***FOR IMMEDIATE RELEASE***
For: ZIONS BANCORPORATION Contact: James Abbott
One South Main, 15th Floor Tel: (801) 524-4787
Salt Lake City, Utah 60; October 18, 2010
Harris H. Simmons
Chairman/Chief Executive Officer
ZIONS BANCORPORATION REPORTS 2010 THIRD QUARTER RESULTS
Loan Balances Stabilizing While Credit Measures Continue to Improve
SALT LAKE CITY, October 18, 2010 – Zions Bancorporation (Nasdaq: ZION) (“Zions” or “the Company”) today reported a third quarter net loss applicable to common shareholders of $80.5 million or $0.47 per diluted share, compared to a net loss of $135.2 million or $0.84 per diluted share for the second quarter of 2010.
Third Quarter 2010 Highlights
| · | Loan balances declined at a slower pace of 1.2% compared to 2.5% in the second quarter. Excluding construction and land development loans and FDIC-supported loans, loan balances declined 0.2% compared to 0.9% in the second quarter. |
| · | Loan originations and renewals were $2.4 billion, up 33% from $1.8 billion in the second quarter. |
| · | Net interest income, adjusted for the effects of additional accretion on FDIC-supported loans and interest amortization from subordinated debt conversions, was relatively stable compared to the second quarter. |
| · | Nonperforming lending-related assets continued to decline, down 10% to $2.29 billion from $2.55 billion in the second quarter. Additions to nonperforming lending-related assets declined to $426 million from $591 million in the second quarter. |
| · | Excluding FDIC-supported other real estate owned, OREO declined 17% to $304.5 million from $365.0 million at June 30, 2010. |
| · | The tangible common equity ratio increased to 7.03% from 6.86% in the second quarter. The estimated Tier 1 common to risk-weighted assets ratio improved to 8.77% from 7.91% in the second quarter. |
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ZIONS BANCORPORATION
Press Release – Page 2
October 18, 2010
“Overall, we are encouraged by the trends exhibited in our third quarter results. Excluding construction and FDIC-supported loans, our loan balances held relatively steady and the core net interest margin performed in line with our expectations. Furthermore, asset quality metrics improved across all major fronts and we generally expect continued improvement into the fourth quarter and beyond,” said Harris H. Simmons, chairman and chief executive officer. Mr. Simmons continued, “Additionally, we ended the quarter with record high capital levels.”
Loans
Net loans and leases of $37.5 billion at September 30, 2010 decreased approximately $0.5 billion or 1.2% from $38.0 billion at June 30, 2010, compared to a 2.5% decrease from the balances at March 31, 2010. Commercial and consumer loan balances were stable compared to the second quarter. Runoff occurred in construction and land development loans and FDIC-supported loans, which the Company is actively managing downward. Certain FDIC-supported loans have experienced better performance than previous estimates. The expectation of higher-than-expected cash flows from this portfolio results in a higher rate of accretion in loan balances and the recognition of additional interest income. Lower losses on paid-off loans have also contributed to the overall higher expected cash flows. The effect on the financial statements of this higher accretion and the corresponding impact to the FDIC indemnification asset is summarized as follows:
| (In thousands) | September 30, | June 30, | ||||
| 2010 | 2010 | |||||
Balance sheet – increase (decrease) in assets: | ||||||
FDIC-supported loans | $ | 18,713 | $ | 9,109 | ||
FDIC indemnification asset (included in other assets) | (14,970 | ) | (8,976 | ) | ||
| Three Months Ended | ||||||
| September 30, | June 30, | |||||
| 2010 | 2010 | |||||
| Statement of income: | ||||||
| Interest income: | ||||||
Interest and fees on loans | $ | 18,713 | $ | 9,109 | ||
| Noninterest expense: | ||||||
Other noninterest expense | 14,970 | 8,976 | ||||
Net increase in pretax income | $ | 3,743 | $ | 133 | ||
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ZIONS BANCORPORATION
Press Release – Page 3
October 18, 2010
The balance of the FDIC indemnification asset, reflecting the above reduction and other changes in the third quarter, was $233.6 million at September 30, 2010 compared to $243.8 million at June 30, 2010.
Asset Quality
Net loan and lease charge-offs declined to $235.7 million for the third quarter of 2010 from $255.2 million for the second quarter of 2010. Gross charge-offs of $263.7 million included $7.7 million from FDIC-supported loans. Net charge-offs recoverable from the FDIC were $5.7 million. The provision for loan losses declined to $184.7 million for the third quarter of 2010 compared to $228.7 million for the second quarter of 2010. Despite the lower provision and the decline in net charge-offs, the allowance for loan losses as a percentage of net loans and leases was relatively stable, at 4.07% at September 30, 2010 compared to 4.11% at June 30, 2010. The allowance for credit losses was $1,627.9 million, or 4.34% of net loans and leases at September 30, 2010, compared to $1,660.5 million, or 4.37% at June 30, 2010.
Excluding FDIC-supported other real estate owned, OREO declined 17% to $304.5 million at September 30, 2010 compared to $365.0 million at June 30, 2010. OREO expense increased $1.9 million to $44.3 million during the third quarter from $42.4 million in the second quarter. Additionally, $19.2 million of valuation charges and the losses on the sale of OREO were included in net charge-offs, up from $13.4 million in the previous quarter.
Nonperforming lending-related assets declined 10% to $2,293.1 million at September 30, 2010 from $2,547.4 million at June 30, 2010. Nonaccrual loans declined 9% to $1,936.2 million at September 30, 2010 from $2,134.1 million at June 30, 2010. Delinquent loans (accruing loans past due 30-89 days and 90 days or more) declined 18% to $396.9 million at September 30, 2010 from $482.1 million at June 30, 2010. The ratio of nonperforming lending-related assets to net loans and leases and other real estate owned was 6.01% at September 30, 2010 compared to 6.60% at June 30, 2010. The preceding amounts and comparisons include the FDIC-supported assets.
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ZIONS BANCORPORATION
Press Release – Page 4
October 18, 2010
Capital Transactions
During the third quarter of 2010, the Company increased its Tier 1 capital as a result of the following capital actions:
| 1. | Common stock equity distribution issuances: From August 18, 2010 to September 14, 2010, the Company sold 3,936,300 shares of common stock for $75.5 million (average price of $19.18). |
| 2. | Common stock warrants: On September 28, 2010, the Company sold 7,000,000 warrants for $36.8 million ($5.25 per warrant) through an online modified Dutch auction. Each warrant can be exercised for a share of common stock at an initial price of $36.63 through May 22, 2020. These warrants are part of the same series of warrants initially sold on May 25, 2010. |
Net of commissions and fees, these capital actions added $109.9 million to tangible common equity.
In addition, on September 15, 2010, $54.3 million of convertible subordinated debt was converted into shares of the Company’s preferred stock (54,219 shares of Series C and 40 shares of Series A). Accelerated discount amortization on the converted debt increased interest expense by a pretax amount of approximately $27.5 million.
The tangible common equity ratio was 7.03% at September 30, 2010 compared to 6.86% at June 30, 2010. The increase from June 30, 2010 was primarily due to the previously discussed capital transactions, partially offset by operating results and preferred stock dividends during the third quarter. Preferred stock dividends increased during the third quarter primarily because of the new issuance in the second quarter of Series E preferred stock. The estimated Tier 1 common to risk-weighted assets ratio was 8.77% at September 30, 2010 compared to 7.91% at June 30, 2010. The more significant improvement in risk-based capital ratios compared to the tangible common equity ratio is due to the total return swap.
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ZIONS BANCORPORATION
Press Release – Page 5
October 18, 2010
Total Return Swap
As previously announced on July 29, 2010, the Company entered into a total return swap and related interest rate swaps (“TRS”) relating to a portfolio of $1.16 billion notional amount of its bank and insurance trust preferred collateralized debt obligations (“CDOs”). This transaction increased the Company’s Tier 1 common to risk-weighted assets ratio by 68 bp. The transaction did not qualify for hedge accounting and did not change the accounting for the underlying securities. During the third quarter, the Company incurred a negative initial valuation of $22.8 million, included in fair value and nonhedge derivative income (loss), and structuring costs of $11.6 million, included in other noninterest expense. The negative initial valuation is essentially the amount of the first-year TRS fee.
Deposits
Average total deposits for the third quarter of 2010 decreased $0.5 billion or 1.3% to $41.7 billion compared to $42.2 billion for the second quarter of 2010, as the Company actively worked to reduce excess funding. Average deposit balances fell in the time, foreign and money market categories. Average noninterest-bearing demand deposits for the third quarter of 2010 increased $0.5 billion or 3.5% to $13.8 billion compared to $13.3 billion for the second quarter of 2010, although the end of period balance declined significantly due to active management. The decline in excess funding improved profitability, as such deposits were not necessary to fund loan demand.
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ZIONS BANCORPORATION
Press Release – Page 6
October 18, 2010
Net Interest Income
The net interest margin increased to 3.84% in the third quarter of 2010 compared to 3.58% in the second quarter of 2010. The net interest margin decreased by 12 bp for the discount amortization on the convertible subordinated debt, and by an additional 23 bp (compared to 52 bp in the second quarter) for the accelerated discount amortization when debt holders exercised their options to convert to preferred stock. The net interest margin increased by 16 bp due to the recognition in interest income of the additional accretion on acquired loans. The core net interest margin, adjusted for the amortization and accretion previously discussed, was 4.03% in the third quarter compared to 4.14% in the second quarter, largely due to the increase in average money market investments rising to 11.0% of total interest-earning assets in the third quarter compared to 8.2% in the second quarter.
Investment Securities
During the third quarter of 2010, the Company recognized credit-related net impairment losses on trust preferred CDOs of $23.7 million or $0.08 per diluted share, compared to $18.1 million or $0.07 per diluted share during the second quarter of 2010. The increased impairment is primarily due to assumption changes in prepayment speeds on trust preferred securities, given the adoption of the Dodd-Frank Act, which, among other things, will disqualify trust preferred securities from Tier 1 capital for certain banks. The Company’s estimated default probabilities declined significantly for banks that are deferring payment on their trust preferred securities.
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ZIONS BANCORPORATION
Press Release – Page 7
October 18, 2010
CDOs for which the underlying collateral is predominantly bank trust preferred securities comprised $2.2 billion of the $2.6 billion par amount of the bank and insurance CDO portfolio at September 30, 2010. The following table shows the decrease in carrying value at September 30, 2010 of original AAA and BBB rated CDOs compared to June 30, 2010.
| (In millions) | ||||||||||||||||||||||||||||||||||||
| September 30, 2010 | % of carrying | Change | ||||||||||||||||||||||||||||||||||
| Original | Par | Amortized cost | Carrying value | value to par | 9/30/10 | |||||||||||||||||||||||||||||||
| ratings | Amount | % | Amount | % | Amount | % | 9/30/10 | 6/30/10 | vs 6/30/10 | |||||||||||||||||||||||||||
| AAA | $ | 1,126 | 52 | % | $ | 937 | 54 | % | $ | 781 | 72 | % | 69 | % | 72 | % | -3 | % | ||||||||||||||||||
| A | 949 | 44 | % | 751 | 44 | % | 298 | 27 | % | 31 | % | 31 | % | 0 | % | |||||||||||||||||||||
| BBB | 90 | 4 | % | 34 | 2 | % | 12 | 1 | % | 13 | % | 14 | % | -1 | % | |||||||||||||||||||||
| $ | 2,165 | 100 | % | $ | 1,722 | 100 | % | $ | 1,091 | 100 | % | 50 | % | 52 | % | -2 | % | |||||||||||||||||||
Sale of NetDeposit
On September 3, 2010, the Company sold substantially all of the assets of its wholly-owned subsidiary, NetDeposit, to BServ, Inc. (dba BankServ), a privately-owned company headquartered in San Francisco, California. Both companies specialize in remote deposit capture and electronic payment technologies. The Company recognized a pretax gain on the sale of approximately $13.9 million, which was included in other noninterest income.
Noninterest Income
Noninterest income for the third quarter of 2010 was relatively unchanged at $110.2 million compared to $109.4 million for the second quarter of 2010. Increases from the $13.9 million gain on sale of NetDeposit assets and from fixed income securities gains of $6.1 million on the repurchase at par by the underwriter of certain auction rate securities, were offset by the negative $22.8 million valuation of the TRS and the $5.6 million increase in CDO impairment.
Noninterest Expense
Noninterest expense for the third quarter of 2010 was $456.0 million compared to $430.4 million for the second quarter of 2010. The increase included $11.6 million of structuring costs for the TRS and the $15.0 million reduction compared to $9.0 million in the second quarter of the FDIC indemnification asset.
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ZIONS BANCORPORATION
Press Release – Page 8
October 18, 2010
Conference Call
Zions will host a conference call to discuss these third quarter results at 5:30 p.m. ET this afternoon (October 18, 2010). Media representatives, analysts and the public are invited to listen to this discussion by calling 1-877-368-2147 (international: 253-237-1247) and entering the passcode 14043091, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation website at www.zionsbancorporation.com. A replay of the call will be available from approximately 7:30 p.m. ET on Monday, October 18, 2010, until midnight ET on Monday, October 25, 2010, by dialing 1-800-642-1687 (international: 706-645-9291) and entering the passcode 14043091. 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.
Forward-Looking Information
Statements in this press release that are based on other than historical data or that express the Company’s expectations regarding future events or determinations 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 or determinations. These forward-looking statements are not guarantees of future performance or determinations, 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 press 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 securities 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 (including the Dodd-Frank Wall Street Reform and Consumer Protection Act); and changes in accounting policies, procedures or determinations 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 Zions Bancorporation’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s Internet site (http://www.sec.gov).
Except as required by law, 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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| Press Release – Page 9 | ||||||||||||||||||||
| FINANCIAL HIGHLIGHTS | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| (In thousands, except per share and ratio data) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2010 | 2010 | 2010 | 2009 | 2009 | ||||||||||||||||
| PER COMMON SHARE | ||||||||||||||||||||
| Dividends | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||||||
| Book value per common share | 26.07 | 26.63 | 26.89 | 27.85 | 30.38 | |||||||||||||||
| Tangible common equity per common share | 19.81 | 20.19 | 19.89 | 20.35 | 22.01 | |||||||||||||||
| SELECTED RATIOS | ||||||||||||||||||||
| Return on average assets | (0.36 | )% | (0.87 | )% | (0.47 | )% | (1.37 | )% | (1.15 | )% | ||||||||||
| Return on average common equity | (6.94 | )% | (12.41 | )% | (8.30 | )% | (16.80 | )% | (16.74 | )% | ||||||||||
| Net interest margin | 3.84 | % | 3.58 | % | 4.03 | % | 3.81 | % | 3.91 | % | ||||||||||
| Capital Ratios | ||||||||||||||||||||
| Tangible common equity ratio | 7.03 | % | 6.86 | % | 6.30 | % | 6.12 | % | 5.76 | % | ||||||||||
| Tangible equity ratio | 10.78 | % | 10.40 | % | 9.36 | % | 9.16 | % | 8.73 | % | ||||||||||
| Average equity to average assets | 12.40 | % | 11.59 | % | 11.16 | % | 10.76 | % | 10.94 | % | ||||||||||
Risk-Based Capital Ratios 1: | ||||||||||||||||||||
| Tier 1 common to risk-weighted assets | 8.77 | % | 7.91 | % | 7.14 | % | 6.73 | % | 6.59 | % | ||||||||||
| Tier 1 leverage | 11.99 | % | 11.80 | % | 10.77 | % | 10.38 | % | 10.40 | % | ||||||||||
| Tier 1 risk-based capital | 14.15 | % | 12.63 | % | 11.19 | % | 10.53 | % | 10.34 | % | ||||||||||
| Total risk-based capital | 16.73 | % | 15.25 | % | 13.93 | % | 13.28 | % | 13.08 | % | ||||||||||
| Taxable-equivalent net interest income | $ | 457,172 | $ | 418,953 | $ | 460,981 | $ | 462,608 | $ | 478,135 | ||||||||||
| Weighted average common and common- | ||||||||||||||||||||
| equivalent shares outstanding | 172,864,619 | 161,810,017 | 151,073,384 | 139,858,788 | 127,581,404 | |||||||||||||||
| Common shares outstanding | 177,202,340 | 173,331,281 | 160,300,162 | 150,425,070 | 136,398,089 | |||||||||||||||
1 Ratios for September 30, 2010 are estimates. | ||||||||||||||||||||
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| ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| Press Release – Page 10 | ||||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (In thousands, except share amounts) | 2010 | 2010 | 2010 | 2009 | 2009 | |||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 1,060,646 | $ | 1,068,755 | $ | 1,045,391 | $ | 1,370,189 | $ | 992,940 | ||||||||||
| Money market investments: | ||||||||||||||||||||
Interest-bearing deposits | 4,468,778 | 4,861,871 | 3,410,211 | 652,964 | 2,234,337 | |||||||||||||||
Federal funds sold | 67,026 | 44,720 | 44,436 | 20,985 | 44,056 | |||||||||||||||
Security resell agreements | 49,432 | 58,954 | 73,112 | 57,556 | 52,539 | |||||||||||||||
| Investment securities: | ||||||||||||||||||||
Held-to-maturity, at adjusted cost (approximate fair value | ||||||||||||||||||||
$783,362, $802,370, $856,256, $833,455, and $835,814) | 841,573 | 852,606 | 902,902 | 869,595 | 877,105 | |||||||||||||||
Available-for-sale, at fair value | 3,295,864 | 3,416,448 | 3,437,098 | 3,655,619 | 3,547,092 | |||||||||||||||
Trading account, at fair value | 42,811 | 85,707 | 50,698 | 23,543 | 76,709 | |||||||||||||||
| 4,180,248 | 4,354,761 | 4,390,698 | 4,548,757 | 4,500,906 | ||||||||||||||||
| Loans held for sale | 217,409 | 189,376 | 171,892 | 208,567 | 206,387 | |||||||||||||||
| Loans: | ||||||||||||||||||||
Loans and leases excluding FDIC-supported assets | 36,579,470 | 36,920,355 | 37,784,853 | 38,882,083 | 39,782,240 | |||||||||||||||
FDIC-supported loans | 1,089,926 | 1,208,362 | 1,320,737 | 1,444,594 | 1,607,493 | |||||||||||||||
| 37,669,396 | 38,128,717 | 39,105,590 | 40,326,677 | 41,389,733 | ||||||||||||||||
Less: | ||||||||||||||||||||
Unearned income and fees, net of related costs | 120,037 | 125,779 | 131,555 | 137,697 | 134,629 | |||||||||||||||
Allowance for loan losses | 1,529,955 | 1,563,753 | 1,581,577 | 1,531,332 | 1,432,715 | |||||||||||||||
Loans and leases, net of allowance | 36,019,404 | 36,439,185 | 37,392,458 | 38,657,648 | 39,822,389 | |||||||||||||||
| Other noninterest-bearing investments | 858,402 | 866,970 | 909,601 | 1,099,961 | 1,061,464 | |||||||||||||||
| Premises and equipment, net | 719,592 | 705,372 | 707,387 | 710,534 | 698,225 | |||||||||||||||
| Goodwill | 1,015,161 | 1,015,161 | 1,015,161 | 1,015,161 | 1,017,385 | |||||||||||||||
| Core deposit and other intangibles | 94,128 | 100,425 | 106,839 | 113,416 | 123,551 | |||||||||||||||
| Other real estate owned | 356,923 | 413,336 | 414,237 | 389,782 | 413,901 | |||||||||||||||
| Other assets | 1,940,627 | 2,028,409 | 2,031,558 | 2,277,487 | 2,130,070 | |||||||||||||||
| $ | 51,047,776 | $ | 52,147,295 | $ | 51,712,981 | $ | 51,123,007 | $ | 53,298,150 | |||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
Noninterest-bearing demand | $ | 13,264,415 | $ | 14,071,456 | $ | 12,799,002 | $ | 12,324,247 | $ | 11,453,247 | ||||||||||
Interest-bearing: | ||||||||||||||||||||
Savings and NOW | 6,394,964 | 6,030,986 | 5,978,536 | 5,843,573 | 5,392,096 | |||||||||||||||
Money market | 15,398,157 | 15,562,664 | 16,667,011 | 16,378,874 | 17,413,735 | |||||||||||||||
Time under $100,000 | 2,037,318 | 2,155,366 | 2,306,101 | 2,497,395 | 2,784,593 | |||||||||||||||
Time $100,000 and over | 2,417,779 | 2,509,479 | 2,697,261 | 3,117,472 | 3,949,684 | |||||||||||||||
Foreign | 1,447,507 | 1,683,925 | 1,647,898 | 1,679,028 | 2,014,626 | |||||||||||||||
| 40,960,140 | 42,013,876 | 42,095,809 | 41,840,589 | 43,007,981 | ||||||||||||||||
| Securities sold, not yet purchased | 41,943 | 81,511 | 47,890 | 43,404 | 39,360 | |||||||||||||||
| Federal funds purchased | 367,402 | 391,213 | 477,959 | 208,669 | 1,008,181 | |||||||||||||||
| Security repurchase agreements | 371,149 | 500,812 | 475,832 | 577,346 | 509,014 | |||||||||||||||
| Federal Home Loan Bank advances and other borrowings: | ||||||||||||||||||||
One year or less | 236,507 | 218,589 | 178,435 | 121,273 | 45,411 | |||||||||||||||
Over one year | 20,239 | 15,558 | 15,640 | 15,722 | 18,803 | |||||||||||||||
| Long-term debt | 1,919,156 | 1,918,852 | 2,000,821 | 2,017,220 | 2,324,020 | |||||||||||||||
| Reserve for unfunded lending commitments | 97,899 | 96,795 | 96,312 | 116,445 | 97,225 | |||||||||||||||
| Other liabilities | 538,750 | 488,987 | 467,371 | 472,082 | 553,914 | |||||||||||||||
Total liabilities | 44,553,185 | 45,726,193 | 45,856,069 | 45,412,750 | 47,603,909 | |||||||||||||||
| Shareholders’ equity: | ||||||||||||||||||||
Preferred stock, without par value, authorized 4,400,000 shares | 1,875,463 | 1,806,877 | 1,532,323 | 1,502,784 | 1,529,462 | |||||||||||||||
Common stock, without par value; authorized 350,000,000 | ||||||||||||||||||||
shares; issued and outstanding 177,202,340, 173,331,281, | ||||||||||||||||||||
160,300,162, 150,425,070, and 136,398,089 shares | 4,070,963 | 3,964,140 | 3,517,621 | 3,318,417 | 3,125,344 | |||||||||||||||
Retained earnings | 1,017,428 | 1,099,621 | 1,236,497 | 1,324,516 | 1,502,232 | |||||||||||||||
Accumulated other comprehensive income (loss) | (452,553 | ) | (433,020 | ) | (428,177 | ) | (436,899 | ) | (469,112 | ) | ||||||||||
Deferred compensation | (15,869 | ) | (15,776 | ) | (16,058 | ) | (16,160 | ) | (15,218 | ) | ||||||||||
Controlling interest shareholders’ equity | 6,495,432 | 6,421,842 | 5,842,206 | 5,692,658 | 5,672,708 | |||||||||||||||
Noncontrolling interests | (841 | ) | (740 | ) | 14,706 | 17,599 | 21,533 | |||||||||||||
Total shareholders’ equity | 6,494,591 | 6,421,102 | 5,856,912 | 5,710,257 | 5,694,241 | |||||||||||||||
| $ | 51,047,776 | $ | 52,147,295 | $ | 51,712,981 | $ | 51,123,007 | $ | 53,298,150 | |||||||||||
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| Press Release – Page 11 | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| (In thousands, except per share amounts) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2010 | 2010 | 2010 | 2009 | 2009 | ||||||||||||||||
| Interest income: | ||||||||||||||||||||
Interest and fees on loans | $ | 543,478 | $ | 541,474 | $ | 540,144 | $ | 569,613 | $ | 586,246 | ||||||||||
Interest on loans held for sale | 2,223 | 1,937 | 2,363 | 2,735 | 2,434 | |||||||||||||||
Lease financing | 4,788 | 4,251 | 5,129 | 5,289 | 5,125 | |||||||||||||||
Interest on money market investments | 3,487 | 2,601 | 1,439 | 1,800 | 1,195 | |||||||||||||||
Interest on securities: | ||||||||||||||||||||
Held-to-maturity – taxable | 1,000 | 6,113 | 2,456 | (2,075 | ) | 4,864 | ||||||||||||||
Held-to-maturity – nontaxable | 5,063 | 5,187 | 5,437 | 5,396 | 5,806 | |||||||||||||||
Available-for-sale – taxable | 19,782 | 19,818 | 20,971 | 21,063 | 23,460 | |||||||||||||||
Available-for-sale – nontaxable | 1,571 | 1,700 | 1,721 | 1,813 | 1,830 | |||||||||||||||
Trading account | 542 | 657 | 475 | 492 | 842 | |||||||||||||||
Total interest income | 581,934 | 583,738 | 580,135 | 606,126 | 631,802 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
Interest on savings and money market deposits | 29,900 | 34,124 | 36,389 | 43,921 | 54,554 | |||||||||||||||
Interest on time and foreign deposits | 16,468 | 18,629 | 19,687 | 28,671 | 42,780 | |||||||||||||||
Interest on short-term borrowings | 3,566 | 3,486 | 3,067 | 2,714 | 2,325 | |||||||||||||||
Interest on long-term borrowings | 80,125 | 114,153 | 65,692 | 73,931 | 59,963 | |||||||||||||||
Total interest expense | 130,059 | 170,392 | 124,835 | 149,237 | 159,622 | |||||||||||||||
Net interest income | 451,875 | 413,346 | 455,300 | 456,889 | 472,180 | |||||||||||||||
| Provision for loan losses | 184,668 | 228,663 | 265,565 | 390,719 | 565,930 | |||||||||||||||
Net interest income after provision for loan losses | 267,207 | 184,683 | 189,735 | 66,170 | (93,750 | ) | ||||||||||||||
| Noninterest income: | ||||||||||||||||||||
Service charges and fees on deposit accounts | 49,733 | 51,909 | 51,608 | 53,475 | 54,466 | |||||||||||||||
Other service charges, commissions and fees | 41,780 | 43,395 | 39,042 | 38,794 | 39,227 | |||||||||||||||
Trust and wealth management income | 6,310 | 7,021 | 7,609 | 5,825 | 8,209 | |||||||||||||||
Capital markets and foreign exchange | 13,154 | 10,733 | 8,539 | 8,692 | 12,106 | |||||||||||||||
Dividends and other investment income | 8,874 | 8,879 | 7,700 | 12,942 | 2,597 | |||||||||||||||
Loan sales and servicing income | 8,390 | 5,617 | 6,432 | 7,011 | 2,359 | |||||||||||||||
Fair value and nonhedge derivative income (loss) | (21,854 | ) | (1,552 | ) | 2,188 | 31,367 | 58,092 | |||||||||||||
Equity securities losses, net | (1,082 | ) | (1,500 | ) | (3,165 | ) | (2,164 | ) | (1,805 | ) | ||||||||||
Fixed income securities gains (losses), net | 8,428 | 530 | 1,256 | (7,385 | ) | 1,900 | ||||||||||||||
Impairment losses on investment securities: | ||||||||||||||||||||
Impairment losses on investment securities | (73,082 | ) | (19,557 | ) | (48,570 | ) | (134,357 | ) | (198,378 | ) | ||||||||||
Noncredit-related losses on securities not expected to | ||||||||||||||||||||
be sold (recognized in other comprehensive income) | 49,370 | 1,497 | 17,307 | 35,051 | 141,863 | |||||||||||||||
Net impairment losses on investment securities | (23,712 | ) | (18,060 | ) | (31,263 | ) | (99,306 | ) | (56,515 | ) | ||||||||||
Gain on subordinated debt modification | - | - | - | 15,220 | - | |||||||||||||||
Gain on subordinated debt exchange | - | - | 14,471 | - | - | |||||||||||||||
Acquisition related gains | - | - | - | 56 | 146,153 | |||||||||||||||
Other | 20,179 | 2,441 | 3,193 | 1,360 | 3,951 | |||||||||||||||
Total noninterest income | 110,200 | 109,413 | 107,610 | 65,887 | 270,740 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
Salaries and employee benefits | 207,947 | 205,776 | 204,333 | 206,823 | 205,433 | |||||||||||||||
Occupancy, net | 29,292 | 27,822 | 28,488 | 28,667 | 28,556 | |||||||||||||||
Furniture and equipment | 25,591 | 25,703 | 24,996 | 24,689 | 25,320 | |||||||||||||||
Other real estate expense | 44,256 | 42,444 | 32,648 | 38,290 | 30,419 | |||||||||||||||
Credit related expense | 17,438 | 17,658 | 16,825 | 16,347 | 11,793 | |||||||||||||||
Provision for unfunded lending commitments | 1,104 | 483 | (20,133 | ) | 19,220 | 36,537 | ||||||||||||||
Legal and professional services | 9,305 | 8,887 | 9,976 | 10,081 | 9,076 | |||||||||||||||
Advertising | 5,575 | 5,772 | 6,374 | 5,738 | 4,418 | |||||||||||||||
FDIC premiums | 25,706 | 26,438 | 24,210 | 24,197 | 19,820 | |||||||||||||||
Amortization of core deposit and other intangibles | 6,296 | 6,414 | 6,577 | 10,135 | 7,575 | |||||||||||||||
Other | 83,534 | 62,958 | 54,832 | 56,942 | 55,760 | |||||||||||||||
Total noninterest expense | 456,044 | 430,355 | 389,126 | 441,129 | 434,707 | |||||||||||||||
| Impairment loss on goodwill | - | - | - | 2,224 | - | |||||||||||||||
Income (loss) before income taxes | (78,637 | ) | (136,259 | ) | (91,781 | ) | (311,296 | ) | (257,717 | ) | ||||||||||
| Income taxes (benefit) | (31,180 | ) | (22,898 | ) | (28,644 | ) | (125,809 | ) | (100,046 | ) | ||||||||||
Net income (loss) | (47,457 | ) | (113,361 | ) | (63,137 | ) | (185,487 | ) | (157,671 | ) | ||||||||||
| Net income (loss) applicable to noncontrolling interests | (132 | ) | (368 | ) | (2,927 | ) | (1,423 | ) | (2,394 | ) | ||||||||||
Net income (loss) applicable to controlling interest | (47,325 | ) | (112,993 | ) | (60,210 | ) | (184,064 | ) | (155,277 | ) | ||||||||||
| Preferred stock dividends | (33,144 | ) | (25,342 | ) | (26,311 | ) | (24,633 | ) | (26,603 | ) | ||||||||||
| Preferred stock redemption | - | 3,107 | - | 32,215 | - | |||||||||||||||
Net earnings (loss) applicable to common shareholders | $ | (80,469 | ) | $ | (135,228 | ) | $ | (86,521 | ) | $ | (176,482 | ) | $ | (181,880 | ) | |||||
| Weighted average common shares outstanding during the period: | ||||||||||||||||||||
Basic shares | 172,865 | 161,810 | 151,073 | 139,859 | 127,581 | |||||||||||||||
Diluted shares | 172,865 | 161,810 | 151,073 | 139,859 | 127,581 | |||||||||||||||
| Net earnings (loss) per common share: | ||||||||||||||||||||
Basic | $ | (0.47 | ) | $ | (0.84 | ) | $ | (0.57 | ) | $ | (1.26 | ) | $ | (1.43 | ) | |||||
Diluted | (0.47 | ) | (0.84 | ) | (0.57 | ) | (1.26 | ) | (1.43 | ) | ||||||||||
- more -
| ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| Press Release – Page 12 | ||||||||||||||||||||
| Loan Balances By Portfolio Type | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (In millions) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2010 | 2010 | 2010 | 2009 | 2009 | ||||||||||||||||
| Commercial lending: | ||||||||||||||||||||
Commercial and industrial | $ | 9,402 | $ | 9,384 | $ | 9,543 | $ | 9,922 | $ | 10,124 | ||||||||||
Leasing | 402 | 442 | 442 | 466 | 449 | |||||||||||||||
Owner occupied | 8,345 | 8,334 | 8,457 | 8,752 | 8,745 | |||||||||||||||
Total commercial lending | 18,149 | 18,160 | 18,442 | 19,140 | 19,318 | |||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
Construction and land development | 4,206 | 4,484 | 5,060 | 5,552 | 6,087 | |||||||||||||||
Term | 7,550 | 7,567 | 7,524 | 7,255 | 7,279 | |||||||||||||||
Total commercial real estate | 11,756 | 12,051 | 12,584 | 12,807 | 13,366 | |||||||||||||||
| Consumer: | ||||||||||||||||||||
Home equity credit line | 2,157 | 2,139 | 2,121 | 2,135 | 2,114 | |||||||||||||||
1-4 family residential | 3,509 | 3,549 | 3,584 | 3,642 | 3,698 | |||||||||||||||
Construction and other consumer real estate | 366 | 379 | 403 | 459 | 537 | |||||||||||||||
Bankcard and other revolving plans | 287 | 285 | 314 | 341 | 333 | |||||||||||||||
Other | 271 | 271 | 279 | 293 | 343 | |||||||||||||||
Total consumer | 6,590 | 6,623 | 6,701 | 6,870 | 7,025 | |||||||||||||||
| Foreign loans | 84 | 87 | 58 | 65 | 74 | |||||||||||||||
FDIC-supported loans 1 | 1,090 | 1,208 | 1,321 | 1,445 | 1,607 | |||||||||||||||
Total loans | $ | 37,669 | $ | 38,129 | $ | 39,106 | $ | 40,327 | $ | 41,390 | ||||||||||
1 FDIC-supported loans represent loans acquired from the FDIC subject to loss sharing agreements. | ||||||||||||||||||||
- more -
| ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| Press Release – Page 13 | ||||||||||||||||||||
| Nonperforming Lending-Related Assets | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (In thousands) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2010 | 2010 | 2010 | 2009 | 2009 | ||||||||||||||||
| Nonaccrual loans | $ | 1,809,570 | $ | 1,962,313 | $ | 2,087,203 | $ | 2,023,503 | $ | 1,811,827 | ||||||||||
| Other real estate owned | 304,498 | 364,954 | 366,798 | 335,652 | 359,187 | |||||||||||||||
Nonperforming lending-related assets, excluding | ||||||||||||||||||||
FDIC-supported assets | 2,114,068 | 2,327,267 | 2,454,001 | 2,359,155 | 2,171,014 | |||||||||||||||
| FDIC-supported nonaccrual loans | 126,634 | 171,764 | 283,999 | 355,911 | 544,558 | |||||||||||||||
| FDIC-supported other real estate owned | 52,425 | 48,382 | 47,439 | 54,130 | 54,714 | |||||||||||||||
FDIC-supported nonperforming assets | 179,059 | 220,146 | 331,438 | 410,041 | 599,272 | |||||||||||||||
Total nonperforming assets | $ | 2,293,127 | $ | 2,547,413 | $ | 2,785,439 | $ | 2,769,196 | $ | 2,770,286 | ||||||||||
| Ratio of nonperforming lending-related assets to net loans | ||||||||||||||||||||
and leases 1 and other real estate owned | 6.01 | % | 6.60 | % | 7.04 | % | 6.79 | % | 6.62 | % | ||||||||||
| Accruing loans past due 90 days or more, excluding | ||||||||||||||||||||
FDIC-supported loans | $ | 74,829 | $ | 131,773 | $ | 60,009 | $ | 107,040 | $ | 186,519 | ||||||||||
| FDIC-supported loans past due 90 days or more | 9,689 | 5,483 | 22,275 | 56,260 | 35,553 | |||||||||||||||
| Ratio of accruing loans past due 90 days or more to | ||||||||||||||||||||
net loans and leases 1 | 0.22 | % | 0.36 | % | 0.21 | % | 0.40 | % | 0.54 | % | ||||||||||
| Nonaccrual loans and accruing loans past due 90 days or more | $ | 2,020,722 | $ | 2,271,333 | $ | 2,453,486 | $ | 2,542,714 | $ | 2,578,457 | ||||||||||
| Ratio of nonaccrual loans and accruing loans past due | ||||||||||||||||||||
90 days or more to net loans and leases 1 | 5.35 | % | 5.95 | % | 6.27 | % | 6.29 | % | 6.22 | % | ||||||||||
| Accruing loans past due 30-89 days, excluding | ||||||||||||||||||||
FDIC-supported loans | $ | 303,472 | $ | 317,666 | $ | 462,409 | $ | 428,290 | $ | 571,399 | ||||||||||
| FDIC-supported loans past due 30-89 days | 8,919 | 27,180 | 55,919 | 27,485 | 74,142 | |||||||||||||||
| Restructured loans included in nonaccrual loans | $ | 354,434 | $ | 339,113 | $ | 340,165 | $ | 298,820 | $ | 106,922 | ||||||||||
| Restructured loans on accrual | 334,416 | 288,388 | 211,486 | 204,233 | 115,635 | |||||||||||||||
1 Includes loans held for sale. | ||||||||||||||||||||
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| ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| Press Release – Page 14 | ||||||||||||||||||||
| Allowance for Credit Losses | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| (In thousands) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2010 | 2010 | 2010 | 2009 | 2009 | ||||||||||||||||
| Allowance for Loan Losses | ||||||||||||||||||||
| Balance at beginning of period | $ | 1,563,753 | $ | 1,581,577 | $ | 1,531,332 | $ | 1,432,715 | $ | 1,248,055 | ||||||||||
| Add: | ||||||||||||||||||||
Provision for losses | 184,668 | 228,663 | 265,565 | 390,719 | 565,930 | |||||||||||||||
Increase in allowance covered by FDIC indemnification | 17,190 | 8,748 | 11,770 | - | - | |||||||||||||||
| Deduct: | ||||||||||||||||||||
Gross loan and lease charge-offs | (263,673 | ) | (279,025 | ) | (248,312 | ) | (355,601 | ) | (389,134 | ) | ||||||||||
Net charge-offs recoverable from FDIC | 5,674 | 629 | 1,859 | 2,303 | - | |||||||||||||||
Recoveries | 22,343 | 23,161 | 19,363 | 61,196 | 7,864 | |||||||||||||||
Net loan and lease charge-offs | (235,656 | ) | (255,235 | ) | (227,090 | ) | (292,102 | ) | (381,270 | ) | ||||||||||
| Balance at end of period | $ | 1,529,955 | $ | 1,563,753 | $ | 1,581,577 | $ | 1,531,332 | $ | 1,432,715 | ||||||||||
| Ratio of allowance for loan losses to net loans and | ||||||||||||||||||||
leases, at period end | 4.07 | % | 4.11 | % | 4.06 | % | 3.81 | % | 3.47 | % | ||||||||||
| Ratio of allowance for loan losses to nonperforming | ||||||||||||||||||||
loans, at period end | 79.02 | % | 73.28 | % | 66.70 | % | 64.36 | % | 60.80 | % | ||||||||||
| Annualized ratio of net loan and lease charge-offs to | ||||||||||||||||||||
average loans | 2.50 | % | 2.64 | % | 2.29 | % | 2.87 | % | 3.65 | % | ||||||||||
| Reserve for Unfunded Lending Commitments | ||||||||||||||||||||
| Balance at beginning of period | $ | 96,795 | $ | 96,312 | $ | 116,445 | $ | 97,225 | $ | 60,688 | ||||||||||
| Provision charged (credited) to earnings | 1,104 | 483 | (20,133 | ) | 19,220 | 36,537 | ||||||||||||||
| Balance at end of period | $ | 97,899 | $ | 96,795 | $ | 96,312 | $ | 116,445 | $ | 97,225 | ||||||||||
| Total Allowance for Credit Losses | ||||||||||||||||||||
| Allowance for loan losses | $ | 1,529,955 | $ | 1,563,753 | $ | 1,581,577 | $ | 1,531,332 | $ | 1,432,715 | ||||||||||
| Reserve for unfunded lending commitments | 97,899 | 96,795 | 96,312 | 116,445 | 97,225 | |||||||||||||||
| Total allowance for credit losses | $ | 1,627,854 | $ | 1,660,548 | $ | 1,677,889 | $ | 1,647,777 | $ | 1,529,940 | ||||||||||
| Ratio of total allowance for credit losses | ||||||||||||||||||||
to net loans and leases outstanding, at period end | 4.34 | % | 4.37 | % | 4.31 | % | 4.10 | % | 3.71 | % | ||||||||||
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| ZIONS BANCORPORATION AND SUBSIDIARIES | |||||||||||||||||||
| Press Release – Page 15 | |||||||||||||||||||
| Nonaccrual Loans By Portfolio Type | |||||||||||||||||||
| (Excluding FDIC-Supported Loans) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| (In millions) | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| 2010 | 2010 | 2010 | 2009 | 2009 | |||||||||||||||
| Commercial lending: | |||||||||||||||||||
Commercial and industrial | $ | 284 | $ | 318 | $ | 320 | $ | 319 | $ | 231 | |||||||||
Leasing | 2 | 8 | 8 | 11 | 10 | ||||||||||||||
Owner occupied | 414 | 438 | 460 | 474 | 357 | ||||||||||||||
Total commercial lending | 700 | 764 | 788 | 804 | 598 | ||||||||||||||
| Commercial real estate: | |||||||||||||||||||
Construction and land development | 660 | 744 | 803 | 825 | 839 | ||||||||||||||
Term | 263 | 281 | 324 | 228 | 221 | ||||||||||||||
Total commercial real estate | 923 | 1,025 | 1,127 | 1,053 | 1,060 | ||||||||||||||
| Consumer: | |||||||||||||||||||
Home equity credit line | 16 | 13 | 14 | 11 | 8 | ||||||||||||||
1-4 family residential | 145 | 136 | 127 | 113 | 101 | ||||||||||||||
Construction and other consumer real estate | 22 | 20 | 28 | 38 | 42 | ||||||||||||||
Bankcard and other revolving plans | 1 | 1 | - | 1 | 1 | ||||||||||||||
Other | 3 | 3 | 3 | 3 | 2 | ||||||||||||||
Total consumer | 187 | 173 | 172 | 166 | 154 | ||||||||||||||
Total nonaccrual loans | $ | 1,810 | $ | 1,962 | $ | 2,087 | $ | 2,023 | $ | 1,812 | |||||||||
| Net Charge-Offs By Portfolio Type | |||||||||||||||||||
| (In millions) | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| 2010 | 2010 | 2010 | 2009 | 2009 | |||||||||||||||
| Commercial lending: | |||||||||||||||||||
Commercial and industrial | $ | 72 | $ | 52 | $ | 49 | $ | 36 | $ | 70 | |||||||||
Leasing | 3 | - | 2 | 2 | 3 | ||||||||||||||
Owner occupied | 32 | 35 | 36 | 27 | 19 | ||||||||||||||
Total commercial lending | 107 | 87 | 87 | 65 | 92 | ||||||||||||||
| Commercial real estate: | |||||||||||||||||||
Construction and land development | 71 | 99 | 86 | 139 | 219 | ||||||||||||||
Term | 31 | 39 | 23 | 56 | 29 | ||||||||||||||
Total commercial real estate | 102 | 138 | 109 | 195 | 248 | ||||||||||||||
| Consumer: | |||||||||||||||||||
Home equity credit line | 6 | 7 | 7 | 4 | 6 | ||||||||||||||
1-4 family residential | 15 | 14 | 15 | 14 | 17 | ||||||||||||||
Construction and other consumer real estate | 7 | 6 | 5 | 10 | 10 | ||||||||||||||
Bankcard and other revolving plans | 2 | 2 | 3 | 2 | 2 | ||||||||||||||
Other | 3 | 2 | 3 | 4 | 6 | ||||||||||||||
Total consumer loans | 33 | 31 | 33 | 34 | 41 | ||||||||||||||
| Charge-offs recoverable from FDIC | (6 | ) | (1 | ) | (2 | ) | (2 | ) | - | ||||||||||
Total net charge-offs | $ | 236 | $ | 255 | $ | 227 | $ | 292 | $ | 381 | |||||||||
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| ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||
| Press Release – Page 16 | ||||||||||||||||||||||||
| CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||
| September 30, 2010 | June 30, 2010 | March 31, 2010 | ||||||||||||||||||||||
| (In thousands) | Average | Average | Average | Average | Average | Average | ||||||||||||||||||
| balance | rate | balance | rate | balance | rate | |||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||
| Money market investments | $ | 5,192,847 | 0.27 | % | $ | 3,853,275 | 0.27 | % | $ | 2,227,181 | 0.26 | % | ||||||||||||
| Securities: | ||||||||||||||||||||||||
Held-to-maturity | 843,268 | 4.14 | % | 888,466 | 6.36 | % | 899,587 | 4.88 | % | |||||||||||||||
Available-for-sale | 3,282,056 | 2.68 | % | 3,364,126 | 2.67 | % | 3,378,930 | 2.83 | % | |||||||||||||||
Trading account | 59,216 | 3.63 | % | 72,322 | 3.64 | % | 51,330 | 3.75 | % | |||||||||||||||
Total securities | 4,184,540 | 2.99 | % | 4,324,914 | 3.45 | % | 4,329,847 | 3.27 | % | |||||||||||||||
| Loans held for sale | 188,794 | 4.67 | % | 166,612 | 4.66 | % | 179,433 | 5.34 | % | |||||||||||||||
| Loans: | ||||||||||||||||||||||||
Net loans and leases excluding FDIC-supported loans 1 | 36,525,416 | 5.60 | % | 37,345,580 | 5.60 | % | 38,274,621 | 5.59 | % | |||||||||||||||
FDIC-supported loans | 1,149,976 | 11.93 | % | 1,265,319 | 8.41 | % | 1,393,775 | 5.59 | % | |||||||||||||||
Total loans and leases | 37,675,392 | 5.79 | % | 38,610,899 | 5.69 | % | 39,668,396 | 5.59 | % | |||||||||||||||
| Total interest-earning assets | 47,241,573 | 4.93 | % | 46,955,700 | 5.03 | % | 46,404,857 | 5.12 | % | |||||||||||||||
| Cash and due from banks | 1,063,000 | 1,444,343 | 1,280,013 | |||||||||||||||||||||
| Allowance for loan losses | (1,556,558 | ) | (1,594,814 | ) | (1,565,136 | ) | ||||||||||||||||||
| Goodwill | 1,015,161 | 1,015,161 | 1,015,161 | |||||||||||||||||||||
| Core deposit and other intangibles | 97,741 | 104,083 | 110,754 | |||||||||||||||||||||
| Other assets | 3,917,955 | 3,945,496 | 4,306,119 | |||||||||||||||||||||
Total assets | $ | 51,778,872 | $ | 51,869,969 | $ | 51,551,768 | ||||||||||||||||||
| LIABILITIES | ||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
Savings and NOW | $ | 6,186,704 | 0.32 | % | $ | 6,026,526 | 0.35 | % | $ | 5,842,531 | 0.36 | % | ||||||||||||
Money market | 15,584,312 | 0.63 | % | 16,292,870 | 0.71 | % | 16,515,285 | 0.77 | % | |||||||||||||||
Time under $100,000 | 2,103,818 | 1.25 | % | 2,247,255 | 1.36 | % | 2,365,645 | 1.44 | % | |||||||||||||||
Time $100,000 and over | 2,462,904 | 1.21 | % | 2,590,056 | 1.30 | % | 2,911,319 | 1.23 | % | |||||||||||||||
Foreign | 1,563,090 | 0.60 | % | 1,754,944 | 0.60 | % | 1,663,380 | 0.61 | % | |||||||||||||||
Total interest-bearing deposits | 27,900,828 | 0.66 | % | 28,911,651 | 0.73 | % | 29,298,160 | 0.78 | % | |||||||||||||||
| Borrowed funds: | ||||||||||||||||||||||||
Securities sold, not yet purchased | 38,789 | 4.33 | % | 41,473 | 4.94 | % | 50,243 | 4.29 | % | |||||||||||||||
Federal funds purchased and security | ||||||||||||||||||||||||
repurchase agreements | 873,954 | 0.14 | % | 871,441 | 0.14 | % | 1,137,716 | 0.20 | % | |||||||||||||||
FHLB advances and other borrowings: | ||||||||||||||||||||||||
One year or less | 210,235 | 5.34 | % | 205,373 | 5.20 | % | 152,203 | 5.28 | % | |||||||||||||||
Over one year | 18,415 | 4.74 | % | 15,611 | 4.98 | % | 15,693 | 5.07 | % | |||||||||||||||
Long-term debt | 1,927,360 | 16.45 | % | 1,963,082 | 23.28 | % | 2,028,912 | 13.09 | % | |||||||||||||||
Total borrowed funds | 3,068,753 | 10.82 | % | 3,096,980 | 15.24 | % | 3,384,767 | 8.24 | % | |||||||||||||||
| Total interest-bearing liabilities | 30,969,581 | 1.67 | % | 32,008,631 | 2.14 | % | 32,682,927 | 1.55 | % | |||||||||||||||
| Noninterest-bearing deposits | 13,786,784 | 13,318,836 | 12,544,442 | |||||||||||||||||||||
| Other liabilities | 601,439 | 530,457 | 570,028 | |||||||||||||||||||||
Total liabilities | 45,357,804 | 45,857,924 | 45,797,397 | |||||||||||||||||||||
| Shareholders’ equity: | ||||||||||||||||||||||||
Preferred equity | 1,819,889 | 1,624,856 | 1,509,197 | |||||||||||||||||||||
Common equity | 4,601,920 | 4,371,255 | 4,229,021 | |||||||||||||||||||||
Controlling interest shareholders’ equity | 6,421,809 | 5,996,111 | 5,738,218 | |||||||||||||||||||||
Noncontrolling interests | (741 | ) | 15,934 | 16,153 | ||||||||||||||||||||
Total shareholders’ equity | 6,421,068 | 6,012,045 | 5,754,371 | |||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 51,778,872 | $ | 51,869,969 | $ | 51,551,768 | ||||||||||||||||||
| Spread on average interest-bearing funds | 3.26 | % | 2.89 | % | 3.57 | % | ||||||||||||||||||
| Taxable-equivalent net interest income and | ||||||||||||||||||||||||
net yield on interest-earning assets | 3.84 | % | 3.58 | % | 4.03 | % | ||||||||||||||||||
1 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 17 | |||||
| GAAP to Non-GAAP Reconciliation | |||||
| (Unaudited) | |||||
| Three Months Ended | |||||
| September 30, | June 30, | ||||
| 2010 | 2010 | ||||
| Net interest margin as reported (GAAP) | 3.84% | 3.58% | |||
| Addback for the impact on net interest margin of: | |||||
Discount amortization on convertible subordinated debt | 0.12% | 0.12% | |||
Accelerated discount amortization on convertible subordinated debt | 0.23% | 0.52% | |||
Additional accretion of interest income on acquired loans | -0.16% | -0.08% | |||
| Core net interest margin | 4.03% | 4.14% | |||
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This Press Release presents a “core net interest margin” which excludes the effects of the (1) discount amortization on convertible subordinated debt; (2) accelerated discount amortization on convertible subordinated debt; and (3) additional accretion of interest income on acquired loans based on increased projected cash flows (hereinafter collectively referred to as the “net interest margin adjustments”). The net interest margin adjustments are included in financial results presented in accordance with generally accepted accounting principles (“GAAP”). Management considers the net interest margin adjustments to be relevant to ongoing operating results.
The Company believes the exclusion of these net interest margin adjustments to present a core net interest margin 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. As a non-GAAP financial measure, the core net interest margin is used by management and the Board of Directors to assess the performance of the Company’s business for the following purposes:
• Evaluation of bank reporting segment performance
• Presentations of Company performance to investors
The Company believes that presenting the core net interest margin 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 non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as an analytical tool, and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP.
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