***FOR IMMEDIATE RELEASE***
| For: ZIONS BANCORPORATION | Contact: James Abbott | |||||
One South Main, 15th Floor | Tel: (801) 524-4787 | |||||
| Salt Lake City, Utah | April 23, 2012 | |||||
| Harris H. Simmons | ||||||
| Chairman/Chief Executive Officer |
ZIONS BANCORPORATION REPORTS EARNINGS OF $0.14
PER DILUTED COMMON SHARE FOR FIRST QUARTER 2012
SALT LAKE CITY, April 23, 2012 – Zions Bancorporation (NASDAQ: ZION) (“Zions” or “the Company”) today reported first quarter net earnings applicable to common shareholders of $25.5 million or $0.14 per diluted common share, compared to $44.4 million or $0.24 per diluted share for the fourth quarter of 2011. Adjusted for the noncash effects of the discount amortization on conversion of subordinated debt and additional accretion (net of expense) on acquired loans ($15.0 million, $0.08 per share), and the accelerated amortization of discount on the $700 million redemption of Troubled Asset Relief Program (“TARP”) preferred stock ($19.6 million, $0.11 per share) in the first quarter, net earnings were $60.1 million or $0.33 per diluted share for the first quarter of 2012, compared to $53.5 million or $0.30 per diluted share for the fourth quarter of 2011.
First Quarter 2012 Highlights
| · | Net charge-offs decreased 43% to $55 million, compared to a decrease of 7% to $95 million in the fourth quarter. |
| · | Nonaccrual loans decreased 4% to $872 million, compared to a decrease of 15% to $910 million in the fourth quarter. |
| · | The tangible common equity ratio increased to 6.89% at March 31, 2012, compared to 6.77% at December 31, 2011. |
| · | Net interest income decreased 4.2% to $442 million from $462 million in the fourth quarter. Core net interest income decreased 1.9% to $453 million from $461 million in the fourth quarter. The core net interest margin decreased 5 basis points to 3.81% from 3.86% in the fourth quarter. |
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ZIONS BANCORPORATION
Press Release – Page 2
April 23, 2012
| · | Loans and leases, excluding FDIC-supported loans, were $35.9 billion at March 31, 2012, or approximately $490 million lower than $36.4 billion at December 31, 2011; average loans and leases, excluding FDIC-supported loans, were essentially unchanged at $36.1 billion for the first quarter of 2012, compared to the fourth quarter of 2011. |
“We are pleased with the continued improvement in underlying credit trends, as reflected in a significantly lower level of loan losses and other credit-related costs than in recent quarters – a trend we foresee continuing,” said Harris H. Simmons, chairman and chief executive officer. “We were also pleased to accomplish the redemption of $700 million of the U.S. Treasury’s TARP investment during the quarter,” continued Mr. Simmons. “At the same time, the combination of sluggish loan demand and very low interest rates continues to impede growth in our largest source of revenue, net interest income.”
Debt and Shareholders’ Equity
The Federal Reserve did not object to the capital actions contained in the Company’s Capital Plan submitted under the Federal Reserve’s 2012 Capital Plan Review. Pursuant to that plan, the Company repaid $700 million of TARP preferred stock on March 28, 2012, and currently expects to repay the remaining $700 million in the second half of the year.
On March 27, 2012, the Company issued $300 million of 4.5% senior notes due on March 27, 2017. The notes were sold at a price of 94.25% through an online modified Dutch auction administered by Zions Direct. Net proceeds to the Company, after commissions and fees, were $280.5 million.
Net of the interest cost on the previously mentioned debt, the $700 million redemption of TARP preferred stock in the first quarter is expected to benefit future net earnings applicable to common shareholders by approximately $0.19 per share on an annualized basis.
Effective March 15, 2012, approximately $29.8 million of convertible subordinated debt was converted into depositary shares each representing a 1/40th interest in a share of the Company’s preferred stock. This conversion added 29,404 shares of Series C and 370 shares of Series A to the Company’s preferred stock. Accelerated discount amortization on the converted debt increased interest expense by a pretax noncash amount of approximately $12.2 million ($9.9 million after-tax) in the first quarter of 2012, compared to $5.8 million ($4.7 million after-tax) in the fourth quarter of 2011.
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ZIONS BANCORPORATION
Press Release – Page 3
April 23, 2012
On April 19, 2012, the Company reported that holders of approximately $50.2 million of subordinated convertible notes elected to convert their debt into depositary shares of the Company’s preferred stock. This anticipated conversion is expected to increase interest expense in the second quarter of 2012 due to the accelerated discount amortization on the converted debt by an estimated noncash amount of $16.2 million pretax ($13.2 million after-tax).
The estimated Tier 1 common to risk-weighted assets ratio was 9.70% at March 31, 2012, compared to 9.57% at December 31, 2011.
Asset Quality
Net loan and lease charge-offs decreased 43% to $55 million for the first quarter of 2012, compared to $95 million for the fourth quarter of 2011. Net charge-offs declined primarily in commercial real estate and owner occupied real estate-secured commercial loans.
Nonperforming lending-related assets declined approximately 3% to $1.0 billion at March 31, 2012 from $1.1 billion at December 31, 2011. Nonaccrual loans declined approximately 4% to $872 million at March 31, 2012 from $910 million at December 31, 2011. Additions to nonaccrual loans were $233 million during the first quarter of 2012, compared to $209 million during the fourth quarter of 2011. Nonaccrual loans that are current as to principal and interest were approximately 41% of the balance at March 31, 2012 and at December 31, 2011. The ratio of nonperforming lending-related assets to loans and leases and other real estate owned decreased to 2.79% at March 31, 2012, compared to 2.83% at December 31, 2011.
Classified loans remained approximately the same at $2.1 billion at March 31, 2012, compared to a decrease of 13% to $2.1 billion at December 31, 2011. Approximately 73% of classified loans were current as to principal and interest for the first quarter of 2012, compared to 72% for the fourth quarter of 2011. Additions to classified loans increased to $503 million during the first quarter of 2012, compared to $330 million during the fourth quarter of 2011.
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ZIONS BANCORPORATION
Press Release – Page 4
April 23, 2012
Additions would have been essentially unchanged compared to the prior quarter, except for a change in grading methodology in our National Real Estate Group. This change had the effect of downgrading to classified status approximately $175 million of performing loans during the quarter.
The provision for loan losses was $15.7 million for the first quarter of 2012, compared to a negative provision of $(1.5) million for the fourth quarter of 2011.
The allowance for credit losses was $1.1 billion, or 3.03% of loans and leases at March 31, 2012, compared to $1.2 billion, or 3.10% of loans and leases at December 31, 2011. The allowance for credit losses was 127% of nonaccrual loans at both March 31, 2012 and December 31, 2011.
Loans
Loans and leases, excluding FDIC-supported loans, were $35.9 billion at March 31, 2012, or approximately $490 million lower than $36.4 billion at December 31, 2011; substantially all of the decline occurred during the first two months of the first quarter. Average loans and leases, excluding FDIC-supported loans, were $36.1 billion for the first quarter of 2012, or essentially the same as the fourth quarter of 2011, which had increased $158 million compared to the previous quarter.
Deposits
Average total deposits for the first quarter of 2012 increased $170 million or 0.4% to $42.4 billion compared to $42.2 billion for the fourth quarter of 2011. The increase resulted primarily from a higher level of average noninterest-bearing demand deposits for the first quarter of 2012, which were $15.7 billion compared to $15.5 billion for the fourth quarter of 2011. The ratio of loans to deposits was 84.9% at March 31, 2012, compared to 86.6% at December 31, 2011.
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ZIONS BANCORPORATION
Press Release – Page 5
April 23, 2012
Net Interest Income
Net interest income decreased 4.2% to $442 million for the first quarter of 2012, compared to $462 million for the fourth quarter of 2011. The decrease was primarily due to rate resets on older vintage longer-term loans and accelerated discount amortization on the larger amount of subordinated debt that converted to preferred stock compared to the previous quarter. Core net interest income, adjusted for discount amortization on convertible subordinated debt and accretion on acquired loans, was approximately $453 million for the first quarter of 2012, compared to $461 million for the fourth quarter of 2011. The net interest margin decreased 13 basis points to 3.73% in the first quarter of 2012, compared to 3.86% in the fourth quarter of 2011. The core net interest margin was 3.81% in the first quarter, compared to 3.86% in the fourth quarter. The decrease in the core net interest margin was primarily due to reduced loan yields.
Investment Securities
During the first quarter of 2012, the Company recognized credit-related other-than-temporary impairment (“OTTI”) on collateralized debt obligations (“CDOs”) of $10.2 million or $0.03 per diluted share, compared to $12.1 million or $0.04 per diluted share during the fourth quarter of 2011. Approximately a third of the OTTI this quarter resulted from prepayments of trust preferred securities by issuing banks in our CDO pools. This had the effect of reducing future cash flows to certain junior CDO tranches, causing OTTI, while providing more immediate cash to senior tranches, resulting in improved balances in accumulated other comprehensive income. The remaining portion of OTTI is attributable to credit deterioration at a small number of banks. There were fewer bank failures in the first quarter of 2012 than in prior quarters, and reperformance of deferring banks continues to be a favorable trend.
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ZIONS BANCORPORATION
Press Release – Page 6
April 23, 2012
The following table stratifies the CDOs into performing tranches without credit impairment and nonperforming tranches at March 31, 2012:
| March 31, 2012 | ||||||||||||||||||||||||
| Net unrealized | % of | |||||||||||||||||||||||
| losses | carrying | |||||||||||||||||||||||
| No. of | Par | Amortized | Carrying | recognized | value | |||||||||||||||||||
| (Amounts in millions) | tranches | amount | cost | value | in OCI 1 | to par | ||||||||||||||||||
| Performing CDOs | ||||||||||||||||||||||||
Predominantly bank CDOs | 32 | $ | 939 | $ | 835 | $ | 619 | $ | (216 | ) | 66% | |||||||||||||
Insurance-only CDOs | 21 | 451 | 446 | 332 | (114 | ) | 74% | |||||||||||||||||
Other CDOs | 7 | 83 | 71 | 65 | (6 | ) | 78% | |||||||||||||||||
Total performing CDOs | 60 | 1,473 | 1,352 | 1,016 | (336 | ) | 69% | |||||||||||||||||
Nonperforming CDOs 2 | ||||||||||||||||||||||||
Deferring interest, but no credit impairment | 3 | 72 | 72 | 18 | (54 | ) | 25% | |||||||||||||||||
Credit impairment prior to last 12 months | 33 | 597 | 439 | 125 | (314 | ) | 21% | |||||||||||||||||
Credit impairment during last 12 months | 21 | 419 | 260 | 60 | (200 | ) | 14% | |||||||||||||||||
Total nonperforming CDOs | 57 | 1,088 | 771 | 203 | (568 | ) | 19% | |||||||||||||||||
| Total CDOs | 117 | $ | 2,561 | $ | 2,123 | $ | 1,219 | $ | (904 | ) | 48% | |||||||||||||
1 Other comprehensive income, amounts presented are pretax. | ||||||||||||||||||||||||
| 2 Defined as either deferring current interest (“PIKing”) or OTTI. | ||||||||||||||||||||||||
Noninterest Income
Noninterest income for the first quarter of 2012 was $107.0 million, compared to $98.3 million for the fourth quarter of 2011. The increase was primarily due to unrealized gains on nonmarketable equity securities. Other service charges, commissions and fees declined approximately $4.3 million primarily as a result of lower loan production and lower fee income on customer swaps.
Noninterest Expense
Noninterest expense for the first quarter of 2012 was $392.4 million compared to $425.0 million for the fourth quarter of 2011. Significant decreases from the fourth quarter related to credit costs, including the provision for unfunded lending commitments, other real estate expense, and credit-related expense. Salaries and employee benefits increased primarily due to increased payroll taxes.
Conference Call
Zions will host a conference call to discuss these first quarter results at 5:30 p.m. ET this afternoon (April 23, 2012). Media representatives, analysts and the public are invited to listen to this discussion by calling 253-237-1247 (domestic and international) and entering the passcode 66010698, 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, April 23, 2012, until midnight ET on Monday, April 30, 2012, by dialing 855-859-2056 (domestic and international) and entering the passcode 66010698. The webcast of the conference call will also be archived and available for 30 days.
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ZIONS BANCORPORATION
Press Release – Page 7
April 23, 2012
About Zions Bancorporation
Zions Bancorporation is one of the nation's premier financial services companies, consisting of a collection of great banks in select Western markets. Zions operates its banking businesses under local management teams and community identities through approximately 500 offices in 10 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.
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ZIONS BANCORPORATION
Press Release – Page 8
April 23, 2012
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 private and governmental legal actions or changes in existing private and governmental legal actions; 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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| ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| Press Release – Page 9 | ||||||||||||||||||||
| FINANCIAL HIGHLIGHTS | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| (In thousands, except share, per share, and ratio data) | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||||
| PER COMMON SHARE | ||||||||||||||||||||
| Dividends | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||||||
| Book value per common share | 25.25 | 25.02 | 24.78 | 24.88 | 24.93 | |||||||||||||||
| Tangible common equity per common share | 19.39 | 19.14 | 18.87 | 18.95 | 18.96 | |||||||||||||||
| SELECTED RATIOS | ||||||||||||||||||||
| Return on average assets | 0.69 | % | 0.67 | % | 0.84 | % | 0.57 | % | 0.42 | % | ||||||||||
| Return on average common equity | 2.21 | % | 3.84 | % | 5.58 | % | 2.53 | % | 1.29 | % | ||||||||||
| Net interest margin | 3.73 | % | 3.86 | % | 3.99 | % | 3.62 | % | 3.76 | % | ||||||||||
| Capital Ratios | ||||||||||||||||||||
| Tangible common equity ratio | 6.89 | % | 6.77 | % | 6.90 | % | 6.95 | % | 7.01 | % | ||||||||||
| Tangible equity ratio | 10.24 | % | 11.33 | % | 11.56 | % | 11.58 | % | 11.36 | % | ||||||||||
| Average equity to average assets | 13.31 | % | 13.27 | % | 13.51 | % | 13.42 | % | 13.25 | % | ||||||||||
Risk-Based Capital Ratios 1 | ||||||||||||||||||||
| Tier 1 common to risk-weighted assets | 9.70 | % | 9.57 | % | 9.53 | % | 9.36 | % | 9.32 | % | ||||||||||
| Tier 1 leverage | 12.16 | % | 13.40 | % | 13.48 | % | 13.44 | % | 13.14 | % | ||||||||||
| Tier 1 risk-based capital | 14.81 | % | 16.13 | % | 16.10 | % | 15.87 | % | 15.46 | % | ||||||||||
| Total risk-based capital | 16.74 | % | 18.06 | % | 18.12 | % | 18.01 | % | 17.77 | % | ||||||||||
| Taxable-equivalent net interest income | $ | 447,161 | $ | 466,699 | $ | 475,580 | $ | 421,226 | $ | 429,231 | ||||||||||
| Weighted average common and common- | ||||||||||||||||||||
| equivalent shares outstanding | 182,963,828 | 182,823,190 | 182,857,702 | 182,728,185 | 181,997,687 | |||||||||||||||
| Common shares outstanding | 184,228,178 | 184,135,388 | 184,294,782 | 184,311,290 | 183,854,486 | |||||||||||||||
1 Ratios for March 31, 2012 are estimates. | ||||||||||||||||||||
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| ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| Press Release – Page 10 | ||||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| (In thousands, except share amounts) | 2012 | 2011 | 2011 | 2011 | 2011 | |||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 1,082,186 | $ | 1,224,350 | $ | 1,102,768 | $ | 1,035,028 | $ | 949,140 | ||||||||||
| Money market investments: | ||||||||||||||||||||
Interest-bearing deposits | 7,629,399 | 7,020,895 | 5,118,066 | 4,924,992 | 4,689,323 | |||||||||||||||
Federal funds sold and security resell agreements | 52,634 | 102,159 | 165,106 | 123,132 | 67,197 | |||||||||||||||
| Investment securities: | ||||||||||||||||||||
Held-to-maturity, at adjusted cost (approximate fair value | ||||||||||||||||||||
$728,479, $729,974, $715,608, $762,998, and $758,169) | 797,149 | 807,804 | 791,569 | 829,702 | 820,636 | |||||||||||||||
Available-for-sale, at fair value | 3,223,086 | 3,230,795 | 3,970,602 | 4,084,963 | 4,130,342 | |||||||||||||||
Trading account, at fair value | 19,033 | 40,273 | 49,782 | 51,152 | 56,549 | |||||||||||||||
| 4,039,268 | 4,078,872 | 4,811,953 | 4,965,817 | 5,007,527 | ||||||||||||||||
| Loans held for sale | 184,579 | 201,590 | 159,300 | 158,943 | 195,055 | |||||||||||||||
| Loans, net of unearned income and fees: | ||||||||||||||||||||
Loans and leases | 35,903,475 | 36,393,782 | 35,924,054 | 35,969,702 | 35,632,972 | |||||||||||||||
FDIC-supported loans | 687,126 | 750,870 | 800,454 | 853,875 | 912,822 | |||||||||||||||
| 36,590,601 | 37,144,652 | 36,724,508 | 36,823,577 | 36,545,794 | ||||||||||||||||
Less allowance for loan losses | 1,010,059 | 1,049,958 | 1,148,903 | 1,237,733 | 1,349,800 | |||||||||||||||
Loans, net of allowance | 35,580,542 | 36,094,694 | 35,575,605 | 35,585,844 | 35,195,994 | |||||||||||||||
| Other noninterest-bearing investments | 875,037 | 865,231 | 860,045 | 858,678 | 858,958 | |||||||||||||||
| Premises and equipment, net | 715,815 | 719,276 | 726,503 | 722,600 | 721,487 | |||||||||||||||
| Goodwill | 1,015,129 | 1,015,129 | 1,015,129 | 1,015,161 | 1,015,161 | |||||||||||||||
| Core deposit and other intangibles | 63,538 | 67,830 | 72,571 | 77,346 | 82,199 | |||||||||||||||
| Other real estate owned | 158,592 | 153,178 | 203,173 | 238,990 | 268,876 | |||||||||||||||
| Other assets | 1,499,588 | 1,605,905 | 1,721,101 | 1,654,883 | 1,756,791 | |||||||||||||||
| $ | 52,896,307 | $ | 53,149,109 | $ | 51,531,320 | $ | 51,361,414 | $ | 50,807,708 | |||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
Noninterest-bearing demand | $ | 16,185,140 | $ | 16,110,857 | $ | 14,911,729 | $ | 14,475,383 | $ | 13,790,615 | ||||||||||
Interest-bearing: | ||||||||||||||||||||
Savings and NOW | 7,406,910 | 7,159,101 | 6,711,002 | 6,555,306 | 6,494,013 | |||||||||||||||
Money market | 14,813,495 | 14,616,740 | 14,576,527 | 14,948,065 | 14,874,507 | |||||||||||||||
Time | 3,326,717 | 3,413,550 | 3,536,755 | 3,775,409 | 3,944,492 | |||||||||||||||
Foreign | 1,366,826 | 1,575,361 | 1,627,135 | 1,437,067 | 1,488,807 | |||||||||||||||
| 43,099,088 | 42,875,609 | 41,363,148 | 41,191,230 | 40,592,434 | ||||||||||||||||
| Securities sold, not yet purchased | 47,404 | 44,486 | 30,070 | 42,709 | 101,406 | |||||||||||||||
| Federal funds purchased and security repurchase agreements | 486,808 | 608,098 | 630,901 | 630,058 | 727,764 | |||||||||||||||
| Other short-term borrowings | 19,839 | 70,273 | 125,290 | 147,945 | 182,167 | |||||||||||||||
| Long-term debt | 2,283,121 | 1,954,462 | 1,898,439 | 1,879,669 | 1,913,083 | |||||||||||||||
| Reserve for unfunded lending commitments | 98,718 | 102,422 | 98,062 | 100,264 | 102,168 | |||||||||||||||
| Other liabilities | 474,551 | 510,531 | 466,493 | 456,448 | 444,099 | |||||||||||||||
Total liabilities | 46,509,529 | 46,165,881 | 44,612,403 | 44,448,323 | 44,063,121 | |||||||||||||||
| Shareholders’ equity: | ||||||||||||||||||||
Preferred stock, without par value, authorized 4,400,000 shares | 1,737,633 | 2,377,560 | 2,354,523 | 2,329,370 | 2,162,399 | |||||||||||||||
Common stock, without par value; authorized 350,000,000 | ||||||||||||||||||||
shares; issued and outstanding 184,228,178, 184,135,388, | ||||||||||||||||||||
184,294,782, 184,311,290, and 183,854,486 shares | 4,162,522 | 4,163,242 | 4,160,697 | 4,158,369 | 4,178,369 | |||||||||||||||
| Retained earnings | 1,060,525 | 1,036,590 | 994,380 | 931,345 | 904,247 | |||||||||||||||
| Accumulated other comprehensive income (loss) | (571,567 | ) | (592,084 | ) | (588,834 | ) | (504,491 | ) | (499,163 | ) | ||||||||||
Controlling interest shareholders’ equity | 6,389,113 | 6,985,308 | 6,920,766 | 6,914,593 | 6,745,852 | |||||||||||||||
| Noncontrolling interests | (2,335 | ) | (2,080 | ) | (1,849 | ) | (1,502 | ) | (1,265 | ) | ||||||||||
Total shareholders’ equity | 6,386,778 | 6,983,228 | 6,918,917 | 6,913,091 | 6,744,587 | |||||||||||||||
| $ | 52,896,307 | $ | 53,149,109 | $ | 51,531,320 | $ | 51,361,414 | $ | 50,807,708 | |||||||||||
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| ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| Press Release – Page 11 | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| (In thousands, except per share amounts) | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||||
| Interest income: | ||||||||||||||||||||
Interest and fees on loans | $ | 486,615 | $ | 504,243 | $ | 520,133 | $ | 523,741 | $ | 518,157 | ||||||||||
Interest on money market investments | 4,628 | 4,308 | 3,482 | 3,199 | 2,843 | |||||||||||||||
Interest on securities: | ||||||||||||||||||||
Held-to-maturity | 8,959 | 9,106 | 8,937 | 9,009 | 8,664 | |||||||||||||||
Available-for-sale | 23,158 | 21,268 | 21,382 | 22,179 | 22,276 | |||||||||||||||
Trading account | 338 | 548 | 462 | 538 | 452 | |||||||||||||||
Total interest income | 523,698 | 539,473 | 554,396 | 558,666 | 552,392 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
Interest on deposits | 23,413 | 26,645 | 31,093 | 34,257 | 36,484 | |||||||||||||||
Interest on short-term borrowings | 779 | 1,221 | 1,501 | 1,783 | 2,180 | |||||||||||||||
Interest on long-term debt | 57,207 | 49,699 | 51,207 | 106,454 | 89,872 | |||||||||||||||
Total interest expense | 81,399 | 77,565 | 83,801 | 142,494 | 128,536 | |||||||||||||||
Net interest income | 442,299 | 461,908 | 470,595 | 416,172 | 423,856 | |||||||||||||||
| Provision for loan losses | 15,664 | (1,476 | ) | 14,553 | 1,330 | 60,000 | ||||||||||||||
Net interest income after provision for loan losses | 426,635 | 463,384 | 456,042 | 414,842 | 363,856 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
Service charges and fees on deposit accounts | 43,532 | 42,873 | 44,154 | 42,878 | 44,530 | |||||||||||||||
Other service charges, commissions and fees | 34,226 | 38,539 | 45,308 | 43,958 | 41,685 | |||||||||||||||
Trust and wealth management income | 6,374 | 6,481 | 6,269 | 7,179 | 6,754 | |||||||||||||||
Capital markets and foreign exchange | 5,734 | 8,106 | 7,729 | 8,358 | 7,214 | |||||||||||||||
Dividends and other investment income | 9,480 | 7,805 | 9,356 | 17,239 | 8,028 | |||||||||||||||
Loan sales and servicing income | 8,352 | 6,058 | 6,165 | 9,836 | 6,013 | |||||||||||||||
Fair value and nonhedge derivative income (loss) | (4,400 | ) | (4,677 | ) | (5,718 | ) | 4,195 | 1,220 | ||||||||||||
Equity securities gains (losses), net | 9,145 | 1,961 | 5,289 | (1,636 | ) | 897 | ||||||||||||||
Fixed income securities gains (losses), net | 720 | 1,288 | 13,035 | (2,396 | ) | (59 | ) | |||||||||||||
Impairment losses on investment securities: | ||||||||||||||||||||
Impairment losses on investment securities | (18,273 | ) | (12,351 | ) | (55,530 | ) | (6,339 | ) | (3,105 | ) | ||||||||||
Noncredit-related losses on securities not expected to | ||||||||||||||||||||
be sold (recognized in other comprehensive income) | 8,064 | 265 | 42,196 | 1,181 | - | |||||||||||||||
Net impairment losses on investment securities | (10,209 | ) | (12,086 | ) | (13,334 | ) | (5,158 | ) | (3,105 | ) | ||||||||||
Other | 4,045 | 1,956 | 2,789 | 3,896 | 20,966 | |||||||||||||||
Total noninterest income | 106,999 | 98,304 | 121,042 | 128,349 | 134,143 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
Salaries and employee benefits | 224,634 | 220,290 | 216,855 | 222,138 | 215,010 | |||||||||||||||
Occupancy, net | 27,951 | 27,899 | 29,040 | 27,588 | 28,010 | |||||||||||||||
Furniture and equipment | 26,792 | 27,036 | 26,852 | 26,153 | 25,662 | |||||||||||||||
Other real estate expense | 7,810 | 14,936 | 20,564 | 17,903 | 24,167 | |||||||||||||||
Credit related expense | 13,485 | 14,213 | 15,379 | 17,124 | 14,913 | |||||||||||||||
Provision for unfunded lending commitments | (3,704 | ) | 4,360 | (2,202 | ) | (1,904 | ) | (9,540 | ) | |||||||||||
Legal and professional services | 11,096 | 14,974 | 8,897 | 8,432 | 6,689 | |||||||||||||||
Advertising | 5,807 | 7,780 | 6,511 | 5,962 | 6,911 | |||||||||||||||
FDIC premiums | 10,919 | 12,012 | 12,573 | 15,232 | 24,101 | |||||||||||||||
Amortization of core deposit and other intangibles | 4,291 | 4,741 | 4,773 | 4,855 | 5,701 | |||||||||||||||
Other | 63,291 | 76,799 | 69,776 | 72,773 | 66,751 | |||||||||||||||
Total noninterest expense | 392,372 | 425,040 | 409,018 | 416,256 | 408,375 | |||||||||||||||
Income before income taxes | 141,262 | 136,648 | 168,066 | 126,935 | 89,624 | |||||||||||||||
| Income taxes | 51,859 | 47,877 | 59,348 | 54,325 | 37,033 | |||||||||||||||
Net income | 89,403 | 88,771 | 108,718 | 72,610 | 52,591 | |||||||||||||||
| Net income (loss) applicable to noncontrolling interests | (273 | ) | (248 | ) | (375 | ) | (265 | ) | (226 | ) | ||||||||||
Net income applicable to controlling interest | 89,676 | 89,019 | 109,093 | 72,875 | 52,817 | |||||||||||||||
| Preferred stock dividends | (64,187 | ) | (44,599 | ) | (43,928 | ) | (43,837 | ) | (38,050 | ) | ||||||||||
Net earnings applicable to common shareholders | $ | 25,489 | $ | 44,420 | $ | 65,165 | $ | 29,038 | $ | 14,767 | ||||||||||
| Weighted average common shares outstanding during the period: | ||||||||||||||||||||
Basic shares | 182,798 | 182,703 | 182,676 | 182,472 | 181,707 | |||||||||||||||
Diluted shares | 182,964 | 182,823 | 182,858 | 182,728 | 181,998 | |||||||||||||||
| Net earnings per common share: | ||||||||||||||||||||
Basic | $ | 0.14 | $ | 0.24 | $ | 0.35 | $ | 0.16 | $ | 0.08 | ||||||||||
Diluted | 0.14 | 0.24 | 0.35 | 0.16 | 0.08 | |||||||||||||||
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| ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| Press Release – Page 12 | ||||||||||||||||||||
| Loan Balances By Portfolio Type | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (In millions) | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||||
| Commercial: | ||||||||||||||||||||
Commercial and industrial | $ | 10,157 | $ | 10,335 | $ | 9,733 | $ | 9,520 | $ | 9,223 | ||||||||||
Leasing | 394 | 380 | 366 | 365 | 366 | |||||||||||||||
Owner occupied | 7,887 | 8,159 | 8,326 | 8,419 | 8,247 | |||||||||||||||
Municipal | 441 | 441 | 440 | 448 | 435 | |||||||||||||||
Total commercial | 18,879 | 19,315 | 18,865 | 18,752 | 18,271 | |||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
Construction and land development | 2,100 | 2,265 | 2,467 | 2,748 | 2,945 | |||||||||||||||
Term | 8,070 | 7,883 | 7,723 | 7,701 | 7,837 | |||||||||||||||
Total commercial real estate | 10,170 | 10,148 | 10,190 | 10,449 | 10,782 | |||||||||||||||
| Consumer: | ||||||||||||||||||||
Home equity credit line | 2,167 | 2,187 | 2,161 | 2,143 | 2,123 | |||||||||||||||
1-4 family residential | 3,875 | 3,921 | 3,891 | 3,807 | 3,625 | |||||||||||||||
Construction and other consumer real estate | 316 | 306 | 303 | 308 | 324 | |||||||||||||||
Bankcard and other revolving plans | 274 | 291 | 278 | 280 | 275 | |||||||||||||||
Other | 223 | 226 | 236 | 231 | 233 | |||||||||||||||
Total consumer | 6,855 | 6,931 | 6,869 | 6,769 | 6,580 | |||||||||||||||
FDIC-supported loans 1 | 687 | 751 | 801 | 854 | 913 | |||||||||||||||
Total loans | $ | 36,591 | $ | 37,145 | $ | 36,725 | $ | 36,824 | $ | 36,546 | ||||||||||
1 FDIC-supported loans represent loans acquired from the FDIC subject to loss sharing agreements. | ||||||||||||||||||||
FDIC-Supported Loans – Effect of Higher Accretion | ||||||||||||||||||||
and Impact on FDIC Indemnification Asset | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (In thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||||
| Balance sheet: | ||||||||||||||||||||
Change in assets from reestimation of cash flows – | ||||||||||||||||||||
increase (decrease): | ||||||||||||||||||||
FDIC-supported loans | $ | 13,171 | $ | 17,003 | $ | 20,642 | $ | 21,467 | $ | 19,257 | ||||||||||
FDIC indemnification asset (included in other assets) | (10,002 | ) | (13,126 | ) | (15,431 | ) | (14,975 | ) | (13,088 | ) | ||||||||||
| Balance at end of period: | ||||||||||||||||||||
FDIC-supported loans | 687,126 | 750,870 | 800,454 | 853,875 | 912,822 | |||||||||||||||
FDIC indemnification asset (included in other assets) | 106,477 | 120,358 | 135,299 | 150,557 | 172,170 | |||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||||
| Statement of income: | ||||||||||||||||||||
| Interest income: | ||||||||||||||||||||
Interest and fees on loans | $ | 13,171 | $ | 17,003 | $ | 20,642 | $ | 21,467 | $ | 19,257 | ||||||||||
| Noninterest expense: | ||||||||||||||||||||
Other noninterest expense | 10,002 | 13,126 | 15,431 | 14,975 | 13,088 | |||||||||||||||
Net increase in pretax income | $ | 3,169 | $ | 3,877 | $ | 5,211 | $ | 6,492 | $ | 6,169 | ||||||||||
- more -
| ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| Press Release – Page 13 | ||||||||||||||||||||
| Nonperforming Lending-Related Assets | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Amounts in thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||||
| Nonaccrual loans | $ | 849,543 | $ | 885,608 | $ | 1,038,803 | $ | 1,243,304 | $ | 1,379,521 | ||||||||||
| Other real estate owned | 129,676 | 128,874 | 170,023 | 195,005 | 225,005 | |||||||||||||||
Nonperforming lending-related assets, excluding | ||||||||||||||||||||
FDIC-supported assets | 979,219 | 1,014,482 | 1,208,826 | 1,438,309 | 1,604,526 | |||||||||||||||
| FDIC-supported nonaccrual loans | 22,623 | 24,267 | 29,082 | 30,414 | 32,935 | |||||||||||||||
| FDIC-supported other real estate owned | 28,916 | 24,304 | 33,150 | 43,985 | 43,871 | |||||||||||||||
FDIC-supported nonperforming assets | 51,539 | 48,571 | 62,232 | 74,399 | 76,806 | |||||||||||||||
Total nonperforming lending-related assets | $ | 1,030,758 | $ | 1,063,053 | $ | 1,271,058 | $ | 1,512,708 | $ | 1,681,332 | ||||||||||
Ratio of nonperforming lending-related assets to loans 1 | ||||||||||||||||||||
and leases and other real estate owned | 2.79 | % | 2.83 | % | 3.43 | % | 4.06 | % | 4.54 | % | ||||||||||
| Accruing loans past due 90 days or more, excluding | ||||||||||||||||||||
FDIC-supported loans | $ | 35,014 | $ | 19,145 | $ | 15,863 | $ | 19,195 | $ | 14,830 | ||||||||||
| FDIC-supported loans past due 90 days or more | 76,945 | 74,611 | 85,714 | 89,554 | 94,715 | |||||||||||||||
| Ratio of accruing loans past due 90 days or more to | ||||||||||||||||||||
loans 1 and leases | 0.30 | % | 0.25 | % | 0.28 | % | 0.29 | % | 0.30 | % | ||||||||||
| Nonaccrual loans and accruing loans past due 90 days or more | $ | 984,125 | $ | 1,003,631 | $ | 1,169,462 | $ | 1,382,467 | $ | 1,522,001 | ||||||||||
| Ratio of nonaccrual loans and accruing loans past due | ||||||||||||||||||||
90 days or more to loans 1 and leases | 2.68 | % | 2.69 | % | 3.17 | % | 3.74 | % | 4.14 | % | ||||||||||
| Accruing loans past due 30 - 89 days, excluding | ||||||||||||||||||||
FDIC-supported loans | $ | 174,382 | $ | 183,976 | $ | 174,250 | $ | 170,782 | $ | 233,601 | ||||||||||
| FDIC-supported loans past due 30 - 89 days | 13,899 | 24,691 | 13,816 | 21,520 | 22,492 | |||||||||||||||
| Restructured loans included in nonaccrual loans | 276,669 | 295,825 | 308,159 | 324,077 | 344,024 | |||||||||||||||
| Restructured loans on accrual | 401,554 | 448,109 | 430,253 | 393,602 | 366,440 | |||||||||||||||
| Classified loans, excluding FDIC-supported loans | 2,076,220 | 2,056,472 | 2,361,574 | 2,675,741 | 3,045,509 | |||||||||||||||
1 Includes loans held for sale. | ||||||||||||||||||||
- more -
| ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| Press Release – Page 14 | ||||||||||||||||||||
| Allowance for Credit Losses | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| (Amounts in thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||||
| Allowance for Loan Losses | ||||||||||||||||||||
| Balance at beginning of period | $ | 1,049,958 | $ | 1,148,903 | $ | 1,237,733 | $ | 1,349,800 | $ | 1,440,341 | ||||||||||
| Add: | ||||||||||||||||||||
Provision for losses | 15,664 | (1,476 | ) | 14,553 | 1,330 | 60,000 | ||||||||||||||
Adjustment for FDIC-supported loans | (1,057 | ) | (2,655 | ) | (1,520 | ) | (162 | ) | (4,514 | ) | ||||||||||
| Deduct: | ||||||||||||||||||||
Gross loan and lease charge-offs | (80,014 | ) | (120,599 | ) | (129,146 | ) | (142,444 | ) | (167,968 | ) | ||||||||||
Recoveries | 25,508 | 25,785 | 27,283 | 29,209 | 21,941 | |||||||||||||||
Net loan and lease charge-offs | (54,506 | ) | (94,814 | ) | (101,863 | ) | (113,235 | ) | (146,027 | ) | ||||||||||
| Balance at end of period | $ | 1,010,059 | $ | 1,049,958 | $ | 1,148,903 | $ | 1,237,733 | $ | 1,349,800 | ||||||||||
| Ratio of allowance for loan losses to loans and | ||||||||||||||||||||
leases, at period end | 2.76 | % | 2.83 | % | 3.13 | % | 3.36 | % | 3.69 | % | ||||||||||
| Ratio of allowance for loan losses to nonperforming | ||||||||||||||||||||
loans, at period end | 115.81 | % | 115.40 | % | 107.59 | % | 97.17 | % | 95.56 | % | ||||||||||
| Annualized ratio of net loan and lease charge-offs to | ||||||||||||||||||||
average loans | 0.59 | % | 1.03 | % | 1.11 | % | 1.23 | % | 1.59 | % | ||||||||||
| Reserve for Unfunded Lending Commitments | ||||||||||||||||||||
| Balance at beginning of period | $ | 102,422 | $ | 98,062 | $ | 100,264 | $ | 102,168 | $ | 111,708 | ||||||||||
| Provision charged (credited) to earnings | (3,704 | ) | 4,360 | (2,202 | ) | (1,904 | ) | (9,540 | ) | |||||||||||
| Balance at end of period | $ | 98,718 | $ | 102,422 | $ | 98,062 | $ | 100,264 | $ | 102,168 | ||||||||||
| Total Allowance for Credit Losses | ||||||||||||||||||||
| Allowance for loan losses | $ | 1,010,059 | $ | 1,049,958 | $ | 1,148,903 | $ | 1,237,733 | $ | 1,349,800 | ||||||||||
| Reserve for unfunded lending commitments | 98,718 | 102,422 | 98,062 | 100,264 | 102,168 | |||||||||||||||
| Total allowance for credit losses | $ | 1,108,777 | $ | 1,152,380 | $ | 1,246,965 | $ | 1,337,997 | $ | 1,451,968 | ||||||||||
| Ratio of total allowance for credit losses | ||||||||||||||||||||
to loans and leases outstanding, at period end | 3.03 | % | 3.10 | % | 3.40 | % | 3.63 | % | 3.97 | % | ||||||||||
- more -
| ZIONS BANCORPORATION AND SUBSIDIARIES | |||||||||||||||||||
| Press Release – Page 15 | |||||||||||||||||||
| Nonaccrual Loans By Portfolio Type | |||||||||||||||||||
| (Excluding FDIC-Supported Loans) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| (In millions) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
| 2012 | 2011 | 2011 | 2011 | 2011 | |||||||||||||||
| Loans held for sale | $ | - | $ | 18 | $ | 18 | $ | 17 | $ | 21 | |||||||||
| Commercial: | |||||||||||||||||||
Commercial and industrial | 149 | 127 | 176 | 186 | 213 | ||||||||||||||
Leasing | 1 | 2 | 1 | 1 | 1 | ||||||||||||||
Owner occupied | 245 | 239 | 268 | 314 | 317 | ||||||||||||||
Municipal | - | - | - | 6 | 2 | ||||||||||||||
Total commercial | 395 | 368 | 445 | 507 | 533 | ||||||||||||||
| Commercial real estate: | |||||||||||||||||||
Construction and land development | 148 | 220 | 245 | 344 | 399 | ||||||||||||||
Term | 191 | 156 | 189 | 233 | 270 | ||||||||||||||
Total commercial real estate | 339 | 376 | 434 | 577 | 669 | ||||||||||||||
| Consumer: | |||||||||||||||||||
Home equity credit line | 17 | 18 | 15 | 13 | 13 | ||||||||||||||
1-4 family residential | 87 | 91 | 108 | 110 | 119 | ||||||||||||||
Construction and other consumer real estate | 8 | 12 | 16 | 16 | 21 | ||||||||||||||
Bankcard and other revolving plans | 1 | - | - | - | - | ||||||||||||||
Other | 3 | 3 | 3 | 3 | 4 | ||||||||||||||
Total consumer | 116 | 124 | 142 | 142 | 157 | ||||||||||||||
Total nonaccrual loans | $ | 850 | $ | 886 | $ | 1,039 | $ | 1,243 | $ | 1,380 | |||||||||
| Net Charge-Offs By Portfolio Type | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| (In millions) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
| 2012 | 2011 | 2011 | 2011 | 2011 | |||||||||||||||
| Commercial: | |||||||||||||||||||
Commercial and industrial | $ | 17 | $ | 9 | $ | 27 | $ | 18 | $ | 31 | |||||||||
Leasing | - | - | - | - | - | ||||||||||||||
Owner occupied | 8 | 33 | 27 | 19 | 22 | ||||||||||||||
Municipal | - | - | - | - | - | ||||||||||||||
Total commercial | 25 | 42 | 54 | 37 | 53 | ||||||||||||||
| Commercial real estate: | |||||||||||||||||||
Construction and land development | (2 | ) | 13 | 17 | 37 | 48 | |||||||||||||
Term | 18 | 24 | 15 | 18 | 22 | ||||||||||||||
Total commercial real estate | 16 | 37 | 32 | 55 | 70 | ||||||||||||||
| Consumer: | |||||||||||||||||||
Home equity credit line | 4 | 6 | 4 | 6 | 6 | ||||||||||||||
1-4 family residential | 7 | 7 | 5 | 11 | 8 | ||||||||||||||
Construction and other consumer real estate | 1 | 1 | 4 | 2 | 4 | ||||||||||||||
Bankcard and other revolving plans | 2 | 2 | 3 | 2 | 3 | ||||||||||||||
Other | - | - | - | - | 2 | ||||||||||||||
Total consumer loans | 14 | 16 | 16 | 21 | 23 | ||||||||||||||
Total net charge-offs | $ | 55 | $ | 95 | $ | 102 | $ | 113 | $ | 146 | |||||||||
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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 | ||||||||||||||||||||||
| March 31, 2012 | December 31, 2011 | September 30, 2011 | ||||||||||||||||||||||
| (In thousands) | Average | Average | Average | Average | Average | Average | ||||||||||||||||||
| balance | rate | balance | rate | balance | rate | |||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||
| Money market investments | $ | 7,282,245 | 0.26 | % | $ | 6,574,588 | 0.26 | % | $ | 5,519,190 | 0.25 | % | ||||||||||||
| Securities: | ||||||||||||||||||||||||
Held-to-maturity | 799,741 | 5.53 | % | 794,030 | 5.60 | % | 821,510 | 5.39 | % | |||||||||||||||
Available-for-sale | 3,093,827 | 3.08 | % | 3,496,842 | 2.47 | % | 3,951,546 | 2.21 | % | |||||||||||||||
Trading account | 41,189 | 3.30 | % | 65,901 | 3.30 | % | 55,214 | 3.32 | % | |||||||||||||||
Total securities | 3,934,757 | 3.58 | % | 4,356,773 | 3.06 | % | 4,828,270 | 2.76 | % | |||||||||||||||
| Loans held for sale | 174,902 | 3.45 | % | 161,134 | 3.45 | % | 118,054 | 4.08 | % | |||||||||||||||
Loans 1: | ||||||||||||||||||||||||
Loans and leases | 36,078,917 | 5.17 | % | 36,122,003 | 5.23 | % | 35,964,005 | 5.39 | % | |||||||||||||||
FDIC-supported loans | 712,877 | 13.29 | % | 775,365 | 14.51 | % | 819,696 | 15.79 | % | |||||||||||||||
Total loans | 36,791,794 | 5.33 | % | 36,897,368 | 5.43 | % | 36,783,701 | 5.62 | % | |||||||||||||||
| Total interest-earning assets | 48,183,698 | 4.41 | % | 47,989,863 | 4.50 | % | 47,249,215 | 4.70 | % | |||||||||||||||
| Cash and due from banks | 1,122,979 | 1,071,368 | 1,036,218 | |||||||||||||||||||||
| Allowance for loan losses | (1,046,709 | ) | (1,128,602 | ) | (1,210,111 | ) | ||||||||||||||||||
| Goodwill | 1,015,129 | 1,015,125 | 1,015,161 | |||||||||||||||||||||
| Core deposit and other intangibles | 65,837 | 70,345 | 75,153 | |||||||||||||||||||||
| Other assets | 3,239,161 | 3,332,441 | 3,407,914 | |||||||||||||||||||||
Total assets | $ | 52,580,095 | $ | 52,350,540 | $ | 51,573,550 | ||||||||||||||||||
| LIABILITIES | ||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
Savings and NOW | $ | 7,200,170 | 0.20 | % | $ | 6,858,799 | 0.23 | % | $ | 6,637,565 | 0.27 | % | ||||||||||||
Money market | 14,701,771 | 0.32 | % | 14,769,654 | 0.36 | % | 14,838,406 | 0.43 | % | |||||||||||||||
Time | 3,369,323 | 0.79 | % | 3,468,855 | 0.84 | % | 3,630,024 | 0.91 | % | |||||||||||||||
Foreign | 1,408,409 | 0.40 | % | 1,634,203 | 0.43 | % | 1,494,995 | 0.55 | % | |||||||||||||||
Total interest-bearing deposits | 26,679,673 | 0.35 | % | 26,731,511 | 0.40 | % | 26,600,990 | 0.46 | % | |||||||||||||||
| Borrowed funds: | ||||||||||||||||||||||||
��Securities sold, not yet purchased | 22,758 | 3.38 | % | 30,704 | 4.11 | % | 31,077 | 4.25 | % | |||||||||||||||
Federal funds purchased and security | ||||||||||||||||||||||||
repurchase agreements | 528,662 | 0.12 | % | 632,030 | 0.11 | % | 616,150 | 0.12 | % | |||||||||||||||
Other short-term borrowings | 48,394 | 3.61 | % | 102,930 | 2.82 | % | 140,252 | 2.79 | % | |||||||||||||||
Long-term debt | 1,991,776 | 11.55 | % | 1,921,251 | 10.26 | % | 1,893,251 | 10.73 | % | |||||||||||||||
Total borrowed funds | 2,591,590 | 9.00 | % | 2,686,915 | 7.52 | % | 2,680,730 | 7.80 | % | |||||||||||||||
| Total interest-bearing liabilities | 29,271,263 | 1.12 | % | 29,418,426 | 1.05 | % | 29,281,720 | 1.14 | % | |||||||||||||||
| Noninterest-bearing deposits | 15,691,499 | 15,469,278 | 14,795,706 | |||||||||||||||||||||
| Other liabilities | 619,231 | 515,595 | 529,343 | |||||||||||||||||||||
Total liabilities | 45,581,993 | 45,403,299 | 44,606,769 | |||||||||||||||||||||
| Shareholders’ equity: | ||||||||||||||||||||||||
Preferred equity | 2,355,549 | 2,365,430 | 2,334,784 | |||||||||||||||||||||
Common equity | 4,644,722 | 4,583,748 | 4,633,555 | |||||||||||||||||||||
Controlling interest shareholders’ equity | 7,000,271 | 6,949,178 | 6,968,339 | |||||||||||||||||||||
Noncontrolling interests | (2,169 | ) | (1,937 | ) | (1,558 | ) | ||||||||||||||||||
Total shareholders’ equity | 6,998,102 | 6,947,241 | 6,966,781 | |||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 52,580,095 | $ | 52,350,540 | $ | 51,573,550 | ||||||||||||||||||
| Spread on average interest-bearing funds | 3.29 | % | 3.45 | % | 3.56 | % | ||||||||||||||||||
| Net yield on interest-earning assets | 3.73 | % | 3.86 | % | 3.99 | % | ||||||||||||||||||
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 | ||||||||||||||||||||
| March 31, 2012 | December 31, 2011 | |||||||||||||||||||
| (Amounts in thousands) | Diluted | Diluted | ||||||||||||||||||
| Amount | EPS | Amount | EPS | |||||||||||||||||
| 1. | Net Earnings Excluding the Effects of the Discount Amortization on | |||||||||||||||||||
| Convertible Subordinated Debt and Additional Accretion on Acquired Loans | ||||||||||||||||||||
| Net earnings applicable to common shareholders (GAAP) | $ | 25,489 | $ | 0.14 | $ | 44,420 | $ | 0.24 | ||||||||||||
| Addback for the after-tax impact of: | ||||||||||||||||||||
Discount amortization on convertible subordinated debt | 6,905 | 0.04 | 6,679 | 0.04 | ||||||||||||||||
Accelerated discount amortization on convertible subordinated debt | 9,920 | 0.05 | 4,687 | 0.03 | ||||||||||||||||
Additional accretion of interest income on acquired loans, net of expense | (1,830 | ) | (0.01 | ) | (2,242 | ) | (0.01 | ) | ||||||||||||
| Net earnings excluding the effects of the discount amortization on convertible | ||||||||||||||||||||
subordinated debt and additional accretion on acquired loans (non-GAAP) | $ | 40,484 | $ | 0.22 | $ | 53,544 | $ | 0.30 | ||||||||||||
| Three Months Ended | ||||||||||||||||||||
| March 31, 2012 | December 31, 2011 | |||||||||||||||||||
| 2. | Core Net Interest Income (NII)/Net Interest Margin (NIM) | NII | NIM | NII | NIM | |||||||||||||||
| Net interest income/net interest margin as reported (GAAP) | $ | 442,299 | 3.73 | % | 1 | $ | 461,908 | 3.86 | % | |||||||||||
| Addback for the pretax impact of: | ||||||||||||||||||||
Discount amortization on convertible subordinated debt | 11,182 | 0.09 | % | 10,817 | 0.09 | % | ||||||||||||||
Accelerated discount amortization on convertible subordinated debt | 12,204 | 0.10 | % | 5,759 | 0.05 | % | ||||||||||||||
Additional accretion of interest income on acquired loans | (13,171 | ) | (0.11 | )% | (17,003 | ) | (0.14 | )% | ||||||||||||
| Core net interest income/net interest margin (non-GAAP) | $ | 452,514 | 3.81 | % | $ | 461,481 | 3.86 | % | ||||||||||||
1 Calculation of net interest margin is based on taxable-equivalent net interest income. | ||||||||||||||||||||
This Press Release presents the following non-GAAP financial measures: 1. Net earnings excluding the effects of the discount amortization on convertible subordinated debt and additional accretion on acquired loans, and 2. Core net interest income/net interest margin. These non-GAAP financial measures exclude the effects of the following adjustments: (i) periodic discount amortization on convertible subordinated debt; (ii) accelerated discount amortization on convertible subordinated debt which has been converted; and (iii) additional accretion of interest income on acquired loans based on increased projected cash flows (net of related expense in 1.).
The identified adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are included where applicable in financial results presented in accordance with GAAP. The Company considers these adjustments to be relevant to ongoing operating results.
The Company believes that excluding the amounts associated with these adjustments to present the non-GAAP financial measures provides a meaningful base for period-to-period and company-to-company comparisons, which will assist investors and analysts in analyzing the operating results of the Company and in predicting future performance. These non-GAAP financial measures are used by management and the Board of Directors to assess the performance of the Company’s business for evaluating bank reporting segment performance, for presentations of Company performance to investors, and for other reasons as may be requested by investors and analysts. The Company further believes that presenting these non-GAAP financial measures will permit investors and analysts 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 to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analyses of results reported under GAAP.
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