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Zions Bancorporation, N.A.
One South Main
Salt Lake City, UT 84133
April 19, 2021 | |
| www.zionsbancorporation.com |
First Quarter 2021 Financial Results: FOR IMMEDIATE RELEASE
Investor and Media Contact: James Abbott (801) 844-7637
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| Zions Bancorporation, N.A. Reports: 1Q21 Net Earnings¹ of $314 million, diluted EPS of $1.90 |
compared with 1Q20 Net Earnings¹ of $6 million, diluted EPS of $0.04,
and 4Q20 Net Earnings¹ of $275 million, diluted EPS of $1.66 |
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FIRST QUARTER RESULTS
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| $1.90 | | $314 million | | 2.86% | | 11.2% |
Net earnings1 per diluted common share | | Net Earnings 1 | | Net interest margin (“NIM”) | | Common Equity
Tier 1 |
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| FIRST QUARTER HIGHLIGHTS² |
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| Net Interest Income and NIM | • | Net interest income was $545 million, compared with $548 million |
| • | NIM was 2.86%, compared with 3.41%, and was significantly impacted by lower interest rates and higher average cash balances of $7.8 billion, compared with $2.0 billion |
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| Operating Performance | • | Pre-provision net revenue ("PPNR") was $287 million, up 2%, and adjusted PPNR³ was $253 million, down 15% |
| • | Noninterest expense was $435 million, up 7%, and adjusted noninterest expense³ was $440 million, up 8%, due to increases in salaries and employee benefits (largely long-term compensation) and PPP-related professional and legal services |
| • | The efficiency ratio³ was 63.5%, compared with 57.7% |
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| Loans and Credit Quality | • | Net loans and leases were $53.5 billion, up $3.5 billion, or 7%, and included PPP loans of $6.5 billion |
| • | About 24,000 PPP Round 2021 loans were originated, totaling $2.6 billion |
| • | Nonperforming assets were $327 million, or 0.7%, of loans (ex-PPP), compared with $280 million, or 0.6%, of loans |
| • | The provision for credit losses was a negative $132 million, compared with a positive $258 million |
| • | The allowance for credit losses was 1.5% of loans (ex-PPP), compared with 1.6% of loans |
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| Capital | • | The CET1 capital ratio was 11.2%, compared with 10.0% |
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| Notable items | • | About 15,000 PPP loans were forgiven by the SBA, totaling $1.6 billion, which contributed $31 million of interest income through accelerated recognition of net unamortized deferred fees |
| • | Deposits were $73.9 billion, up $16.3 billion, or 28%, resulting in a loan-to-deposit ratio of 72%. Deposit growth has been impacted by government stimulus programs |
| • | Gain on sale of remaining Farmer Mac Class C stock of $11 million, or $0.05 per share 4 |
| • | Positive credit valuation adjustment of $18 million, or $0.08 per share,4 on client-related interest rate swaps |
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| CEO COMMENTARY |
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Harris H. Simmons, Chairman and CEO of Zions Bancorporation, commented, “Our first quarter results were strong, reflecting an improving credit environment and outlook, which resulted in minimal net charge-offs and a substantial reversal of loan loss provisions made in prior quarters as the pandemic took hold.”
Mr. Simmons continued, “During the quarter, we assisted more than 24,000 customers in obtaining access to $2.6 billion of governmental relief funds in the form of PPP loans, bringing the total amount of PPP loans made to small businesses over the past year to nearly $10 billion. Non-PPP loan volumes continued to experience attrition while total deposits saw robust growth, both being in large measure a result of unusually strong levels of liquidity in the economy.” |
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OPERATING PERFORMANCE3 |
1 Net Earnings is net earnings applicable to common shareholders.
2 Comparisons noted in the bullet points are calculated for the current quarter versus the same prior-year period, unless otherwise specified.
3 For information on non-GAAP financial measures and the reasons for which the Bank presents these numbers, see pages 15-17.
4 EPS calculations assume a 24.5% statutory tax rate.
ZIONS BANCORPORATION, N.A.
Press Release – Page 2
April 19, 2021
Comparisons noted in the sections below are calculated for the current quarter versus the same prior-year period, unless otherwise specified. Growth rates of 100% or more are considered not meaningful (“NM”) as they are generally reflective of a low initial starting point.
RESULTS OF OPERATIONS
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income and Margin |
| | | | | | | 1Q21 - 4Q20 | | 1Q21 - 1Q20 |
| (In millions) | 1Q21 | | 4Q20 | | 1Q20 | | $ | | % | | $ | | % |
| Interest and fees on loans | $ | 488 | | $ | 499 | | $ | 532 | | $ | (11) | | | (2) | % | | $ | (44) | | | (8) | % |
| Interest on money market investments | 3 | | 3 | | 8 | | — | | | — | | | (5) | | | (63) | |
| Interest on securities | 71 | | 69 | | 82 | | 2 | | | 3 | | | (11) | | | (13) | |
| Total interest income | 562 | | 571 | | 622 | | (9) | | | (2) | | | (60) | | | (10) | |
| Interest on deposits | 9 | | 13 | | 51 | | (4) | | | (31) | | | (42) | | | (82) | |
| Interest on short- and long-term borrowings | 8 | | 8 | | 23 | | — | | | — | | | (15) | | | (65) | |
| Total interest expense | 17 | | 21 | | 74 | | (4) | | | (19) | | | (57) | | | (77) | |
| Net interest income | $ | 545 | | $ | 550 | | $ | 548 | | $ | (5) | | | (1) | | | $ | (3) | | | (1) | |
| | | | | | | bps | | | | bps | | |
Yield on interest-earning assets1 | 2.95 | % | | 3.06 | % | | 3.87 | % | | (11) | | | | | (92) | | | |
Rate paid on total deposits and interest-bearing liabilities1 | 0.09 | % | | 0.12 | % | | 0.48 | % | | (3) | | | | | (39) | | | |
Cost of total deposits1 | 0.05 | % | | 0.08 | % | | 0.36 | % | | (3) | | | | | (31) | | | |
Net interest margin1 | 2.86 | % | | 2.95 | % | | 3.41 | % | | (9) | | | | | (55) | | | |
1 Rates are calculated using amounts in thousands and taxable-equivalent rates are used where applicable.
Net interest income decreased $3 million, or 1%, to $545 million in the first quarter of 2021, from $548 million in the first quarter of 2020. Total interest income decreased $60 million, or 10%, due to a $44 million decrease in interest and fees on loans and an $11 million decrease in interest on securities. The decrease was primarily attributable to the lower interest rate environment, as the average balance of interest-earning assets increased 20%. Interest expense decreased $57 million, or 77%, due to a $42 million decline in interest paid on deposits and a $15 million decline in interest paid on short- and long-term borrowings attributable to lower rates on both categories as well as reduced balances of borrowed funds. The decline in interest expense was also primarily due to the lower interest rate environment and partially attributable to reduced competitive pricing pressure for deposits. Additionally, strong deposit growth of $16 billion, or 28%, reduced the need for borrowed funds and was impacted by government stimulus programs.
The net interest margin compressed to 2.86% in the first quarter of 2021, compared with 3.41% in the same prior year period. The yield on average interest-earning assets was 2.95% in the first quarter of 2021, a decrease of 92 basis points, compared with the first quarter of 2020. Average money market investments, including short-term deposits held at the Federal Reserve, increased to 10.0% of average interest-earning assets in the first quarter of 2021, compared with 3.1% in the same prior year period. This increase had a significant dilutive effect on the net interest margin.
Average interest-earning assets included $6.1 billion of Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans with a yield of 3.98%. During the first quarter of 2021, about 15,000 PPP loans, totaling $1.6 billion, received forgiveness by the SBA and contributed $31 million of interest income through accelerated recognition of net unamortized deferred fees on these loans. As of March 31, 2021, there were approximately $168 million of unamortized net origination fees related to the PPP loans.
The yield on loans decreased 69 basis points from the first quarter of 2020, and, excluding PPP loans, the yield on loans decreased 73 basis points from the first quarter of 2020. The decrease was primarily due to lower benchmark interest rates, but also reflected continued pricing pressure, which was partially attributable to the surplus liquidity in
ZIONS BANCORPORATION, N.A.
Press Release – Page 3
April 19, 2021
the marketplace. The yield on securities decreased 57 basis points from the same prior year period, primarily from lower yields on new investments, which were also attributable to lower benchmark interest rates. The yield on non-PPP loans originated during the first quarter of 2021 was moderately less than the yield on loans maturing or otherwise paying down. Similarly, the yield on securities purchased during the first quarter of 2021 was significantly lower than the yield on securities that paid off or paid down. These trends were consistent with those reported in recent quarters.
The annualized cost of total deposits for the first quarter of 2021 was 0.05%, compared with 0.36% for the first quarter of 2020. The rate paid on total deposits and interest-bearing liabilities was 0.09% during the first quarter of 2021, a decrease from 0.48% during the first quarter of 2020, which was primarily due to lower benchmark interest rates and strong deposit growth. Average noninterest bearing deposits as a percentage of total deposits was 47% for the first quarter of 2021, compared with 41% for the same prior year period. The deposit growth also contributed to a significant reduction in more-costly borrowed funds when compared with the first quarter of 2020.
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| Noninterest Income |
| | | | | | | 1Q21 - 4Q20 | | 1Q21 - 1Q20 |
| (In millions) | 1Q21 | | 4Q20 | | 1Q20 | | $ | | % | | $ | | % |
| Commercial account fees | $ | 32 | | | $ | 32 | | | $ | 31 | | | $ | — | | | — | % | | $ | 1 | | | 3 | % |
| Card fees | 21 | | | 22 | | | 21 | | | (1) | | | (5) | | | — | | | — | |
| Retail and business banking fees | 17 | | | 18 | | | 19 | | | (1) | | | (6) | | | (2) | | | (11) | |
| Loan-related fees and income | 25 | | | 25 | | | 26 | | | — | | | — | | | (1) | | | (4) | |
| Capital markets and foreign exchange fees | 15 | | | 19 | | | 24 | | | (4) | | | (21) | | | (9) | | | (38) | |
| Wealth management fees | 12 | | | 10 | | | 11 | | | 2 | | | 20 | | | 1 | | | 9 | |
| | | | | | | | | | | | | |
| Other customer-related fees | 11 | | | 13 | | | 11 | | | (2) | | | (15) | | | — | | | — | |
| Customer-related fees | 133 | | | 139 | | | 143 | | | (6) | | | (4) | | | (10) | | | (7) | |
| Fair value and nonhedge derivative income (loss) | 18 | | | 8 | | | (11) | | | 10 | | | NM | | 29 | | | NM |
| Dividends and other income | 7 | | | 7 | | | 8 | | | — | | | — | | | (1) | | | (13) | |
| Securities gains (losses), net | 11 | | | 12 | | | (6) | | | (1) | | | (8) | | 17 | | | NM |
| Total noninterest income | $ | 169 | | | $ | 166 | | | $ | 134 | | | $ | 3 | | | 2 | | | $ | 35 | | | 26 | |
Total noninterest income for the first quarter of 2021 increased by $35 million, or 26%, to $169 million, from $134 million for the first quarter of 2020. Total customer-related fees decreased to $133 million from $143 million for the same periods. Although most categories were generally stable when compared with the same prior year period, capital markets and foreign exchange fees decreased $9 million, primarily due to lower customer interest rate swap fees.
In the first quarter of 2021, we recognized a positive $18 million credit valuation adjustment (“CVA”) on client-related interest rate swaps, compared with a negative $11 million CVA in the first quarter of 2020. This change reflects a significant decline in the total exposure of client swaps primarily due to an increase in benchmark interest rates during the quarter and improvements in the credit quality of the customer counterparties associated with the swaps.
Securities gains increased by $17 million, primarily as a result of an $11 million gain on the sale of remaining Farmer Mac Class C stock in the first quarter of 2021. The first quarter of 2020 was negatively impacted by $6 million of unrealized losses related to Small Business Investment Company investments.
ZIONS BANCORPORATION, N.A.
Press Release – Page 4
April 19, 2021
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| Noninterest Expense |
| | | | | | | 1Q21 - 4Q20 | | 1Q21 - 1Q20 |
| (In millions) | 1Q21 | | 4Q20 | | 1Q20 | | $ | | % | | $ | | % |
| Salaries and employee benefits | $ | 288 | | | $ | 277 | | | $ | 274 | | | $ | 11 | | | 4 | % | | $ | 14 | | | 5 | % |
| Occupancy, net | 33 | | | 33 | | | 33 | | | — | | | — | | | — | | | — | |
| Furniture, equipment and software, net | 32 | | | 30 | | | 32 | | | 2 | | | 7 | | | — | | | — | |
| Other real estate expense, net | — | | | 1 | | | — | | | (1) | | | NM | | — | | | — |
| Credit-related expense | 6 | | | 6 | | | 4 | | | — | | | — | | | 2 | | | 50 | |
| Professional and legal services | 20 | | | 19 | | | 12 | | | 1 | | | 5 | | | 8 | | | 67 | |
| Advertising | 5 | | | 6 | | | 3 | | | (1) | | | (17) | | | 2 | | | 67 | |
| FDIC premiums | 7 | | | 6 | | | 5 | | | 1 | | | 17 | | | 2 | | | 40 | |
| Other | 44 | | | 46 | | | 45 | | | (2) | | | (4) | | | (1) | | | (2) | |
| Total noninterest expense | $ | 435 | | | $ | 424 | | | $ | 408 | | | $ | 11 | | | 3 | | | $ | 27 | | | 7 | |
Adjusted noninterest expense 1 | $ | 440 | | | $ | 423 | | | $ | 407 | | | $ | 17 | | | 4 | | | $ | 33 | | | 8 | |
1 For information on non-GAAP financial measures, see pages 15-17.
Total noninterest expense for the first quarter of 2021 increased by $27 million, or 7%, to $435 million, from $408 million for the first quarter of 2020. Salaries and benefits expense increased $14 million, or 5%, and professional and legal services expense increased $8 million, or 67%, from the same prior year period.
The $14 million increase in salaries and employee benefits reflected increases in long-term incentive compensation, including $7 million related to the Value Sharing Plan and share-based compensation, and $6 million of contributions to the employee 401(k) plan. The increases in these expense categories were relative to the depressed levels reported in the prior year period, when uncertainties resulting from the pandemic led to reduced accruals. The increase in salaries and employee benefits expense was partially offset by a $5 million decrease in base salaries due to lower headcount. The $8 million increase in professional and legal services was primarily related to third-party assistance associated with PPP loan forgiveness.
Adjusted noninterest expense for the first quarter of 2021 increased $33 million, or 8%, to $440 million, compared with $407 million for the same prior year period, primarily due to the same reasons previously discussed for noninterest expense. The efficiency ratio was 63.5% for the first quarter of 2021, compared with 57.7% the first quarter of 2020. For information on non-GAAP financial measures, including differences between noninterest expense and adjusted noninterest expense, see pages 15-17.
BALANCE SHEET ANALYSIS
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| Asset Quality |
| | | | | | | 1Q21 - 4Q20 | | 1Q21 - 1Q20 |
| (In millions) | 1Q21 | | 4Q20 | | 1Q20 | | bps | | | | bps | | |
| Ratio of nonperforming assets to loans and leases and other real estate owned | 0.61 | % | | 0.69 | % | | 0.56 | % | | (8) | | | | | 5 | | | |
| Annualized ratio of net loan and lease charge-offs to average loans | 0.06 | % | | 0.11 | % | | 0.06 | % | | (5) | | | | | — | | | |
Ratio of total allowance for credit losses to loans1 and leases outstanding, at period end | 1.30 | % | | 1.56 | % | | 1.56 | % | | (26) | | | | | (26) | | | |
Ratio of total allowance for credit losses to loans1 and leases outstanding (excluding PPP loans), at period end | 1.48 | % | | 1.74 | % | | 1.56 | % | | (26) | | | | | (8) | | | |
| | | | | | | $ | | % | | $ | | % |
| Classified loans | $ | 1,660 | | $ | 1,641 | | $ | 881 | | $ | 19 | | | 1% | | $ | 779 | | | 88% |
| Nonperforming assets | 327 | | 371 | | 280 | | (44) | | | (12) | | 47 | | | 17 |
| Net loan and lease charge-offs | 8 | | 15 | | 7 | | (7) | | | (47) | | 1 | | | 14 |
| Provision for credit losses | (132) | | (67) | | 258 | | (65) | | | (97) | | (390) | | | NM |
1 Does not include loans held for sale.
ZIONS BANCORPORATION, N.A.
Press Release – Page 5
April 19, 2021
Net loan and lease charge-offs were $8 million in the first quarter of 2021, compared with $7 million in the first quarter of 2020. The ratio of nonaccrual loans and accruing loans past due 90 days or more to loans and leases (ex-PPP) was 0.71% for the first quarter of 2021, compared with 0.56% for the first quarter of 2020. The ratio of classified loans to total loans and leases (ex-PPP) was 3.5%, compared with 1.8%, for the same periods, respectively.
We recorded a negative $132 million provision for credit losses during the first quarter of 2021, compared with a negative $67 million during the fourth quarter of 2020, and a positive $258 million for the first quarter of 2020. The allowance for credit losses (“ACL”) was $695 million at March 31, 2021, compared with $835 million at December 31, 2020, and $777 million at March 31, 2020. The decrease in the ACL, compared with the same prior year period, was primarily due to an improvement in the economic outlook, compared with the more stressed economic outlook at the outset of the COVID-19 pandemic. The ratio of total ACL to total loans and leases (ex-PPP) was 1.48% at March 31, 2021, compared with 1.74% at December 31, 2020, and 1.56% at March 31, 2020.
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| Loans and Leases |
| | | | | | | 1Q21 - 4Q20 | | 1Q21 - 1Q20 |
| (In millions) | 1Q21 | | 4Q20 | | 1Q20 | | $ | | % | | $ | | % |
| Loans held for sale | $ | 77 | | | $ | 81 | | | $ | 140 | | | $ | (4) | | | (5)% | | $ | (63) | | | (45)% |
| Loans and leases: | | | | | | | | | | | | | |
Commercial – excluding PPP loans | 24,499 | | | 24,900 | | | 26,392 | | | (401) | | | (2) | | (1,893) | | | (7) |
Commercial – PPP loans | 6,465 | | | 5,572 | | | — | | | 893 | | | 16 | | 6,465 | | | NM |
| Commercial real estate | 12,060 | | | 12,104 | | | 11,741 | | | (44) | | | — | | 319 | | | 3 |
| Consumer | 10,448 | | | 10,900 | | | 11,794 | | | (452) | | | (4) | | (1,346) | | | (11) |
| Loans and leases, net of unearned income and fees | 53,472 | | | 53,476 | | | 49,927 | | | (4) | | | — | | 3,545 | | | 7 |
| Less allowance for loan losses | 646 | | | 777 | | | 730 | | | (131) | | | (17) | | (84) | | | (12) |
| Loans and leases held for investment, net of allowance | $ | 52,826 | | | $ | 52,699 | | | $ | 49,197 | | | $ | 127 | | | — | | $ | 3,629 | | | 7 |
Loans and leases, net of unearned income and fees, increased $3.6 billion, or 7%, to $53.5 billion at March 31, 2021, from $49.9 billion at March 31, 2020, primarily due to the origination of PPP loans. Excluding PPP loans, total loans and leases decreased $2.9 billion, or 6%, to $47.0 billion at March 31, 2021, including a $1.9 billion, or 7%, decrease in commercial loans, as the stressed economic environment and an abundance of liquidity in the marketplace continued to adversely impact loan demand. Within commercial loans, a $2.7 billion decrease in commercial and industrial loans was partially offset by a $751 million increase in municipal loans. Commercial real estate construction and land development loans increased $186 million, and term commercial real estate loans increased $133 million. Consumer loans decreased $1.3 billion, which was spread across all consumer loan subcategories. Unfunded lending commitments and letters of credit increased $2.8 billion, or 12%, to $25.5 billion at March 31, 2021, from $22.7 billion at March 31, 2020, primarily due to a decrease in commitment utilization.
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| Deposits and Borrowed Funds |
| | | | | | | 1Q21 - 4Q20 | | 1Q21 - 1Q20 |
| (In millions) | 1Q21 | | 4Q20 | | 1Q20 | | $ | | % | | $ | | % |
| Noninterest-bearing demand | $ | 35,882 | | | $ | 32,494 | | | $ | 24,380 | | | $ | 3,388 | | | 10 | % | | $ | 11,502 | | | 47 | % |
| Interest-bearing: | | | | | | | | | | | | | |
| Savings and money market | 35,762 | | | 34,571 | | | 28,901 | | | 1,191 | | | 3 | | | 6,861 | | | 24 | |
| Time | 2,209 | | | 2,588 | | | 4,237 | | | (379) | | | (15) | | | (2,028) | | | (48) | |
| | | | | | | | | | | | | |
| Total deposits | $ | 73,853 | | | $ | 69,653 | | | $ | 57,518 | | | $ | 4,200 | | | 6 | | | $ | 16,335 | | | 28 | |
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| Borrowed funds: | | | | | | | | | | | | | |
| Federal funds purchased and other short-term borrowings | $ | 1,032 | | | $ | 1,572 | | | $ | 3,765 | | | $ | (540) | | | (34) | | | $ | (2,733) | | | (73) | |
| Long-term debt | 1,299 | | | 1,336 | | | 1,795 | | | (37) | | | (3) | | | (496) | | | (28) | |
| Total borrowed funds | $ | 2,331 | | | $ | 2,908 | | | $ | 5,560 | | | $ | (577) | | | (20) | | | $ | (3,229) | | | (58) | |
ZIONS BANCORPORATION, N.A.
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April 19, 2021
Total deposits increased by $16.3 billion, or 28%, to $73.9 billion as of March 31, 2021, primarily due to an $11.5 billion increase in noninterest-bearing deposits, which continued to be impacted by government stimulus programs. Average total deposits increased to $71.4 billion for the first quarter of 2021, compared with $56.9 billion for the first quarter of 2020. Average noninterest-bearing deposits increased 43% to $33.7 billion for the first quarter of 2021, from $23.6 billion for the first quarter of 2020, and were 47% and 41% of average total deposits, respectively, for the same periods.
Total borrowed funds decreased $3.2 billion, or 58%, to $2.3 billion as of March 31, 2021. Average borrowed funds decreased to $2.4 billion for the first quarter of 2021, compared with $4.7 billion for the first quarter of 2020. The decrease in both end-of-period and average borrowed funds reflects less reliance on federal funds purchased and other short-term borrowings due to the strength of deposit growth, which significantly exceeded earning asset growth over this period.
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| Shareholders’ Equity |
| | | | | | | 1Q21 - 4Q20 | | 1Q21 - 1Q20 |
| (In millions) | 1Q21 | | 4Q20 | | 1Q20 | | $ | | % | | $ | | % |
| Shareholders’ equity: | | | | | | | | | | | | | |
| Preferred stock | $ | 566 | | $ | 566 | | $ | 566 | | $ | — | | | — | % | | $ | — | | | — | % |
| Common stock and additional paid-in capital | 2,653 | | 2,686 | | 2,668 | | (33) | | | (1) | | | (15) | | | (1) | |
| Retained earnings | 4,566 | | 4,309 | | 3,979 | | 257 | | | 6 | | | 587 | | | 15 | |
| Accumulated other comprehensive income | 148 | | 325 | | 259 | | (177) | | | (54) | | | (111) | | | (43) | |
| Total shareholders' equity | $ | 7,933 | | $ | 7,886 | | $ | 7,472 | | $ | 47 | | | 1 | | | $ | 461 | | | 6 | |
| | | | | | | | | | | | | |
| Capital distributions: | | | | | | | | | | | | | |
| Common dividends paid | $ | 56 | | $ | 56 | | $ | 56 | | $ | — | | | — | | | $ | — | | | — | |
| Bank common stock repurchased | 50 | | — | | 75 | | 50 | | | NM | | (25) | | | (33) | |
| Total capital distributed to common shareholders | $ | 106 | | $ | 56 | | $ | 131 | | $ | 50 | | | 89 | | | $ | (25) | | | (19) | |
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During the first quarter of 2021, the common stock dividend was $0.34 per share, which was unchanged from the first quarter of 2020. Weighted average diluted shares outstanding decreased 9.1 million from the first quarter of 2020, primarily due to the out-of-the-money expiration of 29.2 million ZIONW warrants on May 22, 2020. During the first quarter of 2021, we repurchased 1.0 million common shares outstanding for $50 million at an average price of $49.78 per share.
Accumulated other comprehensive income decreased $111 million to $148 million as of March 31, 2021, compared with $259 million as of March 31, 2020. The decline was primarily a result of decreases in the fair value of available-for-sale securities due to changes in interest rates.
Tangible book value per common share increased to $38.77 at March 31, 2021, compared with $35.96 at March 31, 2020. Basel III common equity tier 1 (“CET1”) capital was $6.2 billion at March 31, 2021 and $5.7 billion at March 31, 2020. The estimated Basel III CET1 capital ratio was 11.2% at March 31, 2021, compared with 10.0% at March 31, 2020. For information on non-GAAP financial measures, see pages 15-17.
ZIONS BANCORPORATION, N.A.
Press Release – Page 7
April 19, 2021
Supplemental Presentation and Conference Call
Zions has posted a supplemental presentation to its website, which will be used to discuss these first quarter results at 5:30 p.m. ET this afternoon (April 19, 2021). 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 2659447, 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, N.A.
Zions Bancorporation, N.A. is one of the nation's premier financial services companies with annual net revenue of $2.8 billion in 2020 and more than $85 billion of total assets. Zions operates under local management teams and distinct brands in 11 western states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. The Bank is a consistent recipient of national and state-wide customer survey awards in small and middle-market banking, as well as a leader in public finance advisory services and Small Business Administration lending, recently ranking as the tenth largest provider in the U.S. of the SBA’s Paycheck Protection Program loans (including both rounds). 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
This earnings release includes “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and assumptions regarding future events or determinations, all of which are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, market trends, industry results or regulatory outcomes to differ materially from those expressed or implied by such forward-looking statements.
Without limiting the foregoing, the words “forecasts,” “targets,” “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “would,” “will” and the negative thereof and similar words and expressions are intended to identify forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about future financial and operating results. Actual results and outcomes may differ materially from those presented, either expressed or implied, in the release. Important risk factors that may cause such material differences are often related to changes in general economic, regulatory, and industry conditions; changes and uncertainties in fiscal, monetary, regulatory, trade and tax policies and legislative and regulatory changes; changes in interest rates and uncertainty regarding the transition away from the London Interbank Offered Rate ("LIBOR") toward other alternative reference rates; the quality and composition of our loan and securities portfolios; competitive pressures and other factors that may affect aspects of our business, such as pricing and demand for our products and services; our ability to execute our strategic plans, manage our risks, and achieve our business objectives; our ability to develop and maintain information security systems, technologies and controls designed to guard against fraud, cyber and privacy risks; and the effects of the COVID-19 pandemic and similar outbreaks that may occur in the future and governmental responses to such matters. These factors, among others, are discussed in the Bank’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 (https://www.sec.gov/). In addition, you may obtain documents filed with the SEC by the Bank free of charge by contacting: Investor Relations, Zions Bancorporation, N.A., One South Main Street, 11th Floor, Salt Lake City, Utah 84133, (801) 844-7637.
We caution you against undue reliance on forward-looking statements, which reflect our views only as of the date they are made. Except as may be required by law, Zions Bancorporation, N.A. 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, N.A.
Press Release – Page 8
April 19, 2021
FINANCIAL HIGHLIGHTS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| (In millions, except share, per share, and ratio data) | March 31,
2021 | | December 31,
2020 | | September 30,
2020 | | June 30,
2020 | | March 31,
2020 |
BALANCE SHEET 1 | | | | | | | | | |
| Loans held for investment, net of allowance | $ | 52,826 | | | $ | 52,699 | | | $ | 53,892 | | | $ | 54,269 | | | $ | 49,197 | |
| Total assets | 85,121 | | | 81,479 | | | 78,357 | | | 76,447 | | | 71,467 | |
| Deposits | 73,853 | | | 69,653 | | | 67,094 | | | 65,684 | | | 57,518 | |
| Total shareholders’ equity | 7,933 | | | 7,886 | | | 7,668 | | | 7,575 | | | 7,472 | |
| STATEMENT OF INCOME | | | | | | | | | |
| Net earnings applicable to common shareholders | $ | 314 | | | $ | 275 | | | $ | 167 | | | $ | 57 | | | $ | 6 | |
| Net interest income | 545 | | | 550 | | | 555 | | | 563 | | | 548 | |
Taxable-equivalent net interest income 2 | 553 | | | 557 | | | 562 | | | 569 | | | 555 | |
| Total noninterest income | 169 | | | 166 | | | 157 | | | 117 | | | 134 | |
| Total noninterest expense | 435 | | | 424 | | | 442 | | | 430 | | | 408 | |
Adjusted pre-provision net revenue 2 | 253 | | | 280 | | | 267 | | | 300 | | | 299 | |
| Provision for credit losses | (132) | | | (67) | | | 55 | | | 168 | | | 258 | |
| SHARE AND PER COMMON SHARE AMOUNTS | | | | | | | | | |
| Net earnings per diluted common share | $ | 1.90 | | | $ | 1.66 | | | $ | 1.01 | | | $ | 0.34 | | | $ | 0.04 | |
| Dividends | 0.34 | | | 0.34 | | | 0.34 | | | 0.34 | | | 0.34 | |
Book value per common share 1 | 44.98 | | | 44.61 | | | 43.30 | | | 42.74 | | | 42.15 | |
Tangible book value per common share 1, 2 | 38.77 | | | 38.42 | | | 37.11 | | | 36.56 | | | 35.96 | |
| Weighted average share price | 51.34 | | | 36.86 | | | 32.09 | | | 31.53 | | | 41.02 | |
| Weighted average diluted common shares outstanding (in thousands) | 163,887 | | | 163,900 | | | 163,779 | | | 164,425 | | | 172,998 | |
Common shares outstanding (in thousands) 1 | 163,800 | | | 164,090 | | | 164,009 | | | 163,978 | | | 163,852 | |
| SELECTED RATIOS AND OTHER DATA | | | | | | | | | |
| Return on average assets | 1.57 | % | | 1.41 | % | | 0.89 | % | | 0.35 | % | | 0.08 | % |
| Return on average common equity | 17.4 | % | | 15.3 | % | | 9.4 | % | | 3.3 | % | | 0.3 | % |
Return on average tangible common equity 2 | 20.2 | % | | 17.8 | % | | 11.0 | % | | 3.8 | % | | 0.4 | % |
| Net interest margin | 2.86 | % | | 2.95 | % | | 3.06 | % | | 3.23 | % | | 3.41 | % |
| Cost of total deposits, annualized | 0.05 | % | | 0.08 | % | | 0.11 | % | | 0.15 | % | | 0.36 | % |
Efficiency ratio 2 | 63.5 | % | | 60.2 | % | | 62.2 | % | | 57.3 | % | | 57.7 | % |
| Effective tax rate | 21.7 | % | | 20.9 | % | | 18.6 | % | | 19.5 | % | | 12.5 | % |
| Ratio of nonperforming assets to loans and leases and other real estate owned | 0.61 | % | | 0.69 | % | | 0.68 | % | | 0.62 | % | | 0.56 | % |
| Annualized ratio of net loan and lease charge-offs to average loans | 0.06 | % | | 0.11 | % | | 0.38 | % | | 0.23 | % | | 0.06 | % |
Ratio of total allowance for credit losses to loans and leases outstanding 1 | 1.30 | % | | 1.56 | % | | 1.68 | % | | 1.66 | % | | 1.56 | % |
| Full-time equivalent employees | 9,682 | | 9,678 | | 9,726 | | 9,859 | | 9,879 |
CAPITAL RATIOS AND DATA 1 | | | | | | | | | |
Common equity tier 1 capital 3 | $ | 6,206 | | $ | 6,013 | | $ | 5,804 | | $ | 5,696 | | $ | 5,667 |
Risk-weighted assets 3 | 55,422 | | 55,866 | | 55,654 | | 55,878 | | 56,861 |
| Tangible common equity ratio | 7.6 | % | | 7.8 | % | | 7.9 | % | | 7.9 | % | | 8.4 | % |
Common equity tier 1 capital ratio 3 | 11.2 | % | | 10.8 | % | | 10.4 | % | | 10.2 | % | | 10.0 | % |
Tier 1 leverage ratio 3 | 8.3 | % | | 8.3 | % | | 8.3 | % | | 8.4 | % | | 9.0 | % |
Tier 1 risk-based capital ratio 3 | 12.2 | % | | 11.8 | % | | 11.4 | % | | 11.2 | % | | 11.0 | % |
Total risk-based capital ratio 3 | 14.5 | % | | 14.1 | % | | 13.7 | % | | 13.5 | % | | 13.2 | % |
1 At period end.
2 For information on non-GAAP financial measures, see pages 15-17.
3 Current period ratios and amounts represent estimates.
ZIONS BANCORPORATION, N.A.
Press Release – Page 9
April 19, 2021
CONSOLIDATED BALANCE SHEETS
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, shares in thousands) | March 31,
2021 | | December 31,
2020 | | September 30,
2020 | | June 30,
2020 | | March 31,
2020 |
| (Unaudited) | | | | (Unaudited) | | (Unaudited) | | (Unaudited) |
| ASSETS | | | | | | | | | |
| Cash and due from banks | $ | 576 | | | $ | 543 | | | $ | 576 | | | $ | 570 | | | $ | 730 | |
| Money market investments: | | | | | | | | | |
| Interest-bearing deposits | 8,427 | | | 1,074 | | | 856 | | | 1,579 | | | 1,225 | |
| Federal funds sold and security resell agreements | 1,315 | | | 5,765 | | | 2,804 | | | 266 | | | 550 | |
| Investment securities: | | | | | | | | | |
Held-to-maturity1, at amortized cost | 583 | | | 636 | | | 592 | | | 688 | | | 585 | |
| Available-for-sale, at fair value | 16,644 | | | 15,731 | | | 14,662 | | | 14,201 | | | 14,231 | |
| Trading account, at fair value | 189 | | | 266 | | | 198 | | | 160 | | | 160 | |
| | | | | | | | | |
| Total securities, net of allowance | 17,416 | | | 16,633 | | | 15,452 | | | 15,049 | | | 14,976 | |
| Loans held for sale | 77 | | | 81 | | | 89 | | | 105 | | | 140 | |
| Loans and leases, net of unearned income and fees | 53,472 | | | 53,476 | | | 54,745 | | | 55,129 | | | 49,927 | |
| Less allowance for loan losses | 646 | | | 777 | | | 853 | | | 860 | | | 730 | |
| Loans held for investment, net of allowance | 52,826 | | | 52,699 | | | 53,892 | | | 54,269 | | | 49,197 | |
| Other noninterest-bearing investments | 815 | | | 817 | | | 830 | | | 813 | | | 916 | |
| Premises, equipment and software, net | 1,236 | | | 1,209 | | | 1,187 | | | 1,173 | | | 1,144 | |
| Goodwill and intangibles | 1,016 | | | 1,016 | | | 1,016 | | | 1,014 | | | 1,014 | |
| Other real estate owned | 3 | | | 4 | | | 6 | | | 5 | | | 6 | |
| Other assets | 1,414 | | | 1,638 | | | 1,649 | | | 1,604 | | | 1,569 | |
| Total assets | $ | 85,121 | | | $ | 81,479 | | | $ | 78,357 | | | $ | 76,447 | | | $ | 71,467 | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | |
| Deposits: | | | | | | | | | |
| Noninterest-bearing demand | $ | 35,882 | | | $ | 32,494 | | | $ | 31,338 | | | $ | 30,714 | | | $ | 24,380 | |
| Interest-bearing: | | | | | | | | | |
| Savings and money market | 35,762 | | | 34,571 | | | 32,305 | | | 31,307 | | | 28,901 | |
| Time | 2,209 | | | 2,588 | | | 3,451 | | | 3,663 | | | 4,237 | |
| | | | | | | | | |
| Total deposits | 73,853 | | | 69,653 | | | 67,094 | | | 65,684 | | | 57,518 | |
| Federal funds purchased and other short-term borrowings | 1,032 | | | 1,572 | | | 1,252 | | | 860 | | | 3,765 | |
| Long-term debt | 1,299 | | | 1,336 | | | 1,347 | | | 1,353 | | | 1,795 | |
| Reserve for unfunded lending commitments | 49 | | | 58 | | | 64 | | | 54 | | | 47 | |
| Other liabilities | 955 | | | 974 | | | 932 | | | 921 | | | 870 | |
| Total liabilities | 77,188 | | | 73,593 | | | 70,689 | | | 68,872 | | | 63,995 | |
| Shareholders’ equity: | | | | | | | | | |
| Preferred stock, without par value; authorized 4,400 shares | 566 | | | 566 | | | 566 | | | 566 | | | 566 | |
Common stock2 ($0.001 par value; authorized 350,000 shares) and additional paid-in capital | 2,653 | | | 2,686 | | | 2,680 | | | 2,675 | | | 2,668 | |
| Retained earnings | 4,566 | | | 4,309 | | | 4,090 | | | 3,979 | | | 3,979 | |
| Accumulated other comprehensive income | 148 | | | 325 | | | 332 | | | 355 | | | 259 | |
| | | | | | | | | |
| | | | | | | | | |
| Total shareholders’ equity | 7,933 | | | 7,886 | | | 7,668 | | | 7,575 | | | 7,472 | |
| Total liabilities and shareholders’ equity | $ | 85,121 | | | $ | 81,479 | | | $ | 78,357 | | | $ | 76,447 | | | $ | 71,467 | |
1 Held-to-maturity (approximate fair value) | $ | 584 | | | $ | 640 | | | $ | 596 | | | $ | 691 | | | $ | 587 | |
2 Common shares (issued and outstanding) | 163,800 | | | 164,090 | | | 164,009 | | | 163,978 | | | 163,852 | |
ZIONS BANCORPORATION, N.A.
Press Release – Page 10
April 19, 2021
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) | Three Months Ended |
| (In millions, except share and per share amounts) | March 31,
2021 | | December 31,
2020 | | September 30,
2020 | | June 30,
2020 | | March 31,
2020 |
| Interest income: | | | | | | | | | |
| Interest and fees on loans | $ | 488 | | | $ | 499 | | | $ | 505 | | | $ | 514 | | | $ | 532 | |
| Interest on money market investments | 3 | | | 3 | | | 2 | | | 1 | | | 8 | |
| Interest on securities | 71 | | | 69 | | | 74 | | | 80 | | | 82 | |
| Total interest income | 562 | | | 571 | | | 581 | | | 595 | | | 622 | |
| Interest expense: | | | | | | | | | |
| Interest on deposits | 9 | | | 13 | | | 18 | | | 23 | | | 51 | |
| Interest on short- and long-term borrowings | 8 | | | 8 | | | 8 | | | 9 | | | 23 | |
| Total interest expense | 17 | | | 21 | | | 26 | | | 32 | | | 74 | |
| Net interest income | 545 | | | 550 | | | 555 | | | 563 | | | 548 | |
| Provision for credit losses: | | | | | | | | | |
| Provision for loan losses | (123) | | | (61) | | | 45 | | | 161 | | | 240 | |
| Provision for unfunded lending commitments | (9) | | | (6) | | | 10 | | | 7 | | | 18 | |
| | | | | | | | | |
| Total provision for credit losses | (132) | | | (67) | | | 55 | | | 168 | | | 258 | |
| Net interest income after provision for credit losses | 677 | | | 617 | | | 500 | | | 395 | | | 290 | |
| Noninterest income: | | | | | | | | | |
| Commercial account fees | 32 | | | 32 | | | 32 | | | 30 | | | 31 | |
| Card fees | 21 | | | 22 | | | 21 | | | 19 | | | 21 | |
| Retail and business banking fees | 17 | | | 18 | | | 17 | | | 15 | | | 19 | |
| Loan-related fees and income | 25 | | | 25 | | | 32 | | | 27 | | | 26 | |
| Capital markets and foreign exchange fees | 15 | | | 19 | | | 16 | | | 18 | | | 24 | |
| Wealth management fees | 12 | | | 10 | | | 10 | | | 9 | | | 11 | |
| | | | | | | | | |
| Other customer-related fees | 11 | | | 13 | | | 11 | | | 12 | | | 11 | |
| Customer-related fees | 133 | | | 139 | | | 139 | | | 130 | | | 143 | |
| Fair value and nonhedge derivative income (loss) | 18 | | | 8 | | | 8 | | | (12) | | | (11) | |
| Dividends and other income | 7 | | | 7 | | | 6 | | | 3 | | | 8 | |
| Securities gains (losses), net | 11 | | | 12 | | | 4 | | | (4) | | | (6) | |
| Total noninterest income | 169 | | | 166 | | | 157 | | | 117 | | | 134 | |
| Noninterest expense: | | | | | | | | | |
| Salaries and employee benefits | 288 | | | 277 | | | 269 | | | 267 | | | 274 | |
| Occupancy, net | 33 | | | 33 | | | 33 | | | 32 | | | 33 | |
| Furniture, equipment and software, net | 32 | | | 30 | | | 32 | | | 32 | | | 32 | |
| Other real estate expense, net | — | | | 1 | | | — | | | — | | | — | |
| Credit-related expense | 6 | | | 6 | | | 6 | | | 6 | | | 4 | |
| Professional and legal services | 20 | | | 19 | | | 12 | | | 10 | | | 12 | |
| Advertising | 5 | | | 6 | | | 7 | | | 3 | | | 3 | |
| FDIC premiums | 7 | | | 6 | | | 7 | | | 7 | | | 5 | |
| Other | 44 | | | 46 | | | 76 | | | 73 | | | 45 | |
| Total noninterest expense | 435 | | | 424 | | | 442 | | | 430 | | | 408 | |
| Income before income taxes | 411 | | | 359 | | | 215 | | | 82 | | | 16 | |
| Income taxes | 89 | | | 75 | | | 40 | | | 16 | | | 2 | |
| Net income | 322 | | | 284 | | | 175 | | | 66 | | | 14 | |
| | | | | | | | | |
| | | | | | | | | |
| Preferred stock dividends | (8) | | | (9) | | | (8) | | | (9) | | | (8) | |
| | | | | | | | | |
| Net earnings applicable to common shareholders | $ | 314 | | | $ | 275 | | | $ | 167 | | | $ | 57 | | | $ | 6 | |
| Weighted average common shares outstanding during the period: | | | | | | | | |
| Basic shares (in thousands) | 163,551 | | | 163,658 | | | 163,608 | | | 163,542 | | | 164,143 | |
| Diluted shares (in thousands) | 163,887 | | | 163,900 | | | 163,779 | | | 164,425 | | | 172,998 | |
| Net earnings per common share: | | | | | | | | | |
| Basic | $ | 1.90 | | | $ | 1.66 | | | $ | 1.01 | | | $ | 0.34 | | | $ | 0.04 | |
| Diluted | 1.90 | | | 1.66 | | | 1.01 | | | 0.34 | | | 0.04 | |
ZIONS BANCORPORATION, N.A.
Press Release – Page 11
April 19, 2021
Loan Balances Held for Investment by Portfolio Type
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | March 31,
2021 | | December 31,
2020 | | September 30,
2020 | | June 30,
2020 | | March 31,
2020 |
| Commercial: | | | | | | | | | |
| Commercial and industrial | $ | 12,843 | | | $ | 13,444 | | | $ | 13,543 | | | $ | 14,076 | | | $ | 15,533 | |
| PPP | 6,465 | | | 5,572 | | | 6,810 | | | 6,690 | | | — | |
| Leasing | 310 | | | 320 | | | 319 | | | 324 | | | 331 | |
| Owner occupied | 8,112 | | | 8,185 | | | 8,136 | | | 8,083 | | | 8,045 | |
| Municipal | 3,234 | | | 2,951 | | | 2,706 | | | 2,535 | | | 2,483 | |
| Total commercial | 30,964 | | | 30,472 | | | 31,514 | | | 31,708 | | | 26,392 | |
| Commercial real estate: | | | | | | | | | |
| Construction and land development | 2,443 | | | 2,345 | | | 2,298 | | | 2,367 | | | 2,257 | |
| Term | 9,617 | | | 9,759 | | | 9,729 | | | 9,587 | | | 9,484 | |
| Total commercial real estate | 12,060 | | | 12,104 | | | 12,027 | | | 11,954 | | | 11,741 | |
| Consumer: | | | | | | | | | |
| Home equity credit line | 2,695 | | | 2,745 | | | 2,797 | | | 2,856 | | | 2,958 | |
| 1-4 family residential | 6,630 | | | 6,969 | | | 7,209 | | | 7,393 | | | 7,567 | |
| Construction and other consumer real estate | 589 | | | 630 | | | 633 | | | 640 | | | 629 | |
| Bankcard and other revolving plans | 409 | | | 432 | | | 431 | | | 437 | | | 488 | |
| Other | 125 | | | 124 | | | 134 | | | 141 | | | 152 | |
| Total consumer | 10,448 | | | 10,900 | | | 11,204 | | | 11,467 | | | 11,794 | |
| Loans and leases, net of unearned income and fees | $ | 53,472 | | | $ | 53,476 | | | $ | 54,745 | | | $ | 55,129 | | | $ | 49,927 | |
Nonperforming Assets
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | March 31,
2021 | | December 31,
2020 | | September 30,
2020 | | June 30,
2020 | | March 31,
2020 |
| | | | | | | | | |
Nonaccrual loans1 | $ | 324 | | | $ | 367 | | | $ | 366 | | | $ | 339 | | | $ | 274 | |
| Other real estate owned | 3 | | | 4 | | | 6 | | | 5 | | | 6 | |
| Total nonperforming assets | $ | 327 | | | $ | 371 | | | $ | 372 | | | $ | 344 | | | $ | 280 | |
Ratio of nonperforming assets to loans1 and leases and other real estate owned | 0.61 | % | | 0.69 | % | | 0.68 | % | | 0.62 | % | | 0.56 | % |
| Accruing loans past due 90 days or more | $ | 9 | | | $ | 12 | | | $ | 9 | | | $ | 16 | | | $ | 8 | |
Ratio of accruing loans past due 90 days or more to loans1 and leases | 0.02 | % | | 0.02 | % | | 0.02 | % | | 0.03 | % | | 0.02 | % |
| Nonaccrual loans and accruing loans past due 90 days or more | $ | 333 | | | $ | 379 | | | $ | 375 | | | $ | 355 | | | $ | 282 | |
Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans1 and leases | 0.62 | % | | 0.71 | % | | 0.68 | % | | 0.64 | % | | 0.56 | % |
| Accruing loans past due 30-89 days | $ | 100 | | | $ | 112 | | | $ | 58 | | | $ | 168 | | | $ | 135 | |
| Restructured loans included in nonaccrual loans | 134 | | | 113 | | | 84 | | | 88 | | | 88 | |
| Restructured loans on accrual | 280 | | | 198 | | | 197 | | | 197 | | | 79 | |
| Classified loans | 1,660 | | | 1,641 | | | 1,639 | | | 1,477 | | | 881 | |
1 Includes loans held for sale.
ZIONS BANCORPORATION, N.A.
Press Release – Page 12
April 19, 2021
Allowance for Credit Losses
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| (In millions) | March 31,
2021 | | December 31,
2020 | | September 30,
2020 | | June 30,
2020 | | March 31,
2020 |
| Allowance for Loan Losses | | | | | | | | | |
| Balance at beginning of period | $ | 777 | | | $ | 853 | | | $ | 860 | | | $ | 730 | | | $ | 497 | |
| | | | | | | | | |
| Provision for loan losses | (123) | | | (61) | | | 45 | | | 161 | | | 240 | |
| | | | | | | | | |
| Loan and lease charge-offs | 21 | | | 21 | | | 58 | | | 36 | | | 13 | |
| Less: Recoveries | 13 | | | 6 | | | 6 | | | 5 | | | 6 | |
| Net loan and lease charge-offs | 8 | | | 15 | | | 52 | | | 31 | | | 7 | |
| Balance at end of period | $ | 646 | | | $ | 777 | | | $ | 853 | | | $ | 860 | | | $ | 730 | |
Ratio of allowance for loan losses to loans1 and leases, at period end | 1.21 | % | | 1.45 | % | | 1.56 | % | | 1.56 | % | | 1.46 | % |
Ratio of allowance for loan losses to nonaccrual loans1 at period end | 199 | % | | 212 | % | | 242 | % | | 254 | % | | 266 | % |
| Annualized ratio of net loan and lease charge-offs to average loans | 0.06 | % | | 0.11 | % | | 0.38 | % | | 0.23 | % | | 0.06 | % |
| | | | | | | | | |
| Reserve for Unfunded Lending Commitments | | | | | | | | | |
| Balance at beginning of period | $ | 58 | | | $ | 64 | | | $ | 54 | | | $ | 47 | | | $ | 29 | |
| Provision for unfunded lending commitments | (9) | | | (6) | | | 10 | | | 7 | | | 18 | |
| Balance at end of period | $ | 49 | | | $ | 58 | | | $ | 64 | | | $ | 54 | | | $ | 47 | |
| | | | | | | | | |
| Allowance for Credit Losses | | | | | | | | | |
| Allowance for loan losses | $ | 646 | | | $ | 777 | | | $ | 853 | | | $ | 860 | | | $ | 730 | |
| Reserve for unfunded lending commitments | 49 | | | 58 | | | 64 | | | 54 | | | 47 | |
| Total allowance for credit losses | $ | 695 | | | $ | 835 | | | $ | 917 | | | $ | 914 | | | $ | 777 | |
Ratio of total allowance for credit losses to loans1 and leases outstanding, at period end | 1.30 | % | | 1.56 | % | | 1.68 | % | | 1.66 | % | | 1.56 | % |
Ratio of total allowance for credit losses to loans1 and leases outstanding (excluding PPP loans), at period end | 1.48 | % | | 1.74 | % | | 1.91 | % | | 1.88 | % | | 1.56 | % |
1 Does not include loans held for sale.
ZIONS BANCORPORATION, N.A.
Press Release – Page 13
April 19, 2021
Nonaccrual Loans by Portfolio Type
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | March 31,
2021 | | December 31,
2020 | | September 30,
2020 | | June 30,
2020 | | March 31,
2020 |
| | | | | | | | | |
| Loans held for sale | $ | — | | | $ | — | | | $ | 14 | | | $ | — | | | $ | — | |
| Commercial: | | | | | | | | | |
| Commercial and industrial | $ | 119 | | | $ | 140 | | | $ | 158 | | | $ | 172 | | | $ | 135 | |
| Leasing | — | | | — | | | 1 | | | 1 | | | 1 | |
| Owner occupied | 74 | | | 76 | | | 81 | | | 68 | | | 65 | |
| Municipal | — | | | — | | | — | | | — | | | — | |
| Total commercial | 193 | | | 216 | | | 240 | | | 241 | | | 201 | |
| Commercial real estate: | | | | | | | | | |
| Construction and land development | — | | | — | | | — | | | — | | | — | |
| Term | 31 | | | 31 | | | 37 | | | 23 | | | 15 | |
| Total commercial real estate | 31 | | | 31 | | | 37 | | | 23 | | | 15 | |
| Consumer: | | | | | | | | | |
| Home equity credit line | 19 | | | 16 | | | 16 | | | 15 | | | 14 | |
| 1-4 family residential | 80 | | | 103 | | | 59 | | | 59 | | | 43 | |
| Construction and other consumer real estate | — | | | — | | | — | | | — | | | — | |
| Bankcard and other revolving plans | 1 | | | 1 | | | — | | | 1 | | | 1 | |
| Other | — | | | — | | | — | | | — | | | — | |
| Total consumer | 100 | | | 120 | | | 75 | | | 75 | | | 58 | |
| | | | | | | | | |
| Total nonaccrual loans | $ | 324 | | | $ | 367 | | | $ | 366 | | | $ | 339 | | | $ | 274 | |
Net Charge-Offs by Portfolio Type
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | March 31,
2021 | | December 31,
2020 | | September 30,
2020 | | June 30,
2020 | | March 31,
2020 |
| Commercial: | | | | | | | | | |
| Commercial and industrial | $ | 8 | | | $ | 15 | | | $ | 51 | | | $ | 26 | | | $ | 7 | |
| Leasing | — | | | — | | | — | | | — | | | — | |
| Owner occupied | — | | | — | | | (1) | | | 2 | | | (1) | |
| Municipal | — | | | — | | | — | | | — | | | — | |
| Total commercial | 8 | | | 15 | | | 50 | | | 28 | | | 6 | |
| Commercial real estate: | | | | | | | | | |
| Construction and land development | — | | | — | | | — | | | — | | | — | |
| Term | — | | | — | | | 1 | | | — | | | — | |
| Total commercial real estate | — | | | — | | | 1 | | | — | | | — | |
| Consumer: | | | | | | | | | |
| Home equity credit line | (1) | | | — | | | — | | | — | | | — | |
| 1-4 family residential | (1) | | | (1) | | | — | | | — | | | (1) | |
| Construction and other consumer real estate | — | | | — | | | — | | | — | | | — | |
| Bankcard and other revolving plans | 1 | | | — | | | 1 | | | 2 | | | 1 | |
| Other | 1 | | | 1 | | | — | | | 1 | | | 1 | |
| Total consumer loans | — | | | — | | | 1 | | | 3 | | | 1 | |
| Total net charge-offs (recoveries) | $ | 8 | | | $ | 15 | | | $ | 52 | | | $ | 31 | | | $ | 7 | |
ZIONS BANCORPORATION, N.A.
Press Release – Page 14
April 19, 2021
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) | Three Months Ended |
| March 31, 2021 | | December 31, 2020 | | March 31, 2020 |
| (In millions) | Average balance | | Average
yield/rate 1 | | Average balance | | Average
yield/rate 1 | | Average balance | | Average
yield/rate 1 |
| ASSETS | | | | | | | | | | | |
| Money market investments | $ | 7,791 | | | 0.16 | % | | $ | 5,450 | | | 0.21 | % | | $ | 2,013 | | | 1.52 | % |
| Securities: | | | | | | | | | | | |
| Held-to-maturity | 663 | | | 2.98 | % | | 577 | | | 3.49 | % | | 593 | | | 3.72 | % |
| Available-for-sale | 15,876 | | | 1.69 | % | | 14,926 | | | 1.70 | % | | 13,687 | | | 2.26 | % |
| Trading account | 231 | | | 3.96 | % | | 198 | | | 4.55 | % | | 164 | | | 4.27 | % |
| Total securities | 16,770 | | | 1.77 | % | | 15,701 | | | 1.81 | % | | 14,444 | | | 2.34 | % |
| Loans held for sale | 68 | | | 2.81 | % | | 62 | | | 2.32 | % | | 109 | | | 3.14 | % |
Loans held for investment:2 | | | | | | | | | | | |
| Commercial - excluding PPP loans | 24,732 | | | 3.83 | % | | 24,583 | | | 3.91 | % | | 25,514 | | | 4.53 | % |
| Commercial - PPP loans | 6,135 | | | 3.98 | % | | 6,310 | | | 3.50 | % | | — | | | — | % |
| Commercial real estate | 12,133 | | | 3.50 | % | | 12,013 | | | 3.55 | % | | 11,546 | | | 4.62 | % |
| Consumer | 10,665 | | | 3.59 | % | | 11,068 | | | 3.58 | % | | 11,737 | | | 3.99 | % |
| Total loans held for investment | 53,665 | | | 3.73 | % | | 53,974 | | | 3.71 | % | | 48,797 | | | 4.42 | % |
| Total interest-earning assets | 78,294 | | | 2.95 | % | | 75,187 | | | 3.06 | % | | 65,363 | | | 3.87 | % |
| Cash and due from banks | 614 | | | | | 601 | | | | | 676 | | | |
| Allowance for credit losses on loans and debt securities | (774) | | | | | (854) | | | | | (499) | | | |
| Goodwill and intangibles | 1,016 | | | | | 1,016 | | | | | 1,014 | | | |
| Other assets | 3,930 | | | | | 4,110 | | | | | 3,651 | | | |
| Total assets | $ | 83,080 | | | | | $ | 80,060 | | | | | $ | 70,205 | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | |
| Interest-bearing deposits: | | | | | | | | | | | |
| Savings and money market | $ | 35,232 | | | 0.07 | % | | $ | 33,305 | | | 0.09 | % | | $ | 28,856 | | | 0.47 | % |
| Time | 2,491 | | | 0.55 | % | | 2,925 | | | 0.76 | % | | 4,454 | | | 1.61 | % |
| | | | | | | | | | | |
| Total interest-bearing deposits | 37,723 | | | 0.10 | % | | 36,230 | | | 0.14 | % | | 33,310 | | | 0.62 | % |
| Borrowed funds: | | | | | | | | | | | |
| Federal funds purchased and other short-term borrowings | 1,110 | | | 0.07 | % | | 1,336 | | | 0.08 | % | | 2,922 | | | 1.19 | % |
| Long-term debt | 1,324 | | | 2.30 | % | | 1,342 | | | 2.25 | % | | 1,747 | | | 3.21 | % |
| Total borrowed funds | 2,434 | | | 1.28 | % | | 2,678 | | | 1.17 | % | | 4,669 | | | 1.95 | % |
| Total interest-bearing funds | 40,157 | | | 0.17 | % | | 38,908 | | | 0.21 | % | | 37,979 | | | 0.78 | % |
| Noninterest-bearing deposits | 33,723 | | | | | 32,036 | | | | | 23,599 | | | |
| Other liabilities | 1,301 | | | | | 1,384 | | | | | 1,137 | | | |
| Total liabilities | 75,181 | | | | | 72,328 | | | | | 62,715 | | | |
| Shareholders’ equity: | | | | | | | | | | | |
| Preferred equity | 566 | | | | | 566 | | | | | 566 | | | |
| Common equity | 7,333 | | | | | 7,166 | | | | | 6,924 | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Total shareholders’ equity | 7,899 | | | | | 7,732 | | | | | 7,490 | | | |
| Total liabilities and shareholders’ equity | $ | 83,080 | | | | | $ | 80,060 | | | | | $ | 70,205 | | | |
| Spread on average interest-bearing funds | | | 2.78 | % | | | | 2.85 | % | | | | 3.09 | % |
| Impact of net noninterest-bearing sources of funds | | | 0.08 | % | | | | 0.10 | % | | | | 0.32 | % |
| Net interest margin | | | 2.86 | % | | | | 2.95 | % | | | | 3.41 | % |
| Memo: total loans and leases, excluding PPP loans | 47,530 | | | 3.69 | % | | 47,664 | | | 3.74 | % | | 48,797 | | | 4.42 | % |
| | | | | | | | | | | |
| Memo: total cost of deposits | | | 0.05 | % | | | | 0.08 | % | | | | 0.36 | % |
| Memo: total deposits and interest-bearing liabilities | 73,880 | | | 0.09 | % | | 70,944 | | | 0.12 | % | | 61,578 | | | 0.48 | % |
1 Rates are calculated using amounts in thousands and tax rates of 21% for 2021 and 2020.
2 Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.
ZIONS BANCORPORATION, N.A.
Press Release – Page 15
April 19, 2021
GAAP to Non-GAAP Reconciliations
(Unaudited)
This press release presents non-GAAP financial measures, in addition to GAAP financial measures, to provide investors with additional information. The adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are presented in the following schedules. We consider these adjustments to be relevant to ongoing operating results and provide a meaningful base for period-to-period and company-to-company comparisons. These non-GAAP financial measures are used by us to assess our performance and financial position and for presentations of our performance to investors. We further believe that presenting these non-GAAP financial measures will permit investors to assess our performance on the same basis as that applied by our management.
Non-GAAP financial measures have inherent limitations, and are not required to be uniformly applied by individual entities. 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.
The following are non-GAAP financial measures presented in this press release and a discussion of the reasons for which we use these non-GAAP measures:
Tangible Book Value per Common Share – this schedule also includes “tangible common equity.” Tangible book value per common share is a non-GAAP financial measure that we believe provides additional useful information about the level of tangible equity in relation to outstanding shares of common stock. We believe the use of ratios that utilize tangible equity provides additional useful information about capital adequacy because they present measures of those assets that can generate income.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, except shares and per share amounts) | | March 31,
2021 | | December 31,
2020 | | September 30,
2020 | | June 30,
2020 | | March 31,
2020 |
| Tangible Book Value per Common Share | | | | | | | | | | |
| Total shareholders’ equity (GAAP) | | $ | 7,933 | | | $ | 7,886 | | | $ | 7,668 | | | $ | 7,575 | | | $ | 7,472 | |
| Preferred stock | | (566) | | | (566) | | | (566) | | | (566) | | | (566) | |
| Goodwill and intangibles | | (1,016) | | | (1,016) | | | (1,016) | | | (1,014) | | | (1,014) | |
| Tangible common equity (non-GAAP) | (a) | $ | 6,351 | | | $ | 6,304 | | | $ | 6,086 | | | $ | 5,995 | | | $ | 5,892 | |
| Common shares outstanding (in thousands) | (b) | 163,800 | | | 164,090 | | | 164,009 | | | 163,978 | | | 163,852 | |
| Tangible book value per common share (non-GAAP) | (a/b) | $ | 38.77 | | | $ | 38.42 | | | $ | 37.11 | | | $ | 36.56 | | | $ | 35.96 | |
ZIONS BANCORPORATION, N.A.
Press Release – Page 16
April 19, 2021
GAAP to Non-GAAP Reconciliations
(Unaudited)
Return on Average Tangible Common Equity (“ROTCE”) – this schedule also includes “net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax” and “average tangible common equity.” ROTCE is a non-GAAP financial measure that we believe provides useful information about our use of shareholders’ equity. We believe the use of ratios that utilize tangible equity provides additional useful information about our performance because they present measures of those assets that can generate income.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (Dollar amounts in millions) | | March 31,
2021 | | December 31,
2020 | | September 30,
2020 | | June 30,
2020 | | March 31,
2020 |
| Return on Average Tangible Common Equity | | | | | | | | | |
| Net earnings applicable to common shareholders (GAAP) | | $ | 314 | | | $ | 275 | | | $ | 167 | | | $ | 57 | | | $ | 6 | |
| Adjustments, net of tax: | | | | | | | | | | |
| | | | | | | | | | |
| Amortization of core deposit and other intangibles | | — | | | — | | | — | | | — | | | — | |
| Net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax (non-GAAP) | (a) | $ | 314 | | | $ | 275 | | | $ | 167 | | | $ | 57 | | | $ | 6 | |
| Average common equity (GAAP) | | $ | 7,333 | | | $ | 7,166 | | | $ | 7,078 | | | $ | 7,030 | | | $ | 6,924 | |
| Average goodwill and intangibles | | (1,016) | | | (1,016) | | | (1,015) | | | (1,014) | | | (1,014) | |
| Average tangible common equity (non-GAAP) | (b) | $ | 6,317 | | | $ | 6,150 | | | $ | 6,063 | | | $ | 6,016 | | | $ | 5,910 | |
| Number of days in quarter | (c) | 90 | | | 92 | | | 92 | | | 91 | | | 91 | |
| Number of days in year | (d) | 365 | | | 366 | | | 366 | | | 366 | | | 366 | |
| Return on average tangible common equity (non-GAAP) | (a/b/c)*d | 20.2 | % | | 17.8 | % | | 11.0 | % | | 3.8 | % | | 0.4 | % |
ZIONS BANCORPORATION, N.A.
Press Release – Page 17
April 19, 2021
GAAP to Non-GAAP Reconciliations
(Unaudited)
Efficiency Ratio – this schedule also includes “adjusted noninterest expense,” “taxable-equivalent net interest income,” “adjusted taxable-equivalent revenue,” “pre-provision net revenue (PPNR)” and “adjusted PPNR.” The methodology of determining the efficiency ratio may differ among companies. We make adjustments to exclude certain items as identified in the subsequent schedule which we believes allows for more consistent comparability among periods. We believe the efficiency ratio provides useful information regarding the cost of generating revenue. Adjusted noninterest expense provides a measure as to how well we are managing our expenses, and adjusted PPNR enables us and others to assess our ability to generate capital to cover credit losses through a credit cycle. Taxable-equivalent net interest income allows us to assess the comparability of revenue arising from both taxable and tax-exempt sources.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In millions) | | March 31,
2021 | | December 31,
2020 | | September 30,
2020 | | June 30,
2020 | | March 31,
2020 |
| Efficiency Ratio | | | | | | | | | | |
| Noninterest expense (GAAP) | (a) | $ | 435 | | | $ | 424 | | | $ | 442 | | | $ | 430 | | | $ | 408 | |
| Adjustments: | | | | | | | | | | |
| Severance costs | | — | | | 1 | | | 1 | | | — | | | — | |
| Other real estate expense, net | | — | | | 1 | | | — | | | — | | | — | |
| | | | | | | | | | |
| | | | | | | | | | |
| Restructuring costs | | — | | | (1) | | | 1 | | | — | | | 1 | |
| Pension termination-related expense | | (5) | | | — | | | — | | | 28 | | | — | |
| Total adjustments | (b) | (5) | | | 1 | | | 2 | | | 28 | | | 1 | |
| Adjusted noninterest expense (non-GAAP) | (a-b)=(c) | $ | 440 | | | $ | 423 | | | $ | 440 | | | $ | 402 | | | $ | 407 | |
| Net interest income (GAAP) | (d) | $ | 545 | | | $ | 550 | | | $ | 555 | | | $ | 563 | | | $ | 548 | |
| Fully taxable-equivalent adjustments | (e) | 8 | | | 7 | | | 7 | | | 6 | | | 7 | |
| Taxable-equivalent net interest income (non-GAAP) | (d+e)=(f) | 553 | | | 557 | | | 562 | | | 569 | | | 555 | |
| Noninterest income (GAAP) | (g) | 169 | | | 166 | | | 157 | | | 117 | | | 134 | |
| Combined income (non-GAAP) | (f+g)=(h) | 722 | | | 723 | | | 719 | | | 686 | | | 689 | |
| Adjustments: | | | | | | | | | | |
| Fair value and nonhedge derivative income (loss) | | 18 | | | 8 | | | 8 | | | (12) | | | (11) | |
| Securities gains (losses), net | | 11 | | | 12 | | | 4 | | | (4) | | | (6) | |
| Total adjustments | (i) | 29 | | | 20 | | | 12 | | | (16) | | | (17) | |
Adjusted taxable-equivalent revenue (non-GAAP) | (h-i)=(j) | $ | 693 | | | $ | 703 | | | $ | 707 | | | $ | 702 | | | $ | 706 | |
| Pre-provision net revenue (PPNR) (non-GAAP) | (h)-(a) | $ | 287 | | | $ | 299 | | | $ | 277 | | | $ | 256 | | | $ | 281 | |
| Adjusted PPNR (non-GAAP) | (j)-(c) | 253 | | | 280 | | | 267 | | | 300 | | | 299 | |
Efficiency ratio (non-GAAP) 1 | (c/j) | 63.5 | % | | 60.2 | % | | 62.2 | % | | 57.3 | % | | 57.7 | % |
1 Excluding the $30 million charitable contribution, the efficiency ratio for the three months ended September 30, 2020 would have been 58.0%.
