ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/ZION
ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/ Fair Value Disclosure
FAIR VALUE
Fair Value Measurement
We measure certain assets and liabilities at fair value. Fair value represents the price that would be received to sell an asset or paid to transfer a liability (i.e., an exit price) in the principal market or most advantageous market available to us, in an orderly transaction between market participants as of the measurement date. To promote consistency and comparability, fair value measurements are categorized within a three-level hierarchy based on the observability of the inputs used, as outlined below. Observable market data is prioritized, and reliance on unobservable inputs in minimized. When quoted market prices are not available, fair value is determined using valuation models that incorporate assumptions that align with those that market participants would consider in pricing the asset or liability. Changes in market conditions may reduce the availability of observable inputs.
The following fair value hierarchy prioritizes the use of observable inputs over unobservable inputs when measuring the fair value of assets and liabilities:
•Level 1 — Quoted prices in active markets for identical assets or liabilities that we can access at the measurement date;
•Level 2 — Observable inputs other than Level 1, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in less active markets, observable inputs other than quoted prices used in the valuation of an asset or liability, and inputs derived principally from or corroborated by observable market data through correlation or other means; and
•Level 3 — Unobservable inputs supported by minimal or no market activity for financial instruments whose value is determined by pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
Fair value classifications are determined based on the lowest level input that is significant to the overall measurement. In the absence of evidence indicating forced or disorderly transactions, market activity is presumed to be orderly. Applicable accounting guidance prohibits the use of blockage discounts or liquidity adjustments based solely on the volume of instruments held by the Bank.
We measure certain assets and liabilities at fair value on a recurring basis when fair value is the primary basis for accounting. Fair value is also applied on a nonrecurring basis for certain assets or liabilities for purposes such as evaluating impairment, applying lower of cost or fair value accounting, or providing fair value disclosures for certain financial instruments.
Fair Value Policies and Procedures
We have implemented a comprehensive framework of policies, processes, and internal controls designed to promote the reasonable estimation, thorough review, and formal approval of fair value measurements. The Securities Valuation Committee, comprised of members of executive management, reviews and approves the key elements of fair value measurements on a quarterly basis, including significant valuation assumptions used in Level 3 measurements. In addition, the Model Risk Management Group is responsible for conducting validations of valuation models, including internally developed models, and for establishing the policies and procedures governing the timing and requirements for subsequent revalidations.
Third-party Service Providers
We utilize a third-party pricing service to determine the fair value of substantially all Level 2 available-for-sale (“AFS”) securities. Fair value measurements for other Level 2 AFS securities are generally based on valuation inputs corroborated by observable market data, which may include discounted cash flow analyses.
For Level 2 securities, the third-party pricing service provides ongoing documentation that incorporates market data, detailed pricing information, and market reference data. This information includes benchmark yields, reported market trades, broker-dealer quotations, issuer-specific spreads, two-sided markets, benchmark securities, bids and
offers, and additional reference data from the vendor's trading platform. We regularly review, test, and validate the information provided to support the reasonableness of the resulting fair value measurements.
The following describes the hierarchy classifications, valuation methodologies, and key inputs used to measure fair value on a recurring basis for designated financial instruments:
Trading securities
Trading securities are measured using observable market inputs and are classified in Level 1 and Level 2.
Available-for-Sale investment securities
•U.S. Treasury, Government Agency, and Corporate Securities — U.S. Treasury securities measured using quoted market prices are classified in Level 1. U.S. agency and corporate securities measured using observable market inputs are classified in Level 2.
•Municipal Securities — Municipal securities are measured using observable market inputs and are classified in Level 2.
•Other Debt Securities — Other debt securities are measured using quoted prices for similar securities and are classified in Level 2.
Loans held for sale
We have elected the fair value option for certain commercial real estate (“CRE”) loans designated for sale to a third-party conduit for securitization. These loans are measured at fair value using observable market prices for mortgage-backed securities with similar collateral and are classified in Level 2. Valuations incorporate adjustments for differences between the securities and the underlying loans, including credit quality, portfolio composition, and liquidity considerations.
Bank-owned Life Insurance
BOLI is measured according to the CSV of the underlying policies. Nearly all policies are general account contracts whose CSVs are based on our claims on the insurers’ assets. The insurers’ investment portfolios primarily consist of fixed-income securities, including investment-grade corporate bonds and various mortgage-related instruments. Management regularly monitors BOLI performance, including concentrations across insurance providers. BOLI balances are classified in Level 2 of the fair value hierarchy.
Private Equity Investments
PEIs measured at fair value on a recurring basis are generally classified in Level 3 due to the use of unobservable valuation inputs. Key assumptions include current and projected financial performance, recent financing transactions, economic and market conditions, comparable company data, market liquidity, and other relevant factors. The majority of these investments are held within our Small Business Investment Company (“SBIC”) and represent early stage venture investments. These investments are reviewed at least quarterly by the Securities Valuation Committee and more frequently when a new financing round occurs. Some PEIs may be valued using operating performance multiples. When an investment becomes publicly traded, it is classified in Level 1. Certain investments may be subject to redemption restrictions.
Agriculture Loan Servicing
We service agriculture loans approved and funded by the Federal Agricultural Mortgage Corporation (“FAMC”) under a servicing agreement for loans owned by FAMC. These servicing assets are measured at fair value, representing the present value of projected net future servicing cash flows. Because the valuation incorporates unobservable inputs, these assets are classified in Level 3 of the fair value hierarchy.
Deferred Compensation Plan Assets
Deferred compensation plan assets consist of shares of registered investment companies. These mutual fund investments are measured using quoted market prices, which represent the net asset value of the shares held at period-end. Accordingly, these assets are classified in Level 1.
Derivatives
Exchange-traded derivatives, such as standardized future contracts, are generally classified in Level 1 because they are valued using quoted prices in active markets. Over-the-counter derivatives—including interest rate swaps, energy commodity swaps, forwards, options, and purchased credit default swaps—are generally classified in Level 2. Their fair values are determined using valuation techniques that incorporate observable market inputs such as yield curves, foreign exchange rates, commodity prices, option volatilities, credit spreads, and other relevant market data. Valuations also include credit valuation adjustments (“CVAs”) to reflect nonperformance risk of both our counterparties and ourselves. CVAs are generally determined by applying a credit spread to expected exposures, net of any collateral.
Securities Sold, Not Yet Purchased
Securities sold, not yet purchased, are included in “Federal funds and other short-term borrowings” on the consolidated balance sheet. These instruments are measured using quoted market prices and are generally classified in Level 1. When quoted prices for identical securities are not available, quoted prices for similar securities are used, in which case the related balances are classified in Level 2.
Fair Value Hierarchy
The following schedule presents assets and liabilities measured at fair value on a recurring basis:
| December 31, 2025 | |||||||||||||||||||||||
| (In millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| ASSETS | |||||||||||||||||||||||
| Trading securities | $ | — | $ | 64 | $ | — | $ | 64 | |||||||||||||||
| Available-for-sale securities: | |||||||||||||||||||||||
| U.S. Treasury, agencies, and corporations | 1,411 | 6,862 | — | 8,273 | |||||||||||||||||||
| Municipal securities | — | 909 | — | 909 | |||||||||||||||||||
| Other debt securities | — | 25 | — | 25 | |||||||||||||||||||
| Total available-for-sale | 1,411 | 7,796 | — | 9,207 | |||||||||||||||||||
| Loans held for sale | — | 71 | — | 71 | |||||||||||||||||||
| Other noninterest-bearing investments: | |||||||||||||||||||||||
| Bank-owned life insurance | — | 573 | — | 573 | |||||||||||||||||||
Private equity investments 1 | 6 | — | 157 | 163 | |||||||||||||||||||
| Other assets: | |||||||||||||||||||||||
| Agriculture loan servicing | — | — | 18 | 18 | |||||||||||||||||||
| Deferred compensation plan assets | 154 | — | — | 154 | |||||||||||||||||||
| Derivatives | — | 360 | — | 360 | |||||||||||||||||||
| Total assets | $ | 1,571 | $ | 8,864 | $ | 175 | $ | 10,610 | |||||||||||||||
| LIABILITIES | |||||||||||||||||||||||
| Fed funds and other short-term borrowings: | |||||||||||||||||||||||
| Securities sold, not yet purchased | $ | 135 | $ | — | $ | — | $ | 135 | |||||||||||||||
| Other liabilities: | |||||||||||||||||||||||
| Derivatives | — | 260 | — | 260 | |||||||||||||||||||
| Total liabilities | $ | 135 | $ | 260 | $ | — | $ | 395 | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| (In millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| ASSETS | |||||||||||||||||||||||
| Trading securities | $ | — | $ | 35 | $ | — | $ | 35 | |||||||||||||||
| Available-for-sale securities: | |||||||||||||||||||||||
| U.S. Treasury, agencies, and corporations | 662 | 7,300 | — | 7,962 | |||||||||||||||||||
| Municipal securities | — | 1,108 | — | 1,108 | |||||||||||||||||||
| Other debt securities | — | 25 | — | 25 | |||||||||||||||||||
| Total available-for-sale | 662 | 8,433 | — | 9,095 | |||||||||||||||||||
| Loans held for sale | — | 25 | — | 25 | |||||||||||||||||||
| Other noninterest-bearing investments: | |||||||||||||||||||||||
| Bank-owned life insurance | — | 562 | — | 562 | |||||||||||||||||||
Private equity investments 1 | 3 | — | 105 | 108 | |||||||||||||||||||
| Other assets: | |||||||||||||||||||||||
| Agriculture loan servicing | — | — | 20 | 20 | |||||||||||||||||||
| Deferred compensation plan assets | 149 | — | — | 149 | |||||||||||||||||||
| Derivatives | — | 446 | — | 446 | |||||||||||||||||||
| Total assets | $ | 814 | $ | 9,501 | $ | 125 | $ | 10,440 | |||||||||||||||
| LIABILITIES | |||||||||||||||||||||||
| Fed funds and other short-term borrowings: | |||||||||||||||||||||||
| Securities sold, not yet purchased | $ | 21 | $ | — | $ | — | $ | 21 | |||||||||||||||
| Other liabilities: | |||||||||||||||||||||||
| Derivatives | — | 350 | — | 350 | |||||||||||||||||||
| Total liabilities | $ | 21 | $ | 350 | $ | — | $ | 371 | |||||||||||||||
1 The level 1 PEIs generally relate to the portion of our SBIC investments and other similar investments that are publicly traded.
Fair Value Option for Certain Loans Held for Sale
We apply the fair value option to certain commercial real estate loans designated for sale to third-party conduits for securitization and hedged with derivative instruments. This election reduces accounting volatility that would otherwise result from the mismatch between measuring loans held for sale at the lower of cost or fair value and derivatives at fair value, without requiring the application of hedge accounting. These loans are included in “Loans held for sale” on the consolidated balance sheet. Related fair value gains and losses are included in “Capital markets fees and income” on the consolidated statement of income, and accrued interest is included in “Interest and fees on loans.”
At December 31, 2025 and 2024, we had $71 million and $25 million, respectively, of loans measured at fair value, with a corresponding unpaid principal balance of $72 million and $26 million. During 2025 and 2024, we recognized approximately $11 million and $14 million, respectively, in net gains from loan sales and valuation adjustments related to loans measured at fair value and the associated derivatives.
Level 3 Valuations
Roll-forward of Level 3 Fair Value Measurements
The following schedule presents a roll-forward of assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs:
| Level 3 Instruments | |||||||||||||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||
| (In millions) | Private equity investments | Ag loan servicing | Private equity investments | Ag loan servicing | Private equity investments | Ag loan servicing | |||||||||||||||||||||||||||||
| Balance at beginning of year | $ | 105 | $ | 20 | $ | 92 | $ | 19 | $ | 81 | $ | 14 | |||||||||||||||||||||||
| Unrealized securities gains (losses), net | 63 | — | 9 | — | (2) | — | |||||||||||||||||||||||||||||
| Other noninterest income | — | (2) | — | 1 | — | 5 | |||||||||||||||||||||||||||||
| Purchases | 15 | — | 11 | — | 14 | — | |||||||||||||||||||||||||||||
| Cost of investments sold | (13) | — | (7) | — | (1) | — | |||||||||||||||||||||||||||||
| Transfers out | (13) | — | — | — | — | — | |||||||||||||||||||||||||||||
| Balance at end of year | $ | 157 | $ | 18 | $ | 105 | $ | 20 | $ | 92 | $ | 19 | |||||||||||||||||||||||
The roll-forward of Level 3 instruments includes the following realized gains and losses recognized in “Securities gains (losses), net” on the consolidated statement of income for the periods presented:
| (In millions) | Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Securities gains (losses), net | $ | (17) | $ | 1 | $ | (1) | |||||||||||
Nonrecurring Fair Value Measurements
Certain assets and liabilities are measured at fair value on a nonrecurring basis. These include impaired loans measured at the fair value of the underlying collateral, OREO, and equity investments without readily determinable fair values. Nonrecurring fair value adjustments generally arise from observable price changes for such equity investments, write-downs of individual assets, or the application of lower of cost or fair value accounting.
Collateral-dependent loans are measured at the lower of amortized cost or the fair value of the collateral. OREO is initially recorded at fair value based on collateral appraisals at the time of transfer and subsequently measured at the lower of cost or fair value, net of estimated selling costs. Fair value measurements for collateral-dependent loans and OREO are derived from third-party appraisals utilizing one or more valuation approaches (income, market, and cost approaches). Adjustments to appraisal values may be made based on recently completed and validated third-party appraisals, third-party appraisal services, automated valuation models, or management’s informed judgment. Automated valuation services—which rely on models incorporating market, economic, and demographic factors—may be used primarily for residential properties when updated valuations from other methods are not available within 90 days of the balance sheet date.
At December 31, 2025, we had $24 million of collateral-dependent loans measured at fair value. During 2025, we recognized $8 million in losses related to changes in fair value for these loans.
Fair Value of Certain Financial Instruments
The following schedule presents the carrying values and estimated fair values of certain financial instruments:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| (In millions) | Carrying value | Fair value | Level | Carrying value | Fair value | Level | |||||||||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||||||||||||||
Held-to-maturity investment securities | $ | 8,867 | $ | 8,940 | 2 | $ | 9,669 | $ | 9,382 | 2 | |||||||||||||||||||||||||
Loans and leases (including loans held for sale), net of allowance | 60,440 | 59,383 | 3 | 58,788 | 57,130 | 3 | |||||||||||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||||||||||||||
| Time deposits | 9,907 | 9,839 | 2 | 11,482 | 11,468 | 2 | |||||||||||||||||||||||||||||
| Long-term debt | 1,472 | 1,506 | 2 | 950 | 950 | 2 | |||||||||||||||||||||||||||||
For the items presented in the preceding schedule, fair value is estimated using the following methodologies:
•Held-to-maturity (“HTM”) investment securities—Fair value is estimated using either a third-party pricing service or an internal valuation model, both of which rely on observable market yields.
•Loans and leases measured at amortized cost—Fair value is estimated for disclosure purposes by discounting expected future cash flows using the applicable yield curve and incorporating a factor based on recent loan originations, which reflects the liquidity premium inherent in the loan portfolio. The discounted cash flows are then reduced by estimated aggregate credit losses over the life of the loan portfolio.
•Time and foreign deposits—Fair value is determined by discounting estimated future cash flows using the yield curve corresponding to the deposits’ respective maturities.
•Long-term debt—When available, fair value is based on actual market trade data. In the absence of observable trades, fair value is estimated by discounting contractual cash flows to maturity using the applicable yield curve, adjusted for credit spreads.
The preceding schedule excludes financial instruments that are recorded at fair value on a recurring basis, as well as certain financial assets and liabilities for which carrying value approximates fair value. These instruments include cash and due from banks, money market investments, demand deposits, savings and money market accounts, federal funds purchased and other short-term borrowings, and security repurchase agreements. The estimated fair value of demand, savings, and money market deposits equals the amount payable on demand at the reporting date. Carrying value is used for these instruments because they have no stated maturity, funds are withdrawable immediately, and credit risk is generally negligible. Instruments for which carrying value approximates fair value are typically classified in Level 2 of the fair value hierarchy because their valuation relies primarily on observable market inputs.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 29, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.