EX-99.1 2 exh9912q20168-k.htm 2Q16 EARNINGS RELEASE Exhibit

ZIONS BANCORPORATION
Press Release – Page 1
July 26, 2016


Zions Bancorporation    
One South Main
Salt Lake City, UT 84133
July 26, 2016
www.zionsbancorporation.com

Second Quarter 2016 Financial Results: FOR IMMEDIATE RELEASE
 
Investor and Media Contact: James Abbott (801) 844-7637


 
Zions Bancorporation Reports: 2Q16 Net Earnings1 of $91 million, diluted EPS of $0.44
compared to 1Q16 Net Earnings1 of $79 million, diluted EPS of $0.38,
              and 2Q15 Net Earnings1 of $(1.1) million, diluted EPS of $(0.01)
 
 


SECOND QUARTER RESULTS
$0.44
 
$91 million
 
6.31%
 
11.9%
 
3.39%
 
64.5%
Earnings per diluted common share
 
Net Earnings 1
 
Tangible return on average tangible common equity 2
 
Common Equity
Tier 1 2
 
Net interest margin (“NIM”)
 
Efficiency ratio 2

HIGHLIGHTS
 
 
Net Interest Income and Net Interest Margin
•
Net interest income was $465 million for 2Q16, up 3% from 1Q16 and up 10% from 2Q15
•
NIM up 4 bps to 3.39% from 3.35% in 1Q16 and up 21 bps from 3.18% in 2Q15
 
 
Operating Performance 3
•
Adjusted pre-provision net revenue ("PPNR")2 was $211 million for 2Q16, up 16% from 1Q16 and up 32% from 2Q15
•
Efficiency ratio2 of 64.5% for 2Q16, an improvement of 399 bps from 1Q16
•
Adjusted noninterest expense2 of $384 million in 2Q16 compared to $396 million in 1Q16
•
Customer-related fees in 2Q16 increased 5% from 1Q16
 
 
Loans and Credit Quality
•
Net loans and leases increased $1.1 billion, or 2.6%, from 1Q16 (10.5% annualized)
•
Nonperforming assets were 1.30% of loans and leases, down from 1.33% in 1Q16
•
Provision for credit losses was $30 million, compared to $36 million in 1Q16
•
Net charge-offs were $38 million in 2Q16, compared to $36 million in 1Q16
 
 
Oil and Gas-Related Exposure
•
Net charge-offs for oil and gas loans were $37 million in 2Q16, compared to $36 million in 1Q16
•
Oil and gas portfolio allowance continued to exceed 8% of the portfolio
•
Criticized oil and gas-related loans remained stable at 38% of the oil and gas-related loans
1 Net Earnings is net earnings applicable to common shareholders.
2 For information on non-GAAP financial measures see pages 15-17.
3 Included in these non-GAAP financial measures are the key metrics to which Zions announced it would hold itself accountable in its June 1, 2015 efficiency initiative, and to which executive compensation is tied.
 
CEO COMMENTARY
 
Harris H. Simmons, Chairman and CEO, commented, “We are pleased with the Company’s positive momentum, as evidenced most notably by the continued strong improvement in pre-provision net revenue which increased 32% in the second quarter from the same prior year period. As anticipated, the strong performance is coming from loan growth, which came from diverse geographies and product types, and well-controlled expenses. We are focused on increasing both the return on and the return of capital. Accordingly, we announced a one-third increase in our dividend, and the commencement at the earliest opportunity of a share repurchase program expected to total $180 million over the next four quarters.”
OPERATING PERFORMANCE2


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ZIONS BANCORPORATION
Press Release – Page 2
July 26, 2016

The percent change amounts presented in the following tables are calculated on amounts in thousands rather than millions.
RESULTS OF OPERATIONS
Net Interest Income
 
 
 
 
 
 
 
 
2Q16 - 1Q16
 
2Q16 - 2Q15
(In millions)
 
2Q16
 
1Q16
 
2Q15
 
$
 
%
 
$
 
%
Interest and fees on loans
 
$
434

 
$
421

 
$
421

 
$
13

 
3
 %
 
$
13

 
3
 %
Interest on money market investments
 
6

 
7

 
6

 
(1
)
 
(21
)
 
—

 
(4
)
Interest on securities
 
47

 
47

 
28

 
—

 
1

 
19

 
65

Total interest income
 
487

 
475

 
455

 
12

 
3

 
32

 
7

Interest on deposits
 
12

 
12

 
12

 
—

 
—

 
—

 
(4
)
Interest on short and long-term borrowings
 
10

 
10

 
19

 
—

 
—

 
(9
)
 
(47
)
Interest expense
 
22

 
22

 
31

 
—

 
—

 
(9
)
 
(30
)
Net interest income
 
$
465

 
$
453

 
$
424

 
$
12

 
3

 
$
41

 
10

Net interest income increased to $465 million in the second quarter of 2016 from $453 million in the first quarter of 2016. The net interest margin increased to 3.39% in the second quarter of 2016, compared to 3.35% in the first quarter of 2016. The Company continues to change its mix of interest-earning assets as average money market investments declined in the second quarter of 2016 by $1.1 billion, much of which was deployed into loans and term investment securities. Average loans and leases held for investment increased in the second quarter of 2016 by $1.1 billion and average securities increased $876 million. The increase in net interest income was due to a $13 million increase in interest and fees on loans resulting from solid loan growth across all segments in recent quarters. Although the average amount of investment securities increased, the interest income on securities was stable with the prior quarter primarily due to elevated prepayments and the corresponding reduction in portfolio yield.
Noninterest Income
 
 
 
 
 
 
 
 
2Q16 - 1Q16
 
2Q16 - 2Q15
(In millions)
 
2Q16
 
1Q16
 
2Q15
 
$
 
%
 
$
 
%
Service charges and fees on deposit accounts
 
$
42

 
$
41

 
$
42

 
$
1

 
2
 %
 
$
—

 
1
 %
Other service charges, commissions and fees
 
52

 
49

 
47

 
3

 
5

 
5

 
11

Wealth management income
 
9

 
8

 
8

 
1

 
10

 
1

 
8

Loan sales and servicing income
 
10

 
8

 
8

 
2

 
28

 
2

 
21

Capital markets and foreign exchange
 
5

 
6

 
7

 
(1
)
 
(20
)
 
(2
)
 
(38
)
Customer-related fees
 
118

 
112

 
112

 
6

 
5

 
6

 
5

Dividends and other investment income
 
6

 
5

 
9

 
1

 
34

 
(3
)
 
(33
)
Fair value and nonhedge derivative income (loss)
 
(2
)
 
(3
)
 
2

 
1

 
26

 
(4
)
 
(204
)
Other
 
4

 
3

 
(128
)
 
1

 
63

 
132

 
103

Total noninterest income
 
$
126

 
$
117

 
$
(5
)
 
$
9

 
8

 
$
131

 
(2,785
)
Total noninterest income for the second quarter of 2016 was $126 million, compared to $117 million for the first quarter of 2016. The improvement in total noninterest income during the quarter was primarily due to customer-related fees, which increased in the second quarter of 2016 by 5% compared to the prior quarter and prior year

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ZIONS BANCORPORATION
Press Release – Page 3
July 26, 2016

period. Additionally, equity securities gains increased primarily due to a $2 million increase in the market value of the Company’s SBIC investments.
Noninterest Expense
 
 
 
 
 
 
 
 
2Q16 - 1Q16
 
2Q16 - 2Q15
(In millions)
 
2Q16
 
1Q16
 
2Q15
 
$
 
%
 
$
 
%
Salaries and employee benefits
 
$
241

 
$
258

 
$
251

 
$
(17
)
 
(7
)%
 
$
(10
)
 
(4
)%
Occupancy, net
 
30

 
30

 
30

 
—

 
(1
)
 
—

 
(2
)
Furniture, equipment and software
 
30

 
32

 
31

 
(2
)
 
(5
)
 
(1
)
 
(2
)
Credit-related expense
 
6

 
6

 
8

 
—

 
(1
)
 
(2
)
 
(28
)
Provision for unfunded lending commitments
 
(4
)
 
(6
)
 
(2
)
 
2

 
27

 
(2
)
 
(83
)
Professional and legal services
 
12

 
11

 
13

 
1

 
7

 
(1
)
 
(7
)
Advertising
 
5

 
6

 
7

 
(1
)
 
(6
)
 
(2
)
 
(19
)
FDIC premiums
 
10

 
7

 
9

 
3

 
34

 
1

 
11

Amortization of core deposit and other intangibles
 
2

 
2

 
2

 
—

 
(2
)
 
—

 
(15
)
Other
 
50

 
50

 
50

 
—

 
1

 
—

 
(1
)
Total noninterest expense
 
$
382

 
$
396

 
$
399

 
$
(14
)
 
(4
)
 
$
(17
)
 
(4
)
Adjusted noninterest expense 1
 
$
384

 
$
396

 
$
395

 
$
(12
)
 
(3
)%
 
$
(11
)
 
(3
)%
1 
For information on non-GAAP financial measures see pages 15-17.
The Company continued to make meaningful progress with its corporate restructuring and cost initiatives during the quarter. Noninterest expense for the second quarter of 2016 was $382 million, compared to $396 million for the first quarter of 2016, and $399 million for the second quarter of 2015. The decrease in total noninterest expense from the first quarter of 2016 was primarily due to a decrease of $17 million in salaries and employee benefits, which was predominantly a result of $13 million of seasonal increases that occurred during the first quarter related to the accrual for annual restricted stock awards and payroll taxes, in addition to a $3 million decline in severance. For more information on adjusted noninterest expense measures used to determine the Company’s efficiency ratio, see pages 15-17.
BALANCE SHEET ANALYSIS
Loans and Leases
 
 
 
 
 
 
 
 
2Q16 - 1Q16
 
2Q16 - 2Q15
(In millions)
 
2Q16
 
1Q16
 
2Q15
 
$
 
%
 
$
 
%
Loans held for sale
 
$
147

 
$
109

 
$
152

 
$
38

 
35
 %
 
$
(5
)
 
(4
)%
Loans and leases, net of unearned income and fees
 
42,501

 
41,418

 
40,024

 
1,083

 
3

 
2,477

 
6

Less allowance for loan losses
 
608

 
612

 
609

 
(4
)
 
(1
)
 
(1
)
 
—

Loans held for investment, net of allowance
 
$
41,893

 
$
40,806

 
$
39,415

 
$
1,087

 
3

 
$
2,478

 
6

Loans and leases, net of unearned income and fees, increased $1.1 billion, or 2.6% (10.5% on an annualized basis based on second quarter growth) to $42.5 billion at June 30, 2016 from $41.4 billion at March 31, 2016. Average loans and leases held for investment of $42.1 billion during the second quarter of 2016 increased from $41.0 billion during the first quarter of 2016. The increase in loans was widespread across products and geography, with

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ZIONS BANCORPORATION
Press Release – Page 4
July 26, 2016

particular strength in commercial real estate term, 1-4 family residential (which includes the purchase of $104 million of loans), and commercial and industrial loans. Unfunded lending commitments were $18.5 billion at June 30, 2016, compared to $18.2 billion at March 31, 2016.
Oil and Gas-Related Exposure1
 
 
 
 
 
 
 
 
2Q16 - 1Q16
 
2Q16 - 2Q15
(In millions)
 
2Q16
 
1Q16
 
2Q15
 
$
 
%
 
$
 
%
Loans and leases
 
 
 
 
 
 
 


 


 


 

Upstream – exploration and production
 
$
831

 
$
859

 
$
954

 
$
(28
)
 
(3
)%
 
$
(123
)
 
(13
)%
Midstream – marketing and transportation
 
658

 
649

 
589

 
9

 
1

 
69

 
12

Downstream – refining
 
131

 
129

 
131

 
2

 
2

 
—

 
—

Other non-services
 
45

 
43

 
75

 
2

 
5

 
(30
)
 
(40
)
Oilfield services
 
712

 
734

 
879

 
(22
)
 
(3
)
 
(167
)
 
(19
)
Oil and gas service manufacturing
 
193

 
229

 
255

 
(36
)
 
(16
)
 
(62
)
 
(24
)
Total loan and lease balances 2
 
2,570

 
2,643

 
2,883

 
(73
)
 
(3
)
 
(313
)
 
(11
)
Unfunded lending commitments
 
1,823

 
2,021

 
2,385

 
(198
)
 
(10
)
 
(562
)
 
(24
)
Total oil and gas credit exposure
 
$
4,393

 
$
4,664

 
$
5,268

 
$
(271
)
 
(6
)
 
$
(875
)
 
(17
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private equity investments
 
$
6

 
$
12

 
$
18

 
$
(6
)
 
(50
)
 
$
(12
)
 
(67
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit quality measures 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Criticized loan ratio
 
37.8
%
 
37.5
%
 
20.3
%
 
 
 
 
 
 
 
 
Classified loan ratio
 
31.5
%
 
26.9
%
 
11.3
%
 
 
 
 
 
 
 
 
Nonaccrual loan ratio
 
11.1
%
 
10.8
%
 
2.3
%
 
 
 
 
 
 
 
 
Current nonaccrual loan ratio
 
89.2
%
 
90.6
%
 
87.9
%
 
 
 
 
 
 
 
 
Net charge-off ratio, annualized 3
 
5.8
%
 
5.4
%
 
—
%
 
 
 
 
 
 
 
 
1 
Because many borrowers operate in multiple businesses, judgment has been applied in characterizing a borrower as oil and gas-related, including a particular segment of oil and gas-related activity, e.g., upstream or downstream; typically, 50% of revenues coming from the oil and gas sector is used as a guide.
2 Total loan and lease balances and the credit quality measures do not include $13 million of oil and gas loans held for sale.
3 
Calculated as the ratio of annualized net charge-offs for each respective period to loan balances at each period end.
During the second quarter of 2016, oil and gas-related loans decreased $73 million, or 3%, and total oil and gas credit exposure decreased by $271 million, or 6%. Oil and gas services (oilfield services and oil and gas service manufacturing) decreased $58 million, or 6%, from the first quarter of 2016, and $229 million, or 20%, from the second quarter of 2015. Unfunded lending commitments decreased by $198 million, primarily in the oilfield services and oil and gas service manufacturing portfolios. Consistent with management’s expectations, the majority of loan downgrades in the second quarter of 2016 reflected deterioration in the financial condition of companies in the oilfield services and the exploration and production portfolios. Oil and gas-related loan net charge-offs were $37 million in the second quarter of 2016 and were predominantly in the oilfield services portfolio, compared to $36 million in the first quarter of 2016. Nonaccrual and criticized oil and gas-related loan ratios remained relatively flat from the first quarter of 2016. Approximately 89% of oil and gas-related nonaccruing loans were current as to principal and interest payments as of June 30, 2016, similar to the 91% reported as of March 31, 2016. The allowance for credit losses related to oil and gas-related loans remained more than 8% for the second quarter of 2016.

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ZIONS BANCORPORATION
Press Release – Page 5
July 26, 2016

Asset Quality
 
 
 
 
 
 
 
 
2Q16 - 1Q16
 
2Q16 - 2Q15
(In millions)
 
2Q16
 
1Q16
 
2Q15
 
bps
 
 
 
bps
 
 
Ratio of nonperforming assets to loans and leases and other real estate owned
 
1.30
%
 
1.33
%
 
0.96
%
 
(3
)
 

 
34

 

Annualized ratio of net loan and lease charge-offs to average loans
 
0.36

 
0.35

 
0.11

 
1

 
 
 
25

 
 
Ratio of total allowance for credit losses to loans and leases outstanding
 
1.58

 
1.64

 
1.72

 
(6
)
 

 
(14
)
 

 
 
 
 
 
 
 
 
$
 
%
 
$
 
%
Classified loans
 
$
1,610

 
$
1,532

 
$
1,293

 
$
78

 
5
 %
 
$
317

 
25
%
Provision for credit losses
 
30

 
36

 
(2
)
 
(6
)
 
(17
)
 
32

 
1,818

Asset quality for the total portfolio remained strong and was generally stable when compared to the prior quarter. Nonperforming assets were $556 million at June 30, 2016, compared to $552 million at March 31, 2016, and classified loans increased 5% to $1.6 billion at June 30, 2016, from $1.5 billion at March 31, 2016. The ratio of nonperforming assets to loans and leases and other real estate owned decreased to 1.30% at June 30, 2016, compared to 1.33% at March 31, 2016. The allowance for credit losses decreased to $673 million at June 30, 2016 from $681 million at March 31, 2016, which was 1.58% and 1.64% of loans and leases, respectively.
Total net charge-offs were $38 million in the second quarter of 2016, or an annualized 0.36% of average loans, compared to $36 million, or an annualized 0.35% of average loans, in the first quarter of 2016. Only $1 million of net charge-offs were attributed to loans outside of the oil and gas portfolio. Additionally, classified loans outside of the oil and gas portfolio decreased by 3% in the second quarter of 2016, compared to the first quarter. The Company provided $30 million for credit losses during the second quarter of 2016, compared to $36 million during the first quarter of 2016. The decrease of $4 million in the allowance for loan losses reflected continued strong credit quality. The reserve for unfunded lending commitments declined by $4 million as a result of improved credit quality assessments related to these obligations.
Deposits
 
 
 
 
 
 
 
 
2Q16 - 1Q16
 
2Q16 - 2Q15
(In millions)
 
2Q16
 
1Q16
 
2Q15
 
$
 
%
 
$
 
%
Noninterest-bearing demand
 
$
22,276

 
$
21,872

 
$
21,558

 
$
404

 
2
 %
 
$
718

 
3
 %
Interest-bearing:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Savings and money market
 
25,541

 
25,724

 
24,744

 
(183
)
 
(1
)
 
797

 
3

Time
 
2,336

 
2,072

 
2,263

 
264

 
13

 
73

 
3

Foreign
 
118

 
220

 
372

 
(102
)
 
(46
)
 
(254
)
 
(68
)
Total deposits
 
$
50,271

 
$
49,888

 
$
48,937

 
$
383

 
1

 
$
1,334

 
3

Total deposits increased to $50.3 billion at June 30, 2016, compared to $49.9 billion at March 31, 2016. Average total deposits increased $396 million to $50.0 billion for the second quarter of 2016, compared to $49.6 billion for

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ZIONS BANCORPORATION
Press Release – Page 6
July 26, 2016

the first quarter of 2016. Average noninterest bearing deposits were generally stable at $21.8 billion for the second quarter of 2016, compared to $21.9 billion for the first quarter of 2016, and were 44% of average total deposits.
Shareholders’ Equity
 
 
 
 
 
 
 
 
2Q16 - 1Q16
 
2Q16 - 2Q15
(In millions)
 
2Q16
 
1Q16
 
2Q15
 
$
 
%
 
$
 
%
Shareholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred Stock
 
$
709

 
$
828

 
$
1,004

 
$
(119
)
 
(14
)%
 
$
(295
)
 
(29
)%
Common Stock
 
4,783

 
4,779

 
4,738

 
4

 
—

 
45

 
1

Retained earnings
 
2,110

 
2,031

 
1,823

 
79

 
4

 
287

 
16

Accumulated other comprehensive income (loss)
 
24

 
(12
)
 
(35
)
 
36

 
303

 
59

 
167

Total shareholders' equity
 
$
7,626

 
$
7,626

 
$
7,530

 
$
—

 
—

 
$
96

 
1

The Company’s preferred stock decreased by $119 million in the second quarter of 2016 as a result of the tender offer the Company completed during the quarter to purchase $27 million of its Series I preferred stock, $59 million of its Series J preferred stock, and $33 million of its Series G preferred stock for an aggregate cash payment of $127 million. The total one-time reduction to net earnings applicable to common shareholders associated with the preferred stock redemption was $10 million. Preferred dividends are expected to be $10.4 million for the third quarter of 2016 and first quarter of 2017 and are expected to be $12.4 million for the fourth quarter of 2016 and the second quarter of 2017.
Accumulated other comprehensive income (loss) increased to $24 million from $(12) million primarily as a result of improvement in the fair value of the Company’s available-for-sale securities portfolio due largely to changes in the interest rate environment.
Tangible book value per common share increased to $28.72 at June 30, 2016, compared to $28.20 at March 31, 2016. The estimated Basel III common equity tier 1 (“CET1”) capital ratio was 11.94% at June 30, 2016, compared to 12.13% at March 31, 2016; Basel III capital ratios are based on the applicable phase-in periods, however, the fully phased-in ratio was not substantially different.
On June 29, the Board of Governors of the Federal Reserve System notified Zions that the Federal Reserve did not object to Zions’ board-approved 2016 capital plan. Zions’ capital plan for the period spanning July 1, 2016 through June 30, 2017 include the following capital actions:
•
The increase of the common dividend to $0.08 per share per quarter
•
Up to $180 million of common stock repurchases
•
Up to $144 million of preferred equity redemption
On July 22, 2016, the Company announced that its board of directors declared a regular quarterly dividend of $0.08 per common share and authorized the commencement of its stock buyback program, including $45 million expected in the third quarter of 2016.

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ZIONS BANCORPORATION
Press Release – Page 7
July 26, 2016

Supplemental Presentation and Conference Call
Zions has posted a supplemental presentation to its website, which will be used to discuss these second quarter results at 5:30 p.m. ET this afternoon (July 26, 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 43431070, 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.

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ZIONS BANCORPORATION
Press Release – Page 8
July 26, 2016

FINANCIAL HIGHLIGHTS
(Unaudited)
 
Three Months Ended
(In thousands, except share, per share, and ratio data)
June 30,
2016
 
March 31,
2016
 
December 31,
2015
 
September 30,
2015
 
June 30,
2015
BALANCE SHEET 1
 
 
 
 
 
 
 
 
 
Loans held for investment, net of allowance
$
41,893,230

 
$
40,806,291

 
$
40,043,494

 
$
39,516,683

 
$
39,414,609

Total assets
59,642,992

 
59,179,913

 
59,664,543

 
58,405,718

 
58,360,005

Deposits
50,270,921

 
49,887,857

 
50,374,091

 
48,920,147

 
48,937,124

Total shareholders’ equity
7,626,383

 
7,625,737

 
7,507,519

 
7,638,095

 
7,530,175

STATEMENT OF INCOME
 
 
 
 
 
 
 
 
 
Net earnings (loss) applicable to common shareholders
90,647

 
78,777

 
88,197

 
84,238

 
(1,100
)
Net interest income
$
464,849

 
$
452,842

 
$
448,833

 
$
425,377

 
$
423,704

Taxable-equivalent net interest income
470,913

 
458,242

 
453,780

 
429,782

 
428,015

Total noninterest income
125,717

 
116,761

 
118,641

 
125,944

 
(4,682
)
Total noninterest expense
381,894

 
395,573

 
397,353

 
391,280

 
398,997

Adjusted pre-provision net revenue 2
211,472

 
182,124

 
174,013

 
171,204

 
160,417

Provision for loan losses
34,492

 
42,145

 
22,701

 
18,262

 
566

Provision for unfunded lending commitments
(4,246
)
 
(5,812
)
 
(6,551
)
 
1,428

 
(2,326
)
Provision for credit losses
30,246

 
36,333

 
16,150

 
19,690

 
(1,760
)
PER COMMON SHARE
 
 
 
 
 
 
 
 
 
Net earnings (loss) per diluted common share
$
0.44

 
$
0.38

 
$
0.43

 
$
0.41

 
$
(0.01
)
Dividends
0.06

 
0.06

 
0.06

 
0.06

 
0.06

Book value per common share 1
33.72

 
33.23

 
32.67

 
32.47

 
32.03

Tangible book value per common share 1, 2
28.72

 
28.20

 
27.63

 
27.42

 
26.95

SELECTED RATIOS AND OTHER DATA
 
 
 
 
 
 
 
 
 
Return on average assets
0.77
%
 
0.62
%
 
0.68
%
 
0.69
%
 
0.10
 %
Return on average common equity
5.30
%
 
4.67
%
 
5.17
%
 
5.02
%
 
(0.07
)%
Tangible return on average tangible common equity 2
6.31
%
 
5.59
%
 
6.20
%
 
6.05
%
 
0.03
 %
Net interest margin
3.39
%
 
3.35
%
 
3.23
%
 
3.11
%
 
3.18
 %
Efficiency ratio 2
64.5
%
 
68.5
%
 
69.6
%
 
69.1
%
 
71.1
 %
Effective tax rate
34.6
%
 
31.4
%
 
30.5
%
 
28.8
%
 
28.3
 %
Ratio of nonperforming assets to loans and leases and other real estate owned
1.30
%
 
1.33
%
 
0.87
%
 
0.92
%
 
0.96
 %
Annualized ratio of net loan and lease charge-offs to average loans
0.36
%
 
0.35
%
 
0.13
%
 
0.31
%
 
0.11
 %
Ratio of total allowance for credit losses to loans and leases outstanding 1
1.58
%
 
1.64
%
 
1.68
%
 
1.69
%
 
1.72
 %
Full-time equivalent employees
10,064

 
10,092

 
10,200

 
10,219

 
10,265

CAPITAL RATIOS 1
 
 
 
 
 
 
 
 
 
Tangible common equity ratio
10.05
%
 
9.92
%
 
9.63
%
 
9.76
%
 
9.58
 %
Basel III: 3
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
11.94
%
 
12.13
%
 
12.22
%
 
12.16
%
 
12.00
 %
Tier 1 leverage
11.25
%
 
11.44
%
 
11.26
%
 
11.63
%
 
11.65
 %
Tier 1 risk-based capital
13.39
%
 
13.87
%
 
14.08
%
 
14.41
%
 
14.26
 %
Total risk-based capital
15.47
%
 
15.97
%
 
16.12
%
 
16.46
%
 
16.32
 %
Risk-weighted assets
49,150,140

 
47,695,790

 
46,747,245

 
46,313,188

 
46,179,545

Weighted average common and common-equivalent shares outstanding
204,536,196

 
204,095,529

 
204,276,930

 
204,154,880

 
202,887,762

Common shares outstanding 1
205,103,566

 
204,543,707

 
204,417,093

 
204,278,594

 
203,740,914

1 
At period end.
2 
For information on non-GAAP financial measures see pages 15-17.

- more -

ZIONS BANCORPORATION
Press Release – Page 9
July 26, 2016

3 
Basel III capital ratios became effective January 1, 2015 and are based on the applicable phase-in periods. Current period ratios and amounts represent estimates.

- more -

ZIONS BANCORPORATION
Press Release – Page 10
July 26, 2016

CONSOLIDATED BALANCE SHEETS
(In thousands, except shares)
June 30,
2016
 
March 31,
2016
 
December 31,
2015
 
September 30,
2015
 
June 30,
2015
 
(Unaudited)
 
(Unaudited)
 

 
(Unaudited)
 
(Unaudited)
ASSETS
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
560,262

 
$
517,803

 
$
798,319

 
$
602,694

 
$
758,238

Money market investments:
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
2,154,959

 
3,039,090

 
6,108,124

 
6,558,678

 
7,661,311

Federal funds sold and security resell agreements
620,469

 
1,587,212

 
619,758

 
1,325,501

 
1,404,246

Investment securities:
 
 
 
 
 
 
 
 
 
Held-to-maturity, at adjusted cost (approximate fair value $720,991, $636,484, $552,088, $553,088, and $578,327)
713,392

 
631,646

 
545,648

 
544,168

 
570,869

Available-for-sale, at fair value
9,477,089

 
8,701,885

 
7,643,116

 
6,000,011

 
4,652,415

Trading account, at fair value
118,775

 
65,838

 
48,168

 
73,521

 
74,519

 
10,309,256

 
9,399,369

 
8,236,932

 
6,617,700

 
5,297,803

Loans held for sale
146,512

 
108,764

 
149,880

 
139,122

 
152,448

Loans and leases, net of unearned income and fees
42,501,575

 
41,418,185

 
40,649,542

 
40,113,123

 
40,023,984

Less allowance for loan losses
608,345

 
611,894

 
606,048

 
596,440

 
609,375

Loans held for investment, net of allowance
41,893,230

 
40,806,291

 
40,043,494

 
39,516,683

 
39,414,609

Other noninterest-bearing investments
850,578

 
855,813

 
848,144

 
851,225

 
863,443

Premises and equipment, net
955,540

 
925,430

 
905,462

 
873,800

 
856,577

Goodwill
1,014,129

 
1,014,129

 
1,014,129

 
1,014,129

 
1,014,129

Core deposit and other intangibles
12,281

 
14,259

 
16,272

 
18,546

 
20,843

Other real estate owned
8,354

 
10,411

 
7,092

 
12,799

 
13,269

Other assets
1,117,422

 
901,342

 
916,937

 
874,841

 
903,089

 
$
59,642,992

 
$
59,179,913

 
$
59,664,543

 
$
58,405,718

 
$
58,360,005

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
22,276,600

 
$
21,872,274

 
$
22,276,664

 
$
21,572,022

 
$
21,557,584

Interest-bearing:
 
 
 
 
 
 
 
 
 
Savings and money market
25,540,525

 
25,723,996

 
25,672,356

 
24,690,359

 
24,744,288

Time
2,336,088

 
2,071,688

 
2,130,680

 
2,216,206

 
2,263,146

Foreign
117,708

 
219,899

 
294,391

 
441,560

 
372,106

 
50,270,921

 
49,887,857

 
50,374,091

 
48,920,147

 
48,937,124

Federal funds and other short-term borrowings
270,255

 
232,188

 
346,987

 
272,391

 
227,124

Long-term debt
698,712

 
802,448

 
812,366

 
939,543

 
1,045,484

Reserve for unfunded lending commitments
64,780

 
69,026

 
74,838

 
81,389

 
79,961

Other liabilities
711,941

 
562,657

 
548,742

 
554,153

 
540,137

Total liabilities
52,016,609

 
51,554,176

 
52,157,024

 
50,767,623

 
50,829,830

Shareholders’ equity:
 
 
 
 
 
 
 
 
 
Preferred stock, without par value, authorized 4,400,000 shares
709,601

 
828,490

 
828,490

 
1,004,159

 
1,004,032

Common stock, without par value; authorized 350,000,000 shares; issued and outstanding 205,103,566, 204,543,707, 204,417,093, 204,278,594, and 203,740,914 shares
4,783,061

 
4,777,630

 
4,766,731

 
4,756,288

 
4,738,272

Retained earnings
2,110,069

 
2,031,270

 
1,966,910

 
1,894,623

 
1,823,043

Accumulated other comprehensive income (loss)
23,652

 
(11,653
)
 
(54,612
)
 
(16,975
)
 
(35,172
)
Total shareholders’ equity
7,626,383

 
7,625,737

 
7,507,519

 
7,638,095

 
7,530,175

 
$
59,642,992

 
$
59,179,913

 
$
59,664,543

 
$
58,405,718

 
$
58,360,005


- more -

ZIONS BANCORPORATION
Press Release – Page 11
July 26, 2016

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
Three Months Ended
(In thousands, except per share amounts)
June 30,
2016
 
March 31,
2016
 
December 31,
2015
 
September 30,
2015
 
June 30,
2015
Interest income:
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
433,743

 
$
420,508

 
$
429,842

 
$
419,981

 
$
420,642

Interest on money market investments
5,564

 
7,029

 
6,144

 
6,018

 
5,785

Interest on securities
47,645

 
47,364

 
37,573

 
30,231

 
28,809

Total interest income
486,952

 
474,901

 
473,559

 
456,230

 
455,236

Interest expense:
 
 
 
 
 
 
 
 
 
Interest on deposits
11,869

 
11,845

 
12,377

 
12,542

 
12,321

Interest on short- and long-term borrowings
10,234

 
10,214

 
12,349

 
18,311

 
19,211

Total interest expense
22,103

 
22,059

 
24,726

 
30,853

 
31,532

Net interest income
464,849

 
452,842

 
448,833

 
425,377

 
423,704

Provision for loan losses
34,492

 
42,145

 
22,701

 
18,262

 
566

Net interest income after provision for loan losses
430,357

 
410,697

 
426,132

 
407,115

 
423,138

Noninterest income:
 
 
 
 
 
 
 
 
 
Service charges and fees on deposit accounts
42,108

 
41,261

 
42,445

 
43,196

 
41,616

Other service charges, commissions and fees
51,906

 
49,474

 
49,335

 
47,968

 
46,602

Wealth management income
8,788

 
7,954

 
7,953

 
7,496

 
8,160

Loan sales and servicing income
10,178

 
7,979

 
6,915

 
7,728

 
8,382

Capital markets and foreign exchange
4,545

 
5,667

 
6,255

 
6,624

 
7,275

Dividends and other investment income
6,226

 
4,639

 
2,986

 
8,449

 
9,343

Fair value and nonhedge derivative income (loss)
(1,910
)
 
(2,585
)
 
688

 
(1,555
)
 
1,844

Equity securities gains (losses), net
2,709

 
(550
)
 
53

 
3,630

 
4,839

Fixed income securities gains (losses), net
25

 
28

 
(7
)
 
(53
)
 
(138,436
)
Other
1,142

 
2,894

 
2,018

 
2,461

 
5,693

Total noninterest income
125,717

 
116,761

 
118,641

 
125,944

 
(4,682
)
Noninterest expense:
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
241,341

 
258,338

 
236,037

 
242,023

 
251,133

Occupancy, net
29,621

 
29,779

 
30,618

 
29,477

 
30,095

Furniture, equipment and software
30,550

 
32,015

 
31,820

 
30,416

 
31,247

Other real estate expense
(527
)
 
(1,329
)
 
(536
)
 
(40
)
 
(445
)
Credit-related expense
5,845

 
5,934

 
7,582

 
6,914

 
8,106

Provision for unfunded lending commitments
(4,246
)
 
(5,812
)
 
(6,551
)
 
1,428

 
(2,326
)
Professional and legal services
12,229

 
11,471

 
13,129

 
12,699

 
13,110

Advertising
5,268

 
5,628

 
5,692

 
6,136

 
6,511

FDIC premiums
9,580

 
7,154

 
9,194

 
8,500

 
8,609

Amortization of core deposit and other intangibles
1,979

 
2,014

 
2,273

 
2,298

 
2,318

Debt extinguishment cost
106

 
247

 
135

 
—

 
2,395

Other
50,148

 
50,134

 
67,960

 
51,429

 
48,244

Total noninterest expense
381,894

 
395,573

 
397,353

 
391,280

 
398,997

Income before income taxes
174,180

 
131,885

 
147,420

 
141,779

 
19,459

Income taxes
60,231

 
41,448

 
44,933

 
40,780

 
5,499

Net income
113,949

 
90,437

 
102,487

 
100,999

 
13,960

Preferred stock dividends
(13,543
)
 
(11,660
)
 
(14,290
)
 
(16,761
)
 
(15,060
)
Preferred stock redemption
(9,759
)
 
—

 
—

 
—

 
—

Net earnings (loss) applicable to common shareholders
$
90,647

 
$
78,777

 
$
88,197

 
$
84,238

 
$
(1,100
)
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding during the period:
 
 
 
 
 
 
 
 
Basic shares
204,236

 
203,967

 
203,884

 
203,668

 
202,888

Diluted shares
204,536

 
204,096

 
204,277

 
204,155

 
202,888

Net earnings (loss) per common share:
 
 
 
 
 
 
 
 
 
Basic
$
0.44

 
$
0.38

 
$
0.43

 
$
0.41

 
$
(0.01
)
Diluted
0.44

 
0.38

 
0.43

 
0.41

 
(0.01
)

- more -

ZIONS BANCORPORATION
Press Release – Page 12
July 26, 2016

Loan Balances Held for Investment by Portfolio Type
(Unaudited)
(In millions)
June 30,
2016
 
March 31,
2016
 
December 31,
2015
 
September 30,
2015
 
June 30,
2015
Commercial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
13,757

 
 
 
$
13,590

 
 
 
$
13,211

 
 
 
$
13,035

 
 
 
$
13,111

 
Leasing
 
426

 
 
 
437

 
 
 
442

 
 
 
427

 
 
 
402

 
Owner occupied
 
6,989

 
 
 
7,022

 
 
 
7,150

 
 
 
7,141

 
 
 
7,277

 
Municipal
 
756

 
 
 
696

 
 
 
676

 
 
 
600

 
 
 
589

 
Total commercial
 
21,928

 
 
 
21,745

 
 
 
21,479

 
 
 
21,203

 
 
 
21,379

 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 
2,088

 
 
 
1,968

 
 
 
1,842

 
 
 
2,214

 
 
 
2,062

 
Term
 
9,230

 
 
 
8,826

 
 
 
8,514

 
 
 
8,089

 
 
 
8,058

 
Total commercial real estate
 
11,318

 
 
 
10,794

 
 
 
10,356

 
 
 
10,303

 
 
 
10,120

 
Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity credit line
 
2,507

 
 
 
2,433

 
 
 
2,417

 
 
 
2,347

 
 
 
2,348

 
1-4 family residential
 
5,680

 
 
 
5,418

 
 
 
5,382

 
 
 
5,269

 
 
 
5,194

 
Construction and other consumer real estate
 
419

 
 
 
401

 
 
 
385

 
 
 
370

 
 
 
372

 
Bankcard and other revolving plans
 
460

 
 
 
439

 
 
 
444

 
 
 
428

 
 
 
409

 
Other
 
189

 
 
 
188

 
 
 
187

 
 
 
193

 
 
 
202

 
Total consumer
 
9,255

 
 
 
8,879

 
 
 
8,815

 
 
 
8,607

 
 
 
8,525

 
Loans and leases, net of unearned income and fees
 
$
42,501

 
 
 
$
41,418

 
 
 
$
40,650

 
 
 
$
40,113

 
 
 
$
40,024

 

Nonperforming Assets
(Unaudited)
(Amounts in thousands)
June 30,
2016
 
March 31,
2016
 
December 31,
2015
 
September 30,
2015
 
June 30,
2015
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans
$
547,402

 
$
541,768

 
$
349,860

 
$
359,272

 
$
372,830

Other real estate owned
8,354

 
10,411

 
7,092

 
12,799

 
13,269

Total nonperforming assets
$
555,756

 
$
552,179

 
$
356,952

 
$
372,071

 
$
386,099

Ratio of nonperforming assets to loans1 and leases and other real estate owned
1.30
%
 
1.33
%
 
0.87
%
 
0.92
%
 
0.96
%
Accruing loans past due 90 days or more
$
28,994

 
$
37,202

 
$
32,024

 
$
34,857

 
$
27,204

Ratio of accruing loans past due 90 days or more to loans1 and leases
0.07
%
 
0.09
%
 
0.08
%
 
0.09
%
 
0.07
%
Nonaccrual loans and accruing loans past due 90 days or more
$
576,396

 
$
578,970

 
$
381,884

 
$
394,129

 
$
400,034

Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans1 and leases
1.35
%
 
1.39
%
 
0.94
%
 
0.98
%
 
1.00
%
Accruing loans past due 30-89 days
$
132,522

 
$
100,341

 
$
121,732

 
$
118,361

 
$
124,955

Restructured loans included in nonaccrual loans
143,379

 
132,524

 
103,004

 
108,387

 
118,358

Restructured loans on accrual
171,854

 
195,482

 
194,084

 
178,136

 
180,146

Classified loans
1,610,263

 
1,532,052

 
1,368,022

 
1,322,924

 
1,292,980


1 Includes loans held for sale.

- more -

ZIONS BANCORPORATION
Press Release – Page 13
July 26, 2016

Allowance for Credit Losses
(Unaudited)
 
Three Months Ended
(Amounts in thousands)
June 30,
2016
 
March 31,
2016
 
December 31,
2015
 
September 30,
2015
 
June 30,
2015
Allowance for Loan Losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
611,894

 
$
606,048

 
$
596,440

 
$
609,375

 
$
620,013

Add:
 
 
 
 
 
 
 
 
 
Provision for losses
34,492

 
42,145

 
22,701

 
18,262

 
566

Adjustment for FDIC-supported/PCI loans
—

 
—

 
5

 
—

 
38

Deduct:
 
 
 
 
 
 
 
 
 
Gross loan and lease charge-offs
(57,629
)
 
(48,110
)
 
(45,334
)
 
(42,359
)
 
(31,048
)
Recoveries
19,588

 
11,811

 
32,236

 
11,162

 
19,806

Net loan and lease (charge-offs) recoveries
(38,041
)
 
(36,299
)
 
(13,098
)
 
(31,197
)
 
(11,242
)
Balance at end of period
$
608,345

 
$
611,894

 
$
606,048

 
$
596,440

 
$
609,375

Ratio of allowance for loan losses to loans and leases, at period end
1.43
%
 
1.48
%
 
1.49
%
 
1.49
%
 
1.52
%
Ratio of allowance for loan losses to nonperforming loans, at period end
111
%
 
113
%
 
173
%
 
166
%
 
163
%
Annualized ratio of net loan and lease charge-offs to average loans
0.36
%
 
0.35
%
 
0.13
%
 
0.31
%
 
0.11
%
 
 
 
 
 
 
 
 
 
 
Reserve for Unfunded Lending Commitments
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
69,026

 
$
74,838

 
$
81,389

 
$
79,961

 
$
82,287

Provision charged (credited) to earnings
(4,246
)
 
(5,812
)
 
(6,551
)
 
1,428

 
(2,326
)
Balance at end of period
$
64,780

 
$
69,026

 
$
74,838

 
$
81,389

 
$
79,961

Total Allowance for Credit Losses
 
 
 
 
 
 
 
 
 
Allowance for loan losses
$
608,345

 
$
611,894

 
$
606,048

 
$
596,440

 
$
609,375

Reserve for unfunded lending commitments
64,780

 
69,026

 
74,838

 
81,389

 
79,961

Total allowance for credit losses
$
673,125

 
$
680,920

 
$
680,886

 
$
677,829

 
$
689,336

Ratio of total allowance for credit losses to loans and leases outstanding, at period end
1.58
%
 
1.64
%
 
1.68
%
 
1.69
%
 
1.72
%




- more -

ZIONS BANCORPORATION
Press Release – Page 14
July 26, 2016

Nonaccrual Loans by Portfolio Type
(Unaudited)
(In millions)
June 30,
2016
 
March 31,
2016
 
December 31,
2015
 
September 30,
2015
 
June 30,
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for sale
 
$
13

 
 
 
$
—

 
 
 
$
—

 
 
 
$
—

 
 
 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
341

 
 
 
$
356

 
 
 
$
164

 
 
 
$
167

 
 
 
$
165

 
Leasing
 
14

 
 
 
14

 
 
 
4

 
 
 
—

 
 
 
—

 
Owner occupied
 
69

 
 
 
74

 
 
 
74

 
 
 
77

 
 
 
89

 
Municipal
 
1

 
 
 
1

 
 
 
1

 
 
 
1

 
 
 
1

 
Total commercial
 
425

 
 
 
445

 
 
 
243

 
 
 
245

 
 
 
255

 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 
5

 
 
 
6

 
 
 
7

 
 
 
15

 
 
 
20

 
Term
 
51

 
 
 
33

 
 
 
40

 
 
 
39

 
 
 
44

 
Total commercial real estate
 
56

 
 
 
39

 
 
 
47

 
 
 
54

 
 
 
64

 
Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity credit line
 
12

 
 
 
11

 
 
 
8

 
 
 
10

 
 
 
9

 
1-4 family residential
 
39

 
 
 
44

 
 
 
50

 
 
 
48

 
 
 
43

 
Construction and other consumer real estate
 
1

 
 
 
1

 
 
 
1

 
 
 
1

 
 
 
1

 
Bankcard and other revolving plans
 
1

 
 
 
2

 
 
 
1

 
 
 
1

 
 
 
1

 
Other
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
Total consumer
 
53

 
 
 
58

 
 
 
60

 
 
 
60

 
 
 
54

 
Total nonaccrual loans
 
$
547

 
 
 
$
542

 
 
 
$
350

 
 
 
$
359

 
 
 
$
373

 


Net Charge-Offs by Portfolio Type
(Unaudited)
 
Three Months Ended
(In millions)
June 30,
2016
 
March 31,
2016
 
December 31,
2015
 
September 30,
2015
 
June 30,
2015
Commercial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
32

 
 
 
$
37

 
 
 
$
18

 
 
 
$
30

 
 
 
$
13

 
Leasing
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
Owner occupied
 
—

 
 
 
(1
)
 
 
 
—

 
 
 
3

 
 
 
(3
)
 
Municipal
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
Total commercial
 
32

 
 
 
36

 
 
 
18

 
 
 
33

 
 
 
10

 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 
(1
)
 
 
 
(2
)
 
 
 
(2
)
 
 
 
(2
)
 
 
 
(1
)
 
Term
 
7

 
 
 
—

 
 
 
(4
)
 
 
 
(1
)
 
 
 
2

 
Total commercial real estate
 
6

 
 
 
(2
)
 
 
 
(6
)
 
 
 
(3
)
 
 
 
1

 
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
 
1

 
 
 
—

 
 
 
2

 
 
 
—

 
 
 
1

 
Other
 
—

 
 
 
—

 
 
 
—

 
 
 
1

 
 
 
(1
)
 
Total consumer loans
 
—

 
 
 
2

 
 
 
1

 
 
 
1

 
 
 
—

 
Total net charge-offs (recoveries)
 
$
38

 
 
 
$
36

 
 
 
$
13

 
 
 
$
31

 
 
 
$
11

 

- more -

ZIONS BANCORPORATION
Press Release – Page 15
July 26, 2016

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
 
Three Months Ended
 
June 30, 2016
 
March 31, 2016
 
June 30, 2015
(In thousands)
Average balance
 
Average
yield/rate 1
 
Average balance
 
Average
yield/rate 1
 
Average balance
 
Average
yield/rate 1
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Money market investments
$
4,045,333

 
0.55
%
 
$
5,122,483

 
0.55
%
 
$
8,414,602

 
0.28
%
Securities:
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity
669,372

 
4.46
%
 
562,040

 
4.86
%
 
583,349

 
5.06
%
Available-for-sale
8,852,688

 
1.93
%
 
8,108,708

 
2.11
%
 
4,585,760

 
1.99
%
Trading account
78,479

 
3.88
%
 
53,367

 
3.56
%
 
76,706

 
3.19
%
Total securities
9,600,539

 
2.13
%
 
8,724,115

 
2.30
%
 
5,245,815

 
2.35
%
Loans held for sale
126,045

 
3.52
%
 
140,423

 
3.95
%
 
115,377

 
3.48
%
Loans held for investment 2:
 
 
 
 
 
 
 
 
 
 
 
Commercial
21,934,114

 
4.20
%
 
21,624,134

 
4.20
%
 
21,527,723

 
4.22
%
Commercial real estate
11,169,157

 
4.31
%
 
10,555,869

 
4.23
%
 
10,089,092

 
4.47
%
Consumer
9,004,845

 
3.88
%
 
8,822,899

 
3.90
%
 
8,514,519

 
3.91
%
Total loans held for investment
42,108,116

 
4.16
%
 
41,002,902

 
4.14
%
 
40,131,334

 
4.22
%
Total interest-earning assets
55,880,033

 
3.55
%
 
54,989,923

 
3.51
%
 
53,907,128

 
3.42
%
Cash and due from banks
520,769

 
 
 
727,577

 
 
 
591,347

 
 
Allowance for loan losses
(606,228
)
 
 
 
(600,216
)
 
 
 
(621,348
)
 
 
Goodwill
1,014,129

 
 
 
1,014,129

 
 
 
1,014,129

 
 
Core deposit and other intangibles
13,527

 
 
 
15,379

 
 
 
22,135

 
 
Other assets
2,723,529

 
 
 
2,679,525

 
 
 
2,558,514

 
 
Total assets
$
59,545,759

 
 
 
$
58,826,317

 
 
 
$
57,471,905

 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Savings and money market
$
25,779,999

 
0.14
%
 
$
25,350,037

 
0.15
%
 
$
24,514,516

 
0.16
%
Time
2,192,366

 
0.46
%
 
2,087,698

 
0.44
%
 
2,300,593

 
0.43
%
Foreign
138,583

 
0.28
%
 
235,331

 
0.26
%
 
325,640

 
0.14
%
Total interest-bearing deposits
28,110,948

 
0.17
%
 
27,673,066

 
0.17
%
 
27,140,749

 
0.18
%
Borrowed funds:
 
 
 
 
 
 
 
 
 
 
 
Federal funds and other short-term borrowings
546,707

 
0.24
%
 
267,431

 
0.18
%
 
214,287

 
0.14
%
Long-term debt
790,103

 
5.05
%
 
809,123

 
5.02
%
 
1,076,178

 
7.13
%
Total borrowed funds
1,336,810

 
3.08
%
 
1,076,554

 
3.82
%
 
1,290,465

 
5.97
%
Total interest-bearing liabilities
29,447,758

 
0.30
%
 
28,749,620

 
0.31
%
 
28,431,214

 
0.44
%
Noninterest-bearing deposits
21,839,395

 
 
 
21,881,777

 
 
 
20,984,073

 
 
Other liabilities
596,697

 
 
 
579,453

 
 
 
559,722

 
 
Total liabilities
51,883,850

 
 
 
51,210,850

 
 
 
49,975,009

 
 
Shareholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
Preferred equity
778,844

 
 
 
828,490

 
 
 
1,004,031

 
 
Common equity
6,883,065

 
 
 
6,786,977

 
 
 
6,492,865

 
 
Total shareholders’ equity
7,661,909

 
 
 
7,615,467

 
 
 
7,496,896

 
 
Total liabilities and shareholders’ equity
$
59,545,759

 
 
 
$
58,826,317

 
 
 
$
57,471,905

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Spread on average interest-bearing funds
 
 
3.25
%
 
 
 
3.20
%
 
 
 
2.98
%
 
 
 
 
 
 
 
 
 
 
 
 
Net yield on interest-earning assets
 
 
3.39
%
 
 
 
3.35
%
 
 
 
3.18
%
1 Taxable-equivalent rates used where applicable.
2 Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.

- more -

ZIONS BANCORPORATION
Press Release – Page 16
July 26, 2016

GAAP to Non-GAAP Reconciliations
(Unaudited)
(In thousands, except per share amounts)
 
June 30,
2016
 
March 31,
2016
 
December 31,
2015
 
September 30,
2015
 
June 30,
2015
Tangible Book Value per Common Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shareholders’ equity (GAAP)
 
$
7,626,383

 
$
7,625,737

 
$
7,507,519

 
$
7,638,095

 
$
7,530,175

Preferred stock
 
(709,601
)
 
(828,490
)
 
(828,490
)
 
(1,004,159
)
 
(1,004,032
)
Goodwill
 
(1,014,129
)
 
(1,014,129
)
 
(1,014,129
)
 
(1,014,129
)
 
(1,014,129
)
Core deposit and other intangibles
 
(12,281
)
 
(14,259
)
 
(16,272
)
 
(18,546
)
 
(20,843
)
Tangible common equity (non-GAAP)
(a)
$
5,890,372

 
$
5,768,859

 
$
5,648,628

 
$
5,601,261

 
$
5,491,171

Common shares outstanding
(b)
205,104

 
204,544

 
204,417

 
204,279

 
203,741

Tangible book value per common share (non-GAAP)
(a/b)
$
28.72

 
$
28.20

 
$
27.63

 
$
27.42

 
$
26.95

 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
(Dollar amounts in thousands)
 
June 30,
2016
 
March 31,
2016
 
December 31,
2015
 
September 30,
2015
 
June 30,
2015
Tangible Return on Average Tangible Common Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings (loss) applicable to common shareholders (GAAP)
 
$
90,647

 
$
78,777

 
$
88,197

 
$
84,238

 
$
(1,100
)
Adjustments, net of tax:
 
 
 
 
 
 
 
 
 
 
Amortization of core deposit and other intangibles
 
1,227

 
1,249

 
1,446

 
1,461

 
1,472

Net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax (non-GAAP)
(a)
$
91,874

 
$
80,026

 
$
89,643

 
$
85,699

 
$
372

Average common equity (GAAP)
 
$
6,883,065

 
$
6,786,977

 
$
6,765,737

 
$
6,655,513

 
$
6,492,865

Average goodwill
 
(1,014,129
)
 
(1,014,129
)
 
(1,014,129
)
 
(1,014,129
)
 
(1,014,129
)
Average core deposit and other intangibles
 
(13,527
)
 
(15,379
)
 
(17,453
)
 
(19,726
)
 
(22,135
)
Average tangible common equity (non-GAAP)
(b)
$
5,855,409

 
$
5,757,469

 
$
5,734,155

 
$
5,621,658

 
$
5,456,601

Number of days in quarter
(c)
91

 
91

 
92

 
92

 
91

Number of days in year
(d)
366

 
366

 
365

 
365

 
365

Tangible return on average tangible common equity (non-GAAP)
(a/b/c*d)
6.31
%
 
5.59
%
 
6.20
%
 
6.05
%
 
0.03
%

- more -

ZIONS BANCORPORATION
Press Release – Page 17
July 26, 2016

 
 
Three Months Ended
(Dollar amounts in thousands)
 
June 30,
2016
 
March 31,
2016
 
December 31,
2015
 
September 30,
2015
 
June 30,
2015
Efficiency Ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest expense (GAAP) 1
(a)
$
381,894

 
$
395,573

 
$
397,353

 
$
391,280

 
$
398,997

Adjustments:
 
 
 
 
 
 
 
 
 
 
Severance costs
 
201

 
3,471

 
3,581

 
3,464

 
1,707

Other real estate expense
 
(527
)
 
(1,329
)
 
(536
)
 
(40
)
 
(445
)
Provision for unfunded lending commitments
(4,246
)
 
(5,812
)
 
(6,551
)
 
1,428

 
(2,326
)
Debt extinguishment cost
 
106

 
247

 
135

 
—

 
2,395

Amortization of core deposit and other intangibles
 
1,979

 
2,014

 
2,273

 
2,298

 
2,318

Restructuring costs
 
47

 
996

 
777

 
1,630

 
679

Total adjustments
(b)
(2,440
)
 
(413
)
 
(321
)
 
8,780

 
4,328

Adjusted noninterest expense (non-GAAP)
(a-b)=(c)
$
384,334


$
395,986


$
397,674


$
382,500


$
394,669

Taxable-equivalent net interest income (GAAP)
(d)
$
470,913

 
$
458,242

 
$
453,780

 
$
429,782

 
$
428,015

Noninterest income (GAAP) 1
(e)
125,717

 
116,761

 
118,641

 
125,944

 
(4,682
)
Combined income
(d+e)=(f)
596,630

 
575,003

 
572,421

 
555,726

 
423,333

Adjustments:
 
 
 
 
 
 
 
 
 
 
Fair value and nonhedge derivative income (loss)
(1,910
)
 
(2,585
)
 
688

 
(1,555
)
 
1,844

Equity securities gains (losses), net
 
2,709

 
(550
)
 
53

 
3,630

 
4,839

Fixed income securities gains (losses), net
 
25

 
28

 
(7
)
 
(53
)
 
(138,436
)
Total adjustments
(g)
824

 
(3,107
)
 
734

 
2,022

 
(131,753
)
Adjusted taxable-equivalent revenue (non-GAAP)
(f-g)=(h)
$
595,806


$
578,110


$
571,687


$
553,704


$
555,086

Adjusted pre-provision net revenue (PPNR)
(h-c)
$
211,472

 
$
182,124

 
$
174,013

 
$
171,204

 
$
160,417

Efficiency ratio 1
(c/h)
64.5
%

68.5
%

69.6
%

69.1
%

71.1
%
1In the first quarter of 2016, to be consistent with industry practice, the Company reclassified its bankcard rewards expense from “Other” noninterest expense to “Other service charges, commissions and fees” in noninterest income in order to offset this expense against the associated revenue. Prior period amounts have been reclassified to reflect this change.

# # #

ZIONS BANCORPORATION
Press Release – Page 18
July 26, 2016

 
 
Six Months Ended
(Dollar amounts in thousands)
 
June 30,
2016
 
June 30,
2015
Efficiency Ratio
 
 
 
 
 
 
 
 
 
Noninterest expense (GAAP) 1
(a)
$
777,467

 
$
791,974

Adjustments:
 
 
 
 
Severance costs
 
3,672

 
3,960

Other real estate expense
 
(1,856
)
 
(71
)
Provision for unfunded lending commitments
(10,058
)
 
(1,115
)
Debt extinguishment cost
 
353

 
2,395

Amortization of core deposit and other intangibles
 
3,993

 
4,676

Restructuring costs
 
1,043

 
1,445

Total adjustments
(b)
(2,853
)
 
11,290

Adjusted noninterest expense (non-GAAP)
(a-b)=(c)
$
780,320

 
$
780,684

Taxable-equivalent net interest income (GAAP)
(d)
$
929,155

 
$
849,596

Noninterest income (GAAP) 1
(e)
242,478

 
112,656

Combined income
(d+e)=(f)
1,171,633

 
962,252

Adjustments:
 
 
 
 
Fair value and nonhedge derivative income (loss)
(4,495
)
 
756

Equity securities gains (losses), net
 
2,159

 
8,192

Fixed income securities gains (losses), net
 
53

 
(138,675
)
Total adjustments
(g)
(2,283
)
 
(129,727
)
Adjusted taxable-equivalent revenue (non-GAAP)
(f-g)=(h)
$
1,173,916

 
$
1,091,979

Adjusted pre-provision net revenue (PPNR)
(h-c)=(i)
$
393,596

 
$
311,295

Efficiency ratio 1
(c/h)
66.5
%
 
71.5
%
1In the first quarter of 2016, to be consistent with industry practice, the Company reclassified its bankcard rewards expense from “Other” noninterest expense to “Other service charges, commissions and fees” in noninterest income in order to offset this expense against the associated revenue. Prior period amounts have been reclassified to reflect this change.

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.

- more -