ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/ZION
ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/ Income Taxes Disclosure
INCOME TAXES
Income Tax Expense and Effective Tax Rates
The following schedule presents the primary components of income tax expense:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Federal: | |||||||||||||||||
| Current | $ | 182 | $ | 194 | $ | 168 | |||||||||||
| Deferred | 23 | (9) | — | ||||||||||||||
| Total federal | 205 | 185 | 168 | ||||||||||||||
| State: | |||||||||||||||||
| Current | 47 | 41 | 47 | ||||||||||||||
| Deferred | 24 | 2 | (9) | ||||||||||||||
| Total state | 71 | 43 | 38 | ||||||||||||||
| Total income tax expense | $ | 276 | $ | 228 | $ | 206 | |||||||||||
The following schedule presents a reconciliation of income tax expense and the effective tax rate:
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| (In millions) | Income tax expense | Effective tax rate | Income tax expense | Effective tax rate | Income tax expense | Effective tax rate | |||||||||||||||||||||||||||||
| U.S. federal statutory income tax | $ | 247 | 21.0 | % | $ | 213 | 21.0 | % | $ | 186 | 21.0 | % | |||||||||||||||||||||||
State and local income taxes, net of federal income tax effects 1 | 57 | 4.9 | 39 | 3.9 | 29 | 3.3 | |||||||||||||||||||||||||||||
| Tax credits: | |||||||||||||||||||||||||||||||||||
Low-income housing tax credit investments 2 | (9) | (0.8) | (9) | (0.9) | (6) | (0.6) | |||||||||||||||||||||||||||||
| Other tax credits | (2) | (0.2) | (1) | (0.1) | (2) | (0.3) | |||||||||||||||||||||||||||||
| Nontaxable or nondeductible items: | |||||||||||||||||||||||||||||||||||
| Disallowed interest expense | 10 | 0.9 | 14 | 1.4 | 11 | 1.2 | |||||||||||||||||||||||||||||
| Tax-exempt interest | (37) | (3.2) | (35) | (3.5) | (32) | (3.5) | |||||||||||||||||||||||||||||
| Nondeductible FDIC premium expense | 14 | 1.2 | 15 | 1.5 | 15 | 1.7 | |||||||||||||||||||||||||||||
| Other nontaxable or nondeductible Items | (4) | (0.3) | (3) | (0.3) | (4) | (0.5) | |||||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | (2) | (0.2) | (8) | (0.8) | 4 | 0.5 | |||||||||||||||||||||||||||||
| Other adjustments | 2 | 0.2 | 3 | 0.3 | 5 | 0.5 | |||||||||||||||||||||||||||||
| Total | $ | 276 | 23.5 | % | $ | 228 | 22.5 | % | $ | 206 | 23.3 | % | |||||||||||||||||||||||
1 State taxes in California and Utah accounted for the majority of the tax effect within this category.
2 Low-income housing credits are presented net of related amortization.
The effective tax rates for the periods presented above were primarily increased by the nondeductibility of certain Federal Deposit Insurance Corporation (“FDIC”) premiums, disallowed interest expense, and other adjustments. While FDIC insurance premiums are not deductible for tax purposes, FDIC special assessments are tax deductible. Conversely, the effective tax rates were primarily reduced by nontaxable municipal interest income and various tax credits.
Investments in technology initiatives, low-income housing, and municipal securities during 2025, 2024, and 2023, generated tax credits and nontaxable income, contributing to lower effective tax rates in each year. In addition, the 2025 and 2024 effective tax rates benefited from a reduction in the reserve for uncertain tax positions associated with technology initiative credits as certain statutes of limitations expired.
Income Tax Payments by Jurisdiction
The following schedule presents the disaggregated amounts of income taxes paid, net of refunds received, by federal and state jurisdictions:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Federal | $ | 143 | $ | 151 | $ | 204 | |||||||||||
| State: | |||||||||||||||||
| California | 22 | 19 | 20 | ||||||||||||||
| Utah | 12 | 8 | 16 | ||||||||||||||
| Other | 19 | 14 | 15 | ||||||||||||||
| Total state | 53 | 41 | 51 | ||||||||||||||
| Total income taxes paid | $ | 196 | $ | 192 | $ | 255 | |||||||||||
Deferred Tax Assets and Liabilities
Deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) arise from temporary differences between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases, based on enacted tax laws and rates. Changes in tax rates that impact DTAs and DTLs are recognized in income during the period in which the enactment occurs. DTAs are recorded only to the extent management believes it more likely than not that they will be realized. Unrecognized tax benefits related to uncertain tax positions primarily pertain to tax credits generated from technology initiatives.
The net DTA or DTL is included in “Other assets” or “Other liabilities,” respectively, on the consolidated balance sheet, respectively. The following schedule presents the tax effects of temporary differences that give rise to significant components of DTAs and DTLs:
| (In millions) | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Gross deferred tax assets: | |||||||||||
| Book loan loss deduction in excess of tax | $ | 179 | $ | 183 | |||||||
| Deferred compensation | 90 | 81 | |||||||||
| Investment securities and derivative fair value adjustments | 620 | 775 | |||||||||
| Lease liabilities | 64 | 60 | |||||||||
| Capitalized costs | 9 | 30 | |||||||||
| Other | 36 | 47 | |||||||||
| Total deferred tax assets before valuation allowance | 998 | 1,176 | |||||||||
| Valuation allowance | — | — | |||||||||
| Total deferred tax assets | 998 | 1,176 | |||||||||
| Gross deferred tax liabilities: | |||||||||||
| Premises and equipment, due to differences in depreciation | (91) | (90) | |||||||||
| Federal Home Loan Bank stock dividends | (3) | (3) | |||||||||
| Leasing operations | (40) | (43) | |||||||||
| Prepaid expenses | (7) | (8) | |||||||||
| Mortgage servicing | (6) | (6) | |||||||||
| Deferred loan costs | (38) | (36) | |||||||||
| ROU assets | (52) | (47) | |||||||||
| Qualified opportunity fund deferred gains | (26) | (26) | |||||||||
| Equity investments | (21) | (13) | |||||||||
| Total deferred tax liabilities | (284) | (272) | |||||||||
| Net deferred tax assets (liabilities) | $ | 714 | $ | 904 | |||||||
At December 31, 2025 and 2024, we reported a net DTA of $714 million and $904 million, respectively. The year-over-year decrease was primarily driven by a reduction in unrealized losses within AOCI associated with investment securities and derivative instruments.
Certain fixed-rate AFS investment securities have experienced declines in fair value due to increases in benchmark interest rates, resulting in unrealized losses in the AFS portfolio and a corresponding DTA. The sale of these securities could result in significant realized losses, requiring future earnings to utilize the DTAs. However, as discussed in Note 5, we have both the intent and the ability to hold these securities until their value recovers.
We regularly evaluate DTAs to determine whether a valuation allowance is required, applying the “more-likely-than-not” criterion that such assets will be realized and considering all available positive and negative evidence. This evaluation includes, but is not limited to:
•Future reversals of existing DTLs — These generally reverse in a pattern consistent with DTAs and can be used to realize the DTAs.
•Tax planning strategies — We consider prudent and feasible tax planning strategies that could be implemented to preserve the value of DTAs, if necessary.
•Projected future taxable income — We expect to generate sufficient future taxable income to offset the reversal of remaining net DTAs.
Based on this evaluation, we concluded that no valuation allowance was required at December 31, 2025 or December 31, 2024.
At December 31, 2025, the tax effect of remaining net operating loss and tax credit carryforwards was less than $1 million, with expirations through 2039.
Unrecognized tax benefits
We maintain a liability for unrecognized tax benefits related to uncertain tax positions, primarily associated with tax credits generated from technology initiatives. The following schedule presents a roll-forward of gross unrecognized tax benefits:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Balance at beginning of year | $ | 7 | $ | 15 | $ | 13 | |||||||||||
| Tax positions related to current year: | |||||||||||||||||
| Additions | — | — | 2 | ||||||||||||||
| Tax positions related to prior years: | |||||||||||||||||
| Additions | — | — | 10 | ||||||||||||||
| Settlements with taxing authorities | — | — | (3) | ||||||||||||||
| Lapses in statutes of limitations | (2) | (8) | (7) | ||||||||||||||
| Balance at end of year | $ | 5 | $ | 7 | $ | 15 | |||||||||||
At December 31, 2025 and 2024, our liability for unrecognized tax benefits totaled approximately $5 million and $7 million, respectively (net of the federal tax benefit on state taxes). If recognized, these amounts would impact the effective tax rate.
Interest and penalties related to unrecognized tax benefits are included in “Income tax expense” on the consolidated statement of income. At December 31, 2025 and 2024, accrued interest and penalties—presented net of any federal and state tax benefits and included in “Other liabilities” on the consolidated balance sheet—totaled approximately $1 million in both periods.
We file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. We are no longer subject to income tax examinations for years prior to 2022 for federal and certain state returns.
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 Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.