***FOR IMMEDIATE RELEASE***
|
| | | | | |
| For: ZIONS BANCORPORATION | | | | | Contact: James Abbott |
| One South Main, 15th Floor | | | | | Tel: (801) 844-7637 |
| Salt Lake City, Utah | | | | | January 25, 2016 |
| Harris H. Simmons | | | | | |
| Chairman/Chief Executive Officer | | | | | |
ZIONS BANCORPORATION REPORTS FOURTH QUARTER
AND ANNUAL 2015 FINANCIAL RESULTS
SALT LAKE CITY, January 25, 2016 – Zions Bancorporation (NASDAQ: ZION) (“Zions” or “the Company”) today reported net earnings applicable to common shareholders for the fourth quarter of 2015 of $88.2 million, or $0.43 per diluted common share, compared to net earnings applicable to common shareholders of $84.2 million, or $0.41 per diluted common share, for the third quarter of 2015 and $66.8 million, or $0.33 per diluted common share, for the fourth quarter of 2014.
Annual net earnings applicable to common shareholders for 2015 was $246.6 million, or $1.20 per diluted common share, compared to $326.6 million, or $1.68 per diluted common share, for 2014. During the second quarter of 2015, the Company sold the remaining portfolio of its collateralized debt obligation (“CDO”) securities and recognized a one-time pretax loss of approximately $137 million, or $0.42 after-tax per diluted common share. Excluding the loss, net earnings applicable to common shareholders for 2015 was $331.5 million, or $1.62 per diluted common share.
Fourth Quarter 2015 Highlights
| |
| • | The net interest margin increased to 3.23% from 3.11% in the prior quarter, while net interest income increased to $449 million in the fourth quarter of 2015 from $425 million in the third quarter of 2015. Adjusted for recoveries of interest income, the net interest margin was 3.18% in the fourth quarter of 2015. The increase in net interest margin was primarily driven by a change in the mix of interest-earning assets and the maturity of high cost long-term debt. The mix of interest-earning assets changed as cash held in money market investments was transitioned to term investment securities. |
ZIONS BANCORPORATION
Press Release – Page 2
January 25, 2016
| |
| • | The Company achieved positive operating leverage in the fourth quarter and met its goals to keep adjusted noninterest expense below $1.6 billion for the year and the efficiency ratio less than 70% during the second half of 2015. Total adjusted noninterest expense was $403 million during the fourth quarter of 2015 and $1,581 million for 2015. The Company’s efficiency ratio for the fourth quarter of 2015 was 69.8% compared to 69.3% in the third quarter of 2015, resulting in an efficiency ratio of 69.6% for the second half of 2015. The Company is committed to maintaining adjusted noninterest expense below $1.6 billion and achieving an efficiency ratio of less than 66% in 2016. Details of the adjusted noninterest expense and efficiency ratio calculation can be found later in this press release. |
| |
| • | Credit quality remained in line with expectations, with deterioration in energy-related loans and continued strength in other loans. When compared to the prior quarter, classified loans increased 3%, nonperforming assets declined 4%, and the allowance for credit losses increased slightly due to energy-related loans. The Company recorded a provision for loan losses of $22.7 million, primarily related to the energy portfolio, during the fourth quarter of 2015 compared to $18.3 million during the third quarter of 2015. Excluding energy-related loans, the Company experienced a net recovery of $11 million in the fourth quarter of 2015, compared to a net charge-off of $14 million in the third quarter of 2015. |
| |
| • | Net charge-offs for energy-related loans were $24 million during the fourth quarter of 2015 compared to $17 million during the third quarter of 2015. The Company increased the allowance for credit losses on its energy portfolio to greater than 5% of oil and gas-related loans due to the duration and amount of the decline in energy prices. |
| |
| • | Excluding the strategic reduction in energy-related loans, net loans and leases increased $728 million, or 2.0% (8.0% on an annualized basis based on fourth quarter growth) during the quarter, compared to $176 million during the prior quarter calculated on the same basis. |
| |
| • | The Company successfully completed the merger of its seven subsidiary banks to a single national bank charter on December 31, 2015. |
Harris H. Simmons, Chairman and CEO of Zions Bancorporation, stated, “We were encouraged with the relatively strong improvement in net interest income, and when combined with the expected benefit from the December interest rate increase, we expect to see continued expansion in the net interest margin in 2016. Despite some headwinds in loan growth, particularly due to energy-related loan reductions, we experienced improvement in loan growth in the fourth quarter relative to the prior quarter.” Mr. Simmons continued, “Credit quality trends, when taken as a whole, remain strong and Zions’ credit performance ratios are among the strongest in the industry. As expected, credit quality for the energy portfolio deteriorated, although we are pleased with the relatively limited energy net charge-offs during the quarter, and the relatively strong pay-downs and payoffs of energy-related loans in the quarter. We boosted the reserve level in the fourth quarter due to the recent additional weakness in energy
ZIONS BANCORPORATION
Press Release – Page 3
January 25, 2016
commodity prices, but we expect that our loan losses from this portfolio should be manageable.” Mr. Simmons concluded, “Finally, we are encouraged with the successful achievement of our financial goals for the second half of 2015 announced in early June, and expect to continue to make progress toward achieving our 2016 and 2017 targets. In addition to achieving our expense goals, during 2015 we substantially strengthened our balance sheet through the liquidation of our remaining CDO portfolio, completed the consolidation of our bank charters as part of an effort to simplify our structure, and made strong progress on technology initiatives that will provide us with a modern, streamlined and fully integrated core operating platform.”
Loans
Net loans and leases held for investment increased $536 million, or 1.3% (approximately 5% on an annualized basis based on fourth quarter growth) to $40.6 billion at December 31, 2015 from $40.1 billion at September 30, 2015. Excluding the strategic reduction in energy-related loans, net loans and leases increased $728 million, or 2.0% (8.0% on an annualized basis based on fourth quarter growth) during the quarter, compared to $176 million during the prior quarter calculated on the same basis. The increase in loans was primarily related to commercial and industrial and consumer loans across the Company’s geographic footprint.
Average loans and leases held for investment of $40.3 billion during the fourth quarter of 2015 increased slightly from $40.0 billion during the third quarter of 2015. Unfunded lending commitments were $18.1 billion at December 31, 2015, compared to $18.0 billion at September 30, 2015.
Energy-Related Exposure
The overall performance of the energy-related loan portfolio has been substantially consistent with the Company’s initial communications in late 2014, which concluded that credit quality deterioration was expected throughout 2016 due to declining energy prices. During the fourth quarter of 2015, energy-related loans declined $192 million, or 6%, primarily as a result of payoffs and pay-downs; further attrition during the next several quarters is likely.
ZIONS BANCORPORATION
Press Release – Page 4
January 25, 2016
The following table presents the distribution of energy-related loans by customer market segment:
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ENERGY-RELATED EXPOSURE1 | | | | | % of total oil and gas related | | | | | | % of total oil and gas related | | | | | | | | | | % of total oil and gas related |
| (In millions) | December 31,
2015 | | | September 30, 2015 | | | $ change | | % change | | June 30, 2015 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Loans and leases | | | | | | | | | | | | | | | | | | | | | |
| Oil and gas-related: | | | | | | | | | | | | | | | | | | | | | |
| Upstream | $ | 817 |
| | | 31 | % | | | $ | 924 |
| | | 33 | % | | $ | (107 | ) | | (12 | )% | | | $ | 954 |
| | | 33 | % |
| Midstream | 621 |
| | | 23 | % | | | 626 |
| | | 22 | % | | (5 | ) | | (1 | )% | | | 589 |
| | | 20 | % |
| Downstream | | 127 |
| | | 5 | % | | | 124 |
| | | 5 | % | | 3 |
| | 2 | % | | | 131 |
| | | 5 | % |
| Other non-services | | 44 |
| | | 2 | % | | | 55 |
| | | 2 | % | | (11 | ) | | (20 | )% | | | 75 |
| | | 3 | % |
| Oilfield services | | 784 |
| | | 30 | % | | | 825 |
| | | 29 | % | | (41 | ) | | (5 | )% | | | 879 |
| | | 30 | % |
| Energy service manufacturing | | 229 |
| | | 9 | % | | | 251 |
| | | 9 | % | | (22 | ) | | (9 | )% | | | 255 |
| | | 9 | % |
| Total oil and gas related | | 2,622 |
| | | 100 | % | | | 2,805 |
| | | 100 | % | | (183 | ) | | (7 | )% | | | 2,883 |
| | | 100 | % |
| Alternative energy | | 205 |
| | | | | | 214 |
| | | | | (9 | ) | | (4 | )% | | | 222 |
| | | |
| Total loans and leases | | 2,827 |
| | | | | | 3,019 |
| | | | | (192 | ) | | (6 | )% | | | 3,105 |
| | | |
| Unfunded lending commitments | | 2,164 |
| | | | | | 2,364 |
| | | | | (200 | ) | | (8 | )% | | | 2,403 |
| | | |
| Total credit exposure | | $ | 4,991 |
| | | | | | $ | 5,383 |
| | | | | $ | (392 | ) | | (7 | )% | | | $ | 5,508 |
| | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Private equity investments | | $ | 13 |
| | | | | | $ | 17 |
| | | | | $ | (4 | ) | | (24 | )% | | | $ | 18 |
| | | |
|
| | | | | | | | |
| Credit quality measures of oil and gas | | | | | |
| Criticized loan ratio | 30.3 | % | | 23.2 | % | | 20.3 | % |
| Classified loan ratio | 19.7 | % | | 15.7 | % | | 11.3 | % |
| Nonperforming loan ratio | 2.5 | % | | 3.0 | % | | 2.3 | % |
| Net charge-off ratio, annualized | 3.7 | % | | 2.4 | % | | — | % |
| |
1 | Because many borrowers operate in multiple businesses, judgment has been applied in characterizing a borrower as energy-related, including a particular segment of energy-related activity, e.g., upstream or downstream. |
Consistent with management’s expectations, the majority of loan downgrades in the fourth quarter of 2015 reflected deterioration in the financial condition of oilfield services companies, and to a lesser degree a small number of downgrades in the upstream portfolio. As a result of the fall redetermination of exploration and production energy-related loan borrowing bases, the borrowing base for total exploration and production commitments, including new commitments, declined approximately 9% since the spring 2015 redetermination. Energy-related loan net charge-offs were $24 million in the fourth quarter of 2015 and were predominantly in the energy services portfolio, compared to $17 million in the third quarter. The Company has a substantial allowance for credit losses for the portfolio of greater than 5% of oil and gas related loans.
Asset Quality
Despite the deterioration in the energy portfolio in the fourth quarter of 2015, the credit quality of the overall loan portfolio was generally strong. Nonperforming assets declined 4% to $357 million at December 31, 2015 from $372 million at September 30, 2015. Classified loans increased 3% to $1.37 billion at December 31, 2015 from $1.32 billion at September 30, 2015. The ratio of nonperforming assets to loans and leases and other real estate owned declined to 0.87% at December 31, 2015, compared to 0.92% at September 30, 2015. Excluding energy-related
ZIONS BANCORPORATION
Press Release – Page 5
January 25, 2016
loans, the ratio of nonperforming assets was stable compared to the prior quarter, at 0.76%. The allowance for credit losses increased to $681 million, which was 1.68% of loans and leases at December 31, 2015, compared to $678 million, or 1.69% of loans and leases at September 30, 2015.
Total net charge-offs were $13 million in the fourth quarter of 2015, or an annualized 0.13% of average loans, compared to $31 million, or an annualized 0.31% of average loans, in the third quarter of 2015. Excluding energy-related charge-offs, the Company experienced net recoveries of $11 million. The Company provided $22.7 million for loan losses during the fourth quarter of 2015, compared to $18.3 million during the third quarter of 2015, largely reflective of continued weakness in the energy sector.
Deposits
Total deposits increased to a record $50.4 billion at December 31, 2015, compared to $48.9 billion at September 30, 2015, as a result of increases in commercial client balances. Average total deposits increased $1.1 billion to $50.0 billion for the fourth quarter of 2015, compared to $48.9 billion for the third quarter of 2015. Average noninterest bearing deposits increased $796 million to $22.4 billion for the fourth quarter of 2015, compared to $21.6 billion for the third quarter of 2015, and were 45% of average total deposits.
Debt and Shareholders’ Equity
On November 16, 2015, the Company redeemed at maturity approximately $124 million par amount of 5.5% subordinated and convertible notes. The total effective cost of this debt was approximately 14% during 2015; the higher effective cost was due to the amortization of debt discount. The Company recognized $2.3 million of interest expense on this debt in the fourth quarter of 2015 prior to its redemption.
On November 17, 2015 the Company completed a tender offer to purchase $176 million of its Series I preferred stock for an aggregate cash payment of $180 million. Assuming no further tender offers, the preferred dividends for 2016 are expected to be $11.7 million in the first and third quarters and $15.1 million in the second and fourth quarters, respectively. However, the Company’s 2015 capital plan, which runs through the second quarter of 2016, allows for an additional use of up to $120 million of cash for preferred stock redemptions.
Tangible book value per common share increased to $27.63 at December 31, 2015, compared to $27.42 at September 30, 2015.
The estimated Basel III common equity tier 1 (“CET1”) capital ratio was 12.20% at December 31, 2015, compared to 12.16% at September 30, 2015. The fully phased-in ratio was not substantially different.
ZIONS BANCORPORATION
Press Release – Page 6
January 25, 2016
Net Interest Income
Net interest income increased to $449 million in the fourth quarter of 2015 from $425 million in the third quarter of 2015. The net interest margin increased to 3.23% in the fourth quarter of 2015, compared to 3.11% in the third quarter of 2015. The increase in net interest margin was primarily driven by a change in the mix of interest-earning assets, as cash held in money market investments was transitioned to term investment securities. Additionally, the net interest margin benefited from recoveries on previously charged off commercial loans, and high cost long-term debt that matured in the third and fourth quarters. Recoveries on commercial loans had a positive impact of $8 million, equaling 5 basis points benefit to the net interest margin for the quarter. Yields on new loan production increased slightly from the prior quarter, and pricing in medium and larger-sized loans seems to have firmed, while some modest pressure remains on the pricing of small business loans.
Noninterest Income
Noninterest income from customer-related fees in the fourth quarter of 2015 was stable compared to the prior quarter and increased approximately 4% from the prior year period. Most of the year-over-year increase was due to an increase in treasury management fees, credit card and interchange fees, and interest rate swap management fees. Total noninterest income for the fourth quarter of 2015 was $124 million, compared to $131 million for the third quarter of 2015; however, the primary reason for the decline in noninterest income was primarily due write-downs on private equity investments reflected in the dividends and other investment income line.
Noninterest Expense
Noninterest expense for the fourth quarter of 2015 was $403 million, compared to $396 million for the third quarter of 2015, and $423 million for the fourth quarter of 2014. These results reflect our commitment to and achievement of our efficiency ratio and noninterest expense goals for 2015. The increase in total noninterest expense was primarily due to payments related to the loss-sharing agreement with the FDIC, an increase in the accrual for legal-related matters, and fees paid to managers of the Company’s Small Business Investment Company (“SBIC”) investments. The fees were related to a successful IPO for a particular portfolio investment. These increases in noninterest expense were partially offset by a decline in salaries and employee benefits and a negative provision for unfunded lending commitments. The negative provision for unfunded lending commitments was primarily due to the resolution of a letter of credit, which was not energy-related, that has carried a specific reserve for several quarters due to the troubled nature of the borrower.
As previously mentioned, the Company made meaningful progress with its corporate restructuring and cost initiatives during the quarter. At year-end 2015 the Company had achieved approximately 50% of its 2017 goal to achieve gross pre-tax cost savings of $120 million from operational expense initiatives. Adjusted noninterest expense for 2015 was $1,581 million, down approximately 2%, compared to $1,611 million for 2014.
ZIONS BANCORPORATION
Press Release – Page 7
January 25, 2016
Income Taxes
The Company’s effective tax rate for the fourth quarter of 2015 was 30.5%, which is lower than the effective tax rate for the prior year fourth quarter of 34.8%. The decrease was primarily due to a higher level of tax credits generated during 2015 due in part to the Company’s continued investment in technology upgrades.
ZIONS BANCORPORATION
Press Release – Page 8
January 25, 2016
Supplemental Presentation and Conference Call
Zions has posted a supplemental presentation to its website, which will be used to discuss these fourth quarter results at 5:30 p.m. ET this afternoon (January 25, 2016). Media representatives, analysts, investors, and the public are invited to join this discussion by calling 253-237-1247 (domestic and international) and entering the passcode 19851960, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation website at 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 with total assets of approximately $60 billion. Zions operates under local management teams and unique brands 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 public finance advisory services, and is a consistent top recipient of numerous Greenwich Excellence awards in banking. In addition, Zions is included in the S&P 500 and NASDAQ Financial 100 indices. Investor information and links to local banking brands can be accessed at 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 or intentions regarding future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management’s views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that 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, our ability to meet our efficiency and noninterest expense goals, 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 25, 2016
FINANCIAL HIGHLIGHTS
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In thousands, except share, per share, and ratio data) | December 31,
2015 | | September 30,
2015 | | June 30,
2015 | | March 31,
2015 | | December 31,
2014 |
| BALANCE SHEET | | | | | | | | | |
| Loans and leases, net of allowance | $ | 40,043,494 |
| | $ | 39,516,683 |
| | $ | 39,414,609 |
| | $ | 39,560,101 |
| | $ | 39,458,995 |
|
| Total assets | 59,669,525 |
| | 58,410,927 |
| | 58,365,459 |
| | 57,555,931 |
| | 57,208,874 |
|
| Deposits | 50,374,091 |
| | 48,920,147 |
| | 48,937,124 |
| | 48,123,360 |
| | 47,848,075 |
|
| Total shareholders’ equity | 7,507,519 |
| | 7,638,095 |
| | 7,530,175 |
| | 7,454,298 |
| | 7,369,530 |
|
| | | | | | | | | | |
| STATEMENT OF INCOME | | | | | | | | | |
| Net interest income | $ | 448,833 |
| | $ | 425,377 |
| | $ | 423,704 |
| | $ | 417,346 |
| | $ | 430,430 |
|
| Taxable-equivalent net interest income | 453,780 |
| | 429,782 |
| | 428,015 |
| | 421,581 |
| | 434,789 |
|
| Provision for loan losses | 22,701 |
| | 18,262 |
| | 566 |
| | (1,494 | ) | | 11,587 |
|
| Total noninterest income | 124,064 |
| | 130,813 |
| | 421 |
| | 121,822 |
| | 129,396 |
|
| Total noninterest expense | 402,776 |
| | 396,149 |
| | 404,100 |
| | 397,461 |
| | 422,666 |
|
| Net earnings (loss) applicable to common shareholders | 88,197 |
| | 84,238 |
| | (1,100 | ) | | 75,279 |
| | 66,761 |
|
| | | | | | | | | | |
| PER COMMON SHARE | | | | | | | | | |
| Net earnings (loss) per diluted common share | $ | 0.43 |
| | $ | 0.41 |
| | $ | (0.01 | ) | | $ | 0.37 |
| | $ | 0.33 |
|
| Dividends | 0.06 |
| | 0.06 |
| | 0.06 |
| | 0.04 |
| | 0.04 |
|
Book value per common share 1 | 32.67 |
| | 32.47 |
| | 32.03 |
| | 31.74 |
| | 31.35 |
|
Tangible book value per common share 1 | 27.63 |
| | 27.42 |
| | 26.95 |
| | 26.64 |
| | 26.23 |
|
| | | | | | | | | | |
| SELECTED RATIOS | | | | | | | | | |
| Return on average assets | 0.68 | % | | 0.69 | % | | 0.10 | % | | 0.66 | % | | 0.57 | % |
| Return on average common equity | 5.17 | % | | 5.02 | % | | (0.07 | )% | | 4.77 | % | | 4.06 | % |
| Tangible return on average tangible common equity | 6.20 | % | | 6.05 | % | | 0.03 | % | | 5.80 | % | | 4.95 | % |
| Net interest margin | 3.23 | % | | 3.11 | % | | 3.18 | % | | 3.22 | % | | 3.25 | % |
| Efficiency ratio | 69.8 | % | | 69.3 | % | | 71.4 | % | | 72.1 | % | | 74.1 | % |
| Effective tax rate | 30.5 | % | | 28.8 | % | | 28.3 | % | | 35.7 | % | | 34.8 | % |
| Ratio of nonperforming assets to loans and leases and other real estate owned | 0.87 | % | | 0.92 | % | | 0.96 | % | | 0.99 | % | | 0.81 | % |
| Annualized ratio of net loan and lease charge-offs to average loans | 0.13 | % | | 0.31 | % | | 0.11 | % | | (0.17 | )% | | 0.17 | % |
Ratio of total allowance for credit losses to loans and leases outstanding 1 | 1.68 | % | | 1.69 | % | | 1.72 | % | | 1.75 | % | | 1.71 | % |
| | | | | | | | | | |
Capital Ratios 1 | | | | | | | | | |
| Tangible common equity ratio | 9.63 | % | | 9.76 | % | | 9.58 | % | | 9.58 | % | | 9.48 | % |
Basel III: 2 | | | | | | | | | |
| Common equity tier 1 capital | 12.20 | % | | 12.16 | % | | 12.00 | % | | 11.76 | % | | |
| Tier 1 leverage | 11.26 | % | | 11.63 | % | | 11.65 | % | | 11.75 | % | | |
| Tier 1 risk-based capital | 14.06 | % | | 14.41 | % | | 14.26 | % | | 13.93 | % | | |
| Total risk-based capital | 16.10 | % | | 16.46 | % | | 16.32 | % | | 15.97 | % | | |
| Basel I: | | | | | | | | | |
| Tier 1 common equity | | | | | | | | | 11.92 | % |
| Tier 1 leverage | | | | | | | | | 11.82 | % |
| Tier 1 risk-based capital | | | | | | | | | 14.47 | % |
| Total risk-based capital | | | | | | | | | 16.27 | % |
| | | | | | | | | | |
| Weighted average common and common-equivalent shares outstanding | 204,276,930 |
| | 204,154,880 |
| | 202,887,762 |
| | 202,944,209 |
| | 203,277,500 |
|
Common shares outstanding 1 | 204,417,093 |
| | 204,278,594 |
| | 203,740,914 |
| | 203,192,991 |
| | 203,014,903 |
|
| |
2 | Basel III capital ratios became effective January 1, 2015 and are based on a 2015 phase-in. |
ZIONS BANCORPORATION
Press Release – Page 10
January 25, 2016
CONSOLIDATED BALANCE SHEETS
|
| | | | | | | | | | | | | | | | | | | |
| (In thousands, except shares) | December 31,
2015 | | September 30,
2015 | | June 30,
2015 | | March 31,
2015 | | December 31,
2014 |
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | |
| ASSETS | | | | | | | | | |
| Cash and due from banks | $ | 798,319 |
| | $ | 602,694 |
| | $ | 758,238 |
| | $ | 720,858 |
| | $ | 841,942 |
|
| Money market investments: | | | | | | | | | |
| Interest-bearing deposits | 6,108,124 |
| | 6,558,678 |
| | 7,661,311 |
| | 6,791,762 |
| | 7,178,097 |
|
| Federal funds sold and security resell agreements | 619,758 |
| | 1,325,501 |
| | 1,404,246 |
| | 1,519,352 |
| | 1,386,291 |
|
| Investment securities: | | | | | | | | | |
| Held-to-maturity, at adjusted cost (approximate fair value $552,088, $553,088, $578,327, $602,355, and $677,196) | 545,648 |
| | 544,168 |
| | 570,869 |
| | 590,950 |
| | 647,252 |
|
| Available-for-sale, at fair value | 7,643,116 |
| | 6,000,011 |
| | 4,652,415 |
| | 4,450,502 |
| | 3,844,248 |
|
| Trading account, at fair value | 48,168 |
| | 73,521 |
| | 74,519 |
| | 71,392 |
| | 70,601 |
|
| | 8,236,932 |
| | 6,617,700 |
| | 5,297,803 |
| | 5,112,844 |
| | 4,562,101 |
|
| | | | | | | | | | |
| Loans held for sale | 149,880 |
| | 139,122 |
| | 152,448 |
| | 128,946 |
| | 132,504 |
|
| | | | | | | | | | |
| Loans and leases, net of unearned income and fees | 40,649,542 |
| | 40,113,123 |
| | 40,023,984 |
| | 40,180,114 |
| | 40,063,658 |
|
| Less allowance for loan losses | 606,048 |
| | 596,440 |
| | 609,375 |
| | 620,013 |
| | 604,663 |
|
| Loans, net of allowance | 40,043,494 |
| | 39,516,683 |
| | 39,414,609 |
| | 39,560,101 |
| | 39,458,995 |
|
| | | | | | | | | | |
| Other noninterest-bearing investments | 848,144 |
| | 851,225 |
| | 863,443 |
| | 870,125 |
| | 865,950 |
|
| Premises and equipment, net | 905,462 |
| | 873,800 |
| | 856,577 |
| | 844,900 |
| | 829,809 |
|
| Goodwill | 1,014,129 |
| | 1,014,129 |
| | 1,014,129 |
| | 1,014,129 |
| | 1,014,129 |
|
| Core deposit and other intangibles | 16,272 |
| | 18,546 |
| | 20,843 |
| | 23,162 |
| | 25,520 |
|
| Other real estate owned | 7,092 |
| | 12,799 |
| | 13,269 |
| | 17,256 |
| | 18,916 |
|
| Other assets | 921,919 |
| | 880,050 |
| | 908,543 |
| | 952,496 |
| | 894,620 |
|
| | $ | 59,669,525 |
| | $ | 58,410,927 |
| | $ | 58,365,459 |
| | $ | 57,555,931 |
| | $ | 57,208,874 |
|
| | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | |
| Deposits: | | | | | | | | | |
| Noninterest-bearing demand | $ | 22,276,664 |
| | $ | 21,572,022 |
| | $ | 21,557,584 |
| | $ | 20,854,630 |
| | $ | 20,529,124 |
|
| Interest-bearing: | | | | | | | | | |
| Savings and money market | 25,672,356 |
| | 24,690,359 |
| | 24,744,288 |
| | 24,540,927 |
| | 24,583,636 |
|
| Time | 2,130,680 |
| | 2,216,206 |
| | 2,263,146 |
| | 2,344,818 |
| | 2,406,924 |
|
| Foreign | 294,391 |
| | 441,560 |
| | 372,106 |
| | 382,985 |
| | 328,391 |
|
| | 50,374,091 |
| | 48,920,147 |
| | 48,937,124 |
| | 48,123,360 |
| | 47,848,075 |
|
| | | | | | | | | | |
| Federal funds and other short-term borrowings | 346,987 |
| | 272,391 |
| | 227,124 |
| | 203,597 |
| | 244,223 |
|
| Long-term debt | 817,348 |
| | 944,752 |
| | 1,050,938 |
| | 1,089,321 |
| | 1,092,282 |
|
| Reserve for unfunded lending commitments | 74,838 |
| | 81,389 |
| | 79,961 |
| | 82,287 |
| | 81,076 |
|
| Other liabilities | 548,742 |
| | 554,153 |
| | 540,137 |
| | 603,068 |
| | 573,688 |
|
| Total liabilities | 52,162,006 |
| | 50,772,832 |
| | 50,835,284 |
| | 50,101,633 |
| | 49,839,344 |
|
| | | | | | | | | | |
| Shareholders’ equity: | | | | | | | | | |
| Preferred stock, without par value, authorized 4,400,000 shares | 828,490 |
| | 1,004,159 |
| | 1,004,032 |
| | 1,004,032 |
| | 1,004,011 |
|
| Common stock, without par value; authorized 350,000,000 shares; issued and outstanding 204,417,093, 204,278,594, 203,740,914, 203,192,991, and 203,014,903 shares | 4,766,731 |
| | 4,756,288 |
| | 4,738,272 |
| | 4,728,556 |
| | 4,723,855 |
|
| Retained earnings | 1,966,910 |
| | 1,894,623 |
| | 1,823,043 |
| | 1,836,619 |
| | 1,769,705 |
|
| Accumulated other comprehensive income (loss) | (54,612 | ) | | (16,975 | ) | | (35,172 | ) | | (114,909 | ) | | (128,041 | ) |
| Total shareholders’ equity | 7,507,519 |
| | 7,638,095 |
| | 7,530,175 |
| | 7,454,298 |
| | 7,369,530 |
|
| | $ | 59,669,525 |
| | $ | 58,410,927 |
| | $ | 58,365,459 |
| | $ | 57,555,931 |
| | $ | 57,208,874 |
|
ZIONS BANCORPORATION
Press Release – Page 11
January 25, 2016
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In thousands, except per share amounts) | December 31,
2015 | | September 30,
2015 | | June 30,
2015 | | March 31,
2015 | | December 31,
2014 |
| Interest income: | | | | | | | | | |
| Interest and fees on loans | $ | 429,842 |
| | $ | 419,981 |
| | $ | 420,642 |
| | $ | 415,755 |
| | $ | 431,084 |
|
| Interest on money market investments | 6,144 |
| | 6,018 |
| | 5,785 |
| | 5,218 |
| | 5,913 |
|
| Interest on securities | 37,573 |
| | 30,231 |
| | 28,809 |
| | 27,473 |
| | 24,963 |
|
| Total interest income | 473,559 |
| | 456,230 |
| | 455,236 |
| | 448,446 |
| | 461,960 |
|
| Interest expense: | | | | | | | | | |
| Interest on deposits | 12,377 |
| | 12,542 |
| | 12,321 |
| | 12,104 |
| | 12,548 |
|
| Interest on short- and long-term borrowings | 12,349 |
| | 18,311 |
| | 19,211 |
| | 18,996 |
| | 18,982 |
|
| Total interest expense | 24,726 |
| | 30,853 |
| | 31,532 |
| | 31,100 |
| | 31,530 |
|
| Net interest income | 448,833 |
| | 425,377 |
| | 423,704 |
| | 417,346 |
| | 430,430 |
|
| Provision for loan losses | 22,701 |
| | 18,262 |
| | 566 |
| | (1,494 | ) | | 11,587 |
|
| Net interest income after provision for loan losses | 426,132 |
| | 407,115 |
| | 423,138 |
| | 418,840 |
| | 418,843 |
|
| | | | | | | | | | |
| Noninterest income: | | | | | | | | | |
| Service charges and fees on deposit accounts | 42,445 |
| | 43,196 |
| | 41,616 |
| | 41,194 |
| | 42,224 |
|
| Other service charges, commissions and fees | 54,758 |
| | 52,837 |
| | 51,705 |
| | 47,486 |
| | 50,130 |
|
| Wealth management income | 7,953 |
| | 7,496 |
| | 8,160 |
| | 7,615 |
| | 8,078 |
|
| Loan sales and servicing income | 6,915 |
| | 7,728 |
| | 8,382 |
| | 7,706 |
| | 7,134 |
|
| Capital markets and foreign exchange | 6,255 |
| | 6,624 |
| | 7,275 |
| | 5,501 |
| | 6,266 |
|
| Dividends and other investment income | 2,986 |
| | 8,449 |
| | 9,343 |
| | 9,372 |
| | 16,479 |
|
| Fair value and nonhedge derivative income (loss) | 688 |
| | (1,555 | ) | | 1,844 |
| | (1,088 | ) | | (961 | ) |
| Equity securities gains, net | 53 |
| | 3,630 |
| | 4,839 |
| | 3,353 |
| | 9,606 |
|
| Fixed income securities losses, net | (7 | ) | | (53 | ) | | (138,436 | ) | | (239 | ) | | (11,620 | ) |
| Other | 2,018 |
| | 2,461 |
| | 5,693 |
| | 922 |
| | 2,060 |
|
| Total noninterest income | 124,064 |
| | 130,813 |
| | 421 |
| | 121,822 |
| | 129,396 |
|
| | | | | | | | | | |
| Noninterest expense: | | | | | | | | | |
| Salaries and employee benefits | 236,037 |
| | 242,023 |
| | 251,133 |
| | 243,519 |
| | 238,731 |
|
| Occupancy, net | 30,618 |
| | 29,477 |
| | 30,095 |
| | 29,339 |
| | 29,962 |
|
| Furniture, equipment and software | 31,820 |
| | 30,416 |
| | 31,247 |
| | 29,713 |
| | 30,858 |
|
| Other real estate expense | (536 | ) | | (40 | ) | | (445 | ) | | 374 |
| | (3,467 | ) |
| Credit-related expense | 7,582 |
| | 6,914 |
| | 8,106 |
| | 5,939 |
| | 7,518 |
|
| Provision for unfunded lending commitments | (6,551 | ) | | 1,428 |
| | (2,326 | ) | | 1,211 |
| | 1,699 |
|
| Professional and legal services | 13,129 |
| | 12,699 |
| | 13,110 |
| | 11,483 |
| | 26,257 |
|
| Advertising | 5,692 |
| | 6,136 |
| | 6,511 |
| | 6,975 |
| | 5,805 |
|
| FDIC premiums | 9,194 |
| | 8,500 |
| | 8,609 |
| | 8,119 |
| | 8,031 |
|
| Amortization of core deposit and other intangibles | 2,273 |
| | 2,298 |
| | 2,318 |
| | 2,358 |
| | 2,640 |
|
| Debt extinguishment cost | 135 |
| | — |
| | 2,395 |
| | — |
| | — |
|
| Other | 73,383 |
| | 56,298 |
| | 53,347 |
| | 58,431 |
| | 74,632 |
|
| Total noninterest expense | 402,776 |
| | 396,149 |
| | 404,100 |
| | 397,461 |
| | 422,666 |
|
| Income before income taxes | 147,420 |
| | 141,779 |
| | 19,459 |
| | 143,201 |
| | 125,573 |
|
| Income taxes | 44,933 |
| | 40,780 |
| | 5,499 |
| | 51,176 |
| | 43,759 |
|
| Net income | 102,487 |
| | 100,999 |
| | 13,960 |
| | 92,025 |
| | 81,814 |
|
| Preferred stock dividends | (14,290 | ) | | (16,761 | ) | | (15,060 | ) | | (16,746 | ) | | (15,053 | ) |
| Net earnings (loss) applicable to common shareholders | $ | 88,197 |
| | $ | 84,238 |
| | $ | (1,100 | ) | | $ | 75,279 |
| | $ | 66,761 |
|
| | | | | | | | | | |
| Weighted average common shares outstanding during the period: | | | | | | | | |
| Basic shares | 203,884 |
| | 203,668 |
| | 202,888 |
| | 202,603 |
| | 202,783 |
|
| Diluted shares | 204,277 |
| | 204,155 |
| | 202,888 |
| | 202,944 |
| | 203,278 |
|
| Net earnings (loss) per common share: | | | | | | | | | |
| Basic | $ | 0.43 |
| | $ | 0.41 |
| | $ | (0.01 | ) | | $ | 0.37 |
| | $ | 0.33 |
|
| Diluted | 0.43 |
| | 0.41 |
| | (0.01 | ) | | 0.37 |
| | 0.33 |
|
ZIONS BANCORPORATION
Press Release – Page 12
January 25, 2016
CONSOLIDATED STATEMENTS OF INCOME
|
| | | | | | | | | | | |
| | Year Ended December 31, |
| (In thousands, except per share amounts) | 2015 | | 2014 | | 2013 |
| | (Unaudited) | | | | |
| Interest income: | | | | | |
| Interest and fees on loans | $ | 1,686,220 |
| | $ | 1,729,652 |
| | $ | 1,814,631 |
|
| Interest on money market investments | 23,165 |
| | 21,414 |
| | 23,363 |
|
| Interest on securities | 124,086 |
| | 101,936 |
| | 103,442 |
|
| Total interest income | 1,833,471 |
| | 1,853,002 |
| | 1,941,436 |
|
| | | | | | |
| Interest expense: | | | | | |
| Interest on deposits | 49,344 |
| | 49,736 |
| | 58,913 |
|
| Interest on short- and long-term borrowings | 68,867 |
| | 123,262 |
| | 186,164 |
|
| Total interest expense | 118,211 |
| | 172,998 |
| | 245,077 |
|
| | | | | | |
| Net interest income | 1,715,260 |
| | 1,680,004 |
| | 1,696,359 |
|
| Provision for loan losses | 40,035 |
| | (98,082 | ) | | (87,136 | ) |
| Net interest income after provision for loan losses | 1,675,225 |
| | 1,778,086 |
| | 1,783,495 |
|
| | | | | | |
| Noninterest income: | | | | | |
| Service charges and fees on deposit accounts | 168,451 |
| | 168,291 |
| | 171,036 |
|
| Other service charges, commissions and fees | 206,786 |
| | 193,978 |
| | 183,961 |
|
| Wealth management income | 31,224 |
| | 30,573 |
| | 29,913 |
|
| Loan sales and servicing income | 30,731 |
| | 29,154 |
| | 38,113 |
|
| Capital markets and foreign exchange | 25,655 |
| | 22,584 |
| | 28,051 |
|
| Dividends and other investment income | 30,150 |
| | 43,662 |
| | 46,062 |
|
| Fair value and nonhedge derivative loss | (111 | ) | | (11,390 | ) | | (18,152 | ) |
| Equity securities gains, net | 11,875 |
| | 13,471 |
| | 8,520 |
|
| Fixed income securities gains (losses), net | (138,735 | ) | | 10,419 |
| | (2,898 | ) |
| Impairment losses on investment securities: | | | | | |
| Impairment losses on investment securities | — |
| | (27 | ) | | (188,606 | ) |
| Noncredit-related losses on securities not expected to be sold (recognized in other comprehensive income) | — |
| | — |
| | 23,472 |
|
| Net impairment losses on investment securities | — |
| | (27 | ) | | (165,134 | ) |
| Other | 11,094 |
| | 7,914 |
| | 17,904 |
|
| Total noninterest income | 377,120 |
| | 508,629 |
| | 337,376 |
|
| | | | | | |
| Noninterest expense: | | | | | |
| Salaries and employee benefits | 972,712 |
| | 956,411 |
| | 912,902 |
|
| Occupancy, net | 119,529 |
| | 115,701 |
| | 112,303 |
|
| Furniture, equipment and software | 123,196 |
| | 115,312 |
| | 106,629 |
|
| Other real estate expense | (647 | ) | | (1,251 | ) | | 1,712 |
|
| Credit related expense | 28,541 |
| | 28,134 |
| | 33,795 |
|
| Provision for unfunded lending commitments | (6,238 | ) | | (8,629 | ) | | (17,104 | ) |
| Professional and legal services | 50,421 |
| | 66,011 |
| | 67,968 |
|
| Advertising | 25,314 |
| | 25,100 |
| | 23,362 |
|
| FDIC premiums | 34,422 |
| | 32,174 |
| | 38,019 |
|
| Amortization of core deposit and other intangibles | 9,247 |
| | 10,923 |
| | 14,375 |
|
| Debt extinguishment cost | 2,530 |
| | 44,422 |
| | 120,192 |
|
| Other | 241,459 |
| | 280,984 |
| | 300,286 |
|
| Total noninterest expense | 1,600,486 |
| | 1,665,292 |
| | 1,714,439 |
|
| | | | | | |
| Income before income taxes | 451,859 |
| | 621,423 |
| | 406,432 |
|
| Income taxes | 142,388 |
| | 222,961 |
| | 142,977 |
|
| Net income | 309,471 |
| | 398,462 |
| | 263,455 |
|
| Net loss applicable to noncontrolling interests | — |
| | — |
| | (336 | ) |
| Net income applicable to controlling interest | 309,471 |
| | 398,462 |
| | 263,791 |
|
| Preferred stock dividends | (62,857 | ) | | (71,894 | ) | | (95,512 | ) |
| Preferred stock redemption | — |
| | — |
| | 125,700 |
|
| Net earnings applicable to common shareholders | $ | 246,614 |
| | $ | 326,568 |
| | $ | 293,979 |
|
| | | | | | |
| Weighted average common shares outstanding during the year: | | | | | |
| Basic shares | 203,265 |
| | 192,207 |
| | 183,844 |
|
| Diluted shares | 203,698 |
| | 192,789 |
| | 184,297 |
|
| | | | | | |
| Net earnings per common share: | | | | | |
| Basic | $ | 1.20 |
| | $ | 1.68 |
| | $ | 1.58 |
|
| Diluted | 1.20 |
| | 1.68 |
| | 1.58 |
|
ZIONS BANCORPORATION
Press Release – Page 13
January 25, 2016
Loan Balances Held for Investment by Portfolio Type
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | December 31,
2015 | | September 30,
2015 | | June 30,
2015 | | March 31,
2015 | | December 31,
2014 |
| Commercial: | | | | | | | | | | | | | | | | | | | |
| Commercial and industrial | | $ | 13,211 |
| | | | $ | 13,035 |
| | | | $ | 13,111 |
| | | | $ | 13,264 |
| | | | $ | 13,163 |
| |
| Leasing | | 442 |
| | | | 427 |
| | | | 402 |
| | | | 407 |
| | | | 409 |
| |
| Owner occupied | | 7,150 |
| | | | 7,141 |
| | | | 7,277 |
| | | | 7,310 |
| | | | 7,351 |
| |
| Municipal | | 676 |
| | | | 600 |
| | | | 589 |
| | | | 555 |
| | | | 521 |
| |
| Total commercial | | 21,479 |
| | | | 21,203 |
| | | | 21,379 |
| | | | 21,536 |
| | | | 21,444 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | |
| Construction and land development | | 1,900 |
| | | | 2,214 |
| | | | 2,062 |
| | | | 2,045 |
| | | | 1,986 |
| |
| Term | | 8,456 |
| | | | 8,089 |
| | | | 8,058 |
| | | | 8,088 |
| | | | 8,127 |
| |
| Total commercial real estate | | 10,356 |
| | | | 10,303 |
| | | | 10,120 |
| | | | 10,133 |
| | | | 10,113 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Consumer: | | | | | | | | | | | | | | | | | | | |
| Home equity credit line | | 2,417 |
| | | | 2,347 |
| | | | 2,348 |
| | | | 2,315 |
| | | | 2,321 |
| |
| 1-4 family residential | | 5,382 |
| | | | 5,269 |
| | | | 5,194 |
| | | | 5,213 |
| | | | 5,201 |
| |
| Construction and other consumer real estate | | 385 |
| | | | 370 |
| | | | 372 |
| | | | 373 |
| | | | 371 |
| |
| Bankcard and other revolving plans | | 444 |
| | | | 428 |
| | | | 409 |
| | | | 407 |
| | | | 401 |
| |
| Other | | 187 |
| | | | 193 |
| | | | 202 |
| | | | 203 |
| | | | 213 |
| |
| Total consumer | | 8,815 |
| | | | 8,607 |
| | | | 8,525 |
| | | | 8,511 |
| | | | 8,507 |
| |
| Total loans | | $ | 40,650 |
| | | | $ | 40,113 |
| | | | $ | 40,024 |
| | | | $ | 40,180 |
| | | | $ | 40,064 |
| |
Nonperforming Assets
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| (Amounts in thousands) | December 31,
2015 | | September 30,
2015 | | June 30,
2015 | | March 31,
2015 | | December 31,
2014 |
| | | | | | | | | | |
| Nonaccrual loans | $ | 349,860 |
| | $ | 359,272 |
| | $ | 372,830 |
| | $ | 382,066 |
| | $ | 306,648 |
|
| Other real estate owned | 7,092 |
| | 12,799 |
| | 13,269 |
| | 17,256 |
| | 18,916 |
|
| Total nonperforming assets | $ | 356,952 |
| | $ | 372,071 |
| | $ | 386,099 |
| | $ | 399,322 |
| | $ | 325,564 |
|
| | | | | | | | | | |
Ratio of nonperforming assets to loans1 and leases and other real estate owned | 0.87 | % | | 0.92 | % | | 0.96 | % | | 0.99 | % | | 0.81 | % |
| | | | | | | | | | |
| Accruing loans past due 90 days or more | $ | 32,024 |
| | $ | 34,857 |
| | $ | 27,204 |
| | $ | 31,552 |
| | $ | 29,228 |
|
Ratio of accruing loans past due 90 days or more to loans1 and leases | 0.08 | % | | 0.09 | % | | 0.07 | % | | 0.08 | % | | 0.07 | % |
| | | | | | | | | | |
| Nonaccrual loans and accruing loans past due 90 days or more | $ | 381,884 |
| | $ | 394,129 |
| | $ | 400,034 |
| | $ | 413,618 |
| | $ | 335,876 |
|
Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans1 and leases | 0.94 | % | | 0.98 | % | | 1.00 | % | | 1.03 | % | | 0.84 | % |
| | | | | | | | | | |
| Accruing loans past due 30-89 days | $ | 121,732 |
| | $ | 118,361 |
| | $ | 124,955 |
| | $ | 97,242 |
| | $ | 86,488 |
|
| | | | | | | | | | |
| Restructured loans included in nonaccrual loans | 103,004 |
| | 108,387 |
| | 118,358 |
| | 110,364 |
| | 97,779 |
|
| Restructured loans on accrual | 194,084 |
| | 178,136 |
| | 180,146 |
| | 199,065 |
| | 245,550 |
|
| | | | | | | | | | |
| Classified loans | 1,368,022 |
| | 1,322,924 |
| | 1,292,980 |
| | 1,268,746 |
| | 1,146,865 |
|
1 Includes loans held for sale.
ZIONS BANCORPORATION
Press Release – Page 14
January 25, 2016
Allowance for Credit Losses
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (Amounts in thousands) | December 31,
2015 | | September 30,
2015 | | June 30,
2015 | | March 31,
2015 | | December 31,
2014 |
| Allowance for Loan Losses | | | | | | | | | |
| Balance at beginning of period | $ | 596,440 |
| | $ | 609,375 |
| | $ | 620,013 |
| | $ | 604,663 |
| | $ | 610,277 |
|
| Add: | | | | | | | | | |
| Provision for losses | 22,701 |
| | 18,262 |
| | 566 |
| | (1,494 | ) | | 11,587 |
|
| Adjustment for FDIC-supported/PCI loans | 5 |
| | — |
| | 38 |
| | (38 | ) | | (19 | ) |
| Deduct: | | | | | | | | | |
| Gross loan and lease charge-offs | (45,334 | ) | | (42,359 | ) | | (31,048 | ) | | (20,188 | ) | | (35,544 | ) |
| Recoveries | 32,236 |
| | 11,162 |
| | 19,806 |
| | 37,070 |
| | 18,362 |
|
| Net loan and lease (charge-offs) recoveries | (13,098 | ) | | (31,197 | ) | | (11,242 | ) | | 16,882 |
| | (17,182 | ) |
| Balance at end of period | $ | 606,048 |
| | $ | 596,440 |
| | $ | 609,375 |
| | $ | 620,013 |
| | $ | 604,663 |
|
| | | | | | | | | | |
| Ratio of allowance for loan losses to loans and leases, at period end | 1.49 | % | | 1.49 | % | | 1.52 | % | | 1.54 | % | | 1.51 | % |
| | | | | | | | | | |
| Ratio of allowance for loan losses to nonperforming loans, at period end | 173.23 | % | | 166.01 | % | | 163.45 | % | | 162.28 | % | | 197.18 | % |
| | | | | | | | | | |
| Annualized ratio of net loan and lease charge-offs to average loans | 0.13 | % | | 0.31 | % | | 0.11 | % | | (0.17 | )% | | 0.17 | % |
| | | | | | | | | | |
| Reserve for Unfunded Lending Commitments | | | | | | | | | |
| Balance at beginning of period | $ | 81,389 |
| | $ | 79,961 |
| | $ | 82,287 |
| | $ | 81,076 |
| | $ | 79,377 |
|
| Provision charged (credited) to earnings | (6,551 | ) | | 1,428 |
| | (2,326 | ) | | 1,211 |
| | 1,699 |
|
| Balance at end of period | $ | 74,838 |
| | $ | 81,389 |
| | $ | 79,961 |
| | $ | 82,287 |
| | $ | 81,076 |
|
| | | | | | | | | | |
| Total Allowance for Credit Losses | | | | | | | | | |
| Allowance for loan losses | $ | 606,048 |
| | $ | 596,440 |
| | $ | 609,375 |
| | $ | 620,013 |
| | $ | 604,663 |
|
| Reserve for unfunded lending commitments | 74,838 |
| | 81,389 |
| | 79,961 |
| | 82,287 |
| | 81,076 |
|
| Total allowance for credit losses | $ | 680,886 |
| | $ | 677,829 |
| | $ | 689,336 |
| | $ | 702,300 |
| | $ | 685,739 |
|
| | | | | | | | | | |
| Ratio of total allowance for credit losses to loans and leases outstanding, at period end | 1.68 | % | | 1.69 | % | | 1.72 | % | | 1.75 | % | | 1.71 | % |
ZIONS BANCORPORATION
Press Release – Page 15
January 25, 2016
Nonaccrual Loans by Portfolio Type
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | December 31,
2015 | | September 30,
2015 | | June 30,
2015 | | March 31,
2015 | | December 31,
2014 |
| | | | | | | | | | | | | | | | | | | | |
| Commercial: | | | | | | | | | | | | | | | | | | | |
| Commercial and industrial | | 164 |
| | | | 167 |
| | | | 165 |
| | | | 163 |
| | | | 106 |
| |
| Leasing | | 4 |
| | | | — |
| | | | — |
| | | | — |
| | | | — |
| |
| Owner occupied | | 74 |
| | | | 77 |
| | | | 89 |
| | | | 98 |
| | | | 87 |
| |
| Municipal | | 1 |
| | | | 1 |
| | | | 1 |
| | | | 1 |
| | | | 1 |
| |
| Total commercial | | 243 |
| | | | 245 |
| | | | 255 |
| | | | 262 |
| | | | 194 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | |
| Construction and land development | | 7 |
| | | | 15 |
| | | | 20 |
| | | | 22 |
| | | | 24 |
| |
| Term | | 40 |
| | | | 39 |
| | | | 44 |
| | | | 38 |
| | | | 25 |
| |
| Total commercial real estate | | 47 |
| | | | 54 |
| | | | 64 |
| | | | 60 |
| | | | 49 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Consumer: | | | | | | | | | | | | | | | | | | | |
| Home equity credit line | | 8 |
| | | | 10 |
| | | | 9 |
| | | | 10 |
| | | | 12 |
| |
| 1-4 family residential | | 50 |
| | | | 48 |
| | | | 43 |
| | | | 48 |
| | | | 50 |
| |
| Construction and other consumer real estate | | 1 |
| | | | 1 |
| | | | 1 |
| | | | 2 |
| | | | 2 |
| |
| Bankcard and other revolving plans | | 1 |
| | | | 1 |
| | | | 1 |
| | | | — |
| | | | — |
| |
| Other | | — |
| | | | — |
| | | | — |
| | | | — |
| | | | — |
| |
| Total consumer | | 60 |
| | | | 60 |
| | | | 54 |
| | | | 60 |
| | | | 64 |
| |
| Total nonaccrual loans | | $ | 350 |
| | | | $ | 359 |
| | | | $ | 373 |
| | | | $ | 382 |
| | | | $ | 307 |
| |
Net Charge-Offs by Portfolio Type
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In millions) | December 31,
2015 | | September 30,
2015 | | June 30,
2015 | | March 31,
2015 | | December 31,
2014 |
| Commercial: | | | | | | | | | | | | | | | | | | | |
| Commercial and industrial | | $ | 18 |
| | | | $ | 30 |
| | | | $ | 13 |
| | | | $ | (5 | ) | | | | $ | 18 |
| |
| Leasing | | — |
| | | | — |
| | | | — |
| | | | — |
| | | | — |
| |
| Owner occupied | | — |
| | | | 3 |
| | | | (3 | ) | | | | — |
| | | | — |
| |
| Municipal | | — |
| | | | — |
| | | | — |
| | | | — |
| | | | — |
| |
| Total commercial | | 18 |
| | | | 33 |
| | | | 10 |
| | | | (5 | ) | | | | 18 |
| |
| | | | | | | | | | | | | | | | | | | | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | |
| Construction and land development | | (2 | ) | | | | (2 | ) | | | | (1 | ) | | | | (3 | ) | | | | (1 | ) | |
| Term | | (4 | ) | | | | (1 | ) | | | | 2 |
| | | | (10 | ) | | | | (1 | ) | |
| Total commercial real estate | | (6 | ) | | | | (3 | ) | | | | 1 |
| | | | (13 | ) | | | | (2 | ) | |
| | | | | | | | | | | | | | | | | | | | |
| Consumer: | | | | | | | | | | | | | | | | | | | |
| Home equity credit line | | (1 | ) | | | | 1 |
| | | | — |
| | | | (1 | ) | | | | — |
| |
| 1-4 family residential | | 1 |
| | | | — |
| | | | — |
| | | | 1 |
| | | | 1 |
| |
| Construction and other consumer real estate | | (1 | ) | | | | (1 | ) | | | | — |
| | | | — |
| | | | — |
| |
| Bankcard and other revolving plans | | 2 |
| | | | — |
| | | | 1 |
| | | | 1 |
| | | | — |
| |
| Other | | — |
| | | | 1 |
| | | | (1 | ) | | | | — |
| | | | — |
| |
| Total consumer loans | | 1 |
| | | | 1 |
| | | | — |
| | | | 1 |
| | | | 1 |
| |
| Total net charge-offs (recoveries) | | $ | 13 |
| | | | $ | 31 |
| | | | $ | 11 |
| | | | $ | (17 | ) | | | | $ | 17 |
| |
ZIONS BANCORPORATION
Press Release – Page 16
January 25, 2016
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | December 31, 2015 | | September 30, 2015 | | June 30, 2015 |
| (In thousands) | Average balance | | Average yield/rate | | Average balance | | Average yield/rate | | Average balance | | Average yield/rate |
| ASSETS | | | | | | | | | | | |
| Money market investments | $ | 7,801,628 |
| | 0.31 | % | | $ | 8,775,823 |
| | 0.27 | % | | $ | 8,414,602 |
| | 0.28 | % |
| Securities: | | | | | | | | | | | |
| Held-to-maturity | 556,676 |
| | 5.06 | % | | 553,615 |
| | 5.07 | % | | 583,349 |
| | 5.06 | % |
| Available-for-sale | 6,770,548 |
| | 1.88 | % | | 5,254,986 |
| | 1.85 | % | | 4,585,760 |
| | 1.99 | % |
| Trading account | 62,372 |
| | 3.57 | % | | 47,235 |
| | 3.74 | % | | 76,706 |
| | 3.19 | % |
| Total securities | 7,389,596 |
| | 2.13 | % | | 5,855,836 |
| | 2.17 | % | | 5,245,815 |
| | 2.35 | % |
| | | | | | | | | | | | |
| Loans held for sale | 148,245 |
| | 3.69 | % | | 131,113 |
| | 3.70 | % | | 115,377 |
| | 3.48 | % |
Loans 1: | | | | | | | | | | | |
| Commercial | 21,287,497 |
| | 4.30 | % | | 21,289,641 |
| | 4.15 | % | | 21,527,723 |
| | 4.22 | % |
| Commercial real estate | 10,363,813 |
| | 4.42 | % | | 10,170,539 |
| | 4.47 | % | | 10,089,092 |
| | 4.47 | % |
| Consumer | 8,695,500 |
| | 3.88 | % | | 8,565,075 |
| | 3.90 | % | | 8,514,519 |
| | 3.91 | % |
| Total loans | 40,346,810 |
| | 4.24 | % | | 40,025,255 |
| | 4.18 | % | | 40,131,334 |
| | 4.22 | % |
| Total interest-earning assets | 55,686,279 |
| | 3.41 | % | | 54,788,027 |
| | 3.34 | % | | 53,907,128 |
| | 3.42 | % |
| Cash and due from banks | 652,201 |
| | | | 583,936 |
| | | | 591,347 |
| | |
| Allowance for loan losses | (595,058 | ) | | | | (602,677 | ) | | | | (621,348 | ) | | |
| Goodwill | 1,014,129 |
| | | | 1,014,129 |
| | | | 1,014,129 |
| | |
| Core deposit and other intangibles | 17,453 |
| | | | 19,726 |
| | | | 22,135 |
| | |
| Other assets | 2,691,163 |
| | | | 2,602,639 |
| | | | 2,564,121 |
| | |
| Total assets | $ | 59,466,167 |
| | | | $ | 58,405,780 |
| | | | $ | 57,477,512 |
| | |
| | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | |
| Interest-bearing deposits: | | | | | | | | | | | |
| Savings and money market | $ | 25,058,336 |
| | 0.15 | % | | $ | 24,676,897 |
| | 0.16 | % | | $ | 24,514,516 |
| | 0.16 | % |
| Time | 2,183,936 |
| | 0.44 | % | | 2,242,064 |
| | 0.43 | % | | 2,300,593 |
| | 0.43 | % |
| Foreign | 395,810 |
| | 0.24 | % | | 441,670 |
| | 0.18 | % | | 325,640 |
| | 0.14 | % |
| Total interest-bearing deposits | 27,638,082 |
| | 0.18 | % | | 27,360,631 |
| | 0.18 | % | | 27,140,749 |
| | 0.18 | % |
| Borrowed funds: | | | | | | | | | | | |
| Federal funds and other short-term borrowings | 294,666 |
| | 0.14 | % | | 211,322 |
| | 0.14 | % | | 214,287 |
| | 0.14 | % |
| Long-term debt | 878,373 |
| | 5.53 | % | | 1,033,818 |
| | 7.00 | % | | 1,081,785 |
| | 7.10 | % |
| Total borrowed funds | 1,173,039 |
| | 4.18 | % | | 1,245,140 |
| | 5.83 | % | | 1,296,072 |
| | 5.95 | % |
| Total interest-bearing liabilities | 28,811,121 |
| | 0.34 | % | | 28,605,771 |
| | 0.43 | % | | 28,436,821 |
| | 0.44 | % |
| Noninterest-bearing deposits | 22,354,766 |
| | | | 21,558,557 |
| | | | 20,984,073 |
| | |
| Other liabilities | 614,398 |
| | | | 581,880 |
| | | | 559,722 |
| | |
| Total liabilities | 51,780,285 |
| | | | 50,746,208 |
| | | | 49,980,616 |
| | |
| Shareholders’ equity: | | | | | | | | | | | |
| Preferred equity | 920,145 |
| | | | 1,004,059 |
| | | | 1,004,031 |
| | |
| Common equity | 6,765,737 |
| | | | 6,655,513 |
| | | | 6,492,865 |
| | |
| Total shareholders’ equity | 7,685,882 |
| | | | 7,659,572 |
| | | | 7,496,896 |
| | |
| Total liabilities and shareholders’ equity | $ | 59,466,167 |
| | | | $ | 58,405,780 |
| | | | $ | 57,477,512 |
| | |
| | | | | | | | | | | | |
| Spread on average interest-bearing funds | | | 3.07 | % | | | | 2.91 | % | | | | 2.98 | % |
| | | | | | | | | | | | |
| Net yield on interest-earning assets | | | 3.23 | % | | | | 3.11 | % | | | | 3.18 | % |
1 Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.
ZIONS BANCORPORATION
Press Release – Page 17
January 25, 2016
GAAP to Non-GAAP Reconciliations
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |
| (In thousands, except per share amounts) | | December 31,
2015 | | September 30,
2015 | | June 30,
2015 | | March 31,
2015 | | December 31,
2014 |
| Tangible Book Value per Common Share | | | | | | | | |
| | | | | | | | | | | |
| Total shareholders’ equity (GAAP) | | $ | 7,507,519 |
| | $ | 7,638,095 |
| | $ | 7,530,175 |
| | $ | 7,454,298 |
| | $ | 7,369,530 |
|
| Preferred stock | | (828,490 | ) | | (1,004,159 | ) | | (1,004,032 | ) | | (1,004,032 | ) | | (1,004,011 | ) |
| Goodwill | | (1,014,129 | ) | | (1,014,129 | ) | | (1,014,129 | ) | | (1,014,129 | ) | | (1,014,129 | ) |
| Core deposit and other intangibles | | (16,272 | ) | | (18,546 | ) | | (20,843 | ) | | (23,162 | ) | | (25,520 | ) |
| Tangible common equity (non-GAAP) | (a) | $ | 5,648,628 |
| | $ | 5,601,261 |
| | $ | 5,491,171 |
| | $ | 5,412,975 |
| | $ | 5,325,870 |
|
| | | | | | | | | | | |
| Common shares outstanding | (b) | 204,417 |
| | 204,279 |
| | 203,741 |
| | 203,193 |
| | 203,015 |
|
| | | | | | | | | | | |
| Tangible book value per common share (non-GAAP) | (a/b) | $ | 27.63 |
| | $ | 27.42 |
| | $ | 26.95 |
| | $ | 26.64 |
| | $ | 26.23 |
|
| | | | | | | | | | | |
| | | Three Months Ended |
| (Dollar amounts in thousands) | | December 31,
2015 | | September 30,
2015 | | June 30,
2015 | | March 31,
2015 | | December 31,
2014 |
| Tangible Return on Average Tangible Common Equity | | | | | | | | |
| | | | | | | | | | | |
| Net earnings (loss) applicable to common shareholders (GAAP) | | $ | 88,197 |
| | $ | 84,238 |
| | $ | (1,100 | ) | | $ | 75,279 |
| | $ | 66,761 |
|
| | | | | | | | | | | |
| Adjustments, net of tax: | | | | | | | | | | |
| Amortization of core deposit and other intangibles | | 1,446 |
| | 1,461 |
| | 1,472 |
| | 1,496 |
| | 1,676 |
|
| Net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax (non-GAAP) | (a) | $ | 89,643 |
| | $ | 85,699 |
| | $ | 372 |
| | $ | 76,775 |
| | $ | 68,437 |
|
| | | | | | | | | | | |
| Average common equity (GAAP) | | $ | 6,765,737 |
| | $ | 6,655,513 |
| | $ | 6,492,865 |
| | $ | 6,405,305 |
| | $ | 6,521,187 |
|
| Average goodwill | | (1,014,129 | ) | | (1,014,129 | ) | | (1,014,129 | ) | | (1,014,129 | ) | | (1,014,129 | ) |
| Average core deposit and other intangibles | | (17,453 | ) | | (19,726 | ) | | (22,135 | ) | | (24,355 | ) | | (26,848 | ) |
| Average tangible common equity (non-GAAP) | (b) | $ | 5,734,155 |
| | $ | 5,621,658 |
| | $ | 5,456,601 |
| | $ | 5,366,821 |
| | $ | 5,480,210 |
|
| | | | | | | | | | | |
| 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) | 6.20 | % | | 6.05 | % | | 0.03 | % | | 5.80 | % | | 4.95 | % |
ZIONS BANCORPORATION
Press Release – Page 18
January 25, 2016
|
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| (Dollar amounts in thousands) | | December 31,
2015 | | September 30,
2015 | | June 30,
2015 | | March 31,
2015 | | December 31,
2014 |
| Efficiency Ratio | | | | | | | | | | |
| | | | | | | | | | | |
| Noninterest expense (GAAP) | (a) | $ | 402,776 |
| | $ | 396,149 |
| | $ | 404,100 |
| | $ | 397,461 |
| | $ | 422,666 |
|
| Adjustments: | | | | | | | | | | |
| Severance costs | | 3,581 |
| | 3,464 |
| | 1,707 |
| | 2,253 |
| | 1,747 |
|
| Other real estate expense | | (536 | ) | | (40 | ) | | (445 | ) | | 374 |
| | (3,467 | ) |
| Provision for unfunded lending commitments | (6,551 | ) | | 1,428 |
| | (2,326 | ) | | 1,211 |
| | 1,699 |
|
| Debt extinguishment cost | | 135 |
| | — |
| | 2,395 |
| | — |
| | — |
|
| Amortization of core deposit and other intangibles | | 2,273 |
| | 2,298 |
| | 2,318 |
| | 2,358 |
| | 2,640 |
|
| Restructuring costs | | 777 |
| | 1,630 |
| | 679 |
| | 766 |
| | — |
|
| Total adjustments | | (321 | ) | | 8,780 |
| | 4,328 |
| | 6,962 |
| | 2,619 |
|
| | | | | | | | | | | |
| Add-back of adjustments | (b) | 321 |
|
| (8,780 | ) |
| (4,328 | ) |
| (6,962 | ) |
| (2,619 | ) |
| Adjusted noninterest expense (non-GAAP) | (a+b)=(c) | $ | 403,097 |
|
| $ | 387,369 |
|
| $ | 399,772 |
|
| $ | 390,499 |
|
| $ | 420,047 |
|
| | | | | | | | | | | |
| Taxable-equivalent net interest income (GAAP) | (d) | $ | 453,780 |
| | $ | 429,782 |
| | $ | 428,015 |
| | $ | 421,581 |
| | $ | 434,789 |
|
| Noninterest income (GAAP) | (e) | 124,064 |
| | 130,813 |
| | 421 |
| | 121,822 |
| | 129,396 |
|
| Adjustments: | | | | | | | | | | |
| Fair value and nonhedge derivative income (loss) | 688 |
| | (1,555 | ) | | 1,844 |
| | (1,088 | ) | | (961 | ) |
| Equity securities gains, net | | 53 |
| | 3,630 |
| | 4,839 |
| | 3,353 |
| | 9,606 |
|
| Fixed income securities losses, net | | (7 | ) | | (53 | ) | | (138,436 | ) | | (239 | ) | | (11,620 | ) |
| Total adjustments | | 734 |
| | 2,022 |
| | (131,753 | ) | | 2,026 |
| | (2,975 | ) |
| | | | | | | | | | | |
| Add-back of adjustments | (f) | (734 | ) |
| (2,022 | ) |
| 131,753 |
|
| (2,026 | ) |
| 2,975 |
|
| Adjusted taxable-equivalent revenue (non-GAAP) | (d+e+f)=(g) | $ | 577,110 |
|
| $ | 558,573 |
|
| $ | 560,189 |
|
| $ | 541,377 |
|
| $ | 567,160 |
|
| | | | | | | | | | | |
| Efficiency ratio | (c/g) | 69.8 | % |
| 69.3 | % |
| 71.4 | % |
| 72.1 | % |
| 74.1 | % |
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 regulators, investors, and analysts in analyzing the operating results or financial position of the Company and in predicting future performance. These non-GAAP financial measures are used by management to assess the performance of the Company’s business or its financial position 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.
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.
