for credit losses (“ACL”), which consists of the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”), represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date. For additional information regarding our policies and methodologies used to estimate the ACL, see Note 6 of our ~~2020~~2021 Form 10-K.

The ACL for AFS and HTM debt securities is estimated separately from loans. For HTM securities, the ACL is estimated consistent with the approach for loans carried at amortized cost. See Note 5 for further discussion onof our estimate of expected credit losses on AFS securities and disclosures related to AFS and HTM securities.

Changes in the ACL are summarized as follows:
Three Months Ended June 30, 2021
(In millions) Commercial Commercial
real estate Consumer Total
Allowance for loan losses
Balance at beginning of period $ 362 $ 152 $ 132 $ 646
Provision for loan losses (43) (41) (29) (113)
Gross loan and lease charge-offs 5 0 3 8
Recoveries 7 0 3 10
Net loan and lease charge-offs (recoveries) (2) 0 0 (2)
Balance at end of period $ 321 $ 111 $ 103 $ 535
Reserve for unfunded lending commitments
Balance at beginning of period $ 24 $ 17 $ 8 $ 49
Provision for unfunded lending commitments (3) (7) 0 (10)
Balance at end of period $ 21 $ 10 $ 8 $ 39
Total allowance for credit losses at end of period
Allowance for loan losses $ 321 $ 111 $ 103 $ 535
Reserve for unfunded lending commitments 21 10 8 39
Total allowance for credit losses $ 342 $ 121 $ 111 $ 574


	Three Months Ended March 31, 2022
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses


Balance at beginning of period	$	311	$	107	$	95	$	513
Provision for loan losses	(24)		(5)		—		(29)
Gross loan and lease charge-offs	13		—		4		17
Recoveries	8		—		3		11
Net loan and lease charge-offs (recoveries)	5		—		1		6
Balance at end of period	$	282	$	102	$	94	$	478
Reserve for unfunded lending commitments


Balance at beginning of period	$	19	$	11	$	10	$	40
Provision for unfunded lending commitments	(5)		1		—		(4)
Balance at end of period	$	14	$	12	$	10	$	36
Total allowance for credit losses at end of period
Allowance for loan losses	$	282	$	102	$	94	$	478
Reserve for unfunded lending commitments	14		12		10		36
Total allowance for credit losses	$	296	$	114	$	104	$	514

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Six Months Ended June 30, 2021
(In millions) Commercial Commercial
real estate Consumer Total
Allowance for loan losses
Balance at beginning of period $ 464 $ 171 $ 142 $ 777
Provision for loan losses (137) (60) (39) (236)
Gross loan and lease charge-offs 23 0 6 29
Recoveries 17 0 6 23
Net loan and lease charge-offs (recoveries) 6 0 0 6
Balance at end of period $ 321 $ 111 $ 103 $ 535
Reserve for unfunded lending commitments
Balance at beginning of period $ 30 $ 20 $ 8 $ 58
Provision for unfunded lending commitments (9) (10) 0 (19)
Balance at end of period $ 21 $ 10 $ 8 $ 39
Total allowance for credit losses at end of period
Allowance for loan losses $ 321 $ 111 $ 103 $ 535
Reserve for unfunded lending commitments 21 10 8 39
Total allowance for credit losses $ 342 $ 121 $ 111 $ 574

Three Months Ended June 30, 2020
(In millions) Commercial Commercial real estate Consumer Total
Allowance for loan losses
Balance at beginning of period $ 413 $ 128 $ 189 $ 730
Provision for loan losses 186 16 (41) 161
Gross loan and lease charge-offs 31 0 5 36
Recoveries 3 0 2 5
Net loan and lease charge-offs (recoveries) 28 0 3 31
Balance at end of period $ 571 $ 144 $ 145 $ 860
Reserve for unfunded lending commitments
Balance at beginning of period $ 16 $ 23 $ 8 $ 47
Provision for unfunded lending commitments 11 (3) (1) 7
Balance at end of period $ 27 $ 20 $ 7 $ 54
Total allowance for credit losses at end of period
Allowance for loan losses $ 571 $ 144 $ 145 $ 860
Reserve for unfunded lending commitments 27 20 7 54
Total allowance for credit losses $ 598 $ 164 $ 152 $ 914

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		Six Months Ended June 30, 2020									Three Months Ended March 31, 2021
(In millions)	(In millions)	Commercial		Commercial real estate		Consumer		Total		(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses	Allowance for loan losses									Allowance for loan losses

Balance at beginning of period	Balance at beginning of period	$	282	$	69	$	146	$	497	Balance at beginning of period	$	464	$	171	$	142	$	777
Provision for loan losses	Provision for loan losses	323		75		3		401		Provision for loan losses	(94)		(19)		(10)		(123)
Gross loan and lease charge-offs	Gross loan and lease charge-offs	41		0		8		49		Gross loan and lease charge-offs	18		—		3		21
Recoveries	Recoveries	7		0		4		11		Recoveries	10		—		3		13
Net loan and lease charge-offs (recoveries)	Net loan and lease charge-offs (recoveries)	34		0		4		38		Net loan and lease charge-offs (recoveries)	8		—		—		8
Balance at end of period	Balance at end of period	$	571	$	144	$	145	$	860	Balance at end of period	$	362	$	152	$	132	$	646

Reserve for unfunded lending commitments	Reserve for unfunded lending commitments									Reserve for unfunded lending commitments

Balance at beginning of period	Balance at beginning of period	$	11	$	12	$	6	$	29	Balance at beginning of period	$	30	$	20	$	8	$	58
Provision for unfunded lending commitments	Provision for unfunded lending commitments	16		8		1		25		Provision for unfunded lending commitments	(6)		(3)		—		(9)
Balance at end of period	Balance at end of period	$	27	$	20	$	7	$	54	Balance at end of period	$	24	$	17	$	8	$	49
Total allowance for credit losses at end of period	Total allowance for credit losses at end of period									Total allowance for credit losses at end of period
Allowance for loan losses	Allowance for loan losses	$	571	$	144	$	145	$	860	Allowance for loan losses	$	362	$	152	$	132	$	646
Reserve for unfunded lending commitments	Reserve for unfunded lending commitments	27		20		7		54		Reserve for unfunded lending commitments	24		17		8		49
Total allowance for credit losses	Total allowance for credit losses	$	598	$	164	$	152	$	914	Total allowance for credit losses	$	386	$	169	$	140	$	695

Nonaccrual Loans

Loans are generally placed on nonaccrual status when payment in full of principal and interest is not expected, or the loan is 90 days or more past due as to principal or interest, unless the loan is both well-secured and in the process of collection. Factors we consider in determining whether a loan is placed on nonaccrual include delinquency status, ~~collateral-value,~~collateral value, borrower or guarantor financial statement information, bankruptcy status, and other information which would indicate that the full and timely collection of interest and principal is uncertain.

A nonaccrual loan may be returned to accrual status when (1) all delinquent interest and principal become current in accordance with the terms of the loan agreement, (2) the loan, if secured, is well-secured, (3) the borrower has paid according to the contractual terms for a minimum of six months, and (4) an analysis of the borrower indicates a reasonable assurance of ~~his or her~~the borrower's ability and willingness to maintain payments.

The amortized cost basis of loans on nonaccrual status is summarized as follows:


	March 31, 2022
	Amortized cost basis				Total amortized cost basis
(In millions)	with no allowance		with allowance				Related allowance


Commercial:
Commercial and industrial	$	20	$	92	$	112	$	38
PPP	—		2		2		—

Owner-occupied	33		20		53		2

Total commercial	53		114		167		40
Commercial real estate:

Term	5		15		20		3
Total commercial real estate	5		15		20		3
Consumer:
Home equity credit line	4		9		13		1
1-4 family residential	8		43		51		5

Bankcard and other revolving plans	—		1		1		1

Total consumer loans	12		53		65		7
Total	$	70	$	182	$	252	$	50

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~~The amortized cost basis of loans on nonaccrual status is summarized as follows:~~
June 30, 2021
Amortized cost basis Total amortized cost basis
(In millions) with no allowance with allowance Related allowance
Loans held for sale $ 1 $ 0 $ 1 $ 0
Commercial:
Commercial and industrial $ 32 $ 79 $ 111 $ 20
PPP 0 1 1 0
Owner-occupied 36 33 69 3
Total commercial 68 113 181 23
Commercial real estate:
Term 13 15 28 2
Total commercial real estate 13 15 28 2
Consumer:
Home equity credit line 6 12 18 3
1-4 family residential 13 65 78 5
Bankcard and other revolving plans 0 1 1 0
Total consumer loans 19 78 97 8
Total $ 100 $ 206 $ 306 $ 33


		December 31, 2020													December 31, 2021
		Amortized cost basis				Total amortized cost basis									Amortized cost basis								Total amortized cost basis
(In millions)	(In millions)	with no allowance		with allowance				Related allowance		(In millions)		with no allowance					with allowance								Related allowance

Commercial:	Commercial:												Commercial:
Commercial and industrial	Commercial and industrial	$	73	$	67			$	140				$	22		Commercial and industrial	$	30			$	94			$	124			$	34

PPP													PPP		2				1				3				—

Owner-occupied	Owner-occupied	38		38		76				4			Owner-occupied		37				20				57				3

Total commercial	Total commercial	111		105		216				26			Total commercial		69				115				184				37
Commercial real estate:	Commercial real estate:												Commercial real estate:

Term	Term	12		19		31				3			Term		6				14				20				3
Total commercial real estate	Total commercial real estate	12		19		31				3			Total commercial real estate		6				14				20				3
Consumer:	Consumer:												Consumer:
Home equity credit line	Home equity credit line	2		14		16				3			Home equity credit line		4				10				14				2
1-4 family residential	1-4 family residential	14		89		103				9			1-4 family residential		9				43				52				5

Bankcard and other revolving plans	Bankcard and other revolving plans	0		1		1				1			Bankcard and other revolving plans		—				1				1				1

Total consumer loans	Total consumer loans	16		104		120				13			Total consumer loans		13				54				67				8
Total	Total	$	139	$	228	$	367			$	42		Total		$	88			$	183			$	271			$	48

For accruing loans, interest is accrued and interest payments are recognized into interest income according to the contractual loan agreement. For nonaccruing loans, the accrual of interest is discontinued, any uncollected or accrued interest is reversed or written-off from interest income in a timely manner (generally within one month), and any payments received on these loans are not recognized into interest income, but are applied as a reduction to the principal outstanding. For the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ there was 0no interest income recognized on a cash basis during the period the loans were on nonaccrual.

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The amount of accrued interest receivables written-off by reversing interest income during the period is summarized by loan portfolio segment as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
(In millions)	(In millions)	2021		2020		2021		2020		(In millions)	2022		2021

Commercial	Commercial	$	4	$	4	$	7	$	8	Commercial	$	4	$	3
Commercial real estate	Commercial real estate	1		1		1		1		Commercial real estate	—		1
Consumer	Consumer	0		0		0		0		Consumer	—		—
Total	Total	$	5	$	5	$	8	$	9	Total	$	4	$	4

Past Due Loans

Closed-end loans with payments scheduled monthly are reported as past due when the borrower is in arrears for two or more monthly payments. Similarly, open-end credits, such as bankcard and other revolving credit plans, are reported as past due when the minimum payment has not been made for two or more billing cycles. Other multi-payment obligations (i.e., quarterly, semi-annual, etc.), single payment, and demand notes, are reported as past due when either principal or interest is due and unpaid for a period of 30 days or more.

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Past due loans (accruing and nonaccruing) are summarized as follows:
June 30, 2021
(In millions) Current 30-89 days
past due 90+ days
past due Total
past due Total
loans Accruing
loans
90+ days
past due
Nonaccrual
loans
that are
current 1
Commercial:
Commercial and industrial $ 12,907 $ 15 $ 25 $ 40 $ 12,947 $ 1 $ 86
PPP 4,461 0 0 0 4,461 0 0
Leasing 307 0 0 0 307 0 0
Owner-occupied 8,197 11 23 34 8,231 3 45
Municipal 3,215 0 0 0 3,215 0 0
Total commercial 29,087 26 48 74 29,161 4 131
Commercial real estate:
Construction and land development 2,576 0 0 0 2,576 0 0
Term 9,521 2 9 11 9,532 2 21
Total commercial real estate 12,097 2 9 11 12,108 2 21
Consumer:
Home equity credit line 2,718 4 5 9 2,727 0 10
1-4 family residential 6,223 7 39 46 6,269 0 36
Construction and other consumer real estate 593 0 0 0 593 0 0
Bankcard and other revolving plans 412 2 1 3 415 0 0
Other 125 0 0 0 125 0 0
Total consumer loans 10,071 13 45 58 10,129 0 46
Total $ 51,255 $ 41 $ 102 $ 143 $ 51,398 $ 6 $ 198
December 31, 2020
(In millions) Current 30-89 days
past due 90+ days
past due Total
past due Total
loans Accruing
loans
90+ days
past due
Nonaccrual
loans
that are
current 1
Commercial:
Commercial and industrial $ 13,388 $ 26 $ 30 $ 56 $ 13,444 $ 2 $ 109
PPP 5,572 0 0 0 5,572 0 0
Leasing 320 0 0 0 320 0 1
Owner-occupied 8,129 34 22 56 8,185 0 48
Municipal 2,951 0 0 0 2,951 0 0
Total commercial 30,360 60 52 112 30,472 2 158
Commercial real estate:
Construction and land development 2,341 0 4 4 2,345 4 0
Term 9,692 57 10 67 9,759 4 13
Total commercial real estate 12,033 57 14 71 12,104 8 13
Consumer:
Home equity credit line 2,733 8 4 12 2,745 0 9
1-4 family residential 6,891 12 66 78 6,969 0 33
Construction and other consumer real estate 630 0 0 0 630 0 0
Bankcard and other revolving plans 428 2 2 4 432 2 1
Other 123 1 0 1 124 0 0
Total consumer loans 10,805 23 72 95 10,900 2 43
Total $ 53,198 $ 140 $ 138 $ 278 $ 53,476 $ 12 $ 214


	March 31, 2022
(In millions)	Current		30-89 days past due		90+ days past due		Total past due		Total loans		Accruing loans 90+ days past due		Nonaccrual loans that are current 1

Commercial:
Commercial and industrial	$	14,285	$	49	$	22	$	71	$	14,356	$	1	$	89
PPP	1,053		26		2		28		1,081		—		—
Leasing	317		1		—		1		318		—		—
Owner-occupied	9,001		13		12		25		9,026		—		40
Municipal	3,944		—		—		—		3,944		—		—
Total commercial	28,600		89		36		125		28,725		1		129
Commercial real estate:
Construction and land development	2,769		—		—		—		2,769		—		—
Term	9,320		1		4		5		9,325		1		17
Total commercial real estate	12,089		1		4		5		12,094		1		17
Consumer:
Home equity credit line	3,083		3		3		6		3,089		—		10
1-4 family residential	6,090		11		21		32		6,122		—		21
Construction and other consumer real estate	692		—		—		—		692		—		—
Bankcard and other revolving plans	408		1		1		2		410		1		—
Other	109		1		—		1		110		—		—
Total consumer loans	10,382		16		25		41		10,423		1		31
Total	$	51,071	$	106	$	65	$	171	$	51,242	$	3	$	177


	December 31, 2021
(In millions)	Current		30-89 days past due		90+ days past due		Total past due		Total loans		Accruing loans 90+ days past due		Nonaccrual loans that are current 1

Commercial:
Commercial and industrial	$	13,822	$	17	$	28	$	45	$	13,867	$	2	$	91
PPP	1,813		35		7		42		1,855		5		—
Leasing	327		—		—		—		327		—		—
Owner-occupied	8,712		7		14		21		8,733		—		42
Municipal	3,658		—		—		—		3,658		—		—
Total commercial	28,332		59		49		108		28,440		7		133
Commercial real estate:
Construction and land development	2,757		—		—		—		2,757		—		—
Term	9,426		10		5		15		9,441		—		15
Total commercial real estate	12,183		10		5		15		12,198		—		15
Consumer:
Home equity credit line	3,008		4		4		8		3,016		—		10
1-4 family residential	6,018		6		26		32		6,050		—		24
Construction and other consumer real estate	638		—		—		—		638		—		—
Bankcard and other revolving plans	393		2		1		3		396		1		—
Other	112		1		—		1		113		—		—
Total consumer loans	10,169		13		31		44		10,213		1		34
Total	$	50,684	$	82	$	85	$	167	$	50,851	$	8	$	182

1 Represents nonaccrual loans that are not past due more than 30 days; however, full payment of principal and interest is still not expected.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES

Credit Quality Indicators

In addition to the nonaccrual and past due criteria, we also analyze loans using loan risk-grading systems, which vary based on the size and type of credit risk exposure. The internal risk grades ~~we assign~~assigned to loans ~~are classified using the following definitions~~follow our definition of Pass, Special Mention, Substandard, and Doubtful, which are consistent with published definitions of regulatory risk classifications.

•Pass – A Pass asset is higher-quality and does not fit any of the other categories described below. The likelihood of loss is considered low.

•Special Mention – A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in our credit position at some future date.

•Substandard – A Substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have well-defined weaknesses and are characterized by the distinct possibility that we may sustain some loss if deficiencies are not corrected.

•Doubtful – A Doubtful asset has all the weaknesses inherent in a Substandard asset with the added characteristics that the weaknesses make collection or liquidation in full highly questionable and improbable.

~~The balance of~~There were 0 loans classified as Doubtful ~~was less than $1 million~~ at ~~June 30, 2021~~both March 31, 2022 and ~~was $4 million at~~ December 31, ~~2020.~~

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~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

2021.

We generally assign internal risk grades to commercial and ~~CRE~~commercial real estate (“CRE”) loans with commitments greater than $1 million based on financial and statistical models, individual credit analysis, and loan officer experience and judgment. For these larger loans, we assign one of multiple risk grades within the Pass classification or one of the risk classifications described previously. We confirm our internal risk grades quarterly, or as soon as we identify information that affects the credit risk of the loan.

For consumer loans and ~~certain small~~for commercial and CRE loans with commitments less than or equal to $1 million, we generally assign internal risk grades similar to those described previously based on automated rules that depend on refreshed credit scores, payment performance, and other risk indicators. These are generally assigned either a Pass, Special Mention, or Substandard grade, and are reviewed as we identify information that might warrant a grade change.

The ~~following schedule presents the~~ amortized cost basis of loans and leases categorized by year of origination and ~~risk classification~~by credit quality classifications as monitored by ~~management. The year of origination is generally represented by the year the loan was either originated or the year in which the loan was renewed or restructured.~~
June 30, 2021
Term loans Revolving loans amortized cost basis Revolving loans converted to term loans amortized cost basis
Amortized cost basis by year of origination
(In millions) 2021 2020 2019 2018 2017 Prior Total
loans
Commercial:
Commercial and industrial
Pass $ 1,052 $ 1,476 $ 1,478 $ 912 $ 418 $ 315 $ 5,966 $ 169 $ 11,786
Special Mention 2 56 64 74 32 29 186 1 444
Accruing Substandard 20 38 139 92 34 64 217 2 606
Nonaccrual 1 10 2 4 8 27 39 20 111
Total commercial and industrial 1,075 1,580 1,683 1,082 492 435 6,408 192 12,947
PPP
Pass 2,556 1,904 0 0 0 0 0 0 4,460
Nonaccrual 0 1 0 0 0 0 0 0 1
Total PPP 2,556 1,905 0 0 0 0 0 0 4,461
Leasing
Pass 11 53 79 74 48 26 0 0 291
Special Mention 0 1 6 2 1 6 0 0 16
Accruing Substandard 0 0 0 0 0 0 0 0 0
Nonaccrual 0 0 0 0 0 0 0 0 0
Total leasing 11 54 85 76 49 32 0 0 307
Owner-occupied
Pass 804 1,568 1,060 1,059 824 2,001 132 76 7,524
Special Mention 8 56 57 55 23 68 8 7 282
Accruing Substandard 55 12 59 54 37 125 13 1 356
Nonaccrual 0 5 14 15 9 23 3 0 69
Total owner-occupied 867 1,641 1,190 1,183 893 2,217 156 84 8,231
Municipal
Pass 548 992 647 313 395 272 0 0 3,167
Special Mention 0 0 0 0 0 34 0 0 34
Accruing Substandard 0 9 0 0 0 5 0 0 14
Nonaccrual 0 0 0 0 0 0 0 0 0
Total municipal 548 1,001 647 313 395 311 0 0 3,215
Total commercial 5,057 6,181 3,605 2,654 1,829 2,995 6,564 276 29,161
Commercial real estate:
Construction and land development
Pass 298 745 708 160 43 3 524 56 2,537
Special Mention 0 0 1 0 0 0 0 0 1
Accruing Substandard 12 0 26 0 0 0 0 0 38
Nonaccrual 0 0 0 0 0 0 0 0 0
Total construction and land development 310 745 735 160 43 3 524 56 2,576
Term
Pass 1,115 2,047 1,796 1,318 620 1,701 207 202 9,006
Special Mention 7 87 26 82 11 36 0 3 252
Accruing Substandard 8 10 30 99 20 76 1 2 246
Nonaccrual 0 0 5 0 1 22 0 0 28
Total term 1,130 2,144 1,857 1,499 652 1,835 208 207 9,532
Total commercial real estate 1,440 2,889 2,592 1,659 695 1,838 732 263 12,108
management are summarized as follows.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES


		June 30, 2021																			March 31, 2022
		Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis					Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
		Amortized cost basis by year of origination																			Amortized cost basis by year of origination
(In millions)	(In millions)	2021		2020		2019		2018		2017		Prior						Total loans		(In millions)	2022		2021		2020		2019		2018		Prior						Total loans

Consumer:
Home equity credit line
Commercial:																				Commercial:
Commercial and industrial																				Commercial and industrial
Pass	Pass	0		0		0		0		0		0		2,601		105		2,706		Pass	$	669	$	2,455	$	1,257	$	1,095	$	700	$	452	$	6,851	$	158	$	13,637
Special Mention	Special Mention	0		0		0		0		0		0		1		0		1		Special Mention	—		5		13		4		13		45		97		1		178
Accruing Substandard	Accruing Substandard	0		0		0		0		0		0		2		0		2		Accruing Substandard	—		30		21		115		44		87		124		8		429
Nonaccrual	Nonaccrual	0		0		0		0		0		0		10		8		18		Nonaccrual	—		13		9		6		1		19		49		15		112
Total home equity credit line		0		0		0		0		0		0		2,614		113		2,727
1-4 family residential
Total commercial and industrial																				Total commercial and industrial	669		2,503		1,300		1,220		758		603		7,121		182		14,356
PPP																				PPP
Pass																				Pass	—		778		301		—		—		—		—		—		1,079

Nonaccrual																				Nonaccrual	—		—		2		—		—		—		—		—		2
Total PPP																				Total PPP	—		778		303		—		—		—		—		—		1,081
Leasing																				Leasing
Pass	Pass	591		1,103		834		636		846		2,178		0		0		6,188		Pass	2		55		70		64		60		55		—		—		306
Special Mention	Special Mention	0		0		0		0		0		1		0		0		1		Special Mention	—		—		—		5		1		1		—		—		7
Accruing Substandard	Accruing Substandard	0		0		0		0		0		2		0		0		2		Accruing Substandard	—		—		—		—		—		5		—		—		5
Nonaccrual	Nonaccrual	0		6		8		4		14		46		0		0		78		Nonaccrual	—		—		—		—		—		—		—		—		—
Total 1-4 family residential		591		1,109		842		640		860		2,227		0		0		6,269
Construction and other consumer real estate
Total leasing																				Total leasing	2		55		70		69		61		61		—		—		318
Owner-occupied																				Owner-occupied
Pass	Pass	71		282		176		49		6		8		0		0		592		Pass	602		2,447		1,311		1,013		810		2,183		193		70		8,629
Special Mention	Special Mention	0		0		0		0		0		0		0		0		0		Special Mention	—		8		12		20		22		65		3		3		133
Accruing Substandard	Accruing Substandard	0		1		0		0		0		0		0		0		1		Accruing Substandard	5		6		28		29		47		91		5		—		211
Nonaccrual	Nonaccrual	0		0		0		0		0		0		0		0		0		Nonaccrual	—		—		2		13		9		25		4		—		53
Total construction and other consumer real estate		71		283		176		49		6		8		0		0		593
Bankcard and other revolving plans
Total owner-occupied																				Total owner-occupied	607		2,461		1,353		1,075		888		2,364		205		73		9,026
Municipal																				Municipal
Pass	Pass	0		0		0		0		0		0		410		2		412		Pass	428		1,279		939		529		208		527		4		—		3,914
Special Mention	Special Mention	0		0		0		0		0		0		0		0		0		Special Mention	—		—		—		—		—		25		—		—		25
Accruing Substandard	Accruing Substandard	0		0		0		0		0		0		2		0		2		Accruing Substandard	—		—		—		—		—		5		—		—		5
Nonaccrual	Nonaccrual	0		0		0		0		0		0		0		1		1		Nonaccrual	—		—		—		—		—		—		—		—		—
Total bankcard and other revolving plans		0		0		0		0		0		0		412		3		415
Other consumer
Total municipal																				Total municipal	428		1,279		939		529		208		557		4		—		3,944
Total commercial																				Total commercial	1,706		7,076		3,965		2,893		1,915		3,585		7,330		255		28,725
Commercial real estate:																				Commercial real estate:
Construction and land development																				Construction and land development
Pass	Pass	47		30		24		14		7		3		0		0		125		Pass	75		695		811		386		61		27		674		36		2,765
Special Mention	Special Mention	0		0		0		0		0		0		0		0		0		Special Mention	—		—		—		1		—		—		—		—		1
Accruing Substandard	Accruing Substandard	0		0		0		0		0		0		0		0		0		Accruing Substandard	—		—		3		—		—		—		—		—		3
Nonaccrual	Nonaccrual	0		0		0		0		0		0		0		0		0		Nonaccrual	—		—		—		—		—		—		—		—		—
Total other consumer		47		30		24		14		7		3		0		0		125
Total consumer		709		1,422		1,042		703		873		2,238		3,026		116		10,129
Total loans		$	7,206	$	10,492	$	7,239	$	5,016	$	3,397	$	7,071	$	10,322	$	655	$	51,398
Total construction and land development																				Total construction and land development	75		695		814		387		61		27		674		36		2,769
Term																				Term
Pass																				Pass	627		2,297		1,604		1,297		994		1,795		189		215		9,018
Special Mention																				Special Mention	—		22		—		—		—		15		—		1		38
Accruing Substandard																				Accruing Substandard	8		9		39		43		95		55		—		—		249
Nonaccrual																				Nonaccrual	—		—		1		5		1		13		—		—		20
Total term																				Total term	635		2,328		1,644		1,345		1,090		1,878		189		216		9,325
Total commercial real estate																				Total commercial real estate	710		3,023		2,458		1,732		1,151		1,905		863		252		12,094

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES


		December 31, 2020																			March 31, 2022
		Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis					Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
		Amortized cost basis by year of origination																			Amortized cost basis by year of origination
(In millions)	(In millions)	2020		2019		2018		2017		2016		Prior						Total loans		(In millions)	2022		2021		2020		2019		2018		Prior						Total loans
Commercial:
Commercial and industrial

Consumer:																				Consumer:
Home equity credit line																				Home equity credit line
Pass	Pass	$	2,585	$	2,743	$	1,903	$	829	$	296	$	228	$	3,298	$	109	$	11,991	Pass	—		—		—		—		—		—		2,982		91		3,073
Special Mention	Special Mention	79		152		183		98		4		43		110		1		670		Special Mention	—		—		—		—		—		—		1		—		1
Accruing Substandard	Accruing Substandard	123		157		129		44		26		17		141		6		643		Accruing Substandard	—		—		—		—		—		—		2		—		2
Nonaccrual	Nonaccrual	57		2		10		8		2		15		36		10		140		Nonaccrual	—		—		—		—		—		—		7		6		13
Total commercial and industrial		2,844		3,054		2,225		979		328		303		3,585		126		13,444
PPP
Pass		5,572		0		0		0		0		0		0		0		5,572

Total PPP		5,572		0		0		0		0		0		0		0		5,572
Leasing
Total home equity credit line																				Total home equity credit line	—		—		—		—		—		—		2,992		97		3,089
1-4 family residential																				1-4 family residential
Pass	Pass	87		121		44		34		14		5		0		0		305		Pass	470		1,384		982		677		428		2,128		—		—		6,069
Special Mention	Special Mention	1		0		2		1		0		6		0		0		10		Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	Accruing Substandard	2		1		1		1		0		0		0		0		5		Accruing Substandard	—		—		—		1		—		1		—		—		2
Nonaccrual	Nonaccrual	0		0		0		0		0		0		0		0		0		Nonaccrual	—		1		3		4		2		41		—		—		51
Total leasing		90		122		47		36		14		11		0		0		320
Owner-occupied
Total 1-4 family residential																				Total 1-4 family residential	470		1,385		985		682		430		2,170		—		—		6,122
Construction and other consumer real estate																				Construction and other consumer real estate
Pass	Pass	1,588		1,205		1,167		895		585		1,806		161		11		7,418		Pass	55		382		186		43		18		8		—		—		692
Special Mention	Special Mention	72		65		60		60		51		41		9		3		361		Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	Accruing Substandard	28		64		61		37		35		98		6		1		330		Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	Nonaccrual	8		11		15		11		6		23		2		0		76		Nonaccrual	—		—		—		—		—		—		—		—		—
Total owner-occupied		1,696		1,345		1,303		1,003		677		1,968		178		15		8,185
Municipal
Total construction and other consumer real estate																				Total construction and other consumer real estate	55		382		186		43		18		8		—		—		692
Bankcard and other revolving plans																				Bankcard and other revolving plans
Pass	Pass	1,031		827		359		419		68		227		3		0		2,934		Pass	—		—		—		—		—		—		401		6		407
Special Mention	Special Mention	0		0		0		0		0		8		0		0		8		Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	Accruing Substandard	0		0		0		0		0		9		0		0		9		Accruing Substandard	—		—		—		—		—		—		2		—		2
Nonaccrual	Nonaccrual	0		0		0		0		0		0		0		0		0		Nonaccrual	—		—		—		—		—		—		1		—		1
Total municipal		1,031		827		359		419		68		244		3		0		2,951
Total commercial		11,233		5,348		3,934		2,437		1,087		2,526		3,766		141		30,472
Commercial real estate:
Construction and land development
Total bankcard and other revolving plans																				Total bankcard and other revolving plans	—		—		—		—		—		—		404		6		410
Other consumer																				Other consumer
Pass	Pass	558		933		267		41		1		6		423		3		2,232		Pass	20		45		19		14		7		5		—		—		110
Special Mention	Special Mention	24		43		11		0		0		0		5		0		83		Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	Accruing Substandard	0		30		0		0		0		0		0		0		30		Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	Nonaccrual	0		0		0		0		0		0		0		0		0		Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and land development		582		1,006		278		41		1		6		428		3		2,345
Term
Pass		2,524		1,858		1,639		761		778		1,291		73		20		8,944
Special Mention		110		89		177		42		23		85		0		5		531
Accruing Substandard		41		34		96		30		18		34		0		0		253
Nonaccrual		3		5		0		2		1		20		0		0		31
Total term		2,678		1,986		1,912		835		820		1,430		73		25		9,759
Total commercial real estate		3,260		2,992		2,190		876		821		1,436		501		28		12,104
Total other consumer																				Total other consumer	20		45		19		14		7		5		—		—		110
Total consumer																				Total consumer	545		1,812		1,190		739		455		2,183		3,396		103		10,423
Total loans																				Total loans	$	2,961	$	11,911	$	7,613	$	5,364	$	3,521	$	7,673	$	11,589	$	610	$	51,242

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		December 31, 2020																			December 31, 2021
		Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis					Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
		Amortized cost basis by year of origination																			Amortized cost basis by year of origination
(In millions)	(In millions)	2020		2019		2018		2017		2016		Prior						Total loans		(In millions)	2021		2020		2019		2018		2016		Prior						Total loans

Consumer:
Home equity credit line
Commercial:																				Commercial:
Commercial and industrial																				Commercial and industrial
Pass	Pass	0		0		0		0		0		0		2,606		115		2,721		Pass	$	2,561	$	1,309	$	1,179	$	748	$	354	$	239	$	6,594	$	121	$	13,105
Special Mention	Special Mention	0		0		0		0		0		0		2		0		2		Special Mention	4		17		9		12		1		3		128		1		175
Accruing Substandard	Accruing Substandard	0		0		0		0		0		0		6		0		6		Accruing Substandard	28		22		99		53		31		65		162		3		463
Nonaccrual	Nonaccrual	0		0		0		0		0		0		11		5		16		Nonaccrual	14		10		6		3		1		21		51		18		124
Total home equity credit line		0		0		0		0		0		0		2,625		120		2,745
1-4 family residential
Total commercial and industrial																				Total commercial and industrial	2,607		1,358		1,293		816		387		328		6,935		143		13,867
PPP																				PPP
Pass																				Pass	1,317		535		—		—		—		—		—		—		1,852

Nonaccrual																				Nonaccrual	—		3		—		—		—		—		—		—		3
Total PPP																				Total PPP	1,317		538		—		—		—		—		—		—		1,855
Leasing																				Leasing
Pass	Pass	1,185		1,017		833		1,081		1,174		1,570		0		0		6,860		Pass	46		74		70		64		42		19		—		—		315
Special Mention	Special Mention	0		0		0		0		0		2		0		0		2		Special Mention	—		1		4		1		1		—		—		—		7
Accruing Substandard	Accruing Substandard	0		0		1		0		2		1		0		0		4		Accruing Substandard	—		—		—		—		—		5		—		—		5
Nonaccrual	Nonaccrual	2		12		7		19		15		48		0		0		103		Nonaccrual	—		—		—		—		—		—		—		—		—
Total 1-4 family residential		1,187		1,029		841		1,100		1,191		1,621		0		0		6,969
Construction and other consumer real estate
Total leasing																				Total leasing	46		75		74		65		43		24		—		—		327
Owner-occupied																				Owner-occupied
Pass	Pass	200		296		106		16		1		11		0		0		630		Pass	2,420		1,366		1,028		868		695		1,663		177		69		8,286
Special Mention	Special Mention	0		0		0		0		0		0		0		0		0		Special Mention	10		13		19		32		18		50		3		3		148
Accruing Substandard	Accruing Substandard	0		0		0		0		0		0		0		0		0		Accruing Substandard	14		24		41		47		24		79		13		—		242
Nonaccrual	Nonaccrual	0		0		0		0		0		0		0		0		0		Nonaccrual	—		4		14		9		9		20		1		—		57
Total construction and other consumer real estate		200		296		106		16		1		11		0		0		630
Bankcard and other revolving plans
Total owner-occupied																				Total owner-occupied	2,444		1,407		1,102		956		746		1,812		194		72		8,733
Municipal																				Municipal
Pass	Pass	0		0		0		0		0		0		426		2		428		Pass	1,303		963		553		250		327		220		3		—		3,619
Special Mention	Special Mention	0		0		0		0		0		0		0		0		0		Special Mention	—		—		—		—		—		25		—		—		25
Accruing Substandard	Accruing Substandard	0		0		0		0		0		0		3		0		3		Accruing Substandard	—		9		—		—		—		5		—		—		14
Nonaccrual	Nonaccrual	0		0		0		0		0		0		0		1		1		Nonaccrual	—		—		—		—		—		—		—		—		—
Total bankcard and other revolving plans		0		0		0		0		0		0		429		3		432
Other consumer
Total municipal																				Total municipal	1,303		972		553		250		327		250		3		—		3,658
Total commercial																				Total commercial	7,717		4,350		3,022		2,087		1,503		2,414		7,132		215		28,440
Commercial real estate:																				Commercial real estate:
Construction and land development																				Construction and land development
Pass	Pass	51		35		22		10		4		2		0		0		124		Pass	640		736		515		94		24		2		650		64		2,725
Special Mention	Special Mention	0		0		0		0		0		0		0		0		0		Special Mention	—		—		1		—		—		—		—		—		1
Accruing Substandard	Accruing Substandard	0		0		0		0		0		0		0		0		0		Accruing Substandard	—		3		28		—		—		—		—		—		31
Nonaccrual	Nonaccrual	0		0		0		0		0		0		0		0		0		Nonaccrual	—		—		—		—		—		—		—		—		—
Total other consumer		51		35		22		10		4		2		0		0		124
Total consumer		1,438		1,360		969		1,126		1,196		1,634		3,054		123		10,900
Total loans		$	15,931	$	9,700	$	7,093	$	4,439	$	3,104	$	5,596	$	7,321	$	292	$	53,476
Total construction and land development																				Total construction and land development	640		739		544		94		24		2		650		64		2,757
Term																				Term
Pass																				Pass	2,407		1,765		1,491		1,066		529		1,401		239		179		9,077
Special Mention																				Special Mention	22		39		10		17		8		25		—		4		125
Accruing Substandard																				Accruing Substandard	9		9		44		77		14		64		—		2		219
Nonaccrual																				Nonaccrual	—		1		5		1		—		13		—		—		20
Total term																				Total term	2,438		1,814		1,550		1,161		551		1,503		239		185		9,441
Total commercial real estate																				Total commercial real estate	3,078		2,553		2,094		1,255		575		1,505		889		249		12,198

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	December 31, 2021
	Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
	Amortized cost basis by year of origination
(In millions)	2021		2020		2019		2018		2016		Prior						Total loans














Consumer:
Home equity credit line
Pass	—		—		—		—		—		—		2,903		96		2,999
Special Mention	—		—		—		—		—		—		1		—		1
Accruing Substandard	—		—		—		—		—		—		2		—		2
Nonaccrual	—		—		—		—		—		—		7		7		14
Total home equity credit line	—		—		—��		—		—		—		2,913		103		3,016
1-4 family residential
Pass	1,391		1,021		728		484		681		1,691		—		—		5,996
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		1		—		—		1		—		—		2
Nonaccrual	—		3		3		3		9		34		—		—		52
Total 1-4 family residential	1,391		1,024		732		487		690		1,726		—		—		6,050
Construction and other consumer real estate
Pass	295		232		73		27		4		7		—		—		638
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and other consumer real estate	295		232		73		27		4		7		—		—		638
Bankcard and other revolving plans
Pass	—		—		—		—		—		—		391		3		394
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		1		—		1
Nonaccrual	—		—		—		—		—		—		1		—		1
Total bankcard and other revolving plans	—		—		—		—		—		—		393		3		396
Other consumer
Pass	58		23		17		9		4		2		—		—		113
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		—		—		—		—
Total other consumer	58		23		17		9		4		2		—		—		113
Total consumer	1,744		1,279		822		523		698		1,735		3,306		106		10,213
Total loans	$	12,539	$	8,182	$	5,938	$	3,865	$	2,776	$	5,654	$	11,327	$	570	$	50,851

Modified and Restructured Loans

Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral position. Loan modifications and restructurings may also occur when the borrower experiences financial difficulty and needs temporary or permanent relief from the original contractual terms of the loan. Loans that have been modified to accommodate a borrower who is experiencing financial difficulties, and for which we have granted a concession that we would not otherwise consider, are considered troubled debt restructurings (“TDRs”).

~~Consistent with recent accounting~~ For further discussion of our policies and regulatory guidance, loan modifications provided to borrowers experiencing financial difficulties exclusively related to the COVID-19 pandemic, in which we provide certain short-term modifications or payment deferrals, are not classified as TDRs. Theprocesses regarding TDRs, ~~disclosed subsequently do not include~~see Note 6 of our 2021 Form 10-K.

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these loan modifications. Other loan modifications above and beyond these short-term modifications or payment deferrals were assessed for TDR classification. For further discussion of our policies and processes regarding TDRs, see Note 6 of our 2020 Form 10-K.

~~Selected information~~Information on TDRs, including the ~~recorded investment~~amortized cost on an accruing and nonaccruing basis by loan class and modification type is summarized in the following schedules:


		June 30, 2021															March 31, 2022
		Recorded investment resulting from the following modification types:															Amortized cost resulting from the following modification types:
(In millions)	(In millions)	Interest rate below market		Maturity or term extension		Principal forgiveness		Payment deferral		Other 1		Multiple modification types 2		Total		(In millions)	Interest rate below market		Maturity or term extension		Principal forgiveness		Payment deferral		Other 1		Multiple modification types 2		Total
Accruing	Accruing															Accruing
Commercial:	Commercial:															Commercial:
Commercial and industrial	Commercial and industrial	$	2	$	0	$	0	$	0	$	12	$	21	$	35	Commercial and industrial	$	19	$	10	$	—	$	—	$	4	$	4	$	37
Owner-occupied	Owner-occupied	5		4		0		8		15		39		71		Owner-occupied	1		4		—		9		14		9		37

Municipal																Municipal	—		10		—		—		—		—		10
Total commercial	Total commercial	7		4		0		8		27		60		106		Total commercial	20		24		—		9		18		13		84
Commercial real estate:	Commercial real estate:															Commercial real estate:
Construction and land development		0		8		0		0		0		0		8

Term	Term	1		26		0		35		96		22		180		Term	1		29		—		27		41		8		106
Total commercial real estate	Total commercial real estate	1		34		0		35		96		22		188		Total commercial real estate	1		29		—		27		41		8		106
Consumer:	Consumer:															Consumer:
Home equity credit line	Home equity credit line	0		1		6		0		0		2		9		Home equity credit line	—		—		5		—		—		2		7
1-4 family residential	1-4 family residential	6		1		3		0		1		16		27		1-4 family residential	3		1		2		—		1		12		19

Total consumer loans	Total consumer loans	6		2		9		0		1		18		36		Total consumer loans	3		1		7		—		1		14		26
Total accruing	Total accruing	14		40		9		43		124		100		330		Total accruing	24		54		7		36		60		35		216
Nonaccruing	Nonaccruing															Nonaccruing
Commercial:	Commercial:															Commercial:
Commercial and industrial	Commercial and industrial	17		1		0		2		8		45		73		Commercial and industrial	1		3		—		11		7		36		58
Owner-occupied	Owner-occupied	5		0		0		3		0		17		25		Owner-occupied	9		—		—		—		—		12		21

Total commercial	Total commercial	22		1		0		5		8		62		98		Total commercial	10		3		—		11		7		48		79
Commercial real estate:	Commercial real estate:															Commercial real estate:

Term	Term	2		0		0		13		2		5		22		Term	—		—		—		11		2		3		16
Total commercial real estate	Total commercial real estate	2		0		0		13		2		5		22		Total commercial real estate	—		—		—		11		2		3		16
Consumer:	Consumer:															Consumer:
Home equity credit line	Home equity credit line	0		0		2		0		0		0		2		Home equity credit line	—		—		1		—		—		—		1
1-4 family residential	1-4 family residential	1		1		1		0		0		3		6		1-4 family residential	—		1		—		—		—		3		4

Total consumer loans	Total consumer loans	1		1		3		0		0		3		8		Total consumer loans	—		1		1		—		—		3		5
Total nonaccruing	Total nonaccruing	25		2		3		18		10		70		128		Total nonaccruing	10		4		1		22		9		54		100
Total	Total	$	39	$	42	$	12	$	61	$	134	$	170	$	458	Total	$	34	$	58	$	8	$	58	$	69	$	89	$	316

1 Includes TDRs that resulted from other modification types including, but not limited to, a legal judgment awarded on different terms, a bankruptcy plan confirmed on different terms, a settlement that includes the delivery of collateral in exchange for debt reduction, etc.

2 Includes TDRs that resulted from a combination of ~~any of~~ the previous modification ~~types.~~types reflected in the schedule.
December 31, 2020
Recorded investment resulting from the following modification types:
(In millions) Interest
rate below
market Maturity
or term
extension Principal
forgiveness Payment
deferral
Other 1
Multiple
modification
types 2
Total
Accruing
Commercial:
Commercial and industrial $ 0 $ 0 $ 0 $ 0 $ 3 $ 4 $ 7
Owner-occupied 5 1 0 4 4 8 22
Total commercial 5 1 0 4 7 12 29
Commercial real estate:
Term 1 0 0 16 94 23 134
Total commercial real estate 1 0 0 16 94 23 134
Consumer:
Home equity credit line 0 1 7 0 0 2 10
1-4 family residential 4 1 3 0 2 15 25
Total consumer loans 4 2 10 0 2 17 35
Total accruing 10 3 10 20 103 52 198
Nonaccruing
Commercial:
Commercial and industrial 0 0 0 3 10 52 65
Owner-occupied 5 0 0 3 0 10 18
Total commercial 5 0 0 6 10 62 83
Commercial real estate:
Term 2 0 0 13 3 2 20
Total commercial real estate 2 0 0 13 3 2 20
Consumer:
Home equity credit line 0 0 2 0 0 0 2
1-4 family residential 1 1 0 0 0 6 8
Total consumer loans 1 1 2 0 0 6 10
Total nonaccruing 8 1 2 19 13 70 113
Total $ 18 $ 4 $ 12 $ 39 $ 116 $ 122 $ 311

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	December 31, 2021
	Amortized cost resulting from the following modification types:
(In millions)	Interest rate below market		Maturity or term extension		Principal forgiveness		Payment deferral		Other 1		Multiple modification types 2		Total
Accruing
Commercial:
Commercial and industrial	$	19	$	1	$	—	$	—	$	4	$	7	$	31
Owner-occupied	5		4		—		8		14		12		43
Municipal	—		10		—		—		—		—		10
Total commercial	24		15		—		8		18		19		84
Commercial real estate:

Term	1		29		—		27		41		8		106
Total commercial real estate	1		29		—		27		41		8		106
Consumer:
Home equity credit line	—		1		5		—		—		2		8
1-4 family residential	5		1		2		—		1		14		23


Total consumer loans	5		2		7		—		1		16		31
Total accruing	30		46		7		35		60		43		221
Nonaccruing
Commercial:
Commercial and industrial	1		4		—		2		8		49		64
Owner-occupied	5		—		—		2		—		13		20

Total commercial	6		4		—		4		8		62		84
Commercial real estate:

Term	—		—		—		11		2		3		16
Total commercial real estate	—		—		—		11		2		3		16
Consumer:
Home equity credit line	—		—		1		—		—		—		1
1-4 family residential	—		1		—		—		3		—		4


Total consumer loans	—		1		1		—		3		—		5
Total nonaccruing	6		5		1		15		13		65		105
Total	$	36	$	51	$	8	$	50	$	73	$	108	$	326

2 Includes TDRs that resulted from a combination of ~~any of~~ the previous modification ~~types.~~types reflected in the schedule.

Unfunded lending commitments on TDRs totaled ~~$27~~$4 million and $3$10 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

The total ~~recorded investment~~amortized cost of all TDRs in which interest rates were modified below market was ~~$107~~$92 million at ~~June 30, 2021~~March 31, 2022 and ~~$76~~$100 million at December 31, ~~2020.~~2021. These loans are included in the previous schedule in the columns for interest rate below market and multiple modification types.

The net financial impact on interest income due to interest rate modifications below market for accruing TDRs for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ was not significant.

On an ongoing basis, we monitor the performance of all TDRs according to their restructured terms. Subsequent payment default is defined in terms of delinquency, when principal or interest payments are past due 90 days or more for commercial loans, or 60 days or more for consumer loans.

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The recorded investment of accruing and nonaccruing TDRs that had a payment default during the three and six months ended June 30, 2021, which were still in default at period end, and were within 12 months or less of being modified as TDRs was approximately $3 million and $5 million, respectively, and $2 million and $3 million for the three and six months ended June 30, 2020,~~respectively.~~

Collateral-Dependent Loans

As discussed previously, when a loan is individually evaluated for expected credit losses, we estimate a specific reserve for the loan based on the projected present value of the loan’s future cash flows discounted at the loan’s effective interest rate, the observable market price of the loan, or the fair value of the loan’s underlying collateral.

Select information on loans for which the repayment is expected to be provided substantially through the operation or sale of the underlying collateral and the borrower is experiencing financial difficulties, including the type of collateral and the extent to which the collateral secures the loans, is summarized as follows:
June 30, 2021
(Dollar amounts in millions) Amortized cost Major types of collateral
Weighted average LTV 1
Commercial:
Commercial and industrial $ 21 Single family residential, Agriculture 49%
Owner-occupied 10 Office building 46%
Commercial real estate:
Term 11 Multi-family, Hotel/Motel, Retail 46%
Consumer:
Home equity credit line 6 Single family residential 41%
1-4 family residential 2 Single family residential 49%
Total $ 50

1 ~~The fair value is based on the most recent appraisal or other collateral evaluation.~~


	March 31, 2022
(Dollar amounts in millions)	Amortized cost		Major types of collateral	Weighted average LTV 1
Commercial:
Commercial and industrial	$	8	Single family residential	39%

Owner-occupied	8		Office building	40%


Commercial real estate:

Term	2		Multi-family	37%

Consumer:
Home equity credit line	4		Single family residential	35%
1-4 family residential	2		Single family residential	38%

Total	$	24

December 31, 2020

December 31, 2021

(Dollar amounts in millions)

Amortized cost

Major types of collateral

Weighted average LTV 1

(Dollar amounts in millions)

Amortized cost

Major types of collateral

Weighted average LTV 1

Commercial:

Commercial and industrial

Single family residential, Agriculture

55%

Commercial and industrial

Corporate assets, Single family residential

55%

Owner-occupied

Office Building

47%

Owner-occupied

Office Building

40%

Commercial real estate:

Term

Multi-family, Hotel/Motel, Retail

58%

Term

Multi-family, Retail

28%

Consumer:

Home equity credit line

Single family residential

34%

Home equity credit line

Single family residential

45%

1-4 family residential

Single family residential

60%

1-4 family residential

Single family residential

35%

Total

1 The fair value is based on the most recent appraisal or other collateral evaluation.

Foreclosed Residential Real Estate

At ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we did 0tnot have any foreclosed residential real estate property. The amortized cost basis of consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure was ~~$11~~$13 million and $10 million for the same periods, respectively.

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7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Objectives and Accounting

Our primary objective for using derivatives is to manage risks, primarily interest rate risk. We use derivatives to manage volatility in interest income, interest expense, earnings, and capital by adjusting our interest rate sensitivity

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to minimize the impact of fluctuations in interest rates. Derivatives are used to stabilize forecasted interest income from variable-rate assets and to modify the coupon or the duration of fixed-rate financial assets or liabilities as we consider advisable. We also assist clients with their risk management needs through the use of derivatives. For a more detailed discussion of the use of and accounting policies regarding derivative instruments, see Note 7 of our ~~2020~~2021 Form 10-K.

Fair Value Hedges of Liabilities – At ~~June 30, 2021,~~March 31, 2022, we had 1 receive-fixed interest rate swap with a notional amount of $500 million designated in a qualifying fair value hedge relationship of fixed-rate debt. The receive-fixed interest rate swap effectively converts the interest on our fixed-rate debt to floating. During the ~~second~~first quarter of ~~2021,~~2022, derivatives designated as fair value hedges of debt ~~increased~~decreased in value by ~~$12~~$7 million which was offset by changes in the fair value of the hedged debt instruments as shown in the schedules below. During the ~~second~~first quarter of ~~2021,~~2022, we fully amortized $3the remaining $1 million of cumulative unamortized debt basis adjustments related to previously terminated fair value hedges of debt. ~~We had $5 million of unamortized debt basis adjustments from previously designated fair value hedges remaining.~~

Fair Value Hedges of Assets – At ~~June 30, 2021,~~March 31, 2022, we had pay-fixed, receive-floating interest rate swaps with an aggregate notional amount of ~~$383~~$990 million designated as fair value hedges of certain AFS securities. These swaps effectively convert the fixed interest income to a floating rate on the hedged portion of the securities. During the ~~second~~first quarter of ~~2021,~~2022, derivatives designated as fair value hedges of fixed-rate AFS securities ~~decreased~~increased in value by ~~$25~~$52 million, which was offset by changes in value of the hedged securities, as shown in the schedules below. We had $7 million of unamortized basis adjustments to AFS securities from previously designated fair value hedges.

Cash Flow Hedges – At ~~June 30, 2021,~~March 31, 2022, we had $4$6 billion notional amount of receive-fixed interest rate swaps designated as cash flow hedges of pools of floating-rate commercial loans. ~~During~~Also during the ~~second~~ quarter, ~~of 2021,~~ our cash flow hedge portfolio decreased in value by ~~$12~~$192 million, which was recorded in AOCI. The amounts deferred in AOCI are reclassified into earnings in the periods in which the hedged interest ~~payments~~receipts occur (i.e., when the hedged forecasted transactions affect earnings).

Collateral and Credit Risk

Exposure to credit risk arises from the possibility of nonperformance by counterparties. No significant losses on derivative instruments have occurred as a result of counterparty nonperformance. For a more detailed discussion of collateral and credit risk related to our derivative contracts, see Note 7 of our ~~2020~~2021 Form 10-K.

Our derivative contracts require us to pledge collateral for derivatives that are in a net liability position at a given balance sheet date. Certain of these derivative contracts contain credit-risk-related contingent features that include the requirement to maintain a minimum debt credit rating. We may be required to pledge additional collateral if a credit-risk-related feature were triggered, such as a downgrade of our credit rating. However, in past situations, not all counterparties have demanded that additional collateral be pledged when provided for by the contractual terms. At ~~June 30, 2021,~~March 31, 2022, the fair value of our derivative liabilities was ~~$295~~$179 million, for which we were required to pledge cash collateral of ~~$61~~$118 million in the normal course of business. If our credit rating were downgraded one notch by either Standard & Poor’s (“S&P”) or Moody’s at ~~June 30, 2021,~~March 31, 2022, there would likely be $2$1 million of additional collateral required to be pledged. As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), all newly eligible derivatives entered into are cleared through a central clearinghouse. Derivatives that are centrally cleared do not have credit-risk-related features that require additional collateral if our credit rating were downgraded.

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Derivative Amounts

~~Selected~~Certain information with respect to notional amounts and recorded gross fair values at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, and the related gain (loss) of derivative instruments is summarized as follows:


		June 30, 2021						December 31, 2020							March 31, 2022						December 31, 2021
		Notional amount		Fair value				Notional amount		Fair value					Notional amount		Fair value				Notional amount		Fair value
(In millions)	(In millions)			Other assets		Other liabilities				Other assets		Other liabilities		(In millions)			Other assets		Other liabilities				Other assets		Other liabilities
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:													Derivatives designated as hedging instruments:
Cash flow hedges of floating-rate assets:	Cash flow hedges of floating-rate assets:													Cash flow hedges of floating-rate assets:
Purchased interest rate floors		$	0	$	0	$	0	$	0	$	0	$	0

Receive-fixed interest rate swaps	Receive-fixed interest rate swaps	3,950		0		0		3,150		0		0		Receive-fixed interest rate swaps	$	6,041	$	—	$	—	$	6,883	$	—	$	—
Fair value hedges:	Fair value hedges:													Fair value hedges:
Debt hedges: Receive-fixed interest rate swaps	Debt hedges: Receive-fixed interest rate swaps	500		0		0		500		0		0		Debt hedges: Receive-fixed interest rate swaps	500		—		—		500		—		—
Asset hedges: Pay-fixed interest rate swaps	Asset hedges: Pay-fixed interest rate swaps	383		9		0		383		3		0		Asset hedges: Pay-fixed interest rate swaps	990		29		—		479		10		—
Total derivatives designated as hedging instruments	Total derivatives designated as hedging instruments	4,833		9		0		4,033		3		0		Total derivatives designated as hedging instruments	7,531		29		—		7,862		10		—
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:													Derivatives not designated as hedging instruments:
Customer-facing interest rate derivatives 1, 2		6,278		261		21		5,986		390		2
Customer-facing interest rate derivatives 1														Customer-facing interest rate derivatives 1	6,604		41		170		6,587		192		36
Offsetting interest rate derivatives 2	Offsetting interest rate derivatives 2	6,278		24		269		5,986		3		409		Offsetting interest rate derivatives 2	6,604		175		43		6,587		38		197
Other interest rate derivatives	Other interest rate derivatives	1,325		8		1		1,649		20		3		Other interest rate derivatives	1,067		6		1		1,286		6		1
Foreign exchange derivatives	Foreign exchange derivatives	359		4		4		223		4		4		Foreign exchange derivatives	380		4		3		288		3		2
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments	14,240		297		295		13,844		417		418		Total derivatives not designated as hedging instruments	14,655		226		217		14,748		239		236
Total derivatives	Total derivatives	$	19,073	$	306	$	295	$	17,877	$	420	$	418	Total derivatives	$	22,186	$	255	$	217	$	22,610	$	249	$	236

1 Customer-facing interest rate derivatives include a net ~~CVA of $5 million at June 30, 2021, and an $18 million net~~ credit valuation adjustment (“CVA”) of $3 million, reducing the fair value ~~amount~~of the liability at March 31, 2022, and $3 million, reducing the fair value of the asset at December 31, ~~2020.~~2021. These adjustments are required to reflect both our nonperformance risk and that of the respective counterparty.

2 The fair value amounts for these derivatives do not include the settlement amounts for those trades that are centrally cleared. Once the settlement amounts with the clearing houses are included the derivative fair values would be the following:


		June 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(In millions)	(In millions)	Other assets		Other liabilities		Other assets		Other liabilities		(In millions)	Other assets		Other liabilities		Other assets		Other liabilities
Customer-facing interest rate derivatives		$	261	$	21	$	390	$	2

Offsetting interest rate derivatives	Offsetting interest rate derivatives	3		18		1		29		Offsetting interest rate derivatives	$	39	$	5	$	8	$	12

The amount of derivative gains (losses) from cash flow and fair value hedges that was deferred in ~~OCI~~other comprehensive income (“OCI”) or recognized in earnings for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is shown in the schedules below.


		Amount of derivative gain (loss) recognized/reclassified
		Three Months Ended June 30, 2021											Three Months Ended March 31, 2022
(In millions)	(In millions)	Effective portion of derivatives gain/(loss) deferred in OCI		Excluded components deferred in OCI (amortization approach)		Amount of gain/(loss) reclassified from OCI into income		Interest on fair value hedges		Hedge ineffectiveness/OCI reclass due to missed forecast		(In millions)	Effective portion of derivative gain/(loss) deferred in AOCI		Excluded components deferred in AOCI (amortization approach)		Amount of gain/(loss) reclassified from AOCI into income		Interest on fair value hedges		Hedge ineffectiveness/AOCI reclass due to missed forecast
Cash flow hedges of floating-rate assets:1	Cash flow hedges of floating-rate assets:1											Cash flow hedges of floating-rate assets:1
Purchased interest rate floors	Purchased interest rate floors	$	0	$	0	$	2	$	0	$	0	Purchased interest rate floors	$	—	$	—	$	2	$	—	$	—
Interest rate swaps	Interest rate swaps	(4)		0		13		0		0		Interest rate swaps	(178)		—		12		—		—
Fair value hedges of liabilities:	Fair value hedges of liabilities:											Fair value hedges of liabilities:
Receive-fixed interest rate swaps	Receive-fixed interest rate swaps	0		0		0		2		0		Receive-fixed interest rate swaps	—		—		—		2		—
Basis amortization on terminated hedges 2, 3	Basis amortization on terminated hedges 2, 3	0		0		0		3		0		Basis amortization on terminated hedges 2, 3	—		—		—		1		—
Fair value hedges of assets:	Fair value hedges of assets:											Fair value hedges of assets:
Pay-fixed interest rate swaps	Pay-fixed interest rate swaps	0		0		0		(1)		0		Pay-fixed interest rate swaps	—		—		—		(1)		—
Basis amortization on terminated hedges 2, 3	Basis amortization on terminated hedges 2, 3	0		0		0		0		0		Basis amortization on terminated hedges 2, 3	—		—		—		—		—
Total derivatives designated as hedging instruments	Total derivatives designated as hedging instruments	$	(4)	$	0	$	15	$	4	$	0	Total derivatives designated as hedging instruments	$	(178)	$	—	$	14	$	2	$	—

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Amount of derivative gain (loss) recognized/reclassified
Six Months Ended June 30, 2021
(In millions) Effective portion of derivatives gain/(loss) deferred in OCI Excluded components deferred in OCI (amortization approach) Amount of gain/(loss) reclassified from OCI into income Interest on fair value hedges Hedge ineffectiveness/OCI reclass due to missed forecast
Cash flow hedges of floating-rate assets: 1
Purchased interest rate floors $ 0 $ 0 $ 6 $ 0 $ 0
Interest rate swaps (9) 0 25 0 0
Fair value hedges of liabilities:
Receive-fixed interest rate swaps 0 0 0 4 0
Basis amortization on terminated hedges 2, 3
0 0 0 6 0
Fair value hedges of assets:
Pay-fixed interest rate swaps 0 0 0 (1) 0
Basis amortization on terminated hedges 2, 3
0 0 0 0 0
Total derivatives designated as hedging instruments $ (9) $ 0 $ 31 $ 9 $ 0

Amount of derivative gain (loss) recognized/reclassified
Three Months Ended June 30, 2020
(In millions) Effective portion of derivatives gain/(loss) deferred in OCI Excluded components deferred in OCI (amortization approach) Amount of gain/(loss) reclassified from OCI into income Interest on fair value hedges Hedge ineffectiveness/OCI reclass due to missed forecast
Cash flow hedges of floating-rate assets: 1
Purchased interest rate floors $ 0 $ 0 $ 3 $ 0 $ 0
Interest rate swaps 10 0 10 0 0
Fair value hedges of liabilities:
Receive-fixed interest rate swaps 0 0 0 1 0
Basis amortization on terminated hedges 2, 3
0 0 0 6 0
Fair value hedges of assets:
Pay-fixed interest rate swaps 0 0 0 0 0
Basis amortization on terminated hedges 2, 3
0 0 0 0 0
Total derivatives designated as hedging instruments $ 10 $ 0 $ 13 $ 7 $ 0

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Amount of derivative gain (loss) recognized/reclassified
Six Months Ended June 30, 2020
(In millions) Effective portion of derivatives gain/(loss) deferred in OCI Excluded components deferred in OCI (amortization approach) Amount of gain/(loss) reclassified from OCI into income Interest on fair value hedges Hedge ineffectiveness/OCI reclass due to missed forecast
Cash flow hedges of floating-rate assets: 1
Purchased interest rate floors $ 0 $ 0 $ 6 $ 0 $ 0
Interest rate swaps 102 0 11 0 0
Fair value hedges of liabilities:
Receive-fixed interest rate swaps 0 0 0 3 0
Basis amortization on terminated hedges 2, 3
0 0 0 7 0
Fair value hedges of assets:
Pay-fixed interest rate swaps 0 0 0 0 0
Basis amortization on terminated hedges 2, 3
0 0 0 0 0
Total derivatives designated as hedging instruments $ 102 $ 0 $ 17 $ 10 $ 0

~~Note: These schedules are not intended to present, at any given time, our long/short position with respect to our derivative contracts.~~


	Three Months Ended March 31, 2021
(In millions)	Effective portion of derivative gain/(loss) deferred in AOCI		Excluded components deferred in AOCI (amortization approach)		Amount of gain/(loss) reclassified from AOCI into income		Interest on fair value hedges		Hedge ineffectiveness/AOCI reclass due to missed forecast
Cash flow hedges of floating-rate assets: 1
Purchased interest rate floors	$	—	$	—	$	3	$	—	$	—
Interest rate swaps	(5)		—		12		—		—
Fair value hedges of liabilities:
Receive-fixed interest rate swaps	—		—		—		2		—
Basis amortization on terminated hedges 2, 3	—		—		—		3		—
Fair value hedges of assets:
Pay-fixed interest rate swaps	—		—		—		(1)		—
Basis amortization on terminated hedges 2, 3	—		—		—		—		—
Total derivatives designated as hedging instruments	$	(5)	$	—	$	15	$	4	$	—

1 ~~Amounts recognized in OCI and reclassified from AOCI represent the effective portion of the derivative gain (loss).~~ For the 12 months following ~~June 30, 2021,~~March 31, 2022, we estimate that ~~$48~~$26 million of losses will be reclassified from AOCI into interest ~~income.~~income, compared with an estimate of $57 million of gains as of March 31, 2021.

2 Adjustment to interest expense resulting from the amortization of the debt basis adjustment on fixed-rate debt previously hedged by terminated receive-fixed interest rate.

3The cumulative unamortized basis adjustment from previously terminated or redesignated fair value hedges at ~~June 30, 2021~~March 31, 2022 is ~~$5 million~~$0 and $7 million of terminated fair value debt and asset hedges, ~~respectively.~~respectively, compared with $9 million and $7 million as of March 31, 2021. The remaining basis adjustment for terminated fair value debt hedges was fully amortized during the first quarter of 2022. The amortization of the cumulative unamortized basis adjustment from asset hedges is not shown in the schedules because it is not significant.

The amount of gains (losses) recognized from derivatives not designated as accounting hedges is summarized as follows:
Other Noninterest Income/(Expense)
(In millions) Three Months Ended June 30, 2021 Six Months Ended June 30, 2021 Three Months Ended June 30, 2020 Six Months Ended June 30, 2020
Derivatives not designated as hedging instruments:
Customer-facing interest rate derivatives $ 87 $ (95) $ 34 $ 346
Offsetting interest rate derivatives (89) 117 (39) (352)
Other interest rate derivatives (6) (10) 2 11
Foreign exchange derivatives 6 11 5 12
Total derivatives not designated as hedging instruments $ (2) $ 23 $ 2 $ 17


	Other Noninterest Income/(Expense)
(In millions)	Three Months Ended March 31, 2022		Three Months Ended March 31, 2021
Derivatives not designated as hedging instruments:
Customer-facing interest rate derivatives	$	(268)	$	(182)
Offsetting interest rate derivatives	281		206
Other interest rate derivatives	1		(4)
Foreign exchange derivatives	6		5
Total derivatives not designated as hedging instruments	$	20	$	25

The following schedule presents derivatives used in fair value hedge accounting relationships, as well as pre-tax gains/(losses) recorded on such derivatives and the related hedged items for the periods presented.


		Gain/(loss) recorded in income													Gain/(loss) recorded in income
		Three Months Ended June 30, 2021						Three Months Ended June 30, 2020							Three Months Ended March 31, 2022						Three Months Ended March 31, 2021
(In millions)	(In millions)	Derivatives 2		Hedged items		Total income statement impact		Derivatives 2		Hedged items		Total income statement impact		(In millions)	Derivatives 2		Hedged items		Total income statement impact		Derivatives 2		Hedged items		Total income statement impact

Debt: Receive-fixed interest rate swaps 1, 2	Debt: Receive-fixed interest rate swaps 1, 2	$	12	$	(12)	$	0	$	4	$	(4)	$	0	Debt: Receive-fixed interest rate swaps 1, 2	$	(32)	$	32	$	—	$	(35)	$	35	$	—
Assets: Pay-fixed interest rate swaps 1, 2	Assets: Pay-fixed interest rate swaps 1, 2	(25)		25		0		0		0		0		Assets: Pay-fixed interest rate swaps 1, 2	53		(53)		—		48		(48)		—

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Gain/(loss) recorded in income
Six Months Ended June 30, 2021 Six Months Ended June 30, 2020
(In millions)
Derivatives 2
Hedged items Total income statement impact
Derivatives 2
Hedged items Total income statement impact
Debt: Receive-fixed interest rate swaps 1, 2
$ (23) $ 23 $ 0 $ 75 $ (75) $ 0
Assets: Pay-fixed interest rate swaps 1, 2
23 (23) 0 0 0 0

1 Consists of hedges of benchmark interest rate risk of fixed-rate long-term debt and fixed-rate AFS securities. Gains and losses were recorded in net interest expense or income consistent with the hedged items.

2 The income/expense for derivatives does not reflect interest income/expense from periodic accruals and payments to be consistent with the presentation of the gains/(losses) on the hedged items.

~~The following schedule provides selected information regarding basis adjustments for hedged items.~~
Par value of hedged assets/(liabilities)
Carrying amount of the hedged assets/(liabilities)1
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item
(In millions) June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020
Long-term fixed-rate debt $ (500) $ (500) $ (514) $ (537) $ (14) $ (37)
Fixed-rate AFS securities 383 383 339 362 (44) (21)

1 ~~Carrying amounts displayed above exclude issuance and purchase discounts or premiums and unamortized issuance/acquisition costs and also exclude amounts related to terminated fair value hedges.~~

~~8. LEASES~~

We determine if a contract is a lease or contains a lease at inception. The right to use leased assets for the lease term are considered right-of-use (“ROU”) assets. Operating lease assets are included in “other assets,” and finance lease assets are included in “premises, equipment and software, net,” and lease liabilities for operating leases are included in “other liabilities,” and finance leases are included in “long-term debt” on our consolidated balance sheet. For a more detailed discussion of our lease policies, see Note 8 of our 2020 Form 10-K.

We have operating and finance leases for branches, corporate offices, and data centers. Our equipment leases are not material. At June 30, 2021, we had 419 branches, of which 273 are owned and 146 are leased. We lease our headquarters in Salt Lake City, Utah, and other office or data centers are either owned or leased.

We may enter into certain lease arrangements with a term of 12 months or less, and we have elected to exclude these from capitalization. The remaining maturities of our lease commitments range from the year 2021 to 2062, and some lease arrangements include options to extend or terminate the leases.

Assets recorded under operating leases were $202 million at June 30, 2021, and $213 million at December 31, 2020, while assets recorded under finance leases were $4 million for the same periods. We utilized a secured incremental borrowing rate based on the remaining term of the lease as of the effective date for the discount rate to determine our lease ROU assets and liabilities.

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The following schedule provides information regarding basis adjustments for hedged items.


	Par value of hedged assets/(liabilities)				Carrying amount of the hedged assets/(liabilities)1				Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item
(In millions)	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021

Long-term fixed-rate debt	$	(500)	$	(500)	$	(474)	$	(507)	$	26	$	(7)
Fixed-rate AFS securities	990		479		894		435		(96)		(44)

1 Carrying amounts displayed above exclude (1) issuance and purchase discounts or premiums, (2) unamortized issuance and acquisition costs, and (3) amounts related to terminated fair value hedges.

8. LEASES

We have operating and finance leases for branches, corporate offices, and data centers. We do not have significant equipment leases. At March 31, 2022, we had 416 branches, of which 273 are owned and 143 are leased. We lease our headquarters in Salt Lake City, Utah. The remaining maturities of our lease commitments range from the year 2022 to 2062, and some lease arrangements include options to extend or terminate the leases.

All leases with lease terms greater than twelve months are reported as a lease liability with a corresponding right-of-use (“ROU”) asset. We present ROU assets for operating leases and finance leases on the consolidated balance sheet in “Other assets,” and “Premises, equipment and software, net,” respectively. The corresponding liabilities for those leases are presented in “Other liabilities,” and “Long-term debt.” For more information about our lease policies, see Note 8 of our 2021 Form 10-K.

The following schedule presents ~~lease-related~~ROU assets and lease liabilities ~~their~~with associated weighted average remaining life and ~~the weighted average~~ discount rate:


(Dollar amounts in millions)	(Dollar amounts in millions)	June 30, 2021			December 31, 2020			(Dollar amounts in millions)	March 31, 2022			December 31, 2021

Operating assets and liabilities
Operating right-of-use assets, net of amortization		$	202		$	213
Operating lease liabilities		229			240
Operating leases								Operating leases
ROU assets, net of amortization								ROU assets, net of amortization	$	188		$	195
Lease liabilities								Lease liabilities	215			222
Financing leases								Financing leases
ROU assets, net of amortization								ROU assets, net of amortization	4			4
Lease liabilities								Lease liabilities	4			4
Weighted average remaining lease term (years)	Weighted average remaining lease term (years)							Weighted average remaining lease term (years)
Operating leases	Operating leases	8.7			8.9			Operating leases	8.5			8.5
Finance leases	Finance leases	18.8			19.2			Finance leases	18.1			18.3
Weighted average discount rate	Weighted average discount rate							Weighted average discount rate
Operating leases	Operating leases	2.8		%	2.9		%	Operating leases	2.8		%	2.8		%
Finance leases	Finance leases	3.1		%	3.1		%	Finance leases	3.1		%	3.1		%

~~The components of lease expense are as follows:~~
Three Months Ended June 30, Six Months Ended June 30,
(In millions) 2021 2020 2021 2020
Operating lease costs $ 12 $ 12 $ 24 $ 24
Variable lease costs 12 12 25 24
Total lease cost $ 24 $ 24 $ 49 $ 48

~~Supplemental cash flow~~Additional information related to ~~leases~~lease expense is ~~as follows:~~
Three Months Ended June 30, Six Months Ended June 30,
(In millions) 2021 2020 2021 2020
Cash paid for amounts in the measurement of lease liabilities:
Operating cash disbursements from operating leases $ 12 $ 13 $ 25 $ 25
presented below:


	Three Months Ended March 31,
(In millions)	2022		2021

Lease expense:
Operating lease expense	$	12	$	12





Other expenses associated with operating leases 1	12		12

Total lease expense	$	24	$	24

Related cash disbursements from operating leases	$	12	$	12

1Other expenses primarily relate to property taxes and building and property maintenance.

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ROU assets ~~obtained in exchange for~~related to new leases totaled $1 million at both March 31, 2022 and December 31, 2021.

Total contractual undiscounted lease ~~liabilities are as follows:~~
Three Months Ended June 30, Six Months Ended June 30,
(In millions) 2021 2020 2021 2020
New operating lease liabilities $ 0 $ 3 $ 0 $ 6

~~Maturities analysis~~payments for operating lease liabilities ~~at June 30, 2021 is as follows (contractual undiscounted lease payments):~~are summarized in the following schedule by expected due date:


(In millions)	(In millions)			(In millions)	Total undiscounted lease payments

2021 1		$	25
2022		47
2022 1				2022 1	$	37
2023	2023	41		2023	45
2024	2024	32		2024	36
2025	2025	23		2025	26
2026				2026	21
Thereafter	Thereafter	97		Thereafter	83
Total	Total	$	265	Total	$	248

1 Contractual maturities for the ~~six~~nine months remaining in ~~2021.~~2022.

We enter into certain lease agreements where we are the lessor of real estate. Real estate leases are made from bank-owned and subleased property to generate cash flow from the property, including from leasing vacant suites in which we occupy portions of the building. Operating lease income was $3 million for both the ~~second~~first quarter of ~~2021~~2022 and ~~2020, and $7 million and $6 million for the first six months of 2021 and 2020, respectively.~~

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2021.

We ~~make~~originated equipment leases, considered to be sales-type leases or direct financing leases, totaling ~~$307~~$318 million and ~~$320~~$327 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. We recorded income of $3 million on these leases for both the ~~second~~first quarter of ~~2021~~2022 and ~~2020, and $6 million and $7 million for the first six months of 2021 and 2020, respectively.~~2021.

9. LONG-TERM DEBT AND SHAREHOLDERS’ EQUITY

Long-Term Debt

~~Long-term~~The long-term debt ~~is summarized as follows:~~

(In millions) June 30,
2021 December 31, 2020
Subordinated notes $ 596 $ 619
Senior notes 708 713
Finance lease obligations 4 4
Total $ 1,308 $ 1,336

~~The preceding~~ carrying values in the following schedule represent the par value of the debt, adjusted for any unamortized premium or discount, unamortized debt issuance costs, and basis adjustments for interest rate swaps designated as fair value hedges.

LONG-TERM DEBT


(In millions)	March 31, 2022		December 31, 2021		Amount change		Percent change



Subordinated notes	$	557	$	590	$	(33)	(6)	%
Senior notes	128		418		(290)		(69)

Finance lease obligations	4		4		—		—
Total	$	689	$	1,012	$	(323)	(32)	%

The decrease in long-term debt was primarily due to the redemption of $290 million of the 4-year, 3.35% senior notes during the first quarter of 2022.

Common Stock

Our common stock is traded on the National Association of Securities Dealers Automated Quotations (“NASDAQ”) Global Select Market. At ~~June 30, 2021,~~March 31, 2022, there were ~~162.2~~151.3 million shares of $0.001 par value common stock outstanding. ~~The balance of common~~Common stock and additional paid-in capital ~~was $2.6~~totaled $1.9 billion at ~~June 30, 2021, and~~March 31, 2022, which decreased ~~$121~~$39 million, or 5%2%, from December 31, ~~2020,~~2021, primarily due to common stock repurchases. During the first ~~six~~three months of ~~2021,~~2022, we repurchased ~~2.7~~0.8 million common shares outstanding for ~~$150~~$50 million at an average price of ~~$54.94~~$65.31 per share.

~~Preferred Stock~~

During the second quarter of 2021, we redeemed the outstanding shares of our 5.75% Series H Non-Cumulative Perpetual Preferred Stock at par value, resulting in a $126 million decrease of preferred stock. There were no additional fees or premium paid associated with the redemption.

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Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) decreased to ~~$175 million~~a loss of $1.3 billion at ~~June 30, 2021, from $325 million at December~~March 31, ~~2020,~~2022, primarily ~~as a result of~~due to decreases in the fair value of ~~AFS~~fixed-rate available-for-sale securities ~~due to~~as a result of changes in interest rates. Changes in AOCI by component are as follows:

(In millions) Net unrealized gains (losses) on investment securities Net unrealized gains (losses) on derivatives and other Pension and post-retirement Total
Six Months Ended June 30, 2021
Balance at December 31, 2020 $ 258 $ 69 $ (2) $ 325
OCI (loss) before reclassifications, net of tax (130) 3 0 (127)
Amounts reclassified from AOCI, net of tax 0 (23) 0 (23)
Other comprehensive income (loss) (130) (20) 0 (150)
Balance at June 30, 2021 $ 128 $ 49 $ (2) $ 175
Income tax benefit included in other comprehensive income (loss) $ (42) $ (6) $ 0 $ (48)
Six Months Ended June 30, 2020
Balance at December 31, 2019 $ 29 $ 28 $ (14) $ 43
OCI before reclassifications, net of tax 241 71 13 325
Amounts reclassified from AOCI, net of tax 0 (13) 0 (13)
Other comprehensive income 241 58 13 312
Balance at June 30, 2020 $ 270 $ 86 $ (1) $ 355
Income tax expense included in OCI $ 79 $ 19 $ 4 $ 102


(In millions)	Net unrealized gains (losses) on investment securities		Net unrealized gains (losses) on derivatives and other		Pension and post-retirement		Total
Three Months Ended March 31, 2022
Balance at December 31, 2021	$	(78)	$	—	$	(2)	$	(80)
OCI (loss) before reclassifications, net of tax	(1,121)		(135)		—		(1,256)
Amounts reclassified from AOCI, net of tax	—		(10)		—		(10)
Other comprehensive loss	(1,121)		(145)		—		(1,266)
Balance at March 31, 2022	$	(1,199)	$	(145)	$	(2)	$	(1,346)
Income tax benefit included in OCI (loss)	$	(363)	$	(47)	$	—	$	(410)
Three Months Ended March 31, 2021
Balance at December 31, 2020	$	258	$	69	$	(2)	$	325
OCI (loss) before reclassifications, net of tax	(165)		(1)		—		(166)
Amounts reclassified from AOCI, net of tax	—		(11)		—		(11)
Other comprehensive income (loss)	(165)		(12)		—		(177)
Balance at March 31, 2021	$	93	$	57	$	(2)	$	148
Income tax benefit included in OCI (loss)	$	(53)	$	(4)	$	—	$	(57)


		Amounts reclassified from AOCI 1				Amounts reclassified from AOCI 1				Statement of income (SI)						Amounts reclassified from AOCI 1								Statement of income (SI)
(In millions)	(In millions)	Three Months Ended June 30,				Six Months Ended June 30,						(In millions)		Three Months Ended March 31,
Details about AOCI components	Details about AOCI components	2021		2020		2021		2020			Affected line item	Details about AOCI components		2022				2021							Affected line item

Net unrealized gains on derivative instruments	Net unrealized gains on derivative instruments	$	15	$	13	$	31	$	17		SI		Interest and fees on loans		Net unrealized gains on derivative instruments			$	14			$	15		SI	Interest and fees on loans
Income tax expense	Income tax expense	4		3		8		4					Income tax expense			4				4
Amounts Reclassified from AOCI		$	11	$	10	$	23	$	13
Amounts reclassified from AOCI													Amounts reclassified from AOCI			$	10			$	11

1 Positive reclassification amounts indicate increases to earnings in the income statement.

10. COMMITMENTS, GUARANTEES, AND CONTINGENT LIABILITIES

Commitments and Guarantees

~~Contractual amounts of various off-balance~~Off-balance sheet financial ~~instruments~~obligations used to meet the financing needs of our customers ~~are as follows:~~include the following:


(In millions)	(In millions)	June 30, 2021		December 31, 2020		(In millions)	March 31, 2022		December 31, 2021

Net unfunded commitments to extend credit 1		$	24,808	$	24,217
Unfunded lending commitments 1						Unfunded lending commitments 1	$	26,391	$	25,797
Standby letters of credit:	Standby letters of credit:					Standby letters of credit:
Financial	Financial	617		531		Financial	589		597
Performance	Performance	233		167		Performance	255		245
Commercial letters of credit	Commercial letters of credit	31		34		Commercial letters of credit	18		22
Total unfunded lending commitments		$	25,689	$	24,949
Total unfunded commitments						Total unfunded commitments	$	27,253	$	26,661

1 Net of participations.

Our 2020 Form 10-K contains further information about these commitments and guarantees including their terms and collateral requirements. At June 30, 2021, we had recorded $4 million as a liability for the guarantees associated

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Our 2021 Form 10-K contains further information about these commitments and guarantees including their terms and collateral requirements. At March 31, 2022, the liability for the guarantees associated with the standby letters of credit was $4 million, which consisted of $2 million attributable to the RULC, and $2 million of deferred commitment fees.

Legal Matters

We are subject to litigation in court and arbitral proceedings, as well as proceedings, investigations, examinations and other actions brought or considered by governmental and self-regulatory agencies. Litigation may relate to lending, deposit and other customer relationships, vendor and contractual issues, employee matters, intellectual property matters, personal injuries and torts, regulatory and legal compliance, and other matters. While most matters relate to individual claims, we are also subject to putative class action claims and similar broader claims. Proceedings, investigations, examinations and other actions brought or considered by governmental and self-regulatory agencies may relate to our banking, investment advisory, trust, securities, and other products and services; our customers’ involvement in money laundering, fraud, securities violations and other illicit activities or our policies and practices relating to such customer activities; and our compliance with the broad range of banking, securities and other laws and regulations applicable to us. At any given time, we may be in the process of responding to subpoenas, requests for documents, data and testimony relating to such matters and engaging in discussions to resolve the matters.

At ~~June 30, 2021,~~March 31, 2022, we were subject to the following material litigation or governmental inquiries:

•a civil suit, JTS Communities, Inc. et. al v. CB&T, Jun Enkoji and Dawn Satow, brought against us in the Superior Court for Sacramento County, California in June 2017. In this case ~~four~~4 investors in our former customer, International Manufacturing Group (“IMG”) seek to hold us liable for losses arising from their investments in that company, alleging that we conspired with and knowingly assisted IMG and its principal in furtherance of an alleged Ponzi scheme. ~~This case~~In March 2022, the parties participated in mediation, which resulted in a binding settlement agreement. Our insurers are responsible for the payment of the settlement amount under applicable policies. The settlement is innot expected to have a significant financial impact on the ~~final discovery phase with a summary judgment motion to be heard on August 26, 2021. Currently, trial is scheduled September 28, 2021.~~Bank.

•a civil class action lawsuit, Evans v. CB&T, brought against us in the United States District Court for the Eastern District of California in May 2017. This case was filed on behalf of a class of up to 50 investors in IMG and seeks to hold us liable for losses of class members arising from their investments in IMG, alleging that we conspired with and knowingly assisted IMG and its principal in furtherance of an alleged Ponzi scheme. In December 2017, the District Court dismissed all claims against the Bank. In January 2018, the plaintiff filed an appeal with the Court of Appeals for the Ninth Circuit. The appeal was heard in early April 2019 with the Court of Appeals reversing the trial court’s dismissal. ~~This case~~In March 2022, the parties participated in mediation and an agreement was reached in principle. Our insurers are responsible for the payment of the settlement amount under applicable policies. The settlement agreement will be submitted to the court for its preliminary approval of the agreement and notification of the putative class. There can be no assurance that the proposed settlement will result in a definitive agreement, that the conditions to the settlement will be met or the settlement will be approved by the court. If completed, the proposed settlement is innot expected to have a significant financial impact on the ~~post-pleading phase and trial will not occur for a substantial period of time.~~Bank.

•two civil cases, Lifescan Inc. and Johnson & Johnson Health Care Services v. Jeffrey Smith, et. al., brought against us in the United States District Court for the District of New Jersey in December 2017, and Roche Diagnostics and Roche Diabetes Care Inc. v. Jeffrey C. Smith, et. al., brought against us in the United States District Court for the District of New Jersey in March 2019. In these cases, certain manufacturers and distributors of medical products seek to hold us liable for allegedly fraudulent practices of a borrower of the Bank who filed for bankruptcy protection in 2017. The cases are in early phases, with initial motion practice and discovery underway in the Lifescan case. Trial has not been scheduled in either case.

•a civil class action lawsuit, Gregory, et. al. v. Zions Bancorporation, brought against us in the United States District Court for Utah in January 2019. This case was filed on behalf of investors in Rust Rare Coin, Inc., alleging that we aided and abetted a Ponzi scheme fraud perpetrated by Rust Rare Coin, a Zions Bank customer.

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The case follows civil actions and the establishment of a receivership for Rust Rare Coin by The Commodities Futures Trading Commission and the Utah Division of Securities in November 2018, as well as a separate suit brought by the ~~SEC~~Securities and Exchange Commission (“SEC”) against Rust Rare Coin and its principal, Gaylen Rust. During the third quarter of 2020, the Court granted our motion to dismiss the plaintiffs' claims in part, dismissing claims relating to fraud and fiduciary duty, but allowing a claim for aiding and abetting conversion to proceed. ~~The case~~On January 14, 2022, the parties notified the court they reached a settlement in principle and the parties are preparing to submit a proposed settlement agreement for the court’s preliminary approval of the agreement and notification of the putative class. There can be no assurance that the proposed settlement will result in a definitive agreement, that the conditions to the settlement will be met or the settlement will be approved by the court. If completed, the proposed settlement is not expected to have a significant financial impact on the Bank.

•Five civil class action cases have been filed against us by the same plaintiffs’ attorney, seeking to hold the Bank liable for practices relating to, and disclosures in, its deposit agreement pertaining to fees. Sipple v. Zions Bancorporation, N.A. was brought against us in the District Court of Clark County, Nevada in February 2021 with respect to foreign transaction fees. The following four cases pertain to insufficient fund fees and have similar or overlapping claims: Ward v. Zions Bancorporation, N.A. was brought against us in federal court in the District of Arizona in May 2021; this case was dismissed by the court in February 2022, but the plaintiff has appealed. Thornton v. Zions Bancorporation, N.A. was brought against us in federal court in the District of Utah in June 2021; the attorney bringing this case took action to dismiss this case in February 2022. Christensen v. Zions Bancorporation, N.A. was brought against us in California state court in November 2021 and removed to federal court in the Southern District of California in January 2022. Covell v. Zions Bancorporation, N.A. was brought against us in federal court in the Southern District of California in April 2022. These cases are all in early ~~discovery phase. Trial has not been scheduled.~~

~~Table~~phases of ~~Contents~~litigation.

~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

At least quarterly, we review outstanding and new legal matters, utilizing then available information. In accordance with applicable accounting guidance, if we determine that a loss from a matter is probable and the amount of the loss can be reasonably estimated, we establish an accrual for the loss. In the absence of such a determination, no accrual is made. Once established, accruals are adjusted to reflect developments relating to the matters.

In our review, we also assess whether we can determine the range of reasonably possible losses for significant matters in which we are unable to determine that the likelihood of a loss is remote. Because of the difficulty of predicting the outcome of legal matters, discussed subsequently, we are able to meaningfully estimate such a range only for a limited number of matters. Based on information available at ~~June 30, 2021,~~March 31, 2022, we estimated that the aggregate range of reasonably possible losses for those matters to be from $0 million to roughly ~~$40~~$10 million in excess of amounts accrued. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from this estimate. Those matters for which a meaningful estimate is not possible are not included within this estimated range and, therefore, this estimated range does not represent our maximum loss exposure.

Based on our current knowledge, we believe that our current estimated liability for litigation and other legal actions and claims, reflected in our accruals and determined in accordance with applicable accounting guidance, is adequate and that liabilities in excess of the amounts currently accrued, if any, arising from litigation and other legal actions and claims for which an estimate as previously described is possible, will not have a material impact on our financial condition, results of operations, or cash flows. However, in light of the significant uncertainties involved in these matters, and the very large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could be material to our financial condition, results of operations, or cash flows for any given reporting period.

Any estimate or determination relating to the future resolution of litigation, arbitration, governmental or self-regulatory examinations, investigations or actions or similar matters is inherently uncertain and involves significant judgment. This is particularly true in the early stages of a legal matter, when legal issues and facts have not been well articulated, reviewed, analyzed, and vetted through discovery, preparation for trial or hearings, substantive and

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productive mediation or settlement discussions, or other actions. It is also particularly true with respect to class action and similar claims involving multiple defendants, matters with complex procedural requirements or substantive issues or novel legal theories, and examinations, investigations and other actions conducted or brought by governmental and self-regulatory agencies, in which the normal adjudicative process is not applicable. Accordingly, we usually are unable to determine whether a favorable or unfavorable outcome is remote, reasonably likely, or probable, or to estimate the amount or range of a probable or reasonably likely loss, until relatively late in the course of a legal matter, sometimes not until a number of years have elapsed. Accordingly, our judgments and estimates relating to claims will change from time to time in light of developments and actual outcomes will differ from our estimates. These differences may be material.

11. REVENUE RECOGNITION

We derive our revenue primarily from interest income on loans and securities, which was approximately ~~73%~~79% of our total revenue in the ~~second~~first quarter of ~~2021.~~2022. Only noninterest income is considered to be revenue from contracts with customers in scope of ASC 606. For ~~a discussion of~~more information about our revenue recognition from contracts, ~~and the implementation of ASC 606,~~ see Note 17 of our ~~2020~~2021 Form 10-K.

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~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

Disaggregation of Revenue

The schedule below presents noninterest income and net revenue by our operating business segments for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021. Certain prior period amounts have been reclassified to conform with the current period ~~presentation.~~presentation, where applicable. These reclassifications did not affect net income or shareholders’ equity.


		Zions Bank				Amegy				CB&T					Zions Bank				Amegy				CB&T
(In millions)	(In millions)	2021		2020		2021		2020		2021		2020		(In millions)	2022		2021		2022		2021		2022		2021

Commercial account fees	Commercial account fees	$	11	$	10	$	10	$	10	$	6	$	5	Commercial account fees	$	15	$	11	$	11	$	10	$	7	$	6
Card fees	Card fees	15		11		7		6		4		3		Card fees	13		13		8		6		5		4
Retail and business banking fees	Retail and business banking fees	6		5		4		3		3		3		Retail and business banking fees	6		5		4		4		3		3

Capital markets and foreign exchange fees	Capital markets and foreign exchange fees	0		(1)		0		1		0		0		Capital markets and foreign exchange fees	—		—		—		—		—		—
Wealth management fees	Wealth management fees	5		4		3		2		1		1		Wealth management fees	6		5		4		3		1		1
Other customer-related fees	Other customer-related fees	2		2		1		2		1		1		Other customer-related fees	2		1		1		1		1		1
Total noninterest income from contracts with customers (ASC 606)	Total noninterest income from contracts with customers (ASC 606)	39		31		25		24		15		13		Total noninterest income from contracts with customers (ASC 606)	42		35		28		24		17		15
Other noninterest income (Non-ASC 606 customer-related)		7		7		9		8		9		6
Total customer-related fees		46		38		34		32		24		19
Other noninterest income (noncustomer-related)		0		0		1		(1)		1		0
Other noninterest income (non-ASC 606 customer-related)														Other noninterest income (non-ASC 606 customer-related)	4		5		9		8		6		8
Total customer-related noninterest income														Total customer-related noninterest income	46		40		37		32		23		23
Other noncustomer-related noninterest income														Other noncustomer-related noninterest income	—		(1)		—		—		1		1
Total noninterest income	Total noninterest income	46		38		35		31		25		19		Total noninterest income	46		39		37		32		24		24

Other real estate owned gain from sale														Other real estate owned gain from sale	—		—		—		—		—		—
Net interest income	Net interest income	159		165		117		126		133		127		Net interest income	157		157		112		116		129		131
Total income less interest expense	Total income less interest expense	$	205	$	203	$	152	$	157	$	158	$	146	Total income less interest expense	$	203	$	196	$	149	$	148	$	153	$	155

		NBAZ				NSB				Vectra
(In millions)		2021		2020		2021		2020		2021		2020

Commercial account fees		$	2	$	2	$	2	$	1	$	2	$	1
Card fees		3		2		3		2		1		1
Retail and business banking fees		2		2		3		2		1		1

Capital markets and foreign exchange fees		0		0		0		0		0		0
Wealth management fees		1		0		1		1		0		0
Other customer-related fees		0		0		0		0		1		1
Total noninterest income from contracts with customers (ASC 606)		8		6		9		6		5		4
Other noninterest income (Non-ASC 606 customer-related)		2		4		3		4		3		4
Total customer-related fees		10		10		12		10		8		8
Other noninterest income (noncustomer-related)		1		0		0		0		0		0
Total noninterest income		11		10		12		10		8		8

Net interest income		53		54		37		37		35		34
Total income less interest expense		$	64	$	64	$	49	$	47	$	43	$	42

		TCBW				Other				Consolidated Bank
(In millions)		2021		2020		2021		2020		2021		2020

Commercial account fees		$	1	$	1	$	0	$	0	$	34	$	30
Card fees		0		0		0		0		33		25
Retail and business banking fees		0		0		(1)		(1)		18		15

Capital markets and foreign exchange fees		0		0		2		3		2		3
Wealth management fees		0		0		0		1		11		9
Other customer-related fees		0		0		8		6		13		12
Total noninterest income from contracts with customers (ASC 606)		1		1		9		9		111		94
Other noninterest income (Non-ASC 606 customer-related)		1		0		(6)		3		28		36
Total customer-related fees		2		1		3		12		139		130
Other noninterest income (noncustomer-related)		0		0		63		(12)		66		(13)
Total noninterest income		2		1		66		0		205		117

Net interest income		14		14		7		6		555		563
Total income less interest expense		$	16	$	15	$	73	$	6	$	760	$	680

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~~The following schedule presents the noninterest income and net revenue by operating segments for the six months ended June 30, 2021 and 2020:~~


		Zions Bank				Amegy				CB&T					NBAZ				NSB				Vectra
(In millions)	(In millions)	2021		2020		2021		2020		2021		2020		(In millions)	2022		2021		2022		2021		2022		2021

Commercial account fees	Commercial account fees	$	22	$	21	$	19	$	18	$	12	$	11	Commercial account fees	$	2	$	2	$	3	$	2	$	2	$	2
Card fees	Card fees	27		23		13		12		8		6		Card fees	4		2		3		3		2		1
Retail and business banking fees	Retail and business banking fees	10		10		7		7		6		6		Retail and business banking fees	2		2		3		3		1		1

Capital markets and foreign exchange fees	Capital markets and foreign exchange fees	0		(1)		2		3		0		0		Capital markets and foreign exchange fees	—		—		—		—		—		—
Wealth management fees	Wealth management fees	10		8		6		6		2		2		Wealth management fees	1		1		1		1		—		—
Other customer-related fees	Other customer-related fees	4		4		3		4		2		3		Other customer-related fees	—		—		—		—		1		1
Total noninterest income from contracts with customers (ASC 606)	Total noninterest income from contracts with customers (ASC 606)	73		65		50		50		30		28		Total noninterest income from contracts with customers (ASC 606)	9		7		10		9		6		5
Other noninterest income (Non-ASC 606 customer-related)		12		12		16		17		17		15
Total customer-related fees		85		77		66		67		47		43
Other noninterest income (noncustomer-related)		0		(1)		1		0		2		1
Other noninterest income (non-ASC 606 customer-related)														Other noninterest income (non-ASC 606 customer-related)	1		4		2		4		2		3
Total customer-related noninterest income														Total customer-related noninterest income	10		11		12		13		8		8
Other noncustomer-related noninterest income														Other noncustomer-related noninterest income	1		—		—		—		—		—
Total noninterest income	Total noninterest income	85		76		67		67		49		44		Total noninterest income	11		11		12		13		8		8

Other real estate owned gain from sale														Other real estate owned gain from sale	—		—		—		—		—		—
Net interest income	Net interest income	316		329		233		246		264		252		Net interest income	51		52		37		37		33		34
Total income less interest expense	Total income less interest expense	$	401	$	405	$	300	$	313	$	313	$	296	Total income less interest expense	$	62	$	63	$	49	$	50	$	41	$	42

		NBAZ				NSB				Vectra					TCBW				Other				Consolidated Bank
(In millions)	(In millions)	2021		2020		2021		2020		2021		2020		(In millions)	2022		2021		2022		2021		2022		2021

Commercial account fees	Commercial account fees	$	4	$	4	$	4	$	4	$	3	$	3	Commercial account fees	$	1	$	1	$	—	$	(2)	$	41	$	32
Card fees	Card fees	5		5		6		5		3		2		Card fees	—		—		1		—		36		29
Retail and business banking fees	Retail and business banking fees	4		4		5		4		2		2		Retail and business banking fees	—		—		—		(1)		19		17

Capital markets and foreign exchange fees	Capital markets and foreign exchange fees	0		0		0		0		0		0		Capital markets and foreign exchange fees	—		—		1		2		1		2
Wealth management fees	Wealth management fees	1		1		2		2		1		1		Wealth management fees	—		—		—		—		13		11
Other customer-related fees	Other customer-related fees	1		0		0		0		1		1		Other customer-related fees	—		—		9		7		14		11
Total noninterest income from contracts with customers (ASC 606)	Total noninterest income from contracts with customers (ASC 606)	15		14		17		15		10		9		Total noninterest income from contracts with customers (ASC 606)	1		1		11		6		124		102
Other noninterest income (Non-ASC 606 customer-related)		6		7		8		6		6		7
Total customer-related fees		21		21		25		21		16		16
Other noninterest income (noncustomer-related)		1		0		0		0		0		0
Other noninterest income (non-ASC 606 customer-related)														Other noninterest income (non-ASC 606 customer-related)	—		—		3		(1)		27		31
Total customer-related noninterest income														Total customer-related noninterest income	1		1		14		5		151		133
Other noncustomer-related noninterest income														Other noncustomer-related noninterest income	—		—		(11)		36		(9)		36
Total noninterest income	Total noninterest income	22		21		25		21		16		16		Total noninterest income	1		1		3		41		142		169

Other real estate owned gain from sale														Other real estate owned gain from sale	—		—		—		—		—		—
Net interest income	Net interest income	105		108		74		73		68		67		Net interest income	14		13		11		5		544		545
Total income less interest expense	Total income less interest expense	$	127	$	129	$	99	$	94	$	84	$	83	Total income less interest expense	$	15	$	14	$	14	$	46	$	686	$	714

		TCBW				Other				Consolidated Bank
(In millions)		2021		2020		2021		2020		2021		2020

Commercial account fees		$	1	$	1	$	1	$	(1)	$	66	$	61
Card fees		1		0		0		2		63		55
Retail and business banking fees		0		0		1		0		35		33

Capital markets and foreign exchange fees		0		0		2		4		4		6
Wealth management fees		0		0		(1)		(1)		21		19
Other customer-related fees		0		0		13		10		24		22
Total noninterest income from contracts with customers (ASC 606)		2		1		16		14		213		196
Other noninterest income (Non-ASC 606 customer-related)		1		1		(7)		10		59		75
Total customer-related fees		3		2		9		24		272		271
Other noninterest income (noncustomer-related)		0		0		98		(21)		102		(21)
Total noninterest income		3		2		107		3		374		250

Net interest income		27		26		13		10		1,100		1,111
Total income less interest expense		$	30	$	28	$	120	$	13	$	1,474	$	1,361

Revenue from contracts with customers did not generate significant contract assets and liabilities. Contract receivables are included in ~~other assets~~“Other assets” on the consolidated balance sheet. Payment terms vary by services offered, and the timing between completion of performance obligations and payment is typically not significant.

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~~ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES~~

12. INCOME TAXES

The effective income tax rate was ~~22.2% for the second quarter of 2021, compared with 19.5% for the second quarter of 2020. The effective income tax rate~~20.4% for the first ~~six months~~quarter of ~~2021 and 2020 was 21.9% and 18.4%, respectively.~~2022, compared with 21.7% for the first quarter of 2021. These rates were reduced by nontaxable municipal interest income and nontaxable income from certain bank-owned life insurance (“BOLI”), and were increased by the non-deductibility of Federal Deposit Insurance Corporation (“FDIC”) premiums, certain executive compensation plans, and other fringe benefits. ~~Compared with 2021, the 2020~~The tax rate for the first quarter 2022 was ~~also~~ lower than the tax rate for the same prior year period, primarily as a result of the proportional increase in nontaxable items and tax credits relative to pretax book income.

~~The amount of our~~At March 31, 2022, we had a net deferred tax ~~liability~~asset (“~~DTL”~~DTA”) ~~was $63~~totaling $467 million, ~~at June 30, 2021,~~ compared with $3$96 million at December 31, ~~2020.~~2021. On the consolidated balance sheet, the net DTA is included in “Other assets.” The increase in the net ~~DTL resulted primarily from~~DTA was driven largely by the increase in unrealized losses in AOCI associated with investment securities and derivative instruments, and was partially offset by the negative provision for credit losses and a decrease in deferred compensation.

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There was ~~partially offset by an increase in unrealized losses in AOCI related to investment securities.~~

~~We had 0~~no valuation allowance at ~~June 30, 2021~~March 31, 2022 or December 31, ~~2020, respectively.~~2021. We ~~regularly~~ evaluate ~~deferred tax assets~~DTAs on a regular basis to determine whether a valuation allowance is required. ~~This~~In conducting this evaluation, ~~considers~~we consider all available evidence, both positive and negative, based on the ~~more likely than not~~more-likely-than-not criteria that such assets will be realized. This evaluation ~~also~~ includes, but is not limited to, (1) available carryback potential to prior tax ~~years,~~years; (2) potential future reversals of existing deferred tax liabilities, which historically ~~has~~have a reversal pattern generally consistent with ~~deferred tax assets,~~DTAs; (3) potential tax planning ~~strategies,~~strategies; and (4) future projected taxable income. Based on ~~our~~this evaluation, ~~and considering the weight of the positive evidence compared with the negative evidence,~~ we concluded that a valuation allowance was not required at ~~June 30, 2021.~~March 31, 2022.

13. NET EARNINGS PER COMMON SHARE

Basic and diluted net earnings per common share based on the weighted average outstanding shares are summarized as follows:

Three Months Ended
June 30, Six Months Ended
June 30,
(In millions, except shares and per share amounts) 2021 2020 2021 2020
Basic:
Net income $ 354 $ 66 $ 676 $ 80
Less common and preferred dividends 65 66 129 130
Less impact from redemption of preferred stock 3 0 3 0
Undistributed earnings 286 0 544 (50)
Less undistributed earnings applicable to nonvested shares 2 0 5 0
Undistributed earnings applicable to common shares 284 0 539 (50)
Distributed earnings applicable to common shares 56 56 111 112
Total earnings applicable to common shares $ 340 $ 56 $ 650 $ 62
Weighted average common shares outstanding (in thousands) 162,742 163,542 163,144 163,843
Net earnings per common share $ 2.08 $ 0.34 $ 3.98 $ 0.38
Diluted:
Total earnings applicable to common shares $ 340 $ 56 $ 650 $ 62
Weighted average common shares outstanding (in thousands) 162,742 163,542 163,144 163,843
Dilutive effect of common stock warrants (in thousands) 0 723 0 4,012
Dilutive effect of stock options (in thousands) 312 160 324 277
Weighted average diluted common shares outstanding (in thousands) 163,054 164,425 163,468 168,132
Net earnings per common share $ 2.08 $ 0.34 $ 3.98 $ 0.37

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	Three Months Ended March 31,
(In millions, except shares and per share amounts)	2022		2021
Basic:
Net income	$	203	$	322
Less common and preferred dividends	66		64

Undistributed earnings	137		258
Less undistributed earnings applicable to nonvested shares	1		2
Undistributed earnings applicable to common shares	136		256
Distributed earnings applicable to common shares	57		56
Total earnings applicable to common shares	$	193	$	312
Weighted average common shares outstanding (in thousands)	151,285		163,551
Net earnings per common share	$	1.27	$	1.90
Diluted:
Total earnings applicable to common shares	$	193	$	312
Weighted average common shares outstanding (in thousands)	151,285		163,551


Dilutive effect of stock options (in thousands)	402		336
Weighted average diluted common shares outstanding (in thousands)	151,687		163,887
Net earnings per common share	$	1.27	$	1.90

The following schedule presents the weighted average stock awards that were anti-dilutive and not included in the calculation of diluted earnings per share:


		Three Months Ended June 30,		Six Months Ended June 30,			Three Months Ended March 31,
(In thousands)	(In thousands)	2021	2020	2021	2020	(In thousands)	2022	2021

Restricted stock and restricted stock units	Restricted stock and restricted stock units	1,374	1,321	1,394	1,357	Restricted stock and restricted stock units	1,339	1,414
Stock options	Stock options	7	938	234	855	Stock options	109	377

14. OPERATING SEGMENT INFORMATION

We manage our operations ~~and prepare management reports and other information~~ with a primary focus on geographic area. We conduct our operations primarily through 7 separately managed affiliate banks, each with its own local branding and management team, including Zions Bank, Amegy Bank, California Bank & Trust, National Bank of Arizona, Nevada State Bank, Vectra Bank Colorado, and The Commerce Bank of Washington. These affiliate banks comprise our primary business segments. Performance assessment and resource allocation are based upon this geographic structure. The operating segment identified as “Other” includes certain non-bank financial service subsidiaries, centralized back-office functions, and eliminations of transactions between segments.

We allocate the cost of centrally provided services to the business segments based upon estimated or actual usage of those services. We also allocate capital based on the risk-weighted assets held at each business segment. We use an

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internal funds transfer pricing (“FTP”) allocation system and process to report results of operations for business segments, which is continually refined. In the third quarter of 2020, we allocated the net interest income associated with our Treasury department to the business segments. Historically, this amount was presented in the “Other” segment. Prior period amounts have been revised to reflect the impact of this change had it been instituted in the periods presented. Total average loans and deposits presented for the business segments include insignificant intercompany amounts between business segments and may also include deposits with the “Other” segment.

At ~~June 30, 2021,~~March 31, 2022, Zions Bank operated 96 branches in Utah, 25 branches in Idaho, and 1 branch in Wyoming. Amegy operated 75 branches in Texas. CB&T operated 8382 branches in California. NBAZ operated 56 branches in Arizona. NSB operated 4543 branches in Nevada. Vectra operated 34 branches in Colorado and 1 branch in New Mexico. TCBW operated 2 branches in Washington and 1 branch in Oregon.

~~The accounting policies of the individual business segments are the same as those of the Bank.~~ Transactions between business segments are primarily conducted at fair value, resulting in profits that are eliminated for reporting consolidated results of operations.

The following ~~schedules do not present total assets or income tax expense for each operating segment, but instead present~~schedule presents average loans, average deposits, and income before income taxes because we use these metrics when evaluating performance and making decisions pertaining to the business segments. The condensed statement of income identifies the components of income and expense which affect the operating amounts presented in the “Other” segment.

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The following schedule presents selected operating segment information for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:


		Zions Bank				Amegy				CB&T					Zions Bank				Amegy				CB&T
(In millions)	(In millions)	2021		2020		2021		2020		2021		2020		(In millions)	2022		2021		2022		2021		2022		2021
SELECTED INCOME STATEMENT DATA	SELECTED INCOME STATEMENT DATA													SELECTED INCOME STATEMENT DATA
Net interest income	Net interest income	$	159	$	165	$	117	$	126	$	133	$	127	Net interest income	$	157	$	157	$	112	$	116	$	129	$	131
Provision for credit losses	Provision for credit losses	(8)		40		(45)		25		(32)		46		Provision for credit losses	(2)		(11)		(27)		(53)		6		(37)
Net interest income after provision for credit losses	Net interest income after provision for credit losses	167		125		162		101		165		81		Net interest income after provision for credit losses	159		168		139		169		123		168
Noninterest income	Noninterest income	46		38		35		31		25		19		Noninterest income	46		39		37		32		24		24
Noninterest expense	Noninterest expense	113		111		84		79		76		74		Noninterest expense	123		117		86		85		84		80
Income (loss) before income taxes	Income (loss) before income taxes	$	100	$	52	$	113	$	53	$	114	$	26	Income (loss) before income taxes	$	82	$	90	$	90	$	116	$	63	$	112
SELECTED AVERAGE BALANCE SHEET DATA	SELECTED AVERAGE BALANCE SHEET DATA													SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	Total average loans	$	13,248	$	14,222	$	12,452	$	13,570	$	13,053	$	12,524	Total average loans	$	12,817	$	13,730	$	11,795	$	12,704	$	12,845	$	13,051
Total average deposits	Total average deposits	22,862		17,977		15,350		13,023		15,602		13,522		Total average deposits	26,120		21,711		16,413		14,243		16,468		15,183

		NBAZ				NSB				Vectra					NBAZ				NSB				Vectra
(In millions)	(In millions)	2021		2020		2021		2020		2021		2020		(In millions)	2022		2021		2022		2021		2022		2021
SELECTED INCOME STATEMENT DATA	SELECTED INCOME STATEMENT DATA													SELECTED INCOME STATEMENT DATA
Net interest income	Net interest income	$	53	$	54	$	37	$	37	$	35	$	34	Net interest income	$	51	$	52	$	37	$	37	$	33	$	34
Provision for credit losses	Provision for credit losses	(14)		16		(12)		40		(11)		(1)		Provision for credit losses	(4)		(10)		(3)		(18)		(4)		—
Net interest income after provision for credit losses	Net interest income after provision for credit losses	67		38		49		(3)		46		35		Net interest income after provision for credit losses	55		62		40		55		37		34
Noninterest income	Noninterest income	11		10		12		10		8		8		Noninterest income	11		11		12		13		8		8
Noninterest expense	Noninterest expense	37		35		36		34		29		27		Noninterest expense	40		38		37		36		30		28
Income (loss) before income taxes	Income (loss) before income taxes	$	41	$	13	$	25	$	(27)	$	25	$	16	Income (loss) before income taxes	$	26	$	35	$	15	$	32	$	15	$	14
SELECTED AVERAGE BALANCE SHEET DATA	SELECTED AVERAGE BALANCE SHEET DATA													SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	Total average loans	$	4,950	$	5,247	$	3,120	$	3,169	$	3,476	$	3,490	Total average loans	$	4,774	$	5,108	$	2,817	$	3,247	$	3,398	$	3,451
Total average deposits	Total average deposits	7,036		5,722		6,552		5,402		4,388		3,662		Total average deposits	7,953		6,544		7,437		6,069		4,298		4,279

		TCBW				Other				Consolidated Bank					TCBW				Other				Consolidated Bank
(In millions)	(In millions)	2021		2020		2021		2020		2021		2020		(In millions)	2022		2021		2022		2021		2022		2021
SELECTED INCOME STATEMENT DATA	SELECTED INCOME STATEMENT DATA													SELECTED INCOME STATEMENT DATA
Net interest income	Net interest income	$	14	$	14	$	7	$	6	$	555	$	563	Net interest income	$	14	$	13	$	11	$	5	$	544	$	545
Provision for credit losses	Provision for credit losses	(1)		5		0		(3)		(123)		168		Provision for credit losses	—		(3)		1		—		(33)		(132)
Net interest income after provision for credit losses	Net interest income after provision for credit losses	15		9		7		9		678		395		Net interest income after provision for credit losses	14		16		10		5		577		677
Noninterest income	Noninterest income	2		1		66		0		205		117		Noninterest income	1		1		3		41		142		169
Noninterest expense	Noninterest expense	5		5		48		65		428		430		Noninterest expense	6		6		58		45		464		435
Income (loss) before income taxes	Income (loss) before income taxes	$	12	$	5	$	25	$	(56)	$	455	$	82	Income (loss) before income taxes	$	9	$	11	$	(45)	$	1	$	255	$	411
SELECTED AVERAGE BALANCE SHEET DATA	SELECTED AVERAGE BALANCE SHEET DATA													SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	Total average loans	$	1,606	$	1,485	$	865	$	561	$	52,770	$	54,268	Total average loans	$	1,591	$	1,573	$	896	$	801	$	50,933	$	53,665
Total average deposits	Total average deposits	1,500		1,282		1,350		2,410		74,640		63,000		Total average deposits	1,581		1,398		1,335		2,019		81,605		71,446

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~~The following schedule presents selected operating segment information for the six months ended June 30, 2021 and 2020:~~

Zions Bank Amegy CB&T
(In millions) 2021 2020 2021 2020 2021 2020
SELECTED INCOME STATEMENT DATA
Net interest income $ 316 $ 329 $ 233 $ 246 $ 264 $ 252
Provision for credit losses (19) 94 (98) 127 (69) 84
Net interest income after provision for credit losses 335 235 331 119 333 168
Noninterest income 85 76 67 67 49 44
Noninterest expense 231 221 169 161 156 151
Income (loss) before income taxes $ 189 $ 90 $ 229 $ 25 $ 226 $ 61
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans $ 13,488 $ 13,611 $ 12,577 $ 12,984 $ 13,052 $ 11,773
Total average deposits 22,289 16,953 14,800 12,344 15,393 12,825
NBAZ NSB Vectra
(In millions) 2021 2020 2021 2020 2021 2020
SELECTED INCOME STATEMENT DATA
Net interest income $ 105 $ 108 $ 74 $ 73 $ 68 $ 67
Provision for credit losses (24) 35 (30) 52 (11) 23
Net interest income after provision for credit losses 129 73 104 21 79 44
Noninterest income 22 21 25 21 16 16
Noninterest expense 75 72 72 70 57 53
Income (loss) before income taxes $ 76 $ 22 $ 57 $ (28) $ 38 $ 7
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans $ 5,029 $ 4,991 $ 3,183 $ 2,942 $ 3,463 $ 3,296
Total average deposits 6,791 5,413 6,312 5,115 4,334 3,325
TCBW Other Consolidated Bank
(In millions) 2021 2020 2021 2020 2021 2020
SELECTED INCOME STATEMENT DATA
Net interest income $ 27 $ 26 $ 13 $ 10 $ 1,100 $ 1,111
Provision for credit losses (3) 10 (1) 1 (255) 426
Net interest income after provision for credit losses 30 16 14 9 1,355 685
Noninterest income 3 2 107 3 374 250
Noninterest expense 11 11 92 98 863 837
Income (loss) before income taxes $ 22 $ 7 $ 29 $ (86) $ 866 $ 98
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans $ 1,590 $ 1,372 $ 833 $ 563 $ 53,215 $ 51,532
Total average deposits 1,449 1,165 1,684 2,814 73,052 59,954

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate and market risks are among the most significant risks regularly undertaken by us, and they are closely monitored as previously discussed. A discussion regarding our management of interest rate and market risk is included in the section entitled “Interest Rate and Market Risk Management” in this Form 10-Q.

ITEM 4. CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures at ~~June 30, 2021.~~March 31, 2022. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at ~~June 30, 2021.~~March 31, 2022. There were no changes in our internal control over financial reporting during the ~~second~~first quarter of ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information contained in Note 10 of the Notes to Consolidated Financial Statements is incorporated by reference herein.

ITEM ~~1.A~~1A. RISK FACTORS

~~We believe there have been no material changes in~~The following risk factor supplements the risk factors ~~included~~disclosed in ~~Zions Bancorporation, National Association's 2020~~our 2021 Form 10-K.

The Russian invasion of Ukraine and the retaliatory measures imposed by the U.S., U.K., European Union and other countries and the responses of Russia to such measures have caused significant disruptions to domestic and foreign economies.

The Russia and Ukraine conflict has created new risks for global markets, trade, economic conditions, cybersecurity, and similar concerns. For example, the conflict could affect the availability and price of commodities and products, adversely affecting supply chains and increasing inflationary pressures; the value of currencies, interest rates and other components of financial markets; and, if the conflict escalates, cyberattacks that could result in severe costs and disruptions to governmental entities and companies and their operations. The impact of the conflict and retaliatory measures is continually evolving and cannot be predicted with certainty. It is likely that the conflict will continue to affect the global political order and global and domestic markets for a substantial period of time, regardless of when the conflict itself ends.

While these events have not materially interrupted our operations, these or future developments resulting from the Russia and Ukraine conflict, such as cyberattacks on the U.S., us, our customers, or our vendors, could make it difficult to conduct business activities for us, our customers, or our vendors.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following schedule summarizes our share repurchases for the ~~second~~first quarter of ~~2021:~~2022:

SHARE REPURCHASES

Period
Total number
of shares
repurchased 1
Average
price paid
per share Total number of shares purchased as part of publicly announced plans or programs
April 6,933 $ 55.57 —
May 1,502,132 58.00 1,499,156
June 225,946 57.61 225,946
Second quarter 1,735,011 57.94 1,725,102


Period	Total number of shares repurchased 1		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs

January		1,742	$	68.82		—
February		116,693	70.03			107,559
March		659,813	64.59			658,022
First quarter		778,248	65.42			765,581

1 ~~Represents~~Includes common shares acquired in connection with our stock compensation plan. Shares were acquired from employees to pay for their payroll taxes and stock option exercise cost upon the exercise of stock options under provisions of an employee share-based compensation plan.

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ITEM 6. EXHIBITS

a.Exhibits


Exhibit Number	Description

3.1	Second Amended and Restated Articles of Association of Zions Bancorporation, National Association, incorporated by reference to Exhibit 3.1 of Form 8-K filed on October 2, 2018.	*

3.2	Second Amended and Restated Bylaws of Zions Bancorporation, National Association, incorporated by reference to Exhibit 3.2 of Form 8-K filed on April 4, 2019.	*

~~10.1~~	Ninth Amendment to the Zions Bancorporation Payshelter 401(k) and Employee Stock Ownership Plan Trust Agreement between Zions Bancorporation and Fidelity Management Trust Company, effective October 27, 2020 (filed herewith).

31.1	Certification by Chief Executive Officer required by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (filed herewith).

31.2	Certification by Chief Financial Officer required by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (filed herewith).

32	Certification by Chief Executive Officer and Chief Financial Officer required by Sections 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 (15 U.S.C. 78m) and 18 U.S.C. Section 1350 (furnished herewith).

101	Pursuant to Rules 405 and 406 of Regulation S-T, the following information is formatted in Inline XBRL (i) the Consolidated Balance Sheets as of ~~June 30,2021~~March 31, 2022 and December 31, ~~2020,~~2021, (ii) the Consolidated Statements of Income for the three months ended ~~June 30,~~March 31, 2022 and March 31, 2021, ~~and June 30, 2020 and the six months ended June 30, 2021 and June 30, 2020,~~ (iii) the Consolidated Statements of Comprehensive Income for the three months ended ~~June 30,~~March 31, 2022 and March 31, 2021, ~~and June 30, 2020 and the six months ended June 30, 2021 and June 30, 2020,~~ (iv) the Consolidated Statements of Changes in Shareholders’ Equity for the three months ended ~~June 30,~~March 31, 2022 and March 31, 2021, ~~and June 30, 2020 and the six months ended June 30, 2021 and June 30, 2020,~~ (v) the Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and March 31, 2021, ~~and June 30, 2020~~ and (vi) the Notes to Consolidated Financial ~~Statement~~Statements (filed herewith).

104	The cover page from this Quarterly Report on Form 10-Q, formatted as Inline XBRL.

* Incorporated by reference

Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, copies of certain instruments defining the rights of holders of long-term debt are not filed. We agree to furnish a copy thereof to the Securities and Exchange Commission and the Office of the Comptroller of the Currency upon request.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



ZIONS BANCORPORATION, NATIONAL ASSOCIATION

/s/ Harris H. Simmons
Harris H. Simmons, Chairman and Chief Executive Officer

/s/ Paul E. Burdiss
Paul E. Burdiss, Executive Vice President and Chief Financial Officer

Date: ~~August 4, 2021~~May 6, 2022

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		~~Page~~
~~PART I. FINANCIAL INFORMATION~~

~~Item 1.~~	~~Financial Statements (Unaudited)~~	37

	~~Consolidated Balance Sheets~~	37
	~~Consolidated Statements of Income~~	38
	~~Consolidated Statements of Comprehensive Income~~	39
	~~Consolidated Statements of Changes in Shareholders’ Equity~~	39
	~~Consolidated Statements of Cash Flows~~	41
	~~Notes to Consolidated Financial Statements~~	42

~~Item 2.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	4

~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~	81

~~Item 4.~~	~~Controls and Procedures~~	81

~~PART II. OTHER INFORMATION~~

~~Item 1.~~	~~Legal Proceedings~~	82

~~Item 1A.~~	~~Risk Factors~~	82

~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	82

~~Item 6.~~	~~Exhibits~~	83

~~Signatures~~		84


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	35

	Consolidated Balance Sheets	35
	Consolidated Statements of Income	36
	Consolidated Statements of Comprehensive Income (Loss)	37
	Consolidated Statements of Changes in Shareholders’ Equity	37
	Consolidated Statements of Cash Flows	38
	Notes to Consolidated Financial Statements	39

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	74

Item 4.	Controls and Procedures	74

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	75

Item 1A.	Risk Factors	75

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	75

Item 6.	Exhibits	76

Signatures		77


	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
(Dollar amounts in millions)	Average balance		Amount of interest 1		Average yield/rate		Average balance		Amount of interest 1		Average yield/rate
ASSETS
Money market investments	$	9,029	$	7	0.17	%	$	1,812	$	9	1.00	%
Securities:
Held-to-maturity	620		9		2.95		612		11		3.65
Available-for-sale	16,462		135		1.66		13,907		151		2.19
Trading account	221		5		4.18		157		3		4.28
Total securities 2	17,303		149		1.74		14,676		165		2.27
Loans held for sale	65		1		2.66		117		2		4.15
Loans and leases 3
Commercial - excluding PPP loans	24,646		470		3.84		25,645		545		4.27
Commercial - PPP loans	6,039		128		4.26		2,506		41		3.29
Commercial real estate	12,085		208		3.48		11,706		245		4.21
Consumer	10,445		184		3.55		11,675		222		3.83
Total loans and leases	53,215		990		3.75		51,532		1,053		4.11
Total interest-earning assets	79,612		1,147		2.90		68,137		1,229		3.63
Cash and due from banks	597						646
Allowance for loan losses	(710)						(611)
Goodwill and intangibles	1,015						1,014
Other assets	4,012						3,873
Total assets	$	84,526					$	73,059
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
Savings and money market	$	35,611	$	11	0.06	%	$	29,475	$	43	0.30	%
Time	2,299		5		0.49		4,153		31		1.49

Total interest-bearing deposits	37,910		16		0.09		33,628		74		0.44
Borrowed funds:
Federal funds purchased and other short-term borrowings	971		1		0.06		2,576		9		0.72
Long-term debt	1,314		15		2.31		1,742		22		2.57
Total borrowed funds	2,285		16		1.35		4,318		31		1.47
Total interest-bearing liabilities	40,195		32		0.16		37,946		105		0.56
Noninterest-bearing demand deposits	35,142						26,326
Other liabilities	1,249						1,244
Total liabilities	76,586						65,516
Shareholders’ equity:
Preferred equity	555						566
Common equity	7,385						6,977
Total shareholders’ equity	7,940						7,543
Total liabilities and shareholders’ equity	$	84,526					$	73,059
Spread on average interest-bearing funds					2.74	%					3.07	%
Net impact of noninterest-bearing sources of funds					0.08	%					0.25	%
Net interest margin			$	1,115	2.82	%			$	1,124	3.32	%
Memo: total loans and leases, excluding PPP loans	$	47,176	862		3.68	%	$	49,026	1,012		4.15	%

Memo: total cost of deposits					0.05	%					0.25	%
Memo: total deposits and interest-bearing liabilities	75,337		32		0.08	%	64,272		105		0.60	%


	June 30, 2021
	Contractual Maturity
(Dollar amounts in millions)	Total			2021			2022			2023			2024			2025			Thereafter			Matured in 2021
Cash flow hedges
Cash flow asset hedges
Net fair value 1	$	67		$	—		$	33		$	11		$	21		$	—		$	2		$	—
Total notional amount	3,950			50			2,400			300			400			—			800			—
Weighted average fixed-rate	1.91		%	1.81		%	2.06		%	2.35		%	2.35		%	—		%	1.08		%	—		%

Fair value hedges				2025			2030			2035			2040			2050			Thereafter
Fair value debt hedges 2
Net fair value1	$	14		$	—		$	14		$	—		$	—		$	—		$	—		$	—
Total notional amount	500			—			500			—			—			—			—			—
Weighted average fixed-rate	1.70		%	—		%	1.70		%	—		%	—		%	—		%	—		%	—		%

Fair value asset hedges 2, 3
Net fair value 1	$	44		$	—		$	—		$	18		$	—		$	26		$	—		$	—
Total notional amount	384			—			—			229			—			155			—			—
Weighted average fixed-rate	1.05		%	—		%	—		%	1.05		%	—		%	1.04		%	—		%	—		%

Total ALM fair value hedges
Net fair value 1	$	58		$	—		$	14		$	18		$	—		$	26		$	—		$	—
Total notional amount	884			—			500			229			—			155			—			—


(In millions)	Fair value at June 30, 2021								Fair value at December 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
ASSETS
Private equity investments	$	0	$	0	$	0	$	0	$	0	$	0	$	1	$	1
Collateral-dependent loans	0		9		0		9		0		14		0		14
Other real estate owned	0		0		0		0		0		1		0		1
Total	$	0	$	9	$	0	$	9	$	0	$	15	$	1	$	16


	June 30, 2021
	Total debt investment securities				Due in one year or less				Due after one year through five years				Due after five years through ten years				Due after ten years
(Dollar amounts in millions)	Amortized cost		Avg yield		Amortized cost		Avg yield		Amortized cost		Avg yield		Amortized cost		Avg yield		Amortized cost		Avg yield

Held-to-maturity
Municipal securities 1	$	620	2.75	%	$	171	1.67	%	$	160	3.37	%	$	172	2.81	%	$	117	3.36	%
Available-for-sale
U.S. Treasury securities	155		1.28		0		0		0		0		0		0		155		1.28
U.S. Government agencies and corporations:
Agency securities	991		2.12		0		0		361		1.36		267		2.52		363		2.59
Agency guaranteed mortgage-backed securities	14,233		1.65		0		0		391		1.41		725		1.63		13,117		1.66
Small Business Administration loan-backed securities	1,076		1.37		0		0		53		1.42		133		1.56		890		1.34
Municipal securities 1	1,522		2.33		104		1.92		643		2.43		506		2.30		269		2.31
Other debt securities	75		2.15		0		0		0		0		60		1.96		15		2.90
Total available-for-sale securities	18,052		1.72		104		1.92		1,448		1.85		1,691		1.98		14,809		1.67
Total investment securities	$	18,672	1.75	%	$	275	1.76	%	$	1,608	2.00	%	$	1,863	2.05	%	$	14,926	1.68	%


	June 30, 2021
	Amortized cost basis by year of issuance
(In millions)	2021		2020		2019		2018		2017		Prior		Total Securities
Held-to-maturity:
Pass	$	209	$	124	$	10	$	0	$	8	$	268	$	619
Accruing substandard	0		0		0		0		0		1		1
Total held-to-maturity	$	209	$	124	$	10	$	0	$	8	$	269	$	620


	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
(In millions)	Gross gains		Gross losses		Gross gains		Gross losses		Gross gains		Gross losses		Gross gains		Gross losses




Other noninterest-bearing investments	$	66	$	3	$	3	$	7	$	80	$	6	$	8	$	17

Net gains (losses) 1			$	63			$	(4)			$	74			$	(9)