Exhibit 99.1
***FOR IMMEDIATE RELEASE***
For: ZIONS BANCORPORATION Contact: Clark Hinckley
One South Main, 15th Floor Tel: (801) 524-4787
Salt Lake City, Utah January 26, 2009
Harris H. Simmons
Chairman/Chief Executive Officer
ZIONS BANCORPORATION REPORTS 2008 FOURTH QUARTER
LOSS DRIVEN LARGELY BY NONCASH GOODWILL IMPAIRMENT
Company Bolstered Loan Loss Reserves, Strengthened Capital and Liquidity,
and Originated $2.7 Billion of New Loans
SALT LAKE CITY, January 26, 2009 – Zions Bancorporation (Nasdaq: ZION) (“Zions” or “the Company”) today reported a fourth quarter loss from core banking operations of $0.32 per diluted common share, excluding noncash charges from goodwill impairment of $2.97 per diluted share and impairment and valuation losses on securities of $1.07 per diluted share. Including these charges, the fourth quarter net loss applicable to common shareholders was $498.1 million, or $4.36 per diluted share. The Company also built its reserve for loan losses by $105.5 million in excess of actual net loan charge-offs.
“In what most observers agree is the most difficult economic environment in over half a century, we have strengthened our balance sheet by building record high levels of capital and liquidity,” said Harris H. Simmons, chairman and chief executive officer. “The goodwill impairment has no impact on regulatory and tangible capital ratios, and reflects in part the fact that market values of all banks are significantly lower in current highly stressed markets.” Simmons added, “While this is a challenging environment for Zions and the industry, we continue to successfully extend new credit and serve our customers. In fact, we extended $4.6 billion of credit in the fourth quarter, of which $2.7 billion were new loans, in our continued effort to make credit available to credit-worthy individuals and businesses. This, in turn, will help them weather this economic storm and strengthen the economy.”
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ZIONS BANCORPORATION
Press Release – Page 2
January 26, 2009
Fourth Quarter 2008 Highlights
· | Tangible common equity ratio of 5.89% and estimated total risk based capital ratio of 14.71%, up from 12.30% at September 30, 2008. |
· | Provision for loan loss reserves of $285.2 million versus net loan charge-offs of $179.7 million. |
· | Noncash impairment loss on goodwill of $353.8 million. |
· | Impairment and valuation losses on securities of $204.3 million. |
· | Capital investment of $1.4 billion from the U.S. Treasury. |
· | Extensions of credit totaling $4.6 billion, of which $2.7 billion were new loans. |
For the year 2008, the Company’s core banking operations made $2.20 per diluted share, excluding noncash charges from goodwill impairment of $3.11 per diluted share and impairment and valuation losses on securities of $1.75 per diluted share. Including these charges, the 2008 net loss applicable to common shareholders was $290.7 million, or $2.66 per diluted share.
Loans
On-balance-sheet net loans and leases were $41.9 billion at December 31, 2008, an increase of approximately $2.8 billion or 7.1% from $39.1 billion at December 31, 2007, and were essentially unchanged from the balance at September 30, 2008. For both the year-over-year and quarterly comparisons, net growth in commercial and industrial loans, consumer loans, and commercial real estate term loans was offset by pay-downs and charge-offs of construction and land development loans.
Deposits
Average total deposits for the fourth quarter of 2008 increased $3.2 billion or 8.8% to $39.6 billion compared to $36.4 billion for the fourth quarter of 2007, and increased $2.3 billion or 24.2% annualized compared to $37.3 billion for the third quarter of 2008. Most of the increase in deposits for the quarter was in brokered money market and other brokered deposits; the growth in these deposits was used primarily to reduce short-term Federal Home Loan Bank and other borrowings by $2.7 billion to $2.0 billion at December 31, 2008.
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ZIONS BANCORPORATION
Press Release – Page 3
January 26, 2009
Net Interest Income
The net interest margin was 4.20% for the fourth quarter of 2008 compared to 4.27% for the fourth quarter of 2007 and 4.13% for the third quarter of 2008. The increased net interest margin for the fourth quarter of 2008 compared to the third quarter of 2008 was driven primarily by the capital investment from the U.S. Treasury, reduced deposit rates, and significantly lower borrowing costs.
Net interest income for the fourth quarter of 2008 increased $29.5 million or 6.2% to $508.4 million compared to $478.9 million for the fourth quarter of 2007, and increased $16.4 million or 13.4% annualized compared to $492.0 million for the third quarter of 2008.
Impairment Loss on Goodwill
The Company recognized an impairment loss on goodwill during the fourth quarter of $353.8 million, or $2.97 per diluted share. Substantially all of this loss resulted from impairment of all of the goodwill at three subsidiary bank reporting segments – National Bank of Arizona, Nevada State Bank, and Vectra Bank Colorado. This impairment loss reflects the Company’s annual impairment testing as of October 1, 2008, as well as an update to December 31, 2008 due to continued market deterioration in the fourth quarter, and is a noncash accounting adjustment to the Company’s balance sheet that does not affect regulatory and tangible capital ratios.
Asset Quality
Nonperforming assets were $1,140.5 million at December 31, 2008 compared to $283.9 million at December 31, 2007 and $924.4 million at September 30, 2008. The increase was driven primarily by deterioration in residential real estate acquisition, development and construction exposures in the Southwest, and by continued weakening in Utah residential construction and commercial and industrial portfolios. The ratio of nonperforming assets to net loans and leases and other real estate owned was 2.71% at December 31, 2008 compared to 0.73% at December 31, 2007 and 2.20% at September 30, 2008.
Net loan and lease charge-offs for 2008 were $393.7 million or 0.96% of average loans. Net loan and lease charge-offs for the fourth quarter of 2008 were $179.7 million or 1.71% annualized of average
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ZIONS BANCORPORATION
Press Release – Page 4
January 26, 2009
loans. This compares with $26.7 million or 0.28% annualized of average loans for the fourth quarter of 2007 and $95.3 million or 0.91% annualized of average loans for the third quarter of 2008. The increase in charge-offs largely was driven by declining collateral values on residential acquisition, development, and construction loans in the Southwest and in Utah.
The provision for loan losses was $285.2 million for the fourth quarter of 2008 compared to $70.0 million for the fourth quarter of 2007 and $156.6 million for the third quarter of 2008. The provision for the fourth quarter of 2008 was 2.72% annualized of average loans and was $105.5 million in excess of net loan and lease charge-offs.
The allowance for loan losses as a percentage of net loans and leases was 1.64% at December 31, 2008 compared to 1.18% at December 31, 2007 and 1.45% at September 30, 2008. The combined allowance for loan losses and the reserve for unfunded lending commitments was $737.9 million, or 1.76% of net loans and leases at December 31, 2008, compared to 1.23% at December 31, 2007 and 1.51% at September 30, 2008.
Investment Securities
The Company recognized other-than-temporary impairment (“OTTI”) and valuation losses during the fourth quarter of 2008 of $204.3 million pretax, or $1.07 per diluted share, including securities newly deemed OTTI and additional impairment on securities on which OTTI had been previously recognized. OTTI and valuation losses during the fourth quarter of 2008 consisted of:
· | $177.9 million for bank and insurance trust preferred CDOs (17 newly deemed OTTI, two previous) |
· | $7.9 million for one downgraded security purchased from Lockhart Funding LLC during the quarter |
· | $1.2 million for bank and insurance income notes (one newly deemed OTTI, two previous) |
· | $12.0 million for REIT trust preferred CDOs (one newly deemed OTTI, two previous) |
· | $1.4 million for ABS CDOs (two previous) |
· | $3.9 million for other securities (one previous) |
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ZIONS BANCORPORATION
Press Release – Page 5
January 26, 2009
Lockhart Funding
At December 31, 2008, Lockhart had total assets of $738 million, with pretax unrealized losses of approximately $119 million. The Company held approximately $412 million at December 31, 2008 of asset-backed commercial paper purchased from Lockhart, compared to $557 million at September 30, 2008 and $493 million at June 30, 2008. The amount of Lockhart commercial paper included in money market investments on the Company’s average balance sheet was approximately $574 million for the fourth quarter of 2008, compared to $597 million for the third quarter of 2008 and $1,091 million for the second quarter of 2008. The Company was able to reduce its purchases of Lockhart commercial paper because Lockhart elected to participate in the Federal Reserve’s Commercial Paper Funding Facility Program.
Noninterest Income
Noninterest income for the fourth quarter of 2008 was $(82.3) million compared to $(20.2) million for the fourth quarter of 2007 and $89.6 million for the third quarter of 2008. The amount for the fourth quarter of 2008 includes impairment and valuation losses on securities of $204.3 million compared to $28.0 million for the third quarter of 2008. Fair value and nonhedge derivative loss was $(5.8) million during the fourth quarter compared to $(26.2) million during the third quarter. The fourth quarter loss includes $2.5 million of income from changes in fair value and interest on nonhedge derivatives, $(4.6) million of counterparty credit adjustments on derivative transactions, and $(3.7) million of other losses. Net equity securities gains (losses) for the fourth quarter were $(14.1) million and include $11.0 million in impairment on Federal Agricultural Mortgage Corporation stock and $3.1 million of net losses on venture capital investments.
Noninterest Expense
Noninterest expense for the fourth quarter of 2008 was $398.2 million compared to $353.0 million for the fourth quarter of 2007 and $372.3 million for the third quarter of 2008. Salaries and employee benefits decreased from the third quarter due to the adjustment of certain employee benefit and variable compensation accruals. Other real estate owned expenses increased $33.0 million (including $22.1 million in charge-downs) compared to the third quarter.
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ZIONS BANCORPORATION
Press Release – Page 6
January 26, 2009
Liquidity Risk Management
As of December 31, 2008, the Company estimates it has available borrowing capacity from the Federal Reserve and the FHLB that approximates one-third of its deposits.
On January 15, 2009, the Company issued $254.9 million of senior floating rate notes due June 21, 2012 at a coupon rate of three-month LIBOR plus 37 basis points. The debt is guaranteed under the FDIC’s Temporary Liquidity Guarantee Program.
Capital Management
Tangible equity increased primarily due to the $1.4 billion preferred capital investment from the U.S. Treasury. The Company’s tangible equity ratio was 8.86% at December 31, 2008 compared to 6.17% at December 31, 2007 and 6.60% at September 30, 2008. The tangible common equity ratio was 5.89% at December 31, 2008 compared to 5.70% at December 31, 2007 and 6.05% at September 30, 2008. At December 31, 2008, estimated regulatory Tier 1 risk-based capital and total risk-based capital were $5,267 million and $7,365 million compared to $3,985 million and $6,073 million at September 30, 2008, respectively. Estimated ratios at December 31, 2008 for Tier 1 risk-based capital and total risk-based capital were 10.52% and 14.71% compared to 8.07% and 12.30% at September 30, 2008, respectively.
Significant changes in Other Comprehensive Income included a $98.3 million increase in unrealized gains on derivative instruments and a net charge of $32.2 million related to the Company’s pension and postretirement plans.
On January 26, 2009, the Board of Directors declared a regular quarterly dividend of $0.04 per common share payable February 25, 2009 to shareholders of record on February 11, 2009. This is a reduction from the prior quarter dividend of $0.32 per common share.
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ZIONS BANCORPORATION
Press Release – Page 7
January 26, 2009
Weighted average common and common-equivalent shares outstanding for the fourth quarter of 2008 were 114,205,587 compared to 106,902,983 for the fourth quarter of 2007 and 108,497,464 for the third quarter of 2008. Common shares outstanding at December 31, 2008 were 115,344,813 compared to 107,116,505 at December 31, 2007 and 115,302,598 at September 30, 2008.
Conference Call
Zions will host a conference call to discuss these fourth quarter results at 5:30 p.m. ET this afternoon (January 26, 2009). Media representatives, analysts and the public are invited to listen to this discussion by calling 1-866-700-0161 (international: 617-213-8832) and entering the passcode 37689022, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation Web site at www.zionsbancorporation.com. A replay of the call will be available from 9:30 p.m. ET on Monday, January 26, 2009, until midnight ET on Monday, February 2, 2009, by dialing 1-888-286-8010 (international: 617-801-6888) and entering the passcode 55903048. The webcast of the conference call will also be archived and available for 30 days.
About Zions Bancorporation
Zions Bancorporation is one of the nation’s premier financial services companies, consisting of a collection of great banks in select high growth markets. Zions operates its banking businesses under local management teams and community identities through approximately 500 offices in ten Western and Southwestern states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah and Washington. The Company is a national leader in Small Business Administration lending and public finance advisory services. In addition, Zions is included in the S&P 500 and NASDAQ Financial 100 indices. Investor information and links to subsidiary banks can be accessed at www.zionsbancorporation.com.
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ZIONS BANCORPORATION
Press Release – Page 8
January 26, 2009
Forward-Looking Information
Statements in this news release that are based on other than historical data are forward-looking, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations or forecasts of future events. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this news release. Factors that might cause such differences include, but are not limited to: the Company’s ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either internationally, nationally or locally in areas in which the Company conducts its operations, including changes in asset-backed commercial paper markets and valuations in structured securities and other assets; changes in governmental policies and programs resulting from general economic and financial market conditions; changes in interest and funding rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company’s operations or business; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.
Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the 2007 Annual Report on Form 10-K of Zions Bancorporation filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s Internet site (http://www.sec.gov).
The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.
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FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
(In thousands, except per share and ratio data) | December 31, | December 31, | ||||||||||||||||||||||
2008 | 2007 | % Change | 2008 | 2007 | % Change | |||||||||||||||||||
EARNINGS | ||||||||||||||||||||||||
Taxable-equivalent net interest income | $ | 514,422 | $ | 485,157 | 6.03 | % | $ | 1,995,368 | $ | 1,908,053 | 4.58 | % | ||||||||||||
Taxable-equivalent revenue | 432,132 | 464,923 | (7.05 | )% | 2,186,060 | 2,320,397 | (5.79 | )% | ||||||||||||||||
Net interest income | 508,442 | 478,885 | 6.17 | % | 1,971,646 | 1,881,952 | 4.77 | % | ||||||||||||||||
Noninterest income | (82,290 | ) | (20,234 | ) | (306.69 | )% | 190,692 | 412,344 | (53.75 | )% | ||||||||||||||
Provision for loan losses | 285,189 | 69,982 | 307.52 | % | 648,269 | 152,210 | 325.90 | % | ||||||||||||||||
Noninterest expense | 398,167 | 352,966 | 12.81 | % | 1,474,963 | 1,404,588 | 5.01 | % | ||||||||||||||||
Impairment loss on goodwill | 353,804 | - | 353,804 | - | ||||||||||||||||||||
Income (loss) before income taxes and minority interest | (611,008 | ) | 35,703 | (1,811.36 | )% | (314,698 | ) | 737,498 | (142.67 | )% | ||||||||||||||
Income taxes (benefit) | (126,512 | ) | (11,035 | ) | (1,046.46 | )% | (43,365 | ) | 235,737 | (118.40 | )% | |||||||||||||
Minority interest | (1,520 | ) | 1,197 | (226.98 | )% | (5,064 | ) | 8,016 | (163.17 | )% | ||||||||||||||
Net income (loss) | (482,976 | ) | 45,541 | (1,160.53 | )% | (266,269 | ) | 493,745 | (153.93 | )% | ||||||||||||||
Net earnings (loss) applicable to common shareholders | (498,084 | ) | 42,198 | (1,280.35 | )% | (290,693 | ) | 479,422 | (160.63 | )% | ||||||||||||||
PER COMMON SHARE | ||||||||||||||||||||||||
Net earnings (loss) (diluted) | (4.36 | ) | 0.39 | (1,217.95 | )% | (2.66 | ) | 4.42 | (160.18 | )% | ||||||||||||||
Dividends | 0.32 | 0.43 | (25.58 | )% | 1.61 | 1.68 | (4.17 | )% | ||||||||||||||||
Book value per common share | 42.65 | 47.17 | (9.58 | )% | ||||||||||||||||||||
SELECTED RATIOS | ||||||||||||||||||||||||
Return on average assets | (3.52 | )% | 0.35 | % | (0.50 | )% | 1.01 | % | ||||||||||||||||
Return on average common equity | (38.77 | )% | 3.29 | % | (5.69 | )% | 9.57 | % | ||||||||||||||||
Efficiency ratio | 92.14 | % | 75.92 | % | 67.47 | % | 60.53 | % | ||||||||||||||||
Net interest margin | 4.20 | % | 4.27 | % | 4.18 | % | 4.43 | % |
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FINANCIAL HIGHLIGHTS (Continued) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
(In thousands, except share and ratio data) | December 31, | December 31, | ||||||||||||||||||||||
2008 | 2007 | % Change | 2008 | 2007 | % Change | |||||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||
Total assets | $ | 54,546,364 | $ | 50,941,152 | 7.08 | % | $ | 53,761,908 | $ | 48,847,219 | 10.06 | % | ||||||||||||
Total interest-earning assets | 48,708,673 | 45,106,413 | 7.99 | % | 47,690,955 | 43,048,458 | 10.78 | % | ||||||||||||||||
Securities | 4,516,559 | 5,188,980 | (12.96 | )% | 4,825,234 | 5,406,682 | (10.75 | )% | ||||||||||||||||
Net loans and leases | 41,938,586 | 38,450,974 | 9.07 | % | 40,977,224 | 36,808,146 | 11.33 | % | ||||||||||||||||
Goodwill | 1,720,536 | 2,009,022 | (14.36 | )% | 1,936,865 | 2,005,245 | (3.41 | )% | ||||||||||||||||
Core deposit and other intangibles | 130,703 | 162,679 | (19.66 | )% | 136,698 | 180,783 | (24.39 | )% | ||||||||||||||||
Total deposits | 39,580,867 | 36,381,125 | 8.80 | % | 37,572,680 | 35,823,969 | 4.88 | % | ||||||||||||||||
Minority interest | 28,751 | 32,343 | (11.11 | )% | 29,156 | 36,385 | (19.87 | )% | ||||||||||||||||
Shareholders' equity: | ||||||||||||||||||||||||
Preferred equity | 961,072 | 240,000 | 300.45 | % | 431,936 | 240,000 | 79.97 | % | ||||||||||||||||
Common equity | 5,110,430 | 5,094,138 | 0.32 | % | 5,107,675 | 5,007,627 | 2.00 | % | ||||||||||||||||
Weighted average common and common- | ||||||||||||||||||||||||
equivalent shares outstanding | 114,205,587 | 106,902,983 | 6.83 | % | 109,144,836 | 108,522,864 | 0.57 | % | ||||||||||||||||
AT PERIOD END | ||||||||||||||||||||||||
Total assets | $ | 55,092,791 | $ | 52,947,414 | 4.05 | % | ||||||||||||||||||
Total interest-earning assets | 49,071,281 | 46,448,887 | 5.65 | % | ||||||||||||||||||||
Securities | 4,509,308 | 5,860,900 | (23.06 | )% | ||||||||||||||||||||
Net loans and leases | 41,859,056 | 39,087,779 | 7.09 | % | ||||||||||||||||||||
Allowance for loan losses | 686,999 | 459,376 | 49.55 | % | ||||||||||||||||||||
Reserve for unfunded lending commitments | 50,934 | 21,530 | 136.57 | % | ||||||||||||||||||||
Goodwill | 1,651,377 | 2,009,513 | (17.82 | )% | ||||||||||||||||||||
Core deposit and other intangibles | 125,935 | 149,493 | (15.76 | )% | ||||||||||||||||||||
Total deposits | 41,316,496 | 36,922,753 | 11.90 | % | ||||||||||||||||||||
Minority interest | 27,320 | 30,939 | (11.70 | )% | ||||||||||||||||||||
Shareholders' equity: | ||||||||||||||||||||||||
Preferred equity | 1,581,834 | 240,000 | 559.10 | % | ||||||||||||||||||||
Common equity | 4,919,862 | 5,052,800 | (2.63 | )% | ||||||||||||||||||||
Common shares outstanding | 115,344,813 | 107,116,505 | 7.68 | % | ||||||||||||||||||||
Average equity to average assets | 11.13 | % | 10.47 | % | 10.30 | % | 10.74 | % | ||||||||||||||||
Common dividend payout | n/a | 108.88 | % | n/a | 37.82 | % | ||||||||||||||||||
Tangible equity ratio | 8.86 | % | 6.17 | % | ||||||||||||||||||||
Tangible common equity ratio | 5.89 | % | 5.70 | % | ||||||||||||||||||||
Nonperforming assets | $ | 1,140,461 | $ | 283,854 | 301.78 | % | ||||||||||||||||||
Accruing loans past due 90 days or more | 129,567 | 77,419 | 67.36 | % | ||||||||||||||||||||
Nonperforming assets to net loans and leases | ||||||||||||||||||||||||
and other real estate owned at period end | 2.71 | % | 0.73 | % |
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FINANCIAL HIGHLIGHTS (Continued) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
(In thousands, except per share and ratio data) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2008 | 2008 | 2008 | 2008 | 2007 | ||||||||||||||||
EARNINGS | ||||||||||||||||||||
Taxable-equivalent net interest income | $ | 514,422 | $ | 497,822 | $ | 490,587 | $ | 492,537 | $ | 485,157 | ||||||||||
Taxable-equivalent revenue | 432,132 | 587,432 | 562,959 | 603,537 | 464,923 | |||||||||||||||
Net interest income | 508,442 | 492,003 | 484,743 | 486,458 | 478,885 | |||||||||||||||
Noninterest income | (82,290 | ) | 89,610 | 72,372 | 111,000 | (20,234 | ) | |||||||||||||
Provision for loan losses | 285,189 | 156,606 | 114,192 | 92,282 | 69,982 | |||||||||||||||
Noninterest expense | 398,167 | 372,276 | 354,417 | 350,103 | 352,966 | |||||||||||||||
Impairment loss on goodwill | 353,804 | - | - | - | - | |||||||||||||||
Income (loss) before income taxes and minority interest | (611,008 | ) | 52,731 | 88,506 | 155,073 | 35,703 | ||||||||||||||
Income taxes (benefit) | (126,512 | ) | 11,214 | 22,037 | 49,896 | (11,035 | ) | |||||||||||||
Minority interest | (1,520 | ) | 3,757 | (5,729 | ) | (1,572 | ) | 1,197 | ||||||||||||
Net income (loss) | (482,976 | ) | 37,760 | 72,198 | 106,749 | 45,541 | ||||||||||||||
Net earnings (loss) applicable to common shareholders | (498,084 | ) | 33,351 | 69,744 | 104,296 | 42,198 | ||||||||||||||
PER COMMON SHARE | ||||||||||||||||||||
Net earnings (loss) (diluted) | (4.36 | ) | 0.31 | 0.65 | 0.98 | 0.39 | ||||||||||||||
Dividends | 0.32 | 0.43 | 0.43 | 0.43 | 0.43 | |||||||||||||||
Book value per common share | 42.65 | 45.78 | 46.82 | 47.49 | 47.17 | |||||||||||||||
SELECTED RATIOS | ||||||||||||||||||||
Return on average assets | (3.52 | )% | 0.28 | % | 0.54 | % | 0.81 | % | 0.35 | % | ||||||||||
Return on average common equity | (38.77 | )% | 2.59 | % | 5.53 | % | 8.18 | % | 3.29 | % | ||||||||||
Efficiency ratio | 92.14 | % | 63.37 | % | 62.96 | % | 58.01 | % | 75.92 | % | ||||||||||
Net interest margin | 4.20 | % | 4.13 | % | 4.18 | % | 4.23 | % | 4.27 | % |
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FINANCIAL HIGHLIGHTS (Continued) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
(In thousands, except share and ratio data) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2008 | 2008 | 2008 | 2008 | 2007 | ||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||
Total assets | $ | 54,546,364 | $ | 54,279,760 | $ | 53,293,375 | $ | 52,913,823 | $ | 50,941,152 | ||||||||||
Total interest-earning assets | 48,708,673 | 47,984,725 | 47,202,577 | 46,853,435 | 45,106,413 | |||||||||||||||
Securities | 4,516,559 | 4,582,727 | 4,866,421 | 5,341,287 | 5,188,980 | |||||||||||||||
Net loans and leases | 41,938,586 | 41,984,123 | 40,512,249 | 39,452,309 | 38,450,974 | |||||||||||||||
Goodwill | 1,720,536 | 2,009,509 | 2,009,517 | 2,009,477 | 2,009,022 | |||||||||||||||
Core deposit and other intangibles | 130,703 | 132,167 | 137,675 | 146,363 | 162,679 | |||||||||||||||
Total deposits | 39,580,867 | 37,321,656 | 36,774,214 | 36,594,674 | 36,381,125 | |||||||||||||||
Minority interest | 28,751 | 29,949 | 27,244 | 30,676 | 32,343 | |||||||||||||||
Shareholders' equity: | ||||||||||||||||||||
Preferred equity | 961,072 | 282,500 | 240,000 | 240,000 | 240,000 | |||||||||||||||
Common equity | 5,110,430 | 5,123,399 | 5,070,047 | 5,126,621 | 5,094,138 | |||||||||||||||
Weighted average common and common- | ||||||||||||||||||||
equivalent shares outstanding | 114,205,587 | 108,497,464 | 106,711,948 | 106,722,000 | 106,902,983 | |||||||||||||||
AT PERIOD END | ||||||||||||||||||||
Total assets | $ | 55,092,791 | $ | 53,974,168 | $ | 54,630,883 | $ | 53,408,293 | $ | 52,947,414 | ||||||||||
Total interest-earning assets | 49,071,281 | 47,656,065 | 47,920,419 | 46,962,949 | 46,448,887 | |||||||||||||||
Securities | 4,509,308 | 4,755,359 | 4,784,185 | 5,002,207 | 5,860,900 | |||||||||||||||
Net loans and leases | 41,859,056 | 41,887,693 | 41,872,977 | 39,905,755 | 39,087,779 | |||||||||||||||
Allowance for loan losses | 686,999 | 609,433 | 548,958 | 501,283 | 459,376 | |||||||||||||||
Reserve for unfunded lending commitments | 50,934 | 23,574 | 26,838 | 25,148 | 21,530 | |||||||||||||||
Goodwill | 1,651,377 | 2,009,504 | 2,009,511 | 2,009,517 | 2,009,513 | |||||||||||||||
Core deposit and other intangibles | 125,935 | 133,989 | 132,481 | 140,672 | 149,493 | |||||||||||||||
Total deposits | 41,316,496 | 38,590,901 | 37,607,995 | 37,516,337 | 36,922,753 | |||||||||||||||
Minority interest | 27,320 | 30,288 | 25,528 | 30,413 | 30,939 | |||||||||||||||
Shareholders' equity: | ||||||||||||||||||||
Preferred equity | 1,581,834 | 286,949 | 240,000 | 240,000 | 240,000 | |||||||||||||||
Common equity | 4,919,862 | 5,279,078 | 5,033,530 | 5,087,801 | 5,052,800 | |||||||||||||||
Common shares outstanding | 115,344,813 | 115,302,598 | 107,518,975 | 107,139,188 | 107,116,505 | |||||||||||||||
Average equity to average assets | 11.13 | % | 9.96 | % | 9.96 | % | 10.14 | % | 10.47 | % | ||||||||||
Common dividend payout | n/a | 138.44 | % | 66.23 | % | 44.11 | % | 108.88 | % | |||||||||||
Tangible equity ratio | 8.86 | % | 6.60 | % | 5.97 | % | 6.20 | % | 6.17 | % | ||||||||||
Tangible common equity ratio | 5.89 | % | 6.05 | % | 5.51 | % | 5.73 | % | 5.70 | % | ||||||||||
Nonperforming assets | $ | 1,140,461 | $ | 924,442 | $ | 697,432 | $ | 434,293 | $ | 283,854 | ||||||||||
Accruing loans past due 90 days or more | 129,567 | 97,831 | 108,934 | 84,637 | 77,419 | |||||||||||||||
Nonperforming assets to net loans and leases | ||||||||||||||||||||
and other real estate owned at period end | 2.71 | % | 2.20 | % | 1.66 | % | 1.09 | % | 0.73 | % |
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ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
Press Release – Page 13 | ||||||||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(In thousands, except share amounts) | 2008 | 2008 | 2008 | 2008 | 2007 | |||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 1,475,976 | $ | 1,441,957 | $ | 1,751,724 | $ | 1,660,539 | $ | 1,855,155 | ||||||||||
Money market investments: | ||||||||||||||||||||
Interest-bearing deposits and commercial paper | 2,332,759 | 568,875 | 504,314 | 1,243,860 | 726,446 | |||||||||||||||
Federal funds sold | 83,451 | 274,129 | 274,456 | 121,892 | 102,225 | |||||||||||||||
Security resell agreements | 286,707 | 170,009 | 484,487 | 689,235 | 671,537 | |||||||||||||||
Investment securities: | ||||||||||||||||||||
Held-to-maturity, at adjusted cost (approximate fair value | ||||||||||||||||||||
$1,443,555, $1,587,006, $1,730,104, $704,156 and $702,148) | 1,790,989 | 1,917,354 | 1,914,833 | 701,658 | 704,441 | |||||||||||||||
Available-for-sale, at fair value | 2,676,255 | 2,792,236 | 2,817,682 | 4,259,742 | 5,134,610 | |||||||||||||||
Trading account, at fair value (includes $538, $531, $463, | ||||||||||||||||||||
$0 and $741 transferred as collateral | ||||||||||||||||||||
under repurchase agreements) | 42,064 | 45,769 | 51,670 | 40,807 | 21,849 | |||||||||||||||
4,509,308 | 4,755,359 | 4,784,185 | 5,002,207 | 5,860,900 | ||||||||||||||||
Loans: | ||||||||||||||||||||
Loans held for sale | 200,318 | 152,095 | 158,509 | 208,529 | 207,943 | |||||||||||||||
Loans and leases | 41,791,237 | 41,876,371 | 41,874,224 | 39,855,365 | 39,044,163 | |||||||||||||||
41,991,555 | 42,028,466 | 42,032,733 | 40,063,894 | 39,252,106 | ||||||||||||||||
Less: | ||||||||||||||||||||
Unearned income and fees, net of related costs | 132,499 | 140,773 | 159,756 | 158,139 | 164,327 | |||||||||||||||
Allowance for loan losses | 686,999 | 609,433 | 548,958 | 501,283 | 459,376 | |||||||||||||||
Loans and leases, net of allowance | 41,172,057 | 41,278,260 | 41,324,019 | 39,404,472 | 38,628,403 | |||||||||||||||
Other noninterest-bearing investments | 1,044,092 | 1,170,367 | 1,153,933 | 1,114,902 | 1,034,412 | |||||||||||||||
Premises and equipment, net | 687,096 | 675,480 | 656,013 | 657,183 | 655,712 | |||||||||||||||
Goodwill | 1,651,377 | 2,009,504 | 2,009,511 | 2,009,517 | 2,009,513 | |||||||||||||||
Core deposit and other intangibles | 125,935 | 133,989 | 132,481 | 140,672 | 149,493 | |||||||||||||||
Other real estate owned | 191,792 | 156,817 | 125,186 | 36,476 | 15,201 | |||||||||||||||
Other assets | 1,532,241 | 1,339,422 | 1,430,574 | 1,327,338 | 1,238,417 | |||||||||||||||
$ | 55,092,791 | $ | 53,974,168 | $ | 54,630,883 | $ | 53,408,293 | $ | 52,947,414 | |||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing demand | $ | 9,683,385 | $ | 9,413,484 | $ | 9,735,265 | $ | 9,464,122 | $ | 9,618,300 | ||||||||||
Interest-bearing: | ||||||||||||||||||||
Savings and NOW | 4,452,919 | 4,341,873 | 4,590,767 | 4,661,963 | 4,507,837 | |||||||||||||||
Money market | 16,826,846 | 14,087,288 | 13,387,401 | 12,986,387 | 12,467,239 | |||||||||||||||
Time under $100,000 | 2,974,484 | 2,954,116 | 2,466,082 | 2,564,434 | 2,562,363 | |||||||||||||||
Time $100,000 and over | 4,756,300 | 4,468,225 | 4,102,369 | 4,548,009 | 4,391,588 | |||||||||||||||
Foreign | 2,622,562 | 3,325,915 | 3,326,111 | 3,291,422 | 3,375,426 | |||||||||||||||
41,316,496 | 38,590,901 | 37,607,995 | 37,516,337 | 36,922,753 | ||||||||||||||||
Securities sold, not yet purchased | 35,657 | 29,528 | 46,376 | 184,522 | 224,269 | |||||||||||||||
Federal funds purchased | 965,835 | 1,179,197 | 2,379,055 | 1,817,587 | 2,463,460 | |||||||||||||||
Security repurchase agreements | 899,751 | 734,379 | 1,010,325 | 1,144,178 | 1,298,112 | |||||||||||||||
Other liabilities | 669,111 | 649,672 | 555,812 | 620,528 | 644,375 | |||||||||||||||
Commercial paper | 15,451 | 40,493 | 137,200 | 164,657 | 297,850 | |||||||||||||||
Federal Home Loan Bank advances and other borrowings: | ||||||||||||||||||||
One year or less | 2,039,914 | 4,690,784 | 5,003,057 | 3,956,775 | 3,181,990 | |||||||||||||||
Over one year | 128,253 | 128,855 | 129,474 | 127,006 | 127,612 | |||||||||||||||
Long-term debt | 2,493,307 | 2,334,044 | 2,462,531 | 2,518,489 | 2,463,254 | |||||||||||||||
Total liabilities | 48,563,775 | 48,377,853 | 49,331,825 | 48,050,079 | 47,623,675 | |||||||||||||||
Minority interest | 27,320 | 30,288 | 25,528 | 30,413 | 30,939 | |||||||||||||||
Shareholders’ equity: | ||||||||||||||||||||
Preferred stock, without par value, authorized 3,000,000 shares: | ||||||||||||||||||||
U.S. Treasury | 1,294,885 | - | - | - | - | |||||||||||||||
Other | 286,949 | 286,949 | 240,000 | 240,000 | 240,000 | |||||||||||||||
Common stock, without par value; authorized 350,000,000 | ||||||||||||||||||||
shares; issued and outstanding 115,344,813, 115,302,598, | ||||||||||||||||||||
107,518,975, 107,139,188 and 107,116,505 shares | 2,599,916 | 2,482,517 | 2,224,455 | 2,219,905 | 2,212,237 | |||||||||||||||
Retained earnings | 2,433,363 | 2,968,242 | 2,981,062 | 2,957,511 | 2,910,692 | |||||||||||||||
Accumulated other comprehensive income (loss) | (98,958 | ) | (157,305 | ) | (158,325 | ) | (76,429 | ) | (58,835 | ) | ||||||||||
Deferred compensation | (14,459 | ) | (14,376 | ) | (13,662 | ) | (13,186 | ) | (11,294 | ) | ||||||||||
Total shareholders’ equity | 6,501,696 | 5,566,027 | 5,273,530 | 5,327,801 | 5,292,800 | |||||||||||||||
$ | 55,092,791 | $ | 53,974,168 | $ | 54,630,883 | $ | 53,408,293 | $ | 52,947,414 | |||||||||||
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Press Release – Page 14 | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
(In thousands, except per share amounts) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2008 | 2008 | 2008 | 2008 | 2007 | ||||||||||||||||
Interest income: | ||||||||||||||||||||
Interest and fees on loans | $ | 650,885 | $ | 663,677 | $ | 643,111 | $ | 688,439 | $ | 727,185 | ||||||||||
Interest on loans held for sale | 2,442 | 1,916 | 2,699 | 3,017 | 2,975 | |||||||||||||||
Lease financing | 4,999 | 5,515 | 5,767 | 5,818 | 5,782 | |||||||||||||||
Interest on money market investments | 7,172 | 9,267 | 12,313 | 19,028 | 18,760 | |||||||||||||||
Interest on securities: | ||||||||||||||||||||
Held-to-maturity – taxable | 22,317 | 21,780 | 15,730 | 2,455 | 2,387 | |||||||||||||||
Held-to-maturity – nontaxable | 6,396 | 6,319 | 6,224 | 6,429 | 6,430 | |||||||||||||||
Available-for-sale – taxable | 28,680 | 25,044 | 35,059 | 62,356 | 61,459 | |||||||||||||||
Available-for-sale – nontaxable | 1,711 | 1,697 | 1,870 | 1,892 | 2,070 | |||||||||||||||
Trading account | 598 | 437 | 159 | 681 | 471 | |||||||||||||||
Total interest income | 725,200 | 735,652 | 722,932 | 790,115 | 827,519 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Interest on savings and money market deposits | 95,717 | 90,720 | 80,144 | 103,987 | 125,382 | |||||||||||||||
Interest on time and foreign deposits | 77,806 | 74,837 | 83,460 | 106,222 | 119,242 | |||||||||||||||
Interest on short-term borrowings | 20,368 | 50,164 | 45,070 | 63,273 | 67,601 | |||||||||||||||
Interest on long-term borrowings | 22,867 | 27,928 | 29,515 | 30,175 | 36,409 | |||||||||||||||
Total interest expense | 216,758 | 243,649 | 238,189 | 303,657 | 348,634 | |||||||||||||||
Net interest income | 508,442 | 492,003 | 484,743 | 486,458 | 478,885 | |||||||||||||||
Provision for loan losses | 285,189 | 156,606 | 114,192 | 92,282 | 69,982 | |||||||||||||||
Net interest income after provision for loan losses | 223,253 | 335,397 | 370,551 | 394,176 | 408,903 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Service charges and fees on deposit accounts | 52,641 | 53,695 | 51,067 | 49,585 | 48,130 | |||||||||||||||
Other service charges, commissions and fees | 40,532 | 42,794 | 42,362 | 41,981 | 44,405 | |||||||||||||||
Trust and wealth management income | 8,910 | 8,865 | 10,284 | 9,693 | 10,151 | |||||||||||||||
Capital markets and foreign exchange | 15,048 | 12,257 | 12,196 | 10,397 | 10,632 | |||||||||||||||
Dividends and other investment income | 16,001 | 7,042 | 10,409 | 12,910 | 13,830 | |||||||||||||||
Loan sales and servicing income | 4,420 | 3,633 | 8,516 | 7,810 | 8,640 | |||||||||||||||
Income from securities conduit | 1,542 | 336 | 1,043 | 2,581 | 2,472 | |||||||||||||||
Fair value and nonhedge derivative income (loss) | (5,819 | ) | (26,155 | ) | (19,789 | ) | 3,787 | (7,034 | ) | |||||||||||
Equity securities gains (losses), net | (14,125 | ) | 12,971 | (8,121 | ) | 10,068 | 1,349 | |||||||||||||
Fixed income securities gains (losses), net | (1,139 | ) | 135 | 78 | 1,775 | (753 | ) | |||||||||||||
Impairment losses on investment securities and valuation | ||||||||||||||||||||
losses on securities purchased from Lockhart Funding | (204,340 | ) | (28,022 | ) | (38,761 | ) | (45,989 | ) | (158,208 | ) | ||||||||||
Other | 4,039 | 2,059 | 3,088 | 6,402 | 6,152 | |||||||||||||||
Total noninterest income | (82,290 | ) | 89,610 | 72,372 | 111,000 | (20,234 | ) | |||||||||||||
Noninterest expense: | ||||||||||||||||||||
Salaries and employee benefits | 190,861 | 208,995 | 201,291 | 209,354 | 191,141 | |||||||||||||||
Occupancy, net | 29,460 | 30,552 | 27,364 | 26,799 | 27,312 | |||||||||||||||
Furniture and equipment | 26,507 | 24,281 | 25,610 | 23,738 | 24,917 | |||||||||||||||
Other real estate expense | 40,124 | 7,126 | 1,290 | 1,838 | 1,377 | |||||||||||||||
Legal and professional services | 14,774 | 11,297 | 11,566 | 7,880 | 12,132 | |||||||||||||||
Postage and supplies | 9,873 | 9,257 | 8,536 | 9,789 | 9,416 | |||||||||||||||
Advertising | 10,078 | 6,782 | 7,520 | 6,351 | 6,322 | |||||||||||||||
Impairment losses on long-lived assets | 895 | 2,239 | - | - | - | |||||||||||||||
Merger related expense | 636 | 384 | 281 | 307 | 687 | |||||||||||||||
Amortization of core deposit and other intangibles | 8,055 | 8,096 | 8,191 | 8,820 | 10,459 | |||||||||||||||
Provision for unfunded lending commitments | (577 | ) | (3,264 | ) | 1,690 | 3,618 | 136 | |||||||||||||
Other | 67,481 | 66,531 | 61,078 | 51,609 | 69,067 | |||||||||||||||
Total noninterest expense | 398,167 | 372,276 | 354,417 | 350,103 | 352,966 | |||||||||||||||
Impairment loss on goodwill | 353,804 | - | - | - | - | |||||||||||||||
Income (loss) before income taxes and minority interest | (611,008 | ) | 52,731 | 88,506 | 155,073 | 35,703 | ||||||||||||||
Income taxes (benefit) | (126,512 | ) | 11,214 | 22,037 | 49,896 | (11,035 | ) | |||||||||||||
Minority interest | (1,520 | ) | 3,757 | (5,729 | ) | (1,572 | ) | 1,197 | ||||||||||||
Net income (loss) | (482,976 | ) | 37,760 | 72,198 | 106,749 | 45,541 | ||||||||||||||
Preferred stock dividends | 15,108 | 4,409 | 2,454 | 2,453 | 3,343 | |||||||||||||||
Net earnings (loss) applicable to common shareholders | $ | (498,084 | ) | $ | 33,351 | $ | 69,744 | $ | 104,296 | $ | 42,198 | |||||||||
Weighted average common shares outstanding during the period: | ||||||||||||||||||||
Basic shares | 114,065 | 108,407 | 106,595 | 106,514 | 106,454 | |||||||||||||||
Diluted shares | 114,206 | 108,497 | 106,712 | 106,722 | 106,903 | |||||||||||||||
Net earnings (loss) per common share: | ||||||||||||||||||||
Basic | $ | (4.37 | ) | $ | 0.31 | $ | 0.65 | $ | 0.98 | $ | 0.40 | |||||||||
Diluted | (4.36 | ) | 0.31 | 0.65 | 0.98 | 0.39 |
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Press Release – Page 15 | ||||||||
CONSOLIDATED STATEMENTS OF INCOME (Continued) | ||||||||
(Unaudited) | ||||||||
Years Ended | ||||||||
(In thousands, except per share amounts) | December 31, | |||||||
2008 | 2007 | |||||||
Interest income: | ||||||||
Interest and fees on loans | $ | 2,646,112 | $ | 2,823,382 | ||||
Interest on loans held for sale | 10,074 | 14,867 | ||||||
Lease financing | 22,099 | 21,683 | ||||||
Interest on money market investments | 47,780 | 43,699 | ||||||
Interest on securities: | ||||||||
Held-to-maturity – taxable | 62,282 | 8,997 | ||||||
Held-to-maturity – nontaxable | 25,368 | 25,150 | ||||||
Available-for-sale – taxable | 151,139 | 255,039 | ||||||
Available-for-sale – nontaxable | 7,170 | 9,200 | ||||||
Trading account | 1,875 | 3,309 | ||||||
Total interest income | 2,973,899 | 3,205,326 | ||||||
Interest expense: | ||||||||
Interest on savings and money market deposits | 370,568 | 479,366 | ||||||
Interest on time and foreign deposits | 342,325 | 472,353 | ||||||
Interest on short-term borrowings | 178,875 | 218,696 | ||||||
Interest on long-term borrowings | 110,485 | 152,959 | ||||||
Total interest expense | 1,002,253 | 1,323,374 | ||||||
Net interest income | 1,971,646 | 1,881,952 | ||||||
Provision for loan losses | 648,269 | 152,210 | ||||||
Net interest income after provision for loan losses | 1,323,377 | 1,729,742 | ||||||
Noninterest income: | ||||||||
Service charges and fees on deposit accounts | 206,988 | 183,550 | ||||||
Other service charges, commissions and fees | 167,669 | 170,564 | ||||||
Trust and wealth management income | 37,752 | 36,532 | ||||||
Capital markets and foreign exchange | 49,898 | 43,588 | ||||||
Dividends and other investment income | 46,362 | 50,914 | ||||||
Loan sales and servicing income | 24,379 | 38,503 | ||||||
Income from securities conduit | 5,502 | 18,176 | ||||||
Fair value and nonhedge derivative loss | (47,976 | ) | (14,256 | ) | ||||
Equity securities gains, net | 793 | 17,719 | ||||||
Fixed income securities gains, net | 849 | 3,019 | ||||||
Impairment losses on investment securities and valuation | ||||||||
losses on securities purchased from Lockhart Funding | (317,112 | ) | (158,208 | ) | ||||
Other | 15,588 | 22,243 | ||||||
Total noninterest income | 190,692 | 412,344 | ||||||
Noninterest expense: | ||||||||
Salaries and employee benefits | 810,501 | 799,884 | ||||||
Occupancy, net | 114,175 | 107,438 | ||||||
Furniture and equipment | 100,136 | 96,452 | ||||||
Other real estate expense | 50,378 | 4,391 | ||||||
Legal and professional services | 45,517 | 43,829 | ||||||
Postage and supplies | 37,455 | 36,512 | ||||||
Advertising | 30,731 | 26,920 | ||||||
Impairment losses on long-lived assets | 3,134 | - | ||||||
Merger related expense | 1,608 | 5,266 | ||||||
Amortization of core deposit and other intangibles | 33,162 | 44,895 | ||||||
Provision for unfunded lending commitments | 1,467 | 1,836 | ||||||
Other | 246,699 | 237,165 | ||||||
Total noninterest expense | 1,474,963 | 1,404,588 | ||||||
Impairment loss on goodwill | 353,804 | - | ||||||
Income (loss) before income taxes and minority interest | (314,698 | ) | 737,498 | |||||
Income taxes (benefit) | (43,365 | ) | 235,737 | |||||
Minority interest | (5,064 | ) | 8,016 | |||||
Net income (loss) | (266,269 | ) | 493,745 | |||||
Preferred stock dividends | 24,424 | 14,323 | ||||||
Net earnings (loss) applicable to common shareholders | $ | (290,693 | ) | $ | 479,422 | |||
Weighted average common shares outstanding during the period: | ||||||||
Basic shares | 108,908 | 107,365 | ||||||
Diluted shares | 109,145 | 108,523 | ||||||
Net earnings (loss) per common share: | ||||||||
Basic | $ | (2.67 | ) | $ | 4.47 | |||
Diluted | (2.66 | ) | 4.42 |
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Press Release – Page 16 | ||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
AND COMPREHENSIVE INCOME | ||||||||||||||||||||||||
(Unaudited) | Accumulated | |||||||||||||||||||||||
other | Total | |||||||||||||||||||||||
Preferred | Common | Retained | comprehensive | Deferred | shareholders' | |||||||||||||||||||
(In thousands, except per share amounts) | stock | stock | earnings | income (loss) | compensation | equity | ||||||||||||||||||
Balance, December 31, 2007 | $ | 240,000 | $ | 2,212,237 | $ | 2,910,692 | $ | (58,835 | ) | $ | (11,294 | ) | $ | 5,292,800 | ||||||||||
Cumulative effect of change in accounting principle, | ||||||||||||||||||||||||
adoption of SFAS 159 | (11,471 | ) | 11,471 | - | ||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||
Net income for the period | 106,749 | 106,749 | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||
Net realized and unrealized holding losses | ||||||||||||||||||||||||
on investments and retained interests | (130,066 | ) | ||||||||||||||||||||||
Foreign currency translation | (1 | ) | ||||||||||||||||||||||
Reclassification for net realized losses | ||||||||||||||||||||||||
on investments recorded in operations | 27,301 | |||||||||||||||||||||||
Net unrealized gains on derivative instruments | 73,701 | |||||||||||||||||||||||
Other comprehensive loss | (29,065 | ) | (29,065 | ) | ||||||||||||||||||||
Total comprehensive income | 77,684 | |||||||||||||||||||||||
Net stock issued under employee plans | ||||||||||||||||||||||||
and related tax benefits | 7,668 | 7,668 | ||||||||||||||||||||||
Dividends declared on preferred stock | (2,453 | ) | (2,453 | ) | ||||||||||||||||||||
Dividends on common stock, $.43 per share | (46,006 | ) | (46,006 | ) | ||||||||||||||||||||
Change in deferred compensation | (1,892 | ) | (1,892 | ) | ||||||||||||||||||||
Balance, March 31, 2008 | 240,000 | 2,219,905 | 2,957,511 | (76,429 | ) | (13,186 | ) | 5,327,801 | ||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||
Net income for the period | 72,198 | 72,198 | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||
Net realized and unrealized holding losses | ||||||||||||||||||||||||
on investments and retained interests | (40,336 | ) | ||||||||||||||||||||||
Foreign currency translation | 2 | |||||||||||||||||||||||
Reclassification for net realized losses | ||||||||||||||||||||||||
on investments recorded in operations | 23,816 | |||||||||||||||||||||||
Net unrealized losses on derivative instruments | (66,112 | ) | ||||||||||||||||||||||
Pension and postretirement | 734 | |||||||||||||||||||||||
Other comprehensive loss | (81,896 | ) | (81,896 | ) | ||||||||||||||||||||
Total comprehensive loss | (9,698 | ) | ||||||||||||||||||||||
Stock issued under dividend reinvestment plan | 632 | 632 | ||||||||||||||||||||||
Net stock issued under employee plans | ||||||||||||||||||||||||
and related tax benefits | 3,918 | 3,918 | ||||||||||||||||||||||
Dividends declared on preferred stock | (2,454 | ) | (2,454 | ) | ||||||||||||||||||||
Dividends on common stock, $.43 per share | (46,193 | ) | (46,193 | ) | ||||||||||||||||||||
Change in deferred compensation | (476 | ) | (476 | ) | ||||||||||||||||||||
Balance, June 30, 2008 | 240,000 | 2,224,455 | 2,981,062 | (158,325 | ) | (13,662 | ) | 5,273,530 | ||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||
Net income for the period | 37,760 | 37,760 | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||
Net realized and unrealized holding losses | ||||||||||||||||||||||||
on investments and retained interests | (40,454 | ) | ||||||||||||||||||||||
Foreign currency translation | (53 | ) | ||||||||||||||||||||||
Reclassification for net realized losses | ||||||||||||||||||||||||
on investments recorded in operations | 16,012 | |||||||||||||||||||||||
Net unrealized gains on derivative instruments | 25,515 | |||||||||||||||||||||||
Other comprehensive income | 1,020 | 1,020 | ||||||||||||||||||||||
Total comprehensive income | 38,780 | |||||||||||||||||||||||
Issuance of preferred stock | 46,949 | (503 | ) | 46,446 | ||||||||||||||||||||
Issuance of common stock | 244,889 | 244,889 | ||||||||||||||||||||||
Stock issued under dividend reinvestment plan | 629 | 629 | ||||||||||||||||||||||
Net stock issued under employee plans | ||||||||||||||||||||||||
and related tax benefits | 13,047 | 13,047 | ||||||||||||||||||||||
Dividends declared on preferred stock | (4,409 | ) | (4,409 | ) | ||||||||||||||||||||
Dividends on common stock, $.43 per share | (46,171 | ) | (46,171 | ) | ||||||||||||||||||||
Change in deferred compensation | (714 | ) | (714 | ) | ||||||||||||||||||||
Balance, September 30, 2008 | 286,949 | 2,482,517 | 2,968,242 | (157,305 | ) | (14,376 | ) | 5,566,027 | ||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||
Net loss for the period | (482,976 | ) | (482,976 | ) | ||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||
Net realized and unrealized holding losses | ||||||||||||||||||||||||
on investments and retained interests | (130,311 | ) | ||||||||||||||||||||||
Foreign currency translation | 47 | |||||||||||||||||||||||
Reclassification for net realized losses | ||||||||||||||||||||||||
on investments recorded in operations | 122,467 | |||||||||||||||||||||||
Net unrealized gains on derivative instruments | 98,339 | |||||||||||||||||||||||
Pension and postretirement | (32,195 | ) | ||||||||||||||||||||||
Other comprehensive income | 58,347 | 58,347 | ||||||||||||||||||||||
Total comprehensive loss | (424,629 | ) | ||||||||||||||||||||||
Issuance of preferred stock | 1,292,236 | (77 | ) | 1,292,159 | ||||||||||||||||||||
Issuance of common stock and warrants | 107,764 | 107,764 | ||||||||||||||||||||||
Net stock issued under employee plans | ||||||||||||||||||||||||
and related tax benefits | 9,712 | 9,712 | ||||||||||||||||||||||
Dividends on preferred stock | 2,649 | (15,108 | ) | (12,459 | ) | |||||||||||||||||||
Dividends on common stock, $.32 per share | (36,795 | ) | (36,795 | ) | ||||||||||||||||||||
Change in deferred compensation | (83 | ) | (83 | ) | ||||||||||||||||||||
Balance, December 31, 2008 | $ | 1,581,834 | $ | 2,599,916 | $ | 2,433,363 | $ | (98,958 | ) | $ | (14,459 | ) | $ | 6,501,696 |
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ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||
Press Release – Page 17 | ||||||||||||||||||||||||
INVESTMENT SECURITIES PORTFOLIO | ||||||||||||||||||||||||
ASSET-BACKED SECURITIES CLASSIFIED AT HIGHEST CREDIT RATING* | ||||||||||||||||||||||||
As of December 31, 2008 | ||||||||||||||||||||||||
(Unaudited) | Net | Net | ||||||||||||||||||||||
unrealized | unrealized | |||||||||||||||||||||||
gains (losses) | gains (losses) | Estimated | ||||||||||||||||||||||
(In thousands) | Par | Amortized | recognized | Carrying | not recognized | fair | ||||||||||||||||||
value | cost | in OCI (1) | value | in OCI (1) | value | |||||||||||||||||||
HELD-TO-MATURITY: | ||||||||||||||||||||||||
Municipal securities | $ | 699,673 | $ | 696,653 | $ | - | $ | 696,653 | $ | (1,570 | ) | $ | 695,083 | |||||||||||
Asset-backed securities: | ||||||||||||||||||||||||
Trust preferred securities – banks and insurance | ||||||||||||||||||||||||
AA rated | 10,000 | 10,000 | (1,350 | ) | 8,650 | (3,389 | ) | 5,261 | ||||||||||||||||
A rated | 1,190,637 | 1,048,955 | (157,220 | ) | 891,735 | (291,791 | ) | 599,944 | ||||||||||||||||
BBB rated | 173,333 | 128,849 | (25,572 | ) | 103,277 | (32,446 | ) | 70,831 | ||||||||||||||||
1,373,970 | 1,187,804 | (184,142 | ) | 1,003,662 | (327,626 | ) | 676,036 | |||||||||||||||||
Trust preferred securities – real estate investment trusts | ||||||||||||||||||||||||
AAA rated | 20,000 | 17,720 | (4,830 | ) | 12,890 | (2,266 | ) | 10,624 | ||||||||||||||||
A rated | 25,000 | 18,293 | (3,841 | ) | 14,452 | (4,005 | ) | 10,447 | ||||||||||||||||
45,000 | 36,013 | (8,671 | ) | 27,342 | (6,271 | ) | 21,071 | |||||||||||||||||
Other | ||||||||||||||||||||||||
AAA rated | 23,364 | 21,730 | (171 | ) | 21,559 | (6,507 | ) | 15,052 | ||||||||||||||||
AA rated | 25,320 | 22,721 | (1,120 | ) | 21,601 | (5,128 | ) | 16,473 | ||||||||||||||||
BBB rated | 44,012 | 26,725 | (11,800 | ) | 14,925 | (332 | ) | 14,593 | ||||||||||||||||
Noninvestment grade | 12,619 | 5,147 | - | 5,147 | - | 5,147 | ||||||||||||||||||
105,315 | 76,323 | (13,091 | ) | 63,232 | (11,967 | ) | 51,265 | |||||||||||||||||
Other debt securities | 100 | 100 | - | 100 | - | 100 | ||||||||||||||||||
2,224,058 | 1,996,893 | (205,904 | ) | 1,790,989 | (347,434 | ) | 1,443,555 | |||||||||||||||||
AVAILABLE-FOR-SALE: | ||||||||||||||||||||||||
U.S. Treasury securities | 28,571 | 27,973 | 1,148 | 29,121 | 29,121 | |||||||||||||||||||
U.S. Government agencies and corporations: | ||||||||||||||||||||||||
Agency securities | 323,174 | 323,371 | 1,838 | 325,209 | 325,209 | |||||||||||||||||||
Agency guaranteed mortgage-backed securities | 414,767 | 413,352 | 3,653 | 417,005 | 417,005 | |||||||||||||||||||
Small Business Administration loan-backed securities | 645,166 | 692,634 | (25,957 | ) | 666,677 | 666,677 | ||||||||||||||||||
Municipal securities | 177,116 | 177,938 | 2,060 | 179,998 | 179,998 | |||||||||||||||||||
Asset-backed securities: | ||||||||||||||||||||||||
Trust preferred securities – banks and insurance | ||||||||||||||||||||||||
AAA rated | 760,700 | 729,483 | (119,871 | ) | 609,612 | 609,612 | ||||||||||||||||||
A rated | 53,319 | 48,156 | (21,405 | ) | 26,751 | 26,751 | ||||||||||||||||||
BBB rated | 7,000 | 2,874 | - | 2,874 | 2,874 | |||||||||||||||||||
Not rated | 26,020 | 26,024 | (4,634 | ) | 21,390 | 21,390 | ||||||||||||||||||
847,039 | 806,537 | (145,910 | ) | 660,627 | 660,627 | |||||||||||||||||||
Trust preferred securities – real estate investment trusts | ||||||||||||||||||||||||
A rated | 15,000 | 6,003 | - | 6,003 | 6,003 | |||||||||||||||||||
BBB rated | 35,000 | 12,109 | (2,238 | ) | 9,871 | 9,871 | ||||||||||||||||||
Noninvestment grade | 70,569 | 8,768 | (745 | ) | 8,023 | 8,023 | ||||||||||||||||||
120,569 | 26,880 | (2,983 | ) | 23,897 | 23,897 | |||||||||||||||||||
Other | ||||||||||||||||||||||||
AAA rated | 40,355 | 40,231 | (13,299 | ) | 26,932 | 26,932 | ||||||||||||||||||
A rated | 50,000 | 48,148 | (15,102 | ) | 33,046 | 33,046 | ||||||||||||||||||
BBB rated | 3,021 | 3,001 | (1,793 | ) | 1,208 | 1,208 | ||||||||||||||||||
Noninvestment grade | 30,000 | 4,401 | - | 4,401 | 4,401 | |||||||||||||||||||
123,376 | 95,781 | (30,194 | ) | 65,587 | 65,587 | |||||||||||||||||||
2,679,778 | 2,564,466 | (196,345 | ) | 2,368,121 | 2,368,121 | |||||||||||||||||||
Other securities: | ||||||||||||||||||||||||
Mutual funds and stock | 308,134 | 308,134 | - | 308,134 | 308,134 | |||||||||||||||||||
2,987,912 | 2,872,600 | (196,345 | ) | 2,676,255 | 2,676,255 | |||||||||||||||||||
Total | $ | 5,211,970 | $ | 4,869,493 | $ | (402,249 | ) | $ | 4,467,244 | $ | (347,434 | ) | $ | 4,119,810 | ||||||||||
* Ratings categories include entire range. For example, “A rated” includes A+, A and A-. Split rated securities with more than one rating are categorized at the highest | ||||||||||||||||||||||||
rating level. | ||||||||||||||||||||||||
(1) Other comprehensive income. All amounts reported are pretax. |
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ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||
Press Release – Page 18 | ||||||||||||||||||||||||
INVESTMENT SECURITIES PORTFOLIO | ||||||||||||||||||||||||
ASSET-BACKED SECURITIES CLASSIFIED AT LOWEST CREDIT RATING* | ||||||||||||||||||||||||
As of December 31, 2008 | ||||||||||||||||||||||||
(Unaudited) | Net | Net | ||||||||||||||||||||||
unrealized | unrealized | |||||||||||||||||||||||
gains (losses) | gains (losses) | Estimated | ||||||||||||||||||||||
(In thousands) | Par | Amortized | recognized | Carrying | not recognized | fair | ||||||||||||||||||
value | cost | in OCI (1) | value | in OCI (1) | value | |||||||||||||||||||
HELD-TO-MATURITY: | ||||||||||||||||||||||||
Municipal securities | $ | 699,673 | $ | 696,653 | $ | - | $ | 696,653 | $ | (1,570 | ) | $ | 695,083 | |||||||||||
Asset-backed securities: | ||||||||||||||||||||||||
Trust preferred securities – banks and insurance | ||||||||||||||||||||||||
A rated | 387,874 | 388,065 | (89,494 | ) | 298,571 | (90,658 | ) | 207,913 | ||||||||||||||||
BBB rated | 268,352 | 200,595 | (31,575 | ) | 169,020 | (44,932 | ) | 124,088 | ||||||||||||||||
Noninvestment grade | 717,744 | 599,144 | (63,073 | ) | 536,071 | (192,036 | ) | 344,035 | ||||||||||||||||
1,373,970 | 1,187,804 | (184,142 | ) | 1,003,662 | (327,626 | ) | 676,036 | |||||||||||||||||
Trust preferred securities – real estate investment trusts | ||||||||||||||||||||||||
AA rated | 20,000 | 17,720 | (4,830 | ) | 12,890 | (2,266 | ) | 10,624 | ||||||||||||||||
A rated | 25,000 | 18,293 | (3,841 | ) | 14,452 | (4,005 | ) | 10,447 | ||||||||||||||||
45,000 | 36,013 | (8,671 | ) | 27,342 | (6,271 | ) | 21,071 | |||||||||||||||||
Other | ||||||||||||||||||||||||
AAA rated | 5,518 | 5,276 | (116 | ) | 5,160 | (158 | ) | 5,002 | ||||||||||||||||
AA rated | 17,846 | 16,455 | (55 | ) | 16,400 | (6,349 | ) | 10,051 | ||||||||||||||||
A rated | 21,000 | 19,072 | 48 | 19,120 | (5,772 | ) | 13,348 | |||||||||||||||||
BBB rated | 4,320 | 3,649 | (1,168 | ) | 2,481 | 644 | 3,125 | |||||||||||||||||
Noninvestment grade | 56,631 | 31,871 | (11,800 | ) | 20,071 | (332 | ) | 19,739 | ||||||||||||||||
105,315 | 76,323 | (13,091 | ) | 63,232 | (11,967 | ) | 51,265 | |||||||||||||||||
Other debt securities | 100 | 100 | - | 100 | - | 100 | ||||||||||||||||||
2,224,058 | 1,996,893 | (205,904 | ) | 1,790,989 | (347,434 | ) | 1,443,555 | |||||||||||||||||
AVAILABLE-FOR-SALE: | ||||||||||||||||||||||||
U.S. Treasury securities | 28,571 | 27,973 | 1,148 | 29,121 | 29,121 | |||||||||||||||||||
U.S. Government agencies and corporations: | ||||||||||||||||||||||||
Agency securities | 323,174 | 323,371 | 1,838 | 325,209 | 325,209 | |||||||||||||||||||
Agency guaranteed mortgage-backed securities | 414,767 | 413,352 | 3,653 | 417,005 | 417,005 | |||||||||||||||||||
Small Business Administration loan-backed securities | 645,166 | 692,634 | (25,957 | ) | 666,677 | 666,677 | ||||||||||||||||||
Municipal securities | 177,116 | 177,938 | 2,060 | 179,998 | 179,998 | |||||||||||||||||||
Asset-backed securities: | ||||||||||||||||||||||||
Trust preferred securities – banks and insurance | ||||||||||||||||||||||||
AAA rated | 206,195 | 199,728 | (38,853 | ) | 160,875 | 160,875 | ||||||||||||||||||
AA rated | 142,715 | 137,812 | (22,013 | ) | 115,799 | 115,799 | ||||||||||||||||||
A rated | 175,500 | 168,674 | (31,821 | ) | 136,853 | 136,853 | ||||||||||||||||||
BBB rated | 187,290 | 176,132 | (18,613 | ) | 157,519 | 157,519 | ||||||||||||||||||
Not rated | 26,020 | 26,024 | (4,634 | ) | 21,390 | 21,390 | ||||||||||||||||||
Noninvestment grade | 109,319 | 98,167 | (29,976 | ) | 68,191 | 68,191 | ||||||||||||||||||
847,039 | 806,537 | (145,910 | ) | 660,627 | 660,627 | |||||||||||||||||||
Trust preferred securities – real estate investment trusts | ||||||||||||||||||||||||
Noninvestment grade | 120,569 | 26,880 | (2,983 | ) | 23,897 | 23,897 | ||||||||||||||||||
120,569 | 26,880 | (2,983 | ) | 23,897 | 23,897 | |||||||||||||||||||
Other | ||||||||||||||||||||||||
AAA rated | 40,345 | 40,221 | (13,299 | ) | 26,922 | 26,922 | ||||||||||||||||||
AA rated | 10 | 10 | - | 10 | 10 | |||||||||||||||||||
BBB rated | 53,021 | 51,149 | (16,895 | ) | 34,254 | 34,254 | ||||||||||||||||||
Noninvestment grade | 30,000 | 4,401 | - | 4,401 | 4,401 | |||||||||||||||||||
123,376 | 95,781 | (30,194 | ) | 65,587 | 65,587 | |||||||||||||||||||
2,679,778 | 2,564,466 | (196,345 | ) | 2,368,121 | 2,368,121 | |||||||||||||||||||
Other securities: | ||||||||||||||||||||||||
Mutual funds and stock | 308,134 | 308,134 | - | 308,134 | 308,134 | |||||||||||||||||||
2,987,912 | 2,872,600 | (196,345 | ) | 2,676,255 | 2,676,255 | |||||||||||||||||||
Total | $ | 5,211,970 | $ | 4,869,493 | $ | (402,249 | ) | $ | 4,467,244 | $ | (347,434 | ) | $ | 4,119,810 | ||||||||||
* Ratings categories include entire range. For example, “A rated” includes A+, A and A-. Split rated securities with more than one rating are categorized at the lowest | ||||||||||||||||||||||||
rating level. | ||||||||||||||||||||||||
(1) Other comprehensive income. All amounts reported are pretax. |
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ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
Press Release – Page 19 | ||||||||||||||||||||
Nonperforming Assets | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2008 | 2008 | 2008 | 2008 | 2007 | ||||||||||||||||
Nonaccrual loans | $ | 946,583 | $ | 765,522 | $ | 570,101 | $ | 387,717 | $ | 258,513 | ||||||||||
Restructured loans | 2,086 | 2,103 | 2,145 | 10,100 | 10,140 | |||||||||||||||
Other real estate owned | 191,792 | 156,817 | 125,186 | 36,476 | 15,201 | |||||||||||||||
Total | $ | 1,140,461 | $ | 924,442 | $ | 697,432 | $ | 434,293 | $ | 283,854 | ||||||||||
% of net loans and leases* and other real | ||||||||||||||||||||
estate owned | 2.71 | % | 2.20 | % | 1.66 | % | 1.09 | % | 0.73 | % | ||||||||||
Accruing loans past due 90 days or more | $ | 129,567 | $ | 97,831 | $ | 108,934 | $ | 84,637 | $ | 77,419 | ||||||||||
% of net loans and leases* | 0.31 | % | 0.23 | % | 0.26 | % | 0.21 | % | 0.20 | % | ||||||||||
*Includes loans held for sale. | ||||||||||||||||||||
Allowance and Reserve for Credit Losses | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
(In thousands) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2008 | 2008 | 2008 | 2008 | 2007 | ||||||||||||||||
Allowance for Loan Losses | ||||||||||||||||||||
Balance at beginning of period | $ | 609,433 | $ | 548,958 | $ | 501,283 | $ | 459,376 | $ | 418,165 | ||||||||||
Allowance of branches sold | - | - | - | - | (2,034 | ) | ||||||||||||||
Allowance associated with repurchased | ||||||||||||||||||||
securitized loans and loans sold | 30 | (804 | ) | 1,301 | 425 | - | ||||||||||||||
Add: | ||||||||||||||||||||
Provision for losses | 285,189 | 156,606 | 114,192 | 92,282 | 69,982 | |||||||||||||||
Deduct: | ||||||||||||||||||||
Loan and lease charge-offs | (185,317 | ) | (100,241 | ) | (75,378 | ) | (53,751 | ) | (30,023 | ) | ||||||||||
Recoveries | 5,601 | 4,914 | 7,560 | 2,951 | 3,286 | |||||||||||||||
Net loan and lease charge-offs | (179,716 | ) | (95,327 | ) | (67,818 | ) | (50,800 | ) | (26,737 | ) | ||||||||||
Reclassification to reserve for unfunded | ||||||||||||||||||||
lending commitments | (27,937 | ) | - | - | - | - | ||||||||||||||
Balance at end of period | $ | 686,999 | $ | 609,433 | $ | 548,958 | $ | 501,283 | $ | 459,376 | ||||||||||
Ratio of allowance for loan losses to net loans | ||||||||||||||||||||
and leases outstanding at period end | 1.64 | % | 1.45 | % | 1.31 | % | 1.26 | % | 1.18 | % | ||||||||||
Ratio of allowance for loan losses to nonperforming | ||||||||||||||||||||
loans at period end | 72.42 | % | 79.39 | % | 95.93 | % | 126.01 | % | 170.99 | % | ||||||||||
Reserve for Unfunded Lending Commitments | ||||||||||||||||||||
Balance at beginning of period | $ | 23,574 | $ | 26,838 | $ | 25,148 | $ | 21,530 | $ | 21,394 | ||||||||||
Reclassification from allowance for loan losses | 27,937 | - | - | - | - | |||||||||||||||
Provision charged (credited) against earnings | (577 | ) | (3,264 | ) | 1,690 | 3,618 | 136 | |||||||||||||
Balance at end of period | $ | 50,934 | $ | 23,574 | $ | 26,838 | $ | 25,148 | $ | 21,530 | ||||||||||
Total Allowance and Reserve for Credit Losses | ||||||||||||||||||||
Allowance for loan losses | $ | 686,999 | $ | 609,433 | $ | 548,958 | $ | 501,283 | $ | 459,376 | ||||||||||
Reserve for unfunded lending commitments | 50,934 | 23,574 | 26,838 | 25,148 | 21,530 | |||||||||||||||
Total allowance and reserve for credit losses | $ | 737,933 | $ | 633,007 | $ | 575,796 | $ | 526,431 | $ | 480,906 | ||||||||||
Ratio of total allowance and reserve for credit losses | ||||||||||||||||||||
to net loans and leases outstanding at period end | 1.76 | % | 1.51 | % | 1.38 | % | 1.32 | % | 1.23 | % |
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ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
Press Release – Page 20 | ||||||||||||||||||||
Loan Balances By Portfolio Type | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(In millions) | 2008 | 2008 | 2008 | 2008 | 2007 | |||||||||||||||
Loans held for sale | $ | 200 | $ | 152 | $ | 159 | $ | 209 | $ | 208 | ||||||||||
Commercial lending: | ||||||||||||||||||||
Commercial and industrial | 11,448 | 11,351 | 11,247 | 10,626 | 10,407 | |||||||||||||||
Leasing | 431 | 451 | 492 | 494 | 503 | |||||||||||||||
Owner occupied | 8,743 | 8,782 | 8,912 | 7,910 | 7,545 | |||||||||||||||
Total commercial lending | 20,622 | 20,584 | 20,651 | 19,030 | 18,455 | |||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Construction and land development | 7,476 | 7,812 | 7,891 | 7,937 | 7,869 | |||||||||||||||
Term | 6,236 | 6,079 | 5,939 | 5,569 | 5,334 | |||||||||||||||
Total commercial real estate | 13,712 | 13,891 | 13,830 | 13,506 | 13,203 | |||||||||||||||
Consumer: | ||||||||||||||||||||
Home equity credit line | 2,005 | 1,899 | 1,794 | 1,674 | 1,608 | |||||||||||||||
1-4 family residential | 3,877 | 3,892 | 3,914 | 3,920 | 3,975 | |||||||||||||||
Construction and other consumer real estate | 774 | 769 | 852 | 910 | 945 | |||||||||||||||
Bankcard and other revolving plans | 374 | 360 | 332 | 316 | 347 | |||||||||||||||
Other | 385 | 411 | 436 | 440 | 460 | |||||||||||||||
Total consumer | 7,415 | 7,331 | 7,328 | 7,260 | 7,335 | |||||||||||||||
Foreign loans | 43 | 70 | 65 | 59 | 51 | |||||||||||||||
Total loans | $ | 41,992 | $ | 42,028 | $ | 42,033 | $ | 40,064 | $ | 39,252 |
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ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||
Press Release – Page 21 | ||||||||||||||||||||||||
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
December 31, 2008 | September 30, 2008 | |||||||||||||||||||||||
(In thousands) | Average | Amount of | Average | Average | Amount of | Average | ||||||||||||||||||
balance | interest (1) | rate | balance | interest (1) | rate | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Money market investments | $ | 2,253,528 | $ | 7,172 | 1.27 | % | $ | 1,417,875 | $ | 9,267 | 2.60 | % | ||||||||||||
Securities: | ||||||||||||||||||||||||
Held-to-maturity | 1,905,766 | 32,157 | 6.71 | % | 1,918,436 | 31,502 | 6.53 | % | ||||||||||||||||
Available-for-sale | 2,563,569 | 31,313 | 4.86 | % | 2,621,756 | 27,654 | 4.20 | % | ||||||||||||||||
Trading account | 47,224 | 598 | 5.04 | % | 42,535 | 437 | 4.09 | % | ||||||||||||||||
Total securities | 4,516,559 | 64,068 | 5.64 | % | 4,582,727 | 59,593 | 5.17 | % | ||||||||||||||||
Loans: | ||||||||||||||||||||||||
Loans held for sale | 169,050 | 2,442 | 5.75 | % | 160,026 | 1,916 | 4.76 | % | ||||||||||||||||
Net loans and leases (2) | 41,769,536 | 657,498 | 6.26 | % | 41,824,097 | 670,695 | 6.38 | % | ||||||||||||||||
Total loans and leases | 41,938,586 | 659,940 | 6.26 | % | 41,984,123 | 672,611 | 6.37 | % | ||||||||||||||||
Total interest-earning assets | 48,708,673 | 731,180 | 5.97 | % | 47,984,725 | 741,471 | 6.15 | % | ||||||||||||||||
Cash and due from banks | 1,359,684 | 1,424,407 | ||||||||||||||||||||||
Allowance for loan losses | (627,268 | ) | (562,518 | ) | ||||||||||||||||||||
Goodwill | 1,720,536 | 2,009,509 | ||||||||||||||||||||||
Core deposit and other intangibles | 130,703 | 132,167 | ||||||||||||||||||||||
Other assets | 3,254,036 | 3,291,470 | ||||||||||||||||||||||
Total assets | $ | 54,546,364 | $ | 54,279,760 | ||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
Savings and NOW | $ | 4,368,768 | 8,008 | 0.73 | % | $ | 4,248,715 | 8,285 | 0.78 | % | ||||||||||||||
Money market | 15,331,993 | 87,709 | 2.28 | % | 13,880,283 | 82,435 | 2.36 | % | ||||||||||||||||
Time under $100,000 | 3,008,645 | 23,855 | 3.15 | % | 2,675,894 | 21,898 | 3.26 | % | ||||||||||||||||
Time $100,000 and over | 4,794,768 | 39,464 | 3.27 | % | 3,929,454 | 32,918 | 3.33 | % | ||||||||||||||||
Foreign | 2,723,174 | 14,487 | 2.12 | % | 3,397,729 | 20,021 | 2.34 | % | ||||||||||||||||
Total interest-bearing deposits | 30,227,348 | 173,523 | 2.28 | % | 28,132,075 | 165,557 | 2.34 | % | ||||||||||||||||
Borrowed funds: | ||||||||||||||||||||||||
Securities sold, not yet purchased | 32,930 | 434 | 5.24 | % | 30,966 | 393 | 5.05 | % | ||||||||||||||||
Federal funds purchased and security | ||||||||||||||||||||||||
repurchase agreements | 2,344,500 | 4,289 | 0.73 | % | 2,284,997 | 10,246 | 1.78 | % | ||||||||||||||||
Commercial paper | 10,844 | 81 | 2.97 | % | 74,596 | 577 | 3.08 | % | ||||||||||||||||
FHLB advances and other borrowings: | ||||||||||||||||||||||||
One year or less | 3,422,389 | 15,564 | 1.81 | % | 5,983,823 | 38,948 | 2.59 | % | ||||||||||||||||
Over one year | 128,557 | 1,848 | 5.72 | % | 129,162 | 1,856 | 5.72 | % | ||||||||||||||||
Long-term debt | 2,379,407 | 21,019 | 3.51 | % | 2,443,488 | 26,072 | 4.24 | % | ||||||||||||||||
Total borrowed funds | 8,318,627 | 43,235 | 2.07 | % | 10,947,032 | 78,092 | 2.84 | % | ||||||||||||||||
Total interest-bearing liabilities | 38,545,975 | 216,758 | 2.24 | % | 39,079,107 | 243,649 | 2.48 | % | ||||||||||||||||
Noninterest-bearing deposits | 9,353,519 | 9,189,581 | ||||||||||||||||||||||
Other liabilities | 546,617 | 575,224 | ||||||||||||||||||||||
Total liabilities | 48,446,111 | 48,843,912 | ||||||||||||||||||||||
Minority interest | 28,751 | 29,949 | ||||||||||||||||||||||
Shareholders' equity: | ||||||||||||||||||||||||
Preferred equity | 961,072 | 282,500 | ||||||||||||||||||||||
Common equity | 5,110,430 | 5,123,399 | ||||||||||||||||||||||
Total shareholders' equity | 6,071,502 | 5,405,899 | ||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 54,546,364 | $ | 54,279,760 | ||||||||||||||||||||
Spread on average interest-bearing funds | 3.73 | % | 3.67 | % | ||||||||||||||||||||
Taxable-equivalent net interest income and | ||||||||||||||||||||||||
net yield on interest-earning assets | $ | 514,422 | 4.20 | % | $ | 497,822 | 4.13 | % | ||||||||||||||||
(1) Taxable-equivalent rates used where applicable. | ||||||||||||||||||||||||
(2) Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans. |
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ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||
Press Release – Page 22 | ||||||||||||||||||||||||
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Year Ended | Year Ended | |||||||||||||||||||||||
December 31, 2008 | December 31, 2007 | |||||||||||||||||||||||
(In thousands) | Average | Amount of | Average | Average | Amount of | Average | ||||||||||||||||||
balance | interest (1) | rate | balance | interest (1) | rate | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Money market investments | $ | 1,888,497 | $ | 47,780 | 2.53 | % | $ | 833,630 | $ | 43,699 | 5.24 | % | ||||||||||||
Securities: | ||||||||||||||||||||||||
Held-to-maturity | 1,516,504 | 101,310 | 6.68 | % | 684,180 | 47,689 | 6.97 | % | ||||||||||||||||
Available-for-sale | 3,266,209 | 162,170 | 4.97 | % | 4,661,271 | 269,193 | 5.78 | % | ||||||||||||||||
Trading account | 42,521 | 1,875 | 4.41 | % | 61,231 | 3,309 | 5.40 | % | ||||||||||||||||
Total securities | 4,825,234 | 265,355 | 5.50 | % | 5,406,682 | 320,191 | 5.92 | % | ||||||||||||||||
Loans: | ||||||||||||||||||||||||
Loans held for sale | 182,443 | 10,074 | 5.52 | % | 233,565 | 14,867 | 6.37 | % | ||||||||||||||||
Net loans and leases (2) | 40,794,781 | 2,674,412 | 6.56 | % | 36,574,581 | 2,852,670 | 7.80 | % | ||||||||||||||||
Total loans and leases | 40,977,224 | 2,684,486 | 6.55 | % | 36,808,146 | 2,867,537 | 7.79 | % | ||||||||||||||||
Total interest-earning assets | 47,690,955 | 2,997,621 | 6.29 | % | 43,048,458 | 3,231,427 | 7.51 | % | ||||||||||||||||
Cash and due from banks | 1,380,571 | 1,476,664 | ||||||||||||||||||||||
Allowance for loan losses | (546,095 | ) | (391,285 | ) | ||||||||||||||||||||
Goodwill | 1,936,865 | 2,005,245 | ||||||||||||||||||||||
Core deposit and other intangibles | 136,698 | 180,783 | ||||||||||||||||||||||
Other assets | 3,162,914 | 2,527,354 | ||||||||||||||||||||||
Total assets | $ | 53,761,908 | $ | 48,847,219 | ||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
Savings and NOW | $ | 4,446,182 | 35,538 | 0.80 | % | $ | 4,443,072 | 41,400 | 0.93 | % | ||||||||||||||
Money market | 13,738,814 | 335,030 | 2.44 | % | 11,962,006 | 437,966 | 3.66 | % | ||||||||||||||||
Time under $100,000 | 2,694,891 | 96,194 | 3.57 | % | 2,528,429 | 110,722 | 4.38 | % | ||||||||||||||||
Time $100,000 and over | 4,382,386 | 161,918 | 3.69 | % | 4,779,187 | 231,202 | 4.84 | % | ||||||||||||||||
Foreign | 3,165,887 | 84,213 | 2.66 | % | 2,709,997 | 130,429 | 4.81 | % | ||||||||||||||||
Total interest-bearing deposits | 28,428,160 | 712,893 | 2.51 | % | 26,422,691 | 951,719 | 3.60 | % | ||||||||||||||||
Borrowed funds: | ||||||||||||||||||||||||
Securities sold, not yet purchased | 32,689 | 1,574 | 4.82 | % | 29,821 | 1,359 | 4.56 | % | ||||||||||||||||
Federal funds purchased and security | ||||||||||||||||||||||||
repurchase agreements | 2,733,583 | 53,310 | 1.95 | % | 3,211,117 | 148,506 | 4.62 | % | ||||||||||||||||
Commercial paper | 109,609 | 4,212 | 3.84 | % | 256,377 | 13,870 | 5.41 | % | ||||||||||||||||
FHLB advances and other borrowings: | ||||||||||||||||||||||||
One year or less | 4,588,834 | 119,779 | 2.61 | % | 1,099,105 | 54,961 | 5.00 | % | ||||||||||||||||
Over one year | 128,524 | 7,369 | 5.73 | % | 130,512 | 7,537 | 5.77 | % | ||||||||||||||||
Long-term debt | 2,448,991 | 103,116 | 4.21 | % | 2,364,846 | 145,422 | 6.15 | % | ||||||||||||||||
Total borrowed funds | 10,042,230 | 289,360 | 2.88 | % | 7,091,778 | 371,655 | 5.24 | % | ||||||||||||||||
Total interest-bearing liabilities | 38,470,390 | 1,002,253 | 2.61 | % | 33,514,469 | 1,323,374 | 3.95 | % | ||||||||||||||||
Noninterest-bearing deposits | 9,144,520 | 9,401,278 | ||||||||||||||||||||||
Other liabilities | 578,231 | 647,460 | ||||||||||||||||||||||
Total liabilities | 48,193,141 | 43,563,207 | ||||||||||||||||||||||
Minority interest | 29,156 | 36,385 | ||||||||||||||||||||||
Shareholders' equity: | ||||||||||||||||||||||||
Preferred equity | 431,936 | 240,000 | ||||||||||||||||||||||
Common equity | 5,107,675 | 5,007,627 | ||||||||||||||||||||||
Total shareholders' equity | 5,539,611 | 5,247,627 | ||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 53,761,908 | $ | 48,847,219 | ||||||||||||||||||||
Spread on average interest-bearing funds | 3.68 | % | 3.56 | % | ||||||||||||||||||||
Taxable-equivalent net interest income and | ||||||||||||||||||||||||
net yield on interest-earning assets | $ | 1,995,368 | 4.18 | % | $ | 1,908,053 | 4.43 | % | ||||||||||||||||
(1) Taxable-equivalent rates used where applicable. | ||||||||||||||||||||||||
(2) Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans. |
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ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
Press Release – Page 23 | ||||||||||||||||||||
Capital Ratios | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||||||
2008 | 2008 | 2007 | ||||||||||||||||||
Tangible common equity ratio | 5.89 | % | 6.05 | % | 5.70 | % | ||||||||||||||
Tangible equity ratio | 8.86 | % | 6.60 | % | 6.17 | % | ||||||||||||||
Risk-based capital ratios (1): | ||||||||||||||||||||
Tier 1 risk-based capital | 10.52 | % | 8.07 | % | 7.57 | % | ||||||||||||||
Total risk-based capital | 14.71 | % | 12.30 | % | 11.68 | % | ||||||||||||||
(1) Ratios for December 31, 2008 are estimates. | ||||||||||||||||||||
GAAP to Non-GAAP Reconciliation | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
December 31, 2008 | December 31, 2008 | |||||||||||||||||||
Diluted | Diluted | |||||||||||||||||||
(In millions, except per share data) | Amount | EPS (1) | Amount | EPS (2) | ||||||||||||||||
Net earnings (loss) applicable to common shareholders | $ | (498.1 | ) | $ | (4.36 | ) | $ | (290.7 | ) | $ | (2.66 | ) | ||||||||
Addback: | ||||||||||||||||||||
Impairment loss on goodwill, net of tax | 339.7 | 2.97 | 339.7 | 3.11 | ||||||||||||||||
Impairment and valuation losses on securities, net of tax | 122.2 | 1.07 | 191.5 | 1.75 | ||||||||||||||||
Income (loss) from core banking operations (non-GAAP) | $ | (36.2 | ) | $ | (0.32 | ) | $ | 240.5 | $ | 2.20 | ||||||||||
(1) Per diluted common share after tax based on the fourth quarter weighted average shares | ||||||||||||||||||||
(2) Per diluted common share after tax based on the annual weighted average shares | ||||||||||||||||||||
The first two pages of this Press Release present computations of earnings excluding an impairment loss on goodwill and impairment and valuation losses on securities (hereinafter collectively referred to as ‘impairment losses’). The impairment losses are included in financial results presented in accordance with generally accepted accounting principles (GAAP). Zions believes the exclusion of these impairment losses in expressing earnings, including “Income (loss) from core banking operations,” provides a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the operating results of the Company and predicting future performance. This non-GAAP financial measure is also used by management to assess the performance of Zions’ business, because management does not consider these impairment losses to be relevant to ongoing operating results. Management and the Board of Directors utilize these non-GAAP financial measures for the following purposes:
• Evaluation of bank reporting segment performance
• Presentations of Company performance to investors
Zions believes that presenting these non-GAAP financial measures will permit investors to assess the performance of the Company on the same basis as that applied by management and the Board of Directors.
Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. In particular, a measure of earnings that excludes these impairment losses does not represent the amount that effectively accrues directly to shareholders (i.e., these impairment losses are a reduction in earnings and shareholders’ equity).
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