***FOR IMMEDIATE RELEASE***
|
| | | | | |
| For: ZIONS BANCORPORATION | | | | | Contact: James Abbott |
| One South Main, 15th Floor | | | | | Tel: (801) 844-7637 |
| Salt Lake City, Utah | | | | | January 26, 2015 |
| Harris H. Simmons | | | | | |
| Chairman/Chief Executive Officer | | | | | |
ZIONS BANCORPORATION REPORTS ANNUAL NET EARNINGS FOR 2014
OF $333 MILLION, OR $1.71 PER DILUTED COMMON SHARE
SALT LAKE CITY, January 26, 2015 – Zions Bancorporation (NASDAQ: ZION) (“Zions” or “the Company”) today reported annual net earnings for 2014 of $333.0 million, or $1.71 per diluted common share, compared to $294.0 million, or $1.58 per diluted common share, for 2013.
Net earnings for the fourth quarter of 2014 were $73.2 million, or $0.36 per diluted common share, compared to $79.1 million, or $0.40 per diluted share for the third quarter of 2014, and $(59.4) million, or $(0.32) per diluted common share for the fourth quarter of 2013. Earnings per share for the fourth quarter of 2013 were adversely impacted by impairment losses on collateralized debt obligation securities (“CDOs”) as a result of the Volcker Rule and the Company’s risk reduction strategies.
Fourth Quarter 2014 Highlights
| |
| • | Net interest income increased to $430 million this quarter from $417 million in the prior quarter, primarily due to lower interest expense that resulted from the redemption of long-term debt during the prior quarter. As a result, the net interest margin increased to 3.25% this quarter from 3.20% in the prior quarter. |
| |
| • | The provision for loan losses increased to $12 million this quarter from a negative $55 million in the prior quarter, as the Company moved to strengthen reserves for its energy-related lending in light of recent declines in energy prices. |
| |
| • | Credit quality metrics were stable to slightly improved, as nonperforming lending-related assets and classified loans each declined 3% this quarter from the prior quarter, and net charge-offs were 0.17% annualized of average loans. |
| |
| • | The estimated Basel I Tier 1 common equity ratio was stable compared to the prior quarter and was among the highest in the industry at 11.92% at December 31, 2014. |
ZIONS BANCORPORATION
Press Release – Page 2
January 26, 2015
“We are encouraged with the continued strength of our capital and credit quality and believe the Company is well positioned for the next several quarters and years,” said Harris H. Simmons, chairman and chief executive officer. “Unemployment in our footprint has declined faster than the national average while job creation and household formation is faster than the national rate. However, we are exercising caution on lending and maintaining strong discipline with our underwriting standards and concentration limits.”
“We know there is concern regarding the potential effect of the decline of oil and gas prices on Zions’ credit quality and loan growth. Our team of energy bankers and executives, most of whom are at our Amegy Bank affiliate, has decades of energy lending experience through multiple oil and gas cycles. We are actively managing our energy-related exposure, including both individual credits and the portfolio as a whole. Our underwriting discipline has remained strong and growth in 2014 was minimal. We added to the energy-related allowance for credit losses this quarter primarily in recognition that, with the decline in oil and gas prices, the inherent credit risk in our energy portfolio has increased. Disciplined underwriting, combined with strong capital and loan loss reserve ratios, position us to deal effectively with challenges that may arise from the current price environment,” Simmons concluded.
Loans
Net loans and leases held for investment increased $324 million, or 0.8%, to $40.1 billion at December 31, 2014 from $39.7 billion at September 30, 2014. Increases of $535 million were primarily in Texas and Utah for commercial and industrial, and construction real estate loans. The increases were partially offset by $211 million of decreases in commercial owner occupied loans predominantly in the Company’s National Real Estate Group, and term commercial real estate loans primarily in Utah and Colorado, resulting from further competitive pressures from life insurance companies in a flat yield curve environment.
Average loans and leases of $39.8 billion during the fourth quarter of 2014 increased from $39.6 billion during the third quarter. Unfunded lending commitments were $17.6 billion at December 31, 2014, compared to $17.5 billion at September 30, 2014.
Energy-Related Exposure
At December 31, 2014, the Company had approximately $3.2 billion of primarily oil and gas energy-related loan balances, representing 7.9% of the total loan portfolio, compared to $3.1 billion and 7.7% at September 30, 2014, respectively. As of December 2014, $17 million (0.5%) of the $3.2 billion outstanding balances were nonperforming. The distribution of energy-related loans by customer market segment is shown in the following schedule.
ZIONS BANCORPORATION
Press Release – Page 3
January 26, 2015
|
| | | | | | | | | | | |
| ENERGY-RELATED EXPOSURE* | | | | | | | |
| (In millions) | December 31, 2014 | | September 30, 2014 |
| | | | | | | | |
| Loans and leases | | | | | | | |
| Oil and gas-related | | $ | 3,172 |
| | | | $ | 3,064 |
| |
| Alternative energy | | 225 |
| | | | 209 |
| |
| Total loans and leases | | 3,397 |
| | | | 3,273 |
| |
| Unused commitments to extend credit | | 2,827 |
| | | | 2,727 |
| |
| Total credit exposure | | $ | 6,224 |
| | | | $ | 6,000 |
| |
| | | | | | | | |
| Private equity investments | | $ | 19 |
| | | | $ | 20 |
| |
|
| | | | | | | | | |
| Distribution of oil and gas-related balances | | | | | | | |
| Upstream – exploration and production | | 32 | % | | | | 34 | % | |
| Midstream – marketing and transportation | | 19 | % | | | | 18 | % | |
| Downstream – refining | | 2 | % | | | | 2 | % | |
| Other non-services | | 2 | % | | | | 2 | % | |
| Oilfield services | | 33 | % | | | | 31 | % | |
| Energy service manufacturing | | 12 | % | | | | 13 | % | |
| Total loans and leases | | 100 | % | | | | 100 | % | |
| |
| * | Many borrowers operate in multiple businesses. Therefore, judgment has been applied in characterizing a borrower as energy-related, and to a particular segment of energy-related activity, e.g., upstream or downstream. |
The Company’s historical energy lending performance has been strong despite significant volatility in both oil and natural gas prices, largely due to efforts of our highly experienced, dedicated team of bankers, conservative underwriting standards, and solid risk management controls, as detailed later. Losses following the 2008-2009 period of oil and gas price volatility were modest, and the Company has applied lessons learned from that cycle to the management of the portfolio.
| |
| • | Historically, the Company’s cumulative energy net charge-offs have been significantly below the cumulative net loss rate of general commercial and industrial lending during the last five years. |
| |
| • | Classified loans increased significantly during the last downturn, but nonaccrual loans increased much more modestly, and annual losses were relatively minor. |
Risk Mitigation. Several factors reduce the risk inherent in the portfolio:
| |
| • | The Company utilizes concentration limits on its energy lending, and such limits served to constrain loan growth during the past several quarters and years. |
| |
| • | The oil and gas energy-related portfolio contains only senior loans – no junior or second lien positions. The Company generally avoids making first liens to borrowers that employ significant leverage through the use of junior liens or large unsecured senior tranches of debt. |
| |
| • | More than 90% of the total energy-related portfolio is secured by reserves, equipment, real estate, and other collateral, or a combination of collateral types. |
ZIONS BANCORPORATION
Press Release – Page 4
January 26, 2015
Regarding upstream exploration and production loans:
| |
| • | Most borrowers have relatively balanced production between oil and gas. Gas prices have experienced a much more muted decline than oil. |
| |
| • | A significant portion of the Company’s reserve-based borrowers are hedged. Of the oil production projected in 2015 and 2016, more than 50% is hedged based on weighted average commitments and the latest data provided by customers. |
| |
| • | The Company applies multiple discounts to the borrower's stated value of the collateral in determining the borrowing base (commitment), to help protect credit quality against significant commodity price declines. |
| |
| • | The Company employs several third-party engineering firms to conduct independent and unbiased evaluations of the energy reserves. The Company also employs internal engineering staff to review the third-party evaluations; such staff report to the chief credit officer. |
| |
| • | Reserve-based commitments are subject to a borrowing base re-determination based on then-current energy prices at least every six months. The Company generally has the right to conduct two other re-determinations during the year. |
Regarding energy service loans:
| |
| • | Because of the potential volatility in cash flows for energy services companies, the Company significantly limits leverage and analyzes the hypothetical performance of such loans under severely reduced cash flows during underwriting. Debt-to-EBITDA ratios for energy services companies were generally in the area of 1.5-to-1 as of the most recent financial statements available from the borrowers. |
| |
| • | Many borrowers are diversified geographically and service both oil and gas related drilling and production. |
| |
| • | Included in the energy service loans shown in the previous schedule are companies that have a concentration of revenues to the energy industry. However, many of these borrowers provide a broad range of products and services to the energy industry, many of which are not subject to the same volatility as new drilling activities. |
In the fourth quarter, observed credit quality in the energy-related portfolio remained strong and was relatively unchanged from the third quarter. During the fourth quarter, the Company conducted certain sensitivity analyses, and based on those analyses, subjected certain energy-related credits to further scrutiny, resulting in a small number of credit downgrades. The fact that the decline in energy prices has basically all taken place in one quarter makes it difficult to see any measurable changes to the financial condition of borrowers, which is a primary driver of individual loan risk grades; such grades, in turn, are a primary driver of the quantitative portion of the allowance for credit losses. Nevertheless, the Company recognizes that some of its energy-related credits likely have incurred losses, assuming current levels of oil and gas prices persist. Therefore, it made changes to certain qualitative adjustment factors that had the effect of increasing the allowance for credit losses by approximately $25 million.
ZIONS BANCORPORATION
Press Release – Page 5
January 26, 2015
Finally, in addition to re-evaluating certain credits and bolstering the allowance for credit losses in the fourth quarter, the Company has initiated the process of interim borrowing base re-determinations on selected borrowers. This is expected to result in some reduction of the size of the lines of credit available to those borrowers, and may result in some credit downgrades. However, the Company believes it is prudent to take early action and secure additional collateral, reduce commitments, etc., rather than wait for the normal borrowing base re-determination period in the spring of 2015.
Deposits
Total deposits increased $1.5 billion to $47.8 billion at December 31, 2014, compared to $46.3 billion at September 30, 2014, due to increases in both commercial and consumer account balances. Average total deposits for the fourth quarter of 2014 increased $1.2 billion, or 3%, to $47.5 billion, compared to $46.3 billion for the third quarter of 2014. Average noninterest-bearing deposits accounted for $0.8 billion of the total quarterly growth and amounted to 44% of total average deposits, up from 41% in the same year-ago period. Deposit increases are usually seasonally strong in the fourth quarter.
Debt and Shareholders’ Equity
After several quarters of increases, accumulated other comprehensive income (loss) declined to $(128) million at December 31, 2014 from $(111) million at September 30, 2014 primarily due to increased pension benefit obligations at December 31, 2014, which resulted from a decline in long-term interest rates and increased life expectancy assumptions.
Tangible book value per common share improved by approximately 1% to $26.27 at December 31, 2014, compared to $26.00 at September 30, 2014. Compared to December 31, 2013, tangible book value per common share improved by approximately 10%.
The estimated Basel I Tier 1 common equity ratio was 11.92% at December 31, 2014, essentially unchanged from 11.86% at September 30, 2014, but improved 17%, or 1.74 percentage points from 10.18% at December 31, 2013, due largely to the issuance of $525 million of common equity in July 2014.
Investment Securities
During the fourth quarter of 2014, the Company sold approximately $195 million par amount of CDO securities ($158 million amortized cost), resulting in net realized losses of $13 million. This compares to sales of $239 million par amount ($174 million amortized cost) during the third quarter, which resulted in net realized losses of $19 million. Gains on paydowns and payoffs of CDO securities were approximately $2 million during the fourth quarter, compared to $5 million during the third quarter. As of December 31, 2014, the Company had either sold or received full payoff of all of its Volcker-prohibited fixed income investment securities.
ZIONS BANCORPORATION
Press Release – Page 6
January 26, 2015
Also during the fourth quarter of 2014, driven by the Federal Reserve’s adoption of the liquidity coverage ratio and consistent with previously stated intentions, the Company purchased approximately $450 million par amount of U.S. agency mortgage-backed securities. These securities have a duration of approximately 3.5 years.
Net Interest Income
Net interest income increased to $430 million in the fourth quarter of 2014 from $417 million in the third quarter. The net interest margin increased to 3.25% in the fourth quarter of 2014, compared to 3.20% in the third quarter of 2014. Interest expense on long-term debt during the fourth quarter declined approximately $12 million due to the effect of long-term debt redemptions during the third quarter.
Noninterest Income
Noninterest income for the fourth quarter of 2014 was $129 million, compared to $116 million for the third quarter of 2014. The increase in dividends and other investment income and equity securities gains was primarily due to approximately $15 million of unrealized gains on Small Business Investment Company investments. This increase was partially offset by $4 million of impairment on certain Volcker-prohibited (“covered”) private equity investments (“PEIs”). During the fourth quarter, the Company sold two covered PEIs of approximately $6 million and, with the impairment charge, recorded the remaining covered portfolio at an estimated market value of $41 million at December 31, 2014.
Noninterest Expense
Noninterest expense for the fourth quarter of 2014 was $412 million, compared to $439 million for the third quarter of 2014. The decrease was due primarily to the $44 million debt extinguishment and a $5 million severance accrual in salaries and benefits that were both recorded in the third quarter, partially offset by (1) the provision for unfunded lending commitments increasing to a positive $2 million in the fourth quarter from a negative $16 million in the prior quarter, and (2) an increase in professional and legal services related to the Company’s CCAR submission and new lending, deposit and reporting systems.
Asset Quality
Nonperforming lending-related assets declined 3% to $326 million at December 31, 2014 from $335 million at September 30, 2014. Classified loans were $1.1 billion at December 31, 2014, compared to $1.2 billion at September 30, 2014, or a decline of 3%. The ratio of nonperforming lending-related assets to loans and leases and other real estate owned decreased to 0.81% at December 31, 2014, compared to 0.84% at September 30, 2014.
Net loan and lease charge-offs were $17 million in the fourth quarter of 2014, compared to $11 million in the third quarter of 2014. Recoveries were $18 million in the fourth quarter, compared to $15 million in the third quarter.
ZIONS BANCORPORATION
Press Release – Page 7
January 26, 2015
Charge-offs during the quarter took place in the commercial portfolio and were not driven by energy-related lending.
The provision for credit losses consists of the provision for loan losses, $12 million in the fourth quarter, plus the provision for unfunded lending commitments of $2 million in the fourth quarter. The provisions for loan losses and unfunded lending commitments in the fourth quarter reflect the Company’s decision to increase the qualitative portion of the reserves due to recent sharp declines in energy prices, offset by continued improvement in credit quality metrics during the quarter. The large negative provisions during the third quarter were due to significant reductions in commitments and outstanding balances of construction and land development loans, which carry a higher reserve ratio, and to sustained improvement in broader economic and credit quality indicators. The allowance for credit losses was $686 million, or 1.71%, of loans and leases at December 31, 2014, compared to $690 million, or 1.74%, of loans and leases at September 30, 2014.
Conference Call
Zions will host a conference call to discuss these fourth quarter results at 5:30 p.m. ET this afternoon (January 26, 2015). 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 55239414, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation website at www.zionsbancorporation.com. 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 Western markets. Zions operates its banking businesses under local management teams and community identities in 11 Western and Southwestern states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. The Company is a national leader in Small Business Administration lending and received 12 “Excellence” awards by Greenwich Associates for the 2013 survey. 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. Statements based on historical data are not intended and should not be understood to indicate the Company’s expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not
ZIONS BANCORPORATION
Press Release – Page 8
January 26, 2015
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 could cause actual results to differ materially from those expressed in the forward-looking statements include the actual amount and duration of declines in the price of oil and gas as well as other factors discussed in the Company’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.
ZIONS BANCORPORATION
Press Release – Page 9
January 26, 2015
FINANCIAL HIGHLIGHTS
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In thousands, except share, per share, and ratio data) | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | December 31,
2013 |
| PER COMMON SHARE | | | | | | | | | |
| Dividends | $ | 0.04 |
| | $ | 0.04 |
| | $ | 0.04 |
| | $ | 0.04 |
| | $ | 0.04 |
|
Book value per common share 1 | 31.39 |
| | 31.14 |
| | 30.77 |
| | 30.19 |
| | 29.57 |
|
Tangible book value per common share 1 | 26.27 |
| | 26.00 |
| | 25.13 |
| | 24.53 |
| | 23.88 |
|
| | | | | | | | | | |
| SELECTED RATIOS | | | | | | | | | |
| Return on average assets | 0.61 | % | | 0.68 | % | | 0.87 | % | | 0.74 | % | | (0.30 | )% |
| Return on average common equity | 4.45 | % | | 5.05 | % | | 7.30 | % | | 5.52 | % | | (4.51 | )% |
| Tangible return on average tangible common equity | 5.42 | % | | 6.19 | % | | 9.07 | % | | 6.96 | % | | (5.45 | )% |
| Net interest margin | 3.25 | % | | 3.20 | % | | 3.29 | % | | 3.31 | % | | 3.33 | % |
| | | | | | | | | | |
| Capital Ratios | | | | | | | | | |
Tangible common equity ratio 1 | 9.49 | % | | 9.70 | % | | 8.60 | % | | 8.24 | % | | 8.02 | % |
Tangible equity ratio 1 | 11.28 | % | | 11.54 | % | | 10.46 | % | | 10.06 | % | | 9.85 | % |
| Average equity to average assets | 13.22 | % | | 12.87 | % | | 12.26 | % | | 11.90 | % | | 11.20 | % |
| | | | | | | | | | |
Risk-Based Capital Ratios 1,2 | | | | | | | | | |
| Basel I: | | | | | | | | | |
| Tier 1 common equity | 11.92 | % | | 11.86 | % | | 10.45 | % | | 10.56 | % | | 10.18 | % |
| Tier 1 leverage | 11.84 | % | | 11.87 | % | | 11.00 | % | | 10.71 | % | | 10.48 | % |
| Tier 1 risk-based capital | 14.47 | % | | 14.43 | % | | 13.00 | % | | 13.19 | % | | 12.77 | % |
| Total risk-based capital | 16.26 | % | | 16.28 | % | | 14.90 | % | | 15.11 | % | | 14.67 | % |
| | | | | | | | | | |
| Taxable-equivalent net interest income | $ | 434,789 |
| | $ | 420,850 |
| | $ | 420,202 |
| | $ | 420,305 |
| | $ | 435,714 |
|
| | | | | | | | | | |
| Weighted average common and common-equivalent shares outstanding | 203,277,500 |
| | 197,271,076 |
| | 185,286,329 |
| | 185,122,844 |
| | 184,208,544 |
|
Common shares outstanding 1 | 203,014,903 |
| | 202,898,491 |
| | 185,112,965 |
| | 184,895,182 |
| | 184,677,696 |
|
| |
2 | Ratios for December 31, 2014 are estimates. |
ZIONS BANCORPORATION
Press Release – Page 10
January 26, 2015
CONSOLIDATED BALANCE SHEETS
|
| | | | | | | | | | | | | | | | | | | |
| (In thousands, except shares) | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | December 31,
2013 |
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | |
| ASSETS | | | | | | | | | |
| Cash and due from banks | $ | 845,905 |
| | $ | 588,691 |
| | $ | 1,384,131 |
| | $ | 1,341,319 |
| | $ | 1,175,083 |
|
| Money market investments: | | | | | | | | | |
| Interest-bearing deposits | 7,174,134 |
| | 7,464,865 |
| | 6,386,353 |
| | 8,157,837 |
| | 8,175,048 |
|
| Federal funds sold and security resell agreements | 1,386,291 |
| | 355,844 |
| | 478,535 |
| | 379,947 |
| | 282,248 |
|
| Investment securities: | | | | | | | | | |
| Held-to-maturity, at adjusted cost (approximate fair value $677,196, $642,529, $643,926, $635,379, and $609,547) | 647,252 |
| | 609,758 |
| | 615,104 |
| | 606,279 |
| | 588,981 |
|
| Available-for-sale, at fair value | 3,844,248 |
| | 3,563,408 |
| | 3,462,809 |
| | 3,423,205 |
| | 3,701,886 |
|
| Trading account, at fair value | 70,601 |
| | 55,419 |
| | 56,572 |
| | 56,172 |
| | 34,559 |
|
| | 4,562,101 |
| | 4,228,585 |
| | 4,134,485 |
| | 4,085,656 |
| | 4,325,426 |
|
| | | | | | | | | | |
| Loans held for sale | 132,504 |
| | 109,139 |
| | 164,374 |
| | 126,344 |
| | 171,328 |
|
| | | | | | | | | | |
| Loans and leases, net of unearned income and fees | 40,064,016 |
| | 39,739,795 |
| | 39,630,363 |
| | 39,198,136 |
| | 39,043,365 |
|
| Less allowance for loan losses | 604,663 |
| | 610,277 |
| | 675,907 |
| | 736,953 |
| | 746,291 |
|
| Loans, net of allowance | 39,459,353 |
| | 39,129,518 |
| | 38,954,456 |
| | 38,461,183 |
| | 38,297,074 |
|
| | | | | | | | | | |
| Other noninterest-bearing investments | 865,950 |
| | 855,743 |
| | 854,978 |
| | 848,775 |
| | 855,642 |
|
| Premises and equipment, net | 829,809 |
| | 811,127 |
| | 803,214 |
| | 785,519 |
| | 726,372 |
|
| Goodwill | 1,014,129 |
| | 1,014,129 |
| | 1,014,129 |
| | 1,014,129 |
| | 1,014,129 |
|
| Core deposit and other intangibles | 25,520 |
| | 28,160 |
| | 30,826 |
| | 33,562 |
| | 36,444 |
|
| Other real estate owned | 18,916 |
| | 27,418 |
| | 27,725 |
| | 39,248 |
| | 46,105 |
|
| Other assets | 890,231 |
| | 845,651 |
| | 878,069 |
| | 807,325 |
| | 926,228 |
|
| | $ | 57,204,843 |
| | $ | 55,458,870 |
| | $ | 55,111,275 |
| | $ | 56,080,844 |
| | $ | 56,031,127 |
|
| | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | |
| Deposits: | | | | | | | | | |
| Noninterest-bearing demand | $ | 20,528,287 |
| | $ | 19,770,405 |
| | $ | 19,609,990 |
| | $ | 19,257,889 |
| | $ | 18,758,753 |
|
| Interest-bearing: | | | | | | | | | |
| Savings and money market | 24,583,636 |
| | 23,742,911 |
| | 23,308,114 |
| | 23,097,351 |
| | 23,029,928 |
|
| Time | 2,406,924 |
| | 2,441,756 |
| | 2,500,303 |
| | 2,528,735 |
| | 2,593,038 |
|
| Foreign | 328,391 |
| | 310,264 |
| | 252,207 |
| | 1,648,111 |
| | 1,980,161 |
|
| | 47,847,238 |
| | 46,265,336 |
| | 45,670,614 |
| | 46,532,086 |
| | 46,361,880 |
|
| | | | | | | | | | |
| Federal funds and other short-term borrowings | 244,223 |
| | 191,798 |
| | 258,401 |
| | 279,837 |
| | 340,348 |
|
| Long-term debt | 1,092,282 |
| | 1,113,677 |
| | 1,933,136 |
| | 2,158,701 |
| | 2,273,575 |
|
| Reserve for unfunded lending commitments | 81,076 |
| | 79,377 |
| | 95,472 |
| | 88,693 |
| | 89,705 |
|
| Other liabilities | 564,049 |
| | 486,523 |
| | 453,562 |
| | 435,311 |
| | 501,056 |
|
| Total liabilities | 49,828,868 |
| | 48,136,711 |
| | 48,411,185 |
| | 49,494,628 |
| | 49,566,564 |
|
| | | | | | | | | | |
| Shareholders’ equity: | | | | | | | | | |
| Preferred stock, without par value, authorized 4,400,000 shares | 1,004,011 |
| | 1,004,006 |
| | 1,004,006 |
| | 1,003,970 |
| | 1,003,970 |
|
| Common stock, without par value; authorized 350,000,000 shares; issued and outstanding 203,014,903, 202,898,491, 185,112,965, 184,895,182, and 184,677,696 shares | 4,723,855 |
| | 4,717,295 |
| | 4,192,136 |
| | 4,185,513 |
| | 4,179,024 |
|
| Retained earnings | 1,776,150 |
| | 1,711,785 |
| | 1,640,785 |
| | 1,542,195 |
| | 1,473,670 |
|
| Accumulated other comprehensive income (loss) | (128,041 | ) | | (110,927 | ) | | (136,837 | ) | | (145,462 | ) | | (192,101 | ) |
| Total shareholders’ equity | 7,375,975 |
| | 7,322,159 |
| | 6,700,090 |
| | 6,586,216 |
| | 6,464,563 |
|
| | $ | 57,204,843 |
| | $ | 55,458,870 |
| | $ | 55,111,275 |
| | $ | 56,080,844 |
| | $ | 56,031,127 |
|
ZIONS BANCORPORATION
Press Release – Page 11
January 26, 2015
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In thousands, except per share amounts) | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | December 31,
2013 |
| Interest income: | | | | | | | | | |
| Interest and fees on loans | $ | 431,083 |
| | $ | 430,415 |
| | $ | 433,801 |
| | $ | 434,344 |
| | $ | 458,493 |
|
| Interest on money market investments | 5,913 |
| | 5,483 |
| | 4,888 |
| | 5,130 |
| | 5,985 |
|
| Interest on securities | 24,963 |
| | 24,377 |
| | 24,502 |
| | 28,094 |
| | 25,539 |
|
| Total interest income | 461,959 |
| | 460,275 |
| | 463,191 |
| | 467,568 |
| | 490,017 |
|
| | | | | | | | | | |
| Interest expense: | | | | | | | | | |
| Interest on deposits | 12,548 |
| | 12,313 |
| | 12,096 |
| | 12,779 |
| | 13,622 |
|
| Interest on short- and long-term borrowings | 18,982 |
| | 31,144 |
| | 34,812 |
| | 38,324 |
| | 44,360 |
|
| Total interest expense | 31,530 |
| | 43,457 |
| | 46,908 |
| | 51,103 |
| | 57,982 |
|
| | | | | | | | | | |
| Net interest income | 430,429 |
| | 416,818 |
| | 416,283 |
| | 416,465 |
| | 432,035 |
|
| Provision for loan losses | 11,587 |
| | (54,643 | ) | | (54,416 | ) | | (610 | ) | | (30,538 | ) |
| Net interest income after provision for loan losses | 418,842 |
| | 471,461 |
| | 470,699 |
| | 417,075 |
| | 462,573 |
|
| | | | | | | | | | |
| Noninterest income: | | | | | | | | | |
| Service charges and fees on deposit accounts | 43,616 |
| | 44,941 |
| | 42,873 |
| | 42,594 |
| | 43,729 |
|
| Other service charges, commissions and fees | 49,479 |
| | 51,005 |
| | 47,513 |
| | 43,519 |
| | 46,877 |
|
| Wealth management income | 8,078 |
| | 7,438 |
| | 7,980 |
| | 7,077 |
| | 8,067 |
|
| Capital markets and foreign exchange | 6,213 |
| | 5,361 |
| | 5,842 |
| | 5,000 |
| | 6,516 |
|
| Dividends and other investment income | 16,479 |
| | 11,324 |
| | 7,995 |
| | 7,864 |
| | 9,898 |
|
| Loan sales and servicing income | 6,447 |
| | 6,793 |
| | 6,335 |
| | 6,474 |
| | 5,155 |
|
| Fair value and nonhedge derivative income (loss) | (961 | ) | | 44 |
| | (1,934 | ) | | (8,539 | ) | | (5,347 | ) |
| Equity securities gains, net | 9,606 |
| | 440 |
| | 2,513 |
| | 912 |
| | 314 |
|
| Fixed income securities gains (losses), net | (11,620 | ) | | (13,901 | ) | | 5,026 |
| | 30,914 |
| | (6,624 | ) |
| Impairment losses on investment securities: | | | | | | | | | |
| Impairment losses on investment securities | — |
| | — |
| | — |
| | (27 | ) | | (141,733 | ) |
| Noncredit-related losses on securities not expected to be sold (recognized in other comprehensive income) | — |
| | — |
| | — |
| | — |
| | — |
|
| Net impairment losses on investment securities | — |
| | — |
| | — |
| | (27 | ) | | (141,733 | ) |
| Other | 2,060 |
| | 2,627 |
| | 707 |
| | 2,531 |
| | 1,998 |
|
| Total noninterest income (loss) | 129,397 |
| | 116,072 |
| | 124,850 |
| | 138,319 |
| | (31,150 | ) |
| | | | | | | | | | |
| Noninterest expense: | | | | | | | | | |
| Salaries and employee benefits | 238,738 |
| | 245,520 |
| | 238,764 |
| | 233,406 |
| | 226,616 |
|
| Occupancy, net | 29,962 |
| | 28,495 |
| | 28,939 |
| | 28,305 |
| | 28,733 |
|
| Furniture, equipment and software | 30,858 |
| | 28,524 |
| | 27,986 |
| | 27,944 |
| | 27,450 |
|
| Other real estate expense | (3,467 | ) | | 875 |
| | (266 | ) | | 1,607 |
| | (1,024 | ) |
| Credit-related expense | 7,465 |
| | 6,475 |
| | 7,139 |
| | 6,906 |
| | 6,509 |
|
| Provision for unfunded lending commitments | 1,699 |
| | (16,095 | ) | | 6,779 |
| | (1,012 | ) | | 5,558 |
|
| Professional and legal services | 26,257 |
| | 16,588 |
| | 12,171 |
| | 10,995 |
| | 23,886 |
|
| Advertising | 5,805 |
| | 6,094 |
| | 6,803 |
| | 6,398 |
| | 5,571 |
|
| FDIC premiums | 8,031 |
| | 8,204 |
| | 8,017 |
| | 7,922 |
| | 8,789 |
|
| Amortization of core deposit and other intangibles | 2,640 |
| | 2,665 |
| | 2,736 |
| | 2,882 |
| | 3,224 |
|
| Debt extinguishment cost | — |
| | 44,422 |
| | — |
| | — |
| | 79,910 |
|
| Other | 64,203 |
| | 66,769 |
| | 66,959 |
| | 72,710 |
| | 79,528 |
|
| Total noninterest expense | 412,191 |
| | 438,536 |
| | 406,027 |
| | 398,063 |
| | 494,750 |
|
| | | | | | | | | | |
| Income (loss) before income taxes | 136,048 |
| | 148,997 |
| | 189,522 |
| | 157,331 |
| | (63,327 | ) |
| Income taxes (benefit) | 47,789 |
| | 53,109 |
| | 69,972 |
| | 56,121 |
| | (21,855 | ) |
| Net income (loss) | 88,259 |
| | 95,888 |
| | 119,550 |
| | 101,210 |
| | (41,472 | ) |
| Preferred stock dividends | (15,053 | ) | | (16,761 | ) | | (15,060 | ) | | (25,020 | ) | | (17,965 | ) |
| Net earnings (loss) applicable to common shareholders | $ | 73,206 |
| | $ | 79,127 |
| | $ | 104,490 |
| | $ | 76,190 |
| | $ | (59,437 | ) |
| | | | | | | | | | |
| Weighted average common shares outstanding during the period: | | | | | | | | |
| Basic shares | 202,783 |
| | 196,687 |
| | 184,668 |
| | 184,440 |
| | 184,209 |
|
| Diluted shares | 203,278 |
| | 197,271 |
| | 185,286 |
| | 185,123 |
| | 184,209 |
|
| | | | | | | | | | |
| Net earnings (loss) per common share: | | | | | | | | | |
| Basic | $ | 0.36 |
| | $ | 0.40 |
| | $ | 0.56 |
| | $ | 0.41 |
| | $ | (0.32 | ) |
| Diluted | 0.36 |
| | 0.40 |
| | 0.56 |
| | 0.41 |
| | (0.32 | ) |
ZIONS BANCORPORATION
Press Release – Page 12
January 26, 2015
CONSOLIDATED STATEMENTS OF INCOME
|
| | | | | | | | | | | |
| | Year Ended December 31, |
| (In thousands, except per share amounts) | 2014 | | 2013 | | 2012 |
| | (Unaudited) | | | | |
| Interest income: | | | | | |
| Interest and fees on loans | $ | 1,729,643 |
| | $ | 1,814,600 |
| | $ | 1,889,884 |
|
| Interest on money market investments | 21,414 |
| | 23,363 |
| | 21,080 |
|
| Interest on securities | 101,936 |
| | 103,442 |
| | 127,758 |
|
| Total interest income | 1,852,993 |
| | 1,941,405 |
| | 2,038,722 |
|
| | | | | | |
| Interest expense: | | | | | |
| Interest on deposits | 49,736 |
| | 58,913 |
| | 80,146 |
|
| Interest on short- and long-term borrowings | 123,262 |
| | 186,164 |
| | 226,636 |
|
| Total interest expense | 172,998 |
| | 245,077 |
| | 306,782 |
|
| | | | | | |
| Net interest income | 1,679,995 |
| | 1,696,328 |
| | 1,731,940 |
|
| Provision for loan losses | (98,082 | ) | | (87,136 | ) | | 14,227 |
|
| Net interest income after provision for loan losses | 1,778,077 |
| | 1,783,464 |
| | 1,717,713 |
|
| | | | | | |
| Noninterest income: | | | | | |
| Service charges and fees on deposit accounts | 174,024 |
| | 176,339 |
| | 176,401 |
|
| Other service charges, commissions and fees | 191,516 |
| | 181,473 |
| | 174,420 |
|
| Wealth management income | 30,573 |
| | 29,913 |
| | 28,402 |
|
| Capital markets and foreign exchange | 22,416 |
| | 28,051 |
| | 26,810 |
|
| Dividends and other investment income | 43,662 |
| | 46,062 |
| | 55,825 |
|
| Loan sales and servicing income | 26,049 |
| | 35,293 |
| | 39,929 |
|
| Fair value and nonhedge derivative loss | (11,390 | ) | | (18,152 | ) | | (21,782 | ) |
| Equity securities gains, net | 13,471 |
| | 8,520 |
| | 11,253 |
|
| Fixed income securities gains (losses), net | 10,419 |
| | (2,898 | ) | | 19,544 |
|
| Impairment losses on investment securities: | | | | | |
| Impairment losses on investment securities | (27 | ) | | (188,606 | ) | | (166,257 | ) |
| Noncredit-related losses on securities not expected to be sold (recognized in other comprehensive income) | — |
| | 23,472 |
| | 62,196 |
|
| Net impairment losses on investment securities | (27 | ) | | (165,134 | ) | | (104,061 | ) |
| Other | 7,925 |
| | 17,940 |
| | 13,129 |
|
| Total noninterest income | 508,638 |
| | 337,407 |
| | 419,870 |
|
| | | | | | |
| Noninterest expense: | | | | | |
| Salaries and employee benefits | 956,428 |
| | 912,918 |
| | 885,661 |
|
| Occupancy, net | 115,701 |
| | 112,303 |
| | 112,947 |
|
| Furniture, equipment and software | 115,312 |
| | 106,629 |
| | 108,990 |
|
| Other real estate expense | (1,251 | ) | | 1,712 |
| | 19,723 |
|
| Credit related expense | 27,985 |
| | 33,653 |
| | 50,518 |
|
| Provision for unfunded lending commitments | (8,629 | ) | | (17,104 | ) | | 4,387 |
|
| Professional and legal services | 66,011 |
| | 67,968 |
| | 52,509 |
|
| Advertising | 25,100 |
| | 23,362 |
| | 25,720 |
|
| FDIC premiums | 32,174 |
| | 38,019 |
| | 43,401 |
|
| Amortization of core deposit and other intangibles | 10,923 |
| | 14,375 |
| | 17,010 |
|
| Debt extinguishment cost | 44,422 |
| | 120,192 |
| | — |
|
| Other | 270,641 |
| | 300,412 |
| | 275,151 |
|
| Total noninterest expense | 1,654,817 |
| | 1,714,439 |
| | 1,596,017 |
|
| | | | | | |
| Income before income taxes | 631,898 |
| | 406,432 |
| | 541,566 |
|
| Income taxes | 226,991 |
| | 142,977 |
| | 193,416 |
|
| Net income | 404,907 |
| | 263,455 |
| | 348,150 |
|
| Net loss applicable to noncontrolling interests | — |
| | (336 | ) | | (1,366 | ) |
| Net income applicable to controlling interest | 404,907 |
| | 263,791 |
| | 349,516 |
|
| Preferred stock dividends | (71,894 | ) | | (95,512 | ) | | (170,885 | ) |
| Preferred stock redemption | — |
| | 125,700 |
| | — |
|
| Net earnings applicable to common shareholders | $ | 333,013 |
| | $ | 293,979 |
| | $ | 178,631 |
|
| | | | | | |
| Weighted average common shares outstanding during the year: | | |
| Basic shares | 192,207 |
| | 183,844 |
| | 183,081 |
|
| Diluted shares | 192,789 |
| | 184,297 |
| | 183,236 |
|
| | | | | | |
| Net earnings per common share: | | | | | |
| Basic | $ | 1.72 |
| | $ | 1.58 |
| | $ | 0.97 |
|
| Diluted | 1.71 |
| | 1.58 |
| | 0.97 |
|
ZIONS BANCORPORATION
Press Release – Page 13
January 26, 2015
Note: FDIC-supported/PCI loans previously disclosed separately have been reclassified beginning this quarter to their respective loan segments and classes due to declining materiality. Subsequent schedules presented herein reflect, as applicable, these reclassifications.
Loan Balances Held for Investment by Portfolio Type
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | December 31,
2013 |
| Commercial: | | | | | | | | | | | | | | | | | | | |
| Commercial and industrial | | $ | 13,163 |
| | | | $ | 12,874 |
| | | | $ | 12,789 |
| | | | $ | 12,493 |
| | | | $ | 12,459 |
| |
| Leasing | | 409 |
| | | | 405 |
| | | | 415 |
| | | | 390 |
| | | | 388 |
| |
| Owner occupied | | 7,351 |
| | | | 7,430 |
| | | | 7,499 |
| | | | 7,460 |
| | | | 7,568 |
| |
| Municipal | | 521 |
| | | | 518 |
| | | | 522 |
| | | | 482 |
| | | | 449 |
| |
| Total commercial | | 21,444 |
| | | | 21,227 |
| | | | 21,225 |
| | | | 20,825 |
| | | | 20,864 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | |
| Construction and land development | | 1,986 |
| | | | 1,895 |
| | | | 2,343 |
| | | | 2,267 |
| | | | 2,193 |
| |
| Term | | 8,127 |
| | | | 8,259 |
| | | | 8,093 |
| | | | 8,239 |
| | | | 8,203 |
| |
| Total commercial real estate | | 10,113 |
| | | | 10,154 |
| | | | 10,436 |
| | | | 10,506 |
| | | | 10,396 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Consumer: | | | | | | | | | | | | | | | | | | | |
| Home equity credit line | | 2,321 |
| | | | 2,266 |
| | | | 2,215 |
| | | | 2,177 |
| | | | 2,147 |
| |
| 1-4 family residential | | 5,201 |
| | | | 5,156 |
| | | | 4,830 |
| | | | 4,800 |
| | | | 4,742 |
| |
| Construction and other consumer real estate | | 371 |
| | | | 350 |
| | | | 339 |
| | | | 330 |
| | | | 325 |
| |
| Bankcard and other revolving plans | | 401 |
| | | | 389 |
| | | | 381 |
| | | | 365 |
| | | | 361 |
| |
| Other | | 213 |
| | | | 198 |
| | | | 204 |
| | | | 195 |
| | | | 208 |
| |
| Total consumer | | 8,507 |
| | | | 8,359 |
| | | | 7,969 |
| | | | 7,867 |
| | | | 7,783 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Total loans | | $ | 40,064 |
| | | | $ | 39,740 |
| | | | $ | 39,630 |
| | | | $ | 39,198 |
| | | | $ | 39,043 |
| |
FDIC-Supported/PCI Loans – Effect of Higher Accretion
and Impact on FDIC Indemnification Asset
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In thousands) | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | December 31,
2013 |
| Balance sheet: | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Change in assets from reestimation of cash flows – increase (decrease): | | | | | | | | | | | | | | | | | | | |
| FDIC-supported/PCI loans | | $ | 8,876 |
| | | | $ | 7,696 |
| | | | $ | 11,701 |
| | | | $ | 18,453 |
| | | | $ | 28,502 |
| |
| FDIC indemnification asset | | (1,532 | ) | | | | (5,935 | ) | | | | (9,314 | ) | | | | (15,972 | ) | | | | (19,934 | ) | |
| | | | | | | | | | | | | | | | | | | | |
| Balance at end of period: | | | | | | | | | | | | | | | | | | | |
| FDIC-supported/PCI loans (included in loans and leases) | | 181,140 |
| | | | 190,441 |
| | | | 250,568 |
| | | | 285,313 |
| | | | 350,271 |
| |
| FDIC indemnification asset (included in other assets) | | 1,605 |
| | | | 759 |
| | | | 5,777 |
| | | | 13,184 |
| | | | 26,411 |
| |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In thousands) | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | December 31,
2013 |
| Statement of income: | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Interest income: | | | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 8,876 |
| | | | $ | 7,696 |
| | | | $ | 11,701 |
| | | | $ | 18,453 |
| | | | $ | 28,502 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Noninterest expense: | | | | | | | | | | | | | | | | | | | |
| Other noninterest expense | | 1,532 |
| | | | 5,935 |
| | | | 9,314 |
| | | | 15,972 |
| | | | 19,934 |
| |
| Net increase in pretax income | | $ | 7,344 |
| | | | $ | 1,761 |
| | | | $ | 2,387 |
| | | | $ | 2,481 |
| | | | $ | 8,568 |
| |
ZIONS BANCORPORATION
Press Release – Page 14
January 26, 2015
Nonperforming Lending-Related Assets
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| (Amounts in thousands) | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | December 31,
2013 |
| | | | | | | | | | |
| Nonaccrual loans | $ | 306,648 |
| | $ | 307,230 |
| | $ | 351,447 |
| | $ | 401,666 |
| | $ | 406,613 |
|
| Other real estate owned | 18,916 |
| | 27,418 |
| | 27,725 |
| | 39,248 |
| | 46,105 |
|
| Total nonperforming lending-related assets | $ | 325,564 |
| | $ | 334,648 |
| | $ | 379,172 |
| | $ | 440,914 |
| | $ | 452,718 |
|
| | | | | | | | | | |
Ratio of nonperforming lending-related assets to loans1 and leases and other real estate owned | 0.81 | % | | 0.84 | % | | 0.95 | % | | 1.12 | % | | 1.15 | % |
| | | | | | | | | | |
| Accruing loans past due 90 days or more | $ | 29,228 |
| | $ | 30,755 |
| | $ | 46,769 |
| | $ | 38,190 |
| | $ | 40,348 |
|
Ratio of accruing loans past due 90 days or more to loans1 and leases | 0.07 | % | | 0.08 | % | | 0.12 | % | | 0.10 | % | | 0.10 | % |
| | | | | | | | | | |
| Nonaccrual loans and accruing loans past due 90 days or more | $ | 335,876 |
| | $ | 337,985 |
| | $ | 398,216 |
| | $ | 439,856 |
| | $ | 446,961 |
|
Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans1 and leases | 0.84 | % | | 0.85 | % | | 1.00 | % | | 1.12 | % | | 1.14 | % |
| | | | | | | | | | |
| Accruing loans past due 30-89 days | $ | 86,488 |
| | $ | 89,081 |
| | $ | 108,083 |
| | $ | 114,405 |
| | $ | 116,512 |
|
| | | | | | | | | | |
| Restructured loans included in nonaccrual loans | 97,779 |
| | 109,673 |
| | 103,157 |
| | 130,534 |
| | 136,135 |
|
| Restructured loans on accrual | 245,550 |
| | 264,994 |
| | 320,206 |
| | 318,886 |
| | 345,299 |
|
| | | | | | | | | | |
| Classified loans | 1,147,106 |
| | 1,187,407 |
| | 1,304,077 |
| | 1,379,501 |
| | 1,333,224 |
|
1 Includes loans held for sale.
ZIONS BANCORPORATION
Press Release – Page 15
January 26, 2015
Allowance for Credit Losses
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (Amounts in thousands) | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | December 31,
2013 |
| Allowance for Loan Losses | | | | | | | | | |
| Balance at beginning of period | $ | 610,277 |
| | $ | 675,907 |
| | $ | 736,953 |
| | $ | 746,291 |
| | $ | 797,523 |
|
| Add: | | | | | | | | | |
| Provision for losses | 11,587 |
| | (54,643 | ) | | (54,416 | ) | | (610 | ) | | (30,538 | ) |
| Adjustment for FDIC-supported/PCI loans | (19 | ) | | (25 | ) | | (444 | ) | | (817 | ) | | (1,481 | ) |
| Deduct: | | | | | | | | | |
| Gross loan and lease charge-offs | (35,544 | ) | | (26,471 | ) | | (23,400 | ) | | (20,795 | ) | | (37,405 | ) |
| Recoveries | 18,362 |
| | 15,509 |
| | 17,214 |
| | 12,884 |
| | 18,192 |
|
| Net loan and lease charge-offs | (17,182 | ) | | (10,962 | ) | | (6,186 | ) | | (7,911 | ) | | (19,213 | ) |
| Balance at end of period | $ | 604,663 |
| | $ | 610,277 |
| | $ | 675,907 |
| | $ | 736,953 |
| | $ | 746,291 |
|
| | | | | | | | | | |
| Ratio of allowance for loan losses to loans and leases, at period end | 1.51 | % | | 1.54 | % | | 1.71 | % | | 1.88 | % | | 1.91 | % |
| | | | | | | | | | |
| Ratio of allowance for loan losses to nonperforming loans, at period end | 197.18 | % | | 198.64 | % | | 192.32 | % | | 183.47 | % | | 183.54 | % |
| | | | | | | | | | |
| Annualized ratio of net loan and lease charge-offs to average loans | 0.17 | % | | 0.11 | % | | 0.06 | % | | 0.08 | % | | 0.20 | % |
| | | | | | | | | | |
| Reserve for Unfunded Lending Commitments | | | | | | | | | |
| Balance at beginning of period | $ | 79,377 |
| | $ | 95,472 |
| | $ | 88,693 |
| | $ | 89,705 |
| | $ | 84,147 |
|
| Provision charged (credited) to earnings | 1,699 |
| | (16,095 | ) | | 6,779 |
| | (1,012 | ) | | 5,558 |
|
| Balance at end of period | $ | 81,076 |
| | $ | 79,377 |
| | $ | 95,472 |
| | $ | 88,693 |
| | $ | 89,705 |
|
| | | | | | | | | | |
| Total Allowance for Credit Losses | | | | | | | | | |
| Allowance for loan losses | $ | 604,663 |
| | $ | 610,277 |
| | $ | 675,907 |
| | $ | 736,953 |
| | $ | 746,291 |
|
| Reserve for unfunded lending commitments | 81,076 |
| | 79,377 |
| | 95,472 |
| | 88,693 |
| | 89,705 |
|
| Total allowance for credit losses | $ | 685,739 |
| | $ | 689,654 |
| | $ | 771,379 |
| | $ | 825,646 |
| | $ | 835,996 |
|
| | | | | | | | | | |
| Ratio of total allowance for credit losses to loans and leases outstanding, at period end | 1.71 | % | | 1.74 | % | | 1.95 | % | | 2.11 | % | | 2.14 | % |
ZIONS BANCORPORATION
Press Release – Page 16
January 26, 2015
Nonaccrual Loans by Portfolio Type
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | December 31,
2013 |
| | | | | | | | | | | | | | | | | | | | |
| Loans held for sale | | $ | — |
| | | | $ | — |
| | | | $ | 29 |
| | | | $ | — |
| | | | $ | — |
| |
| | | | | | | | | | | | | | | | | | | | |
| Commercial: | | | | | | | | | | | | | | | | | | | |
| Commercial and industrial | | 106 |
| | | | 88 |
| | | | 83 |
| | | | 111 |
| | | | 101 |
| |
| Leasing | | — |
| | | | 1 |
| | | | 1 |
| | | | 1 |
| | | | 1 |
| |
| Owner occupied | | 87 |
| | | | 98 |
| | | | 101 |
| | | | 128 |
| | | | 137 |
| |
| Municipal | | 1 |
| | | | 8 |
| | | | 9 |
| | | | 10 |
| | | | 10 |
| |
| Total commercial | | 194 |
| | | | 195 |
| | | | 194 |
| | | | 250 |
| | | | 249 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | |
| Construction and land development | | 24 |
| | | | 25 |
| | | | 24 |
| | | | 29 |
| | | | 29 |
| |
| Term | | 25 |
| | | | 30 |
| | | | 44 |
| | | | 60 |
| | | | 61 |
| |
| Total commercial real estate | | 49 |
| | | | 55 |
| | | | 68 |
| | | | 89 |
| | | | 90 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Consumer: | | | | | | | | | | | | | | | | | | | |
| Home equity credit line | | 12 |
| | | | 12 |
| | | | 11 |
| | | | 10 |
| | | | 9 |
| |
| 1-4 family residential | | 50 |
| | | | 43 |
| | | | 45 |
| | | | 48 |
| | | | 53 |
| |
| Construction and other consumer real estate | | 2 |
| | | | 2 |
| | | | 2 |
| | | | 3 |
| | | | 4 |
| |
| Bankcard and other revolving plans | | — |
| | | | — |
| | | | 1 |
| | | | 1 |
| | | | 1 |
| |
| Other | | — |
| | | | — |
| | | | 1 |
| | | | 1 |
| | | | 1 |
| |
| Total consumer | | 64 |
| | | | 57 |
| | | | 60 |
| | | | 63 |
| | | | 68 |
| |
| Subtotal nonaccrual loans | | 307 |
| | | | 307 |
| | | | 322 |
| | | | 402 |
| | | | 407 |
| |
| Total nonaccrual loans | | $ | 307 |
| | | | $ | 307 |
| | | | $ | 351 |
| | | | $ | 402 |
| | | | $ | 407 |
| |
Net Charge-Offs by Portfolio Type
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In millions) | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | December 31,
2013 |
| Commercial: | | | | | | | | | | | | | | | | | | | |
| Commercial and industrial | | $ | 18 |
| | | | $ | 9 |
| | | | $ | 7 |
| | | | $ | 1 |
| | | | $ | 15 |
| |
| Leasing | | — |
| | | | — |
| | | | — |
| | | | (1 | ) | | | | — |
| |
| Owner occupied | | — |
| | | | 2 |
| | | | (2 | ) | | | | 2 |
| | | | 1 |
| |
| Municipal | | — |
| | | | — |
| | | | — |
| | | | — |
| | | | — |
| |
| Total commercial | | 18 |
| | | | 11 |
| | | | 5 |
| | | | 2 |
| | | | 16 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | |
| Construction and land development | | (1 | ) | | | | (2 | ) | | | | (3 | ) | | | | (2 | ) | | | | (3 | ) | |
| Term | | (1 | ) | | | | 2 |
| | | | 3 |
| | | | 7 |
| | | | 5 |
| |
| Total commercial real estate | | (2 | ) | | | | — |
| | | | — |
| | | | 5 |
| | | | 2 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Consumer: | | | | | | | | | | | | | | | | | | | |
| Home equity credit line | | — |
| | | | — |
| | | | 1 |
| | | | — |
| | | | — |
| |
| 1-4 family residential | | 1 |
| | | | (1 | ) | | | | (1 | ) | | | | 1 |
| | | | — |
| |
| Construction and other consumer real estate | | — |
| | | | — |
| | | | — |
| | | | (1 | ) | | | | — |
| |
| Bankcard and other revolving plans | | — |
| | | | 1 |
| | | | 1 |
| | | | 2 |
| | | | 1 |
| |
| Other | | — |
| | | | — |
| | | | — |
| | | | (1 | ) | | | | — |
| |
| Total consumer loans | | 1 |
| | | | — |
| | | | 1 |
| | | | 1 |
| | | | 1 |
| |
| Total net charge-offs | | $ | 17 |
| | | | $ | 11 |
| | | | $ | 6 |
| | | | $ | 8 |
| | | | $ | 19 |
| |
ZIONS BANCORPORATION
Press Release – Page 17
January 26, 2015
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
| (In thousands) | Average balance | | Average rate | | Average balance | | Average rate | | Average balance | | Average rate |
| ASSETS | | | | | | | | | | | |
| Money market investments | $ | 8,708,616 |
| | 0.27 | % | | $ | 8,489,153 |
| | 0.26 | % | | $ | 7,500,554 |
| | 0.26 | % |
| Securities: | | | | | | | | | | | |
| Held-to-maturity | 634,973 |
| | 4.97 | % | | 612,244 |
| | 5.13 | % | | 600,392 |
| | 5.37 | % |
| Available-for-sale | 3,676,403 |
| | 1.98 | % | | 3,383,618 |
| | 2.10 | % | | 3,355,710 |
| | 2.12 | % |
| Trading account | 69,323 |
| | 3.02 | % | | 50,970 |
| | 3.14 | % | | 66,929 |
| | 3.39 | % |
| Total securities | 4,380,699 |
| | 2.43 | % | | 4,046,832 |
| | 2.57 | % | | 4,023,031 |
| | 2.63 | % |
| | | | | | | | | | | | |
| Loans held for sale | 115,372 |
| | 3.53 | % | | 124,347 |
| | 3.76 | % | | 113,569 |
| | 3.61 | % |
Loans and leases 1 | 39,845,708 |
| | 4.31 | % | | 39,567,789 |
| | 4.33 | % | | 39,544,113 |
| | 4.41 | % |
| Total interest-earning assets | 53,050,395 |
| | 3.49 | % | | 52,228,121 |
| | 3.53 | % | | 51,181,267 |
| | 3.66 | % |
| Cash and due from banks | 768,490 |
| | | | 861,798 |
| | | | 922,421 |
| | |
| Allowance for loan losses | (607,317 | ) | | | | (674,590 | ) | | | | (734,517 | ) | | |
| Goodwill | 1,014,129 |
| | | | 1,014,129 |
| | | | 1,014,129 |
| | |
| Core deposit and other intangibles | 26,848 |
| | | | 29,535 |
| | | | 32,234 |
| | |
| Other assets | 2,692,137 |
| | | | 2,668,896 |
| | | | 2,620,739 |
| | |
| Total assets | $ | 56,944,682 |
| | | | $ | 56,127,889 |
| | | | $ | 55,036,273 |
| | |
| | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | |
| Interest-bearing deposits: | | | | | | | | | | | |
| Savings and money market | $ | 24,089,519 |
| | 0.16 | % | | $ | 23,637,158 |
| | 0.16 | % | | $ | 23,479,755 |
| | 0.15 | % |
| Time | 2,426,878 |
| | 0.45 | % | | 2,466,552 |
| | 0.45 | % | | 2,507,489 |
| | 0.47 | % |
| Foreign | 325,013 |
| | 0.15 | % | | 254,549 |
| | 0.16 | % | | 258,234 |
| | 0.17 | % |
| Total interest-bearing deposits | 26,841,410 |
| | 0.19 | % | | 26,358,259 |
| | 0.19 | % | | 26,245,478 |
| | 0.18 | % |
| Borrowed funds: | | | | | | | | | | | |
| Federal funds and other short-term borrowings | 205,507 |
| | 0.13 | % | | 176,383 |
| | 0.12 | % | | 261,011 |
| | 0.10 | % |
| Long-term debt | 1,102,673 |
| | 6.81 | % | | 1,878,247 |
| | 6.57 | % | | 2,038,810 |
| | 6.84 | % |
| Total borrowed funds | 1,308,180 |
| | 5.76 | % | | 2,054,630 |
| | 6.01 | % | | 2,299,821 |
| | 6.07 | % |
| Total interest-bearing liabilities | 28,149,590 |
| | 0.44 | % | | 28,412,889 |
| | 0.61 | % | | 28,545,299 |
| | 0.66 | % |
| Noninterest-bearing deposits | 20,705,718 |
| | | | 19,932,040 |
| | | | 19,212,574 |
| | |
| Other liabilities | 564,034 |
| | | | 557,604 |
| | | | 529,716 |
| | |
| Total liabilities | 49,419,342 |
| | | | 48,902,533 |
| | | | 48,287,589 |
| | |
| Shareholders’ equity: | | | | | | | | | | | |
| Preferred equity | 1,004,006 |
| | | | 1,004,012 |
| | | | 1,003,988 |
| | |
| Common equity | 6,521,334 |
| | | | 6,221,344 |
| | | | 5,744,696 |
| | |
| Total shareholders’ equity | 7,525,340 |
| | | | 7,225,356 |
| | | | 6,748,684 |
| | |
| Total liabilities and shareholders’ equity | $ | 56,944,682 |
| | | | $ | 56,127,889 |
| | | | $ | 55,036,273 |
| | |
| | | | | | | | | | | | |
| Spread on average interest-bearing funds | | | 3.05 | % | | | | 2.92 | % | | | | 3.00 | % |
| | | | | | | | | | | | |
| Net yield on interest-earning assets | | | 3.25 | % | | | | 3.20 | % | | | | 3.29 | % |
1 Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.
ZIONS BANCORPORATION
Press Release – Page 18
January 26, 2015
CDO Investments – Selected Information Stratified into Performing
Tranches Without Credit Impairment and Nonperforming Tranches
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | December 31, 2014 |
| | | | | | | | | | | Net unrealized (losses) gains recognized in AOCI 1 | | Weighted average discount rate 2 | | % of carrying value
to par |
| (Amounts in millions) | | No. of
tranches | | Par
amount | | Amortized
cost | | Carrying
value | | |
| Performing CDOs | | | | | | | | | | | | | | | | |
| Predominantly bank CDOs | | 17 |
| | $ | 443 |
| | $ | 420 |
| | $ | 325 |
| | | $ | (95 | ) | | | 3.6 | % | | 73% |
| Total performing CDOs | | 17 |
| | 443 |
| | 420 |
| | 325 |
| | | (95 | ) | | | 3.6 | % | | 73% |
| | | | | | | | | | | | | | | | | |
Nonperforming CDOs 3 | | | | | | | | | | | | | | | | |
| CDOs credit impaired prior to last 12 months | | 12 |
| | 279 |
| | 172 |
| | 107 |
| | | (65 | ) | | | 4.9 | % | | 38% |
| CDOs credit impaired during last 12 months | | 1 |
| | 1 |
| | — |
| | — |
| | | — |
| | | 3.4 | % | | —% |
| Total nonperforming CDOs | | 13 |
| | 280 |
| | 172 |
| | 107 |
| | | (65 | ) | | | 4.9 | % | | 38% |
| | | | | | | | | | | | | | | | | |
| Total CDOs | | 30 |
| | $ | 723 |
| | $ | 592 |
| | $ | 432 |
| | | $ | (160 | ) | | | 4.0 | % | | 60% |
| | | | | | | | | | | | | | | | | |
1 Amounts presented are pretax.
2 Margin over related LIBOR index.
3 Defined as either deferring current interest (“PIKing”) or OTTI.
CDO Investments – Changes in Selected Information
|
| | | | | | | | | | | | | | | | | | | | | |
| | | Changes from December 31, 2013 to December 31, 2014 |
| | | | | | | | | | | Decrease (increase) in net unrealized losses recognized in AOCI |
| (Amounts in millions) | | No. of tranches | | Par amount | | Amortized cost | | Carrying value | |
| Performing CDOs | | | | | | | | | | | | |
| Predominantly bank CDOs | | (6 | ) | | $ | (244 | ) | | $ | (197 | ) | | $ | (174 | ) | | | $ | 23 |
| |
| Insurance CDOs | | (22 | ) | | (433 | ) | | (413 | ) | | (346 | ) | | | 67 |
| |
| Other CDOs | | (3 | ) | | (43 | ) | | (26 | ) | | (26 | ) | | | — |
| |
| Total performing CDOs | | (31 | ) | | (720 | ) | | (636 | ) | | (546 | ) | | | 90 |
| |
| | | | | | | | | | | | | |
| Nonperforming CDOs | | | | | | | | | | | | |
| CDOs credit impaired prior to last 12 months | | (20 | ) | | (335 | ) | | (197 | ) | | (178 | ) | | | 19 |
| |
| CDOs credit impaired during last 12 months | | (22 | ) | | (447 | ) | | (187 | ) | | (147 | ) | | | 40 |
| |
| Total nonperforming CDOs | | (42 | ) | | (782 | ) | | (384 | ) | | (325 | ) | | | 59 |
| |
| | | | | | | | | | | | | |
| Total CDOs | | (73 | ) | | $ | (1,502 | ) | | $ | (1,020 | ) | | $ | (871 | ) | | | $ | 149 |
| |
| | | | | | | | | | | | | |
ZIONS BANCORPORATION
Press Release – Page 19
January 26, 2015
GAAP to Non-GAAP Reconciliations
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| (Amounts in thousands) | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | December 31,
2013 |
| Tangible Book Value per Common Share | | | | | | | | |
| | | | | | | | | | |
| Total shareholders’ equity (GAAP) | $ | 7,375,975 |
| | $ | 7,322,159 |
| | $ | 6,700,090 |
| | $ | 6,586,216 |
| | $ | 6,464,563 |
|
| Preferred stock | (1,004,011 | ) | | (1,004,006 | ) | | (1,004,006 | ) | | (1,003,970 | ) | | (1,003,970 | ) |
| Goodwill | (1,014,129 | ) | | (1,014,129 | ) | | (1,014,129 | ) | | (1,014,129 | ) | | (1,014,129 | ) |
| Core deposit and other intangibles | (25,520 | ) | | (28,160 | ) | | (30,826 | ) | | (33,562 | ) | | (36,444 | ) |
| Tangible common equity (non-GAAP) (a) | $ | 5,332,315 |
| | $ | 5,275,864 |
| | $ | 4,651,129 |
| | $ | 4,534,555 |
| | $ | 4,410,020 |
|
| | | | | | | | | | |
| Common shares outstanding (b) | 203,015 |
| | 202,898 |
| | 185,113 |
| | 184,895 |
| | 184,678 |
|
| | | | | | | | | | |
| Tangible book value per common share (non-GAAP) (a/b) | $ | 26.27 |
| | $ | 26.00 |
| | $ | 25.13 |
| | $ | 24.53 |
| | $ | 23.88 |
|
| | | | | | | | | | |
| | Three Months Ended |
| (Amounts in thousands) | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | December 31,
2013 |
| Tangible Return on Average Tangible Common Equity | | | | | | | | |
| | | | | | | | | | |
| Net earnings (loss) applicable to common shareholders (GAAP) | $ | 73,206 |
| | $ | 79,127 |
| | $ | 104,490 |
| | $ | 76,190 |
| | $ | (59,437 | ) |
| | | | | | | | | | |
| Adjustments, net of tax: | | | | | | | | | |
| Amortization of core deposit and other intangibles | 1,676 |
| | 1,690 |
| | 1,735 |
| | 1,827 |
| | 2,046 |
|
| Net earnings (loss) applicable to common shareholders, excluding the effects of the adjustments, net of tax (non-GAAP) (a) | $ | 74,882 |
| | $ | 80,817 |
| | $ | 106,225 |
| | $ | 78,017 |
| | $ | (57,391 | ) |
| | | | | | | | | | |
| Average common equity (GAAP) | $ | 6,521,334 |
| | $ | 6,221,344 |
| | $ | 5,744,696 |
| | $ | 5,595,363 |
| | $ | 5,233,422 |
|
| Average goodwill | (1,014,129 | ) | | (1,014,129 | ) | | (1,014,129 | ) | | (1,014,129 | ) | | (1,014,129 | ) |
| Average core deposit and other intangibles | (26,848 | ) | | (29,535 | ) | | (32,234 | ) | | (35,072 | ) | | (38,137 | ) |
| Average tangible common equity (non-GAAP) (b) | $ | 5,480,357 |
| | $ | 5,177,680 |
| | $ | 4,698,333 |
| | $ | 4,546,162 |
| | $ | 4,181,156 |
|
| | | | | | | | | | |
| Number of days in quarter (c) | 92 |
| | 92 |
| | 91 |
| | 90 |
| | 92 |
|
| Number of days in year (d) | 365 |
| | 365 |
| | 365 |
| | 365 |
| | 365 |
|
| | | | | | | | | | |
| Tangible return on average tangible common equity (non-GAAP) (a/b/c*d) | 5.42 | % | | 6.19 | % | | 9.07 | % | | 6.96 | % | | (5.45 | )% |
This press release presents the non-GAAP financial measures previously shown. The 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 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 analysis of results reported under GAAP.
