EX-99.1 2 exh9911q20178-k.htm EXHIBIT 99.1 Exhibit

ZIONS BANCORPORATION
Press Release – Page 1
April 24, 2017


Zions Bancorporation    
One South Main
Salt Lake City, UT 84133
April 24, 2017
www.zionsbancorporation.com

bancorpa12.jpg
First Quarter 2017 Financial Results: FOR IMMEDIATE RELEASE
 
Investor and Media Contact: James Abbott (801) 844-7637
Zions Bancorporation Reports: 1Q17 Net Earnings¹ of $129 million, diluted EPS of $0.61
compared with 4Q16 Net Earnings¹ of $125 million, diluted EPS of $0.60,
and 1Q16 Net Earnings¹ of $79 million, diluted EPS of $0.38


FIRST QUARTER RESULTS
$0.61
 
$129 million
 
3.38%
 
12.2%
Earnings per diluted common share
 
Net Earnings 1
 
Net interest margin (“NIM”)
 
Common Equity
Tier 1

FIRST QUARTER HIGHLIGHTS
 
 
 
Net Interest Income and Net Interest Margin
•
Net interest income was $489 million, up 2% from 4Q16 and up 8% from 1Q16
•
NIM was 3.38% compared with 3.37% in 4Q16 and 3.35% in 1Q16
 
 
 
Operating Performance2
•
Pre-provision net revenue ("PPNR") was $215 million, up 1% from 4Q16 and up 20% from 1Q16
•
Adjusted PPNR² was $213 million, down 2% from 4Q16 and up 17% from 1Q16
•
Noninterest expense was $414 million, compared with $404 million in 4Q16
•
Adjusted noninterest expense² was $411 million, compared with $395 million in 4Q16
•
Efficiency ratio² was 65.9%, compared with 64.5% for 4Q16
 
 
 
Loans and Credit Quality
•
Net loans and leases were $42.7 billion, compared with $42.6 billion for 4Q16
•
Provision for credit losses was $18 million, compared with less than $1 million in 4Q16
•
Net charge-offs were $46 million, compared with $27 million in 4Q16
 
 
 
Oil and Gas-Related Exposure
•
Net charge-offs for oil and gas loans were $14 million, compared with $16 million in 4Q16
•
Oil and gas allowance for credit losses continued to exceed 8% of the portfolio
•
38% of oil and gas-related loans were criticized for both 1Q17 and 4Q16
 
 
 
Capital Return
•
Tangible return on average tangible common equity² was 8.8%, compared with 8.4% in 4Q16 and 5.6% in 1Q16
•
Common stock repurchases of $45 million during the quarter
 
 
 
Income Taxes
•
The tax rate of 24.5% in 1Q17 was lower due to a one-time adjustment and the adoption of new stock-based compensation accounting guidance
 
CEO COMMENTARY
 
Harris H. Simmons, Chairman and CEO, commented, “While we are pleased with the strong 61% improvement in earnings per share over the same period a year ago, results relative to the fourth quarter of 2016 were muted due to lackluster loan growth, a condition which has recently been prevalent throughout the industry. Although we experienced a single loan loss that comprised nearly two-thirds of total net charge-offs during the quarter, credit quality was generally strong and improving, with classified loan totals improving by 7% relative to fourth quarter results.” Mr. Simmons concluded, “While operating costs were seasonally higher, we remain committed to a continued focus on expense control and improvement in our profitability through the remainder of 2017 and beyond.”

OPERATING PERFORMANCE2
exh9912q20_chart-39401a03.jpgexh9912q20_chart-40338a03.jpg
¹ Net Earnings is net earnings applicable to common shareholders.
² For information on non-GAAP financial measures and why the Company presents these numbers, see pages 16-18. 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.

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ZIONS BANCORPORATION
Press Release – Page 2
April 24, 2017

RESULTS OF OPERATIONS
Net Interest Income
 
 
 
 
 
 
 
1Q17 - 4Q16
 
1Q17 - 1Q16
(In millions)
1Q17
 
4Q16
 
1Q16
 
$
 
%
 
$
 
%
Interest and fees on loans
$
433

 
$
438

 
$
421

 
$
(5
)
 
(1
)%
 
$
12

 
3
 %
Interest on money market investments
4

 
4

 
7

 
—

 
—

 
(3
)
 
(43
)
Interest on securities
78

 
59

 
47

 
19

 
32

 
31

 
66

Total interest income
515

 
501

 
475

 
14

 
3

 
40

 
8

Interest on deposits
13

 
13

 
12

 
—

 
—

 
1

 
8

Interest on short and long-term borrowings
13

 
8

 
10

 
5

 
63

 
3

 
30

Interest expense
26

 
21

 
22

 
5

 
24

 
4

 
18

Net interest income
$
489

 
$
480

 
$
453

 
$
9

 
2

 
$
36

 
8

Net interest income increased to $489 million in the first quarter of 2017 from $480 million in the fourth quarter of 2016. The increase in net interest income was due to a $19 million increase in interest from investment securities. Average securities increased in the first quarter of 2017 by $2.5 billion as the Company continued to reposition the balance sheet and moderately reduce its interest rate sensitivity. The Company expects to maintain its securities portfolio at approximately the current level in the near term. Average loans were relatively stable during the first quarter of 2017, and the yield on the loan portfolio increased 3 basis points to 4.14% during the quarter. However, an increase in nonaccrual loans, a decrease in prepayments, and a decline in the revenue from loans purchased from the FDIC in 2009 muted some of the natural asset sensitivity of the Company. These factors, and two fewer days in the quarter, resulted in a $5 million decrease in interest and fees on loans in the first quarter of 2017.
The net interest margin increased slightly to 3.38% in the first quarter of 2017, compared with 3.37% in the fourth quarter of 2016. The increase in net interest margin was driven by increased yields on the loans and securities portfolios, up 3 and 20 basis points from the prior quarter, respectively, but was tempered somewhat due to the continued shift to a greater concentration of securities as a percentage of earning assets and lower marginal net yields on balance sheet growth.
Noninterest Income
 
 
 
 
 
 
 
1Q17 - 4Q16
 
1Q17 - 1Q16
(In millions)
1Q17
 
4Q16
 
1Q16
 
$
 
%
 
$
 
%
Service charges and fees on deposit accounts
$
42

 
$
43

 
$
41

 
$
(1
)
 
(2
)%
 
$
1

 
2
 %
Other service charges, commissions and fees
49

 
52

 
49

 
(3
)
 
(6
)
 
—

 
—

Wealth management income
10

 
11

 
8

 
(1
)
 
(9
)
 
2

 
25

Loan sales and servicing income
7

 
6

 
8

 
1

 
17

 
(1
)
 
(13
)
Capital markets and foreign exchange
7

 
6

 
6

 
1

 
17

 
1

 
17

Customer-related fees
115

 
118

 
112

 
(3
)
 
(3
)
 
3

 
3

Dividends and other investment income
12

 
4

 
5

 
8

 
200

 
7

 
140

Securities gains (losses), net
5

 
(3
)
 
—

 
8

 
267

 
5

 
NM
Other
—

 
9

 
—

 
(9
)
 
(100
)
 
—

 
—

Total noninterest income
$
132

 
$
128

 
$
117

 
$
4

 
3

 
$
15

 
13


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ZIONS BANCORPORATION
Press Release – Page 3
April 24, 2017

Total noninterest income for the first quarter of 2017 was $132 million, compared with $128 million for the fourth quarter of 2016. The increase in total noninterest income during the quarter was driven by an $8 million increase in net securities gains and an $8 million increase in dividends and other investment income, primarily due to increased market values of the Company’s Small Business Investment Company (“SBIC”) investments. These gains were partially offset by a $9 million decline in other noninterest income, driven by a $7 million decline in fair value and nonhedge derivative income resulting from fair value adjustments.
Customer-related fees decreased by $3 million in the first quarter of 2017 compared with the prior quarter, which was primarily due to a decline in lending activity, partially offset by an increase in credit card and interchange fees. Customer-related fees increased by $3 million compared with the first quarter of 2016, primarily due to increased wealth management income.
Noninterest Expense
 
 
 
 
 
 
 
1Q17 - 4Q16
 
1Q17 - 1Q16
(In millions)
1Q17
 
4Q16
 
1Q16
 
$
 
%
 
$
 
%
Salaries and employee benefits
$
262

 
$
241

 
$
258

 
$
21

 
9
 %
 
$
4

 
2
 %
Occupancy, net
33

 
32

 
30

 
1

 
3

 
3

 
10

Furniture, equipment and software, net
32

 
33

 
32

 
(1
)
 
(3
)
 
—

 
—

Other real estate expense, net
—

 
—

 
(1
)
 
—

 
—

 
1

 
100

Credit-related expense
8

 
7

 
6

 
1

 
14

 
2

 
33

Provision for unfunded lending commitments
(5
)
 
3

 
(6
)
 
(8
)
 
(267
)
 
1

 
17

Professional and legal services
14

 
17

 
12

 
(3
)
 
(18
)
 
2

 
17

Advertising
5

 
5

 
6

 
—

 
—

 
(1
)
 
(17
)
FDIC premiums
12

 
11

 
7

 
1

 
9

 
5

 
71

Amortization of core deposit and other intangibles
2

 
2

 
2

 
—

 
—

 
—

 
—

Other
51

 
53

 
50

 
(2
)
 
(4
)
 
1

 
2

Total noninterest expense
$
414

 
$
404

 
$
396

 
$
10

 
2

 
$
18

 
5

Adjusted noninterest expense 1
$
411

 
$
395

 
$
396

 
$
16

 
4
 %
 
$
15

 
4
 %
1 
For information on non-GAAP financial measures see pages 16-18.
Noninterest expense for the first quarter of 2017 was $414 million, compared with $404 million for the fourth quarter of 2016, and $396 million for the first quarter of 2016. The increase in total noninterest expense from the fourth quarter of 2016 was driven by a $21 million increase in salaries and employee benefits, partially offset by an $8 million decline in the provision for unfunded lending commitments. The change in salaries and employee benefits during the first quarter was due to a $4 million increase in severance and the following seasonal increases:
•
$7 million in stock-based compensation related to equity grants to retirement-eligible employees
•
$6 million in payroll taxes
•
$4 million related to the Company’s contribution to the employee 401(k) plan
These increases in salaries and employee benefits were partially offset by a $3 million reduction in salary expense, primarily related to loan originations. This was the result of an update in the estimation process associated with the consolidation of loan operations.

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ZIONS BANCORPORATION
Press Release – Page 4
April 24, 2017

The Company is committed to its expense and efficiency ratio goals for 2017, which are to hold adjusted noninterest expense growth to 2-3% in 2017, and to achieve an efficiency ratio in the low 60s. For information on non-GAAP measures see pages 16-18.
Income Taxes
The tax rate of 24.5% as of March 31, 2017 was lower than the 33.8% tax rate at December 31, 2016. The reduction in tax rate was primarily driven by a one-time $14 million benefit to tax expense related to state tax adjustments, and a $4 million benefit from the implementation of new accounting guidance related to stock-based compensation. Excluding these items, the Company expects the tax rate for the rest of 2017 to be approximately 34% to 35%.
BALANCE SHEET ANALYSIS
Asset Quality
 
 
 
 
 
 
 
1Q17 - 4Q16
 
1Q17 - 1Q16
(In millions)
1Q17
 
4Q16
 
1Q16
 
bps
 
 
 
bps
 
 
Ratio of nonperforming assets to loans and leases and other real estate owned
1.37
%
 
1.34
%
 
1.33
%
 
3

 
 
 
4

 
 
Annualized ratio of net loan and lease charge-offs to average loans
0.43

 
0.25

 
0.35

 
18

 
 
 
8

 
 
Ratio of total allowance for credit losses to loans and leases outstanding
1.41

 
1.48

 
1.64

 
(7
)
 
 
 
(23
)
 
 
 
 
 
 
 
 
 
$
 
%
 
$
 
%
Classified loans
$
1,464

 
$
1,577

 
$
1,532

 
$
(113
)
 
(7
)%
 
$
(68
)
 
(4
)%
Provision for credit losses
18

 
—

 
36

 
18

 
NM
 
(18
)
 
(50
)
Asset quality for the total portfolio remained strong and was generally stable when compared with the prior quarter. Classified loans for the total portfolio decreased to $1.5 billion at March 31, 2017, from $1.6 billion at December 31, 2016. Nonperforming assets were $588 million at March 31, 2017, compared with $573 million at December 31, 2016. The ratio of nonperforming assets to loans and leases and other real estate owned remained relatively stable at 1.37% at March 31, 2017, compared with 1.34% at December 31, 2016. Total net charge-offs were $46 million in the first quarter of 2017, or an annualized 0.43% of average loans, compared with $27 million, or an annualized 0.25% of average loans, in the fourth quarter of 2016. Nearly two-thirds of the total net charge-offs in the first quarter of 2017 were related to an isolated event with one non oil and gas-related borrower, who is subject to a government investigation and seizure of assets. Additionally, $14 million of net charge-offs were related to the oil and gas-related portfolio.
The Company provided $18 million for credit losses during the first quarter of 2017, compared with less than $1 million during the fourth quarter of 2016. The increase in the provision for credit losses was primarily due to the isolated charge-off discussed previously, partially offset by a decrease in the provision related to the oil and gas portfolio. The allowance for credit losses decreased to $604 million at March 31, 2017 from $632 million at December 31, 2016, which was 1.41% and 1.48% of loans and leases, respectively. The allowance for credit losses

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ZIONS BANCORPORATION
Press Release – Page 5
April 24, 2017

decreased as a result of credit quality improvement in the total portfolio. The reserve for unfunded lending commitments decreased by $5 million as a result of credit quality improvement in the oil and gas-related portfolio.
Loans and Leases
 
 
 
 
 
 
 
1Q17 - 4Q16
 
1Q17 - 1Q16
(In millions)
1Q17
 
4Q16
 
1Q16
 
$
 
%
 
$
 
%
Loans held for sale
$
128

 
$
172

 
$
109

 
$
(44
)
 
(26
)%
 
$
19

 
17

Loans and leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
21,556

 
21,615

 
21,745

 
(59
)
 
—

 
(189
)
 
(1
)
Commercial real estate
11,206

 
11,341

 
10,794

 
(135
)
 
(1
)
 
412

 
4

Consumer
9,980

 
9,693

 
8,879

 
287

 
3

 
1,101

 
12

Loans and leases, net of unearned income and fees
42,742

 
42,649

 
41,418

 
93

 
—

 
1,324

 
3

Less allowance for loan losses
544

 
567

 
612

 
(23
)
 
(4
)
 
(68
)
 
(11
)
Loans held for investment, net of allowance
$
42,198

 
$
42,082

 
$
40,806

 
$
116

 
—

 
$
1,392

 
3

Loans and leases, net of unearned income and fees, were $42.7 billion at March 31, 2017, compared with $42.6 billion at December 31, 2016. During the first quarter of 2017, consumer loans increased $287 million, predominately in 1-4 family residential loans, which includes the purchase of $166 million of loans. This increase was slightly offset by a $97 million decline in the oil and gas-related portfolio, primarily due to active management of the portfolio, including payoffs, paydowns and charge-offs. Excluding the reduction in oil and gas-related loans, net loans and leases increased $190 million during the first quarter of 2017. Unfunded lending commitments were $19.4 billion at March 31, 2017, compared with $19.3 billion at December 31, 2016.
Oil and Gas-Related Exposure1
 
 
 
 
 
 
 
1Q17 - 4Q16
 
1Q17 - 1Q16
(In millions)
1Q17
 
4Q16
 
1Q16
 
$
 
%
 
$
 
%
Loans and leases
 
 
 
 
 
 


 


 


 

Upstream – exploration and production
$
685

 
$
733

 
$
859

 
$
(48
)
 
(7
)%
 
$
(174
)
 
(20
)%
Midstream – marketing and transportation
603

 
598

 
649

 
5

 
1

 
(46
)
 
(7
)
Downstream – refining
108

 
137

 
129

 
(29
)
 
(21
)
 
(21
)
 
(16
)
Other non-services
38

 
38

 
43

 
—

 
—

 
(5
)
 
(12
)
Oilfield services
466

 
500

 
734

 
(34
)
 
(7
)
 
(268
)
 
(37
)
Oil and gas service manufacturing
161

 
152

 
229

 
9

 
6

 
(68
)
 
(30
)
Total loan and lease balances 2
2,061

 
2,158

 
2,643

 
(97
)
 
(4
)
 
(582
)
 
(22
)
Unfunded lending commitments
1,886

 
1,722

 
2,021

 
164

 
10

 
(135
)
 
(7
)
Total oil and gas credit exposure
$
3,947

 
$
3,880

 
$
4,664

 
$
67

 
2

 
$
(717
)
 
(15
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private equity investments
$
6

 
$
7

 
$
12

 
$
(1
)
 
(14
)
 
$
(6
)
 
(50
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit quality measures 2
 
 
 
 
 
 
 
 
 
 
 
 
 
Criticized loan ratio
38.0
%
 
37.8
%
 
37.5
%
 
 
 
 
 
 
 
 
Classified loan ratio
30.4
%
 
31.6
%
 
26.9
%
 
 
 
 
 
 
 
 
Nonaccrual loan ratio
14.8
%
 
13.6
%
 
10.8
%
 
 
 
 
 
 
 
 
Ratio of nonaccrual loans that are current
73.1
%
 
86.1
%
 
90.6
%
 
 
 
 
 
 
 
 
Net charge-off ratio, annualized 3
2.7
%
 
3.0
%
 
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.

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ZIONS BANCORPORATION
Press Release – Page 6
April 24, 2017

2 Total loan and lease balances and the credit quality measures do not include $21 million of oil and gas loans held for sale at March 31, 2017.
3 
Calculated as the ratio of annualized net charge-offs for each respective period to loan balances at each period end.
Oil and gas-related loans represent 5% of the total loan portfolio. Unfunded lending commitments increased by $164 million during the first quarter of 2017, primarily in the midstream portfolio. Criticized oil and gas-related loans decreased $32 million, or 4%, during the first quarter of 2017, mainly due to payoffs and paydowns. Oil and gas-related loan net charge-offs were $14 million in the first quarter of 2017, compared with $16 million in the fourth quarter of 2016, and were predominantly in the upstream portfolio. The allowance for credit losses related to oil and gas-related loans continued to exceed 8% at the end of the first quarter of 2017.
Deposits
 
 
 
 
 
 
 
1Q17 - 4Q16
 
1Q17 - 1Q16
(In millions)
1Q17
 
4Q16
 
1Q16
 
$
 
%
 
$
 
%
Noninterest-bearing demand
$
24,410

 
$
24,115

 
$
21,872

 
$
295

 
1
 %
 
$
2,538

 
12
 %
Interest-bearing:
 
 
 
 
 
 
 
 
 
 
 
 
 
Savings and money market
26,071

 
26,364

 
25,724

 
(293
)
 
(1
)
 
347

 
1

Time
2,994

 
2,757

 
2,072

 
237

 
9

 
922

 
44

Foreign
—

 
—

 
220

 
—

 
—

 
(220
)
 
(100
)
Total deposits
$
53,475

 
$
53,236

 
$
49,888

 
$
239

 
—

 
$
3,587

 
7

Total deposits increased to $53.5 billion at March 31, 2017, compared with $53.2 billion at December 31, 2016, as a result of a temporary increase in client activity at quarter-end. Average total deposits were $52.2 billion for both the first quarter of 2017 and the fourth quarter of 2016. Average noninterest bearing deposits decreased slightly to $23.5 billion for the first quarter of 2017, compared with $23.6 billion for the fourth quarter of 2016, and were 45% of average total deposits.
Long-term Debt and Shareholders’ Equity
 
 
 
 
 
 
 
1Q17 - 4Q16
 
1Q17 - 1Q16
(In millions)
1Q17
 
4Q16
 
1Q16
 
$
 
%
 
$
 
%
Shareholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred Stock
$
710

 
$
710

 
$
828

 
$
—

 
—
 %
 
$
(118
)
 
(14
)%
Common Stock
4,696

 
4,725

 
4,778

 
(29
)
 
(1
)
 
(82
)
 
(2
)
Retained earnings
2,435

 
2,321

 
2,031

 
114

 
5

 
404

 
20

Accumulated other comprehensive income (loss)
(111
)
 
(122
)
 
(12
)
 
11

 
9

 
(99
)
 
(825
)
Total shareholders' equity
$
7,730

 
$
7,634

 
$
7,625

 
$
96

 
1

 
$
105

 
1

During the first quarter of 2017, the Company continued its stock buyback program and repurchased $45 million of common stock during the quarter at an average price of $42.43 per share, and has repurchased $135 million of common stock since July 1, 2016 at an average price of $34.18 per share, leaving $45 million of buyback capacity remaining in the 2016 capital plan (which spans the timeframe of July 2016 to June 2017). Despite the share repurchases, the increase in the average market price per share of common stock for the first quarter, compared with

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ZIONS BANCORPORATION
Press Release – Page 7
April 24, 2017

the fourth quarter, increased the weighted average diluted shares by 5.0 million due to warrants that have been outstanding since 2008 (“TARP” warrants - NASDAQ: ZIONZ) and 2010 (NASDAQ: ZIONW).
Preferred dividends are expected to be $12.4 million for the second quarter of 2017. Our preferred stock may be reduced if we redeem $144 million of preferred equity in the second quarter of 2017, as outlined by our 2016 capital plan. Additionally, the Company reduced its long-term debt by $152 million during the first quarter of 2017 due to the maturity of 4.50% senior notes.
Tangible book value per common share increased to $29.61 at March 31, 2017, compared with $29.06 at December 31, 2016. The estimated Basel III common equity tier 1 (“CET1”) capital ratio was 12.2% at March 31, 2017 compared with 12.1% at December 31, 2016; Basel III capital ratios are based on the applicable phase-in periods, however, the fully phased-in ratio is not substantially different. For information on non-GAAP measures see pages 16-18.

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ZIONS BANCORPORATION
Press Release – Page 8
April 24, 2017

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 24, 2017). 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 91430582, 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 exceeding $65 billion. 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 company is a national leader in Small Business Administration lending and public finance advisory services, and is a consistent top recipient of 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 9
April 24, 2017

FINANCIAL HIGHLIGHTS
(Unaudited)
 
Three Months Ended
(In millions, except share, per share, and ratio data)
March 31,
2017
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
 
March 31,
2016
BALANCE SHEET 1
 
 
 
 
 
 
 
 
 
Loans held for investment, net of allowance
$
42,198

 
$
42,082

 
$
41,943

 
$
41,894

 
$
40,806

Total assets
65,463

 
63,239

 
61,039

 
59,643

 
59,180

Deposits
53,475

 
53,236

 
50,849

 
50,271

 
49,888

Total shareholders’ equity
7,730

 
7,634

 
7,679

 
7,626

 
7,625

STATEMENT OF INCOME
 
 
 
 
 
 
 
 
 
Net earnings applicable to common shareholders
$
129

 
$
125

 
$
117

 
$
91

 
$
79

Net interest income
489

 
480

 
469

 
465

 
453

Taxable-equivalent net interest income
497

 
488

 
476

 
471

 
458

Total noninterest income
132

 
128

 
145

 
126

 
117

Total noninterest expense
414

 
404

 
403

 
382

 
396

Adjusted pre-provision net revenue 2
213

 
217

 
209

 
211

 
182

Provision for loan losses
23

 
(3
)
 
19

 
35

 
42

Provision for unfunded lending commitments
(5
)
 
3

 
(3
)
 
(4
)
 
(6
)
Provision for credit losses
18

 
—

 
16

 
31

 
36

PER COMMON SHARE
 
 
 
 
 
 
 
 
 
Net earnings per diluted common share
$
0.61

 
$
0.60

 
$
0.57

 
$
0.44

 
$
0.38

Dividends
0.08

 
0.08

 
0.08

 
0.06

 
0.06

Book value per common share 1
34.65

 
34.09

 
34.19

 
33.72

 
33.23

Tangible book value per common share 1, 2
29.61

 
29.06

 
29.16

 
28.72

 
28.20

SELECTED RATIOS AND OTHER DATA
 
 
 
 
 
 
 
 
 
Return on average assets
0.88
%
 
0.88
%
 
0.84
%
 
0.77
%
 
0.62
%
Return on average common equity
7.48
%
 
7.11
%
 
6.66
%
 
5.32
%
 
4.68
%
Tangible return on average tangible common equity 2
8.8
%
 
8.4
%
 
7.9
%
 
6.3
%
 
5.6
%
Net interest margin
3.38
%
 
3.37
%
 
3.36
%
 
3.39
%
 
3.35
%
Efficiency ratio 2
65.9
%
 
64.5
%
 
65.9
%
 
64.6
%
 
68.5
%
Effective tax rate
24.5
%
 
33.8
%
 
33.9
%
 
34.5
%
 
31.1
%
Ratio of nonperforming assets to loans and leases and other real estate owned
1.37
%
 
1.34
%
 
1.37
%
 
1.30
%
 
1.33
%
Annualized ratio of net loan and lease charge-offs to average loans
0.43
%
 
0.25
%
 
0.28
%
 
0.37
%
 
0.35
%
Ratio of total allowance for credit losses to loans and leases outstanding 1
1.41
%
 
1.48
%
 
1.55
%
 
1.58
%
 
1.64
%
Full-time equivalent employees
10,076

 
10,057

 
9,968

 
10,064

 
10,092

CAPITAL RATIOS 1
 
 
 
 
 
 
 
 
 
Tangible common equity ratio
9.31
%
 
9.49
%
 
9.91
%
 
10.05
%
 
9.92
%
Basel III: 3
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
12.2
%
 
12.1
%
 
12.0
%
 
12.0
%
 
12.1
%
Tier 1 leverage
10.8
%
 
11.1
%
 
11.3
%
 
11.3
%
 
11.4
%
Tier 1 risk-based capital
13.6
%
 
13.5
%
 
13.5
%
 
13.4
%
 
13.9
%
Total risk-based capital
15.3
%
 
15.2
%
 
15.3
%
 
15.5
%
 
16.0
%
Risk-weighted assets
50,016

 
49,937

 
49,318

 
49,017

 
47,696

Weighted average common and common-equivalent shares outstanding (in thousands)
210,405

 
205,446

 
204,714

 
204,536

 
204,096

Common shares outstanding (in thousands) 1
202,595

 
203,085

 
203,850

 
205,104

 
204,544

1 
At period end.
2 
For information on non-GAAP financial measures see pages 16-18.
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
April 24, 2017

CONSOLIDATED BALANCE SHEETS
(In millions, shares in thousands)
March 31,
2017
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
 
March 31,
2016
 
(Unaudited)
 

 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
ASSETS
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
566

 
$
737

 
$
553

 
$
560

 
$
518

Money market investments:
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
1,761

 
1,411

 
1,489

 
2,155

 
3,039

Federal funds sold and security resell agreements
363

 
568

 
1,676

 
620

 
1,587

Investment securities:
 
 
 
 
 
 
 
 
 
Held-to-maturity, at amortized cost (approximate fair value $803, $850, $718, $721, and $636)
815

 
868

 
715

 
713

 
631

Available-for-sale, at fair value
15,606

 
13,372

 
10,358

 
9,477

 
8,702

Trading account, at fair value
40

 
115

 
108

 
119

 
66

 
16,461

 
14,355

 
11,181

 
10,309

 
9,399

Loans held for sale
128

 
172

 
160

 
147

 
109

Loans and leases, net of unearned income and fees
42,742

 
42,649

 
42,540

 
42,502

 
41,418

Less allowance for loan losses
544

 
567

 
597

 
608

 
612

Loans held for investment, net of allowance
42,198

 
42,082

 
41,943

 
41,894

 
40,806

Other noninterest-bearing investments
973

 
884

 
894

 
851

 
856

Premises, equipment and software, net
1,047

 
1,020

 
987

 
956

 
925

Goodwill
1,014

 
1,014

 
1,014

 
1,014

 
1,014

Core deposit and other intangibles
7

 
8

 
10

 
12

 
14

Other real estate owned
3

 
4

 
8

 
8

 
11

Other assets
942

 
984

 
1,124

 
1,117

 
902

 
$
65,463

 
$
63,239

 
$
61,039

 
$
59,643

 
$
59,180

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
24,410

 
$
24,115

 
$
22,711

 
$
22,277

 
$
21,872

Interest-bearing:
 
 
 
 
 
 
 
 
 
Savings and money market
26,071

 
26,364

 
25,503

 
25,540

 
25,724

Time
2,994

 
2,757

 
2,516

 
2,336

 
2,072

Foreign
—

 
—

 
119

 
118

 
220

 
53,475

 
53,236

 
50,849

 
50,271

 
49,888

Federal funds and other short-term borrowings
3,137

 
827

 
1,116

 
271

 
233

Long-term debt
383

 
535

 
570

 
699

 
802

Reserve for unfunded lending commitments
60

 
65

 
62

 
65

 
69

Other liabilities
678

 
942

 
763

 
711

 
563

Total liabilities
57,733

 
55,605

 
53,360

 
52,017

 
51,555

Shareholders’ equity:
 
 
 
 
 
 
 
 
 
Preferred stock, without par value, authorized 4,400 shares
710

 
710

 
710

 
710

 
828

Common stock, without par value; authorized 350,000 shares; issued and outstanding 202,595, 203,085, 203,850, 205,104 and 204,544 shares
4,696

 
4,725

 
4,748

 
4,783

 
4,778

Retained earnings
2,435

 
2,321

 
2,212

 
2,110

 
2,031

Accumulated other comprehensive income (loss)
(111
)
 
(122
)
 
9

 
23

 
(12
)
Total shareholders’ equity
7,730

 
7,634

 
7,679

 
7,626

 
7,625

 
$
65,463

 
$
63,239

 
$
61,039

 
$
59,643

 
$
59,180


- more -

ZIONS BANCORPORATION
Press Release – Page 11
April 24, 2017

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
Three Months Ended
(In millions, except share and per share amounts)
March 31,
2017
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
 
March 31,
2016
Interest income:
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
433

 
$
438

 
$
437

 
$
434

 
$
421

Interest on money market investments
4

 
4

 
5

 
5

 
7

Interest on securities
78

 
59

 
49

 
48

 
47

Total interest income
515

 
501

 
491

 
487

 
475

Interest expense:
 
 
 
 
 
 
 
 
 
Interest on deposits
13

 
13

 
13

 
12

 
12

Interest on short- and long-term borrowings
13

 
8

 
9

 
10

 
10

Total interest expense
26

 
21

 
22

 
22

 
22

Net interest income
489

 
480

 
469

 
465

 
453

Provision for loan losses
23

 
(3
)
 
19

 
35

 
42

Net interest income after provision for loan losses
466

 
483

 
450

 
430

 
411

Noninterest income:
 
 
 
 
 
 
 
 
 
Service charges and fees on deposit accounts
42

 
43

 
45

 
42

 
41

Other service charges, commissions and fees
49

 
52

 
54

 
52

 
49

Wealth management income
10

 
11

 
10

 
9

 
8

Loan sales and servicing income
7

 
6

 
11

 
10

 
8

Capital markets and foreign exchange
7

 
6

 
6

 
5

 
6

Customer-related fees
115

 
118


126

 
118

 
112

Dividends and other investment income
12

 
4

 
9

 
6

 
5

Securities gains (losses), net
5

 
(3
)
 
8

 
3

 
—

Other
—

 
9

 
2

 
(1
)
 
—

Total noninterest income
132

 
128

 
145

 
126

 
117

Noninterest expense:
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
262

 
241

 
242

 
241

 
258

Occupancy, net
33

 
32

 
33

 
30

 
30

Furniture, equipment and software, net
32

 
33

 
29

 
31

 
32

Other real estate expense, net
—

 
—

 
—

 
(1
)
 
(1
)
Credit-related expense
8

 
7

 
7

 
6

 
6

Provision for unfunded lending commitments
(5
)
 
3

 
(3
)
 
(4
)
 
(6
)
Professional and legal services
14

 
17

 
14

 
12

 
12

Advertising
5

 
5

 
6

 
5

 
6

FDIC premiums
12

 
11

 
12

 
10

 
7

Amortization of core deposit and other intangibles
2

 
2

 
2

 
2

 
2

Other
51

 
53

 
61

 
50

 
50

Total noninterest expense
414

 
404

 
403

 
382

 
396

Income before income taxes
184

 
207

 
192

 
174

 
132

Income taxes
45

 
70

 
65

 
60

 
41

Net income
139

 
137

 
127

 
114

 
91

Preferred stock dividends
(10
)
 
(12
)
 
(10
)
 
(13
)
 
(12
)
Preferred stock redemption
—

 
—

 
—

 
(10
)
 
—

Net earnings applicable to common shareholders
$
129

 
$
125

 
$
117

 
$
91

 
$
79

 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding during the period:
 
 
 
 
 
 
 
 
Basic shares (in thousands)
202,347

 
202,886

 
204,312

 
204,236

 
203,967

Diluted shares (in thousands)
210,405

 
205,446

 
204,714

 
204,536

 
204,096

Net earnings per common share:
 
 
 
 
 
 
 
 
 
Basic
$
0.63

 
$
0.61

 
$
0.57

 
$
0.44

 
$
0.38

Diluted
0.61

 
0.60

 
0.57

 
0.44

 
0.38



- more -

ZIONS BANCORPORATION
Press Release – Page 12
April 24, 2017

Loan Balances Held for Investment by Portfolio Type
(Unaudited)
(In millions)
March 31,
2017
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
 
March 31,
2016
Commercial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
13,368

 
 
 
$
13,452

 
 
 
$
13,543

 
 
 
$
13,757

 
 
 
$
13,590

 
Leasing
 
404

 
 
 
423

 
 
 
439

 
 
 
426

 
 
 
437

 
Owner occupied
 
6,973

 
 
 
6,962

 
 
 
6,889

 
 
 
6,989

 
 
 
7,022

 
Municipal
 
811

 
 
 
778

 
 
 
753

 
 
 
756

 
 
 
696

 
Total commercial
 
21,556

 
 
 
21,615

 
 
 
21,624

 
 
 
21,928

 
 
 
21,745

 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 
2,123

 
 
 
2,019

 
 
 
2,147

 
 
 
2,088

 
 
 
1,968

 
Term
 
9,083

 
 
 
9,322

 
 
 
9,303

 
 
 
9,230

 
 
 
8,826

 
Total commercial real estate
 
11,206

 
 
 
11,341

 
 
 
11,450

 
 
 
11,318

 
 
 
10,794

 
Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity credit line
 
2,638

 
 
 
2,645

 
 
 
2,581

 
 
 
2,507

 
 
 
2,433

 
1-4 family residential
 
6,185

 
 
 
5,891

 
 
 
5,785

 
 
 
5,680

 
 
 
5,418

 
Construction and other consumer real estate
 
517

 
 
 
486

 
 
 
453

 
 
 
419

 
 
 
401

 
Bankcard and other revolving plans
 
459

 
 
 
481

 
 
 
458

 
 
 
460

 
 
 
439

 
Other
 
181

 
 
 
190

 
 
 
189

 
 
 
189

 
 
 
188

 
Total consumer
 
9,980

 
 
 
9,693

 
 
 
9,466

 
 
 
9,255

 
 
 
8,879

 
Loans and leases, net of unearned income and fees
 
$
42,742

 
 
 
$
42,649

 
 
 
$
42,540

 
 
 
$
42,501

 
 
 
$
41,418

 

Nonperforming Assets
(Unaudited)
(In millions)
March 31,
2017
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
 
March 31,
2016
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans1
$
585

 
$
569

 
$
579

 
$
547

 
$
542

Other real estate owned
3

 
4

 
8

 
8

 
10

Total nonperforming assets
$
588

 
$
573

 
$
587

 
$
555

 
$
552

Ratio of nonperforming assets to loans1 and leases and other real estate owned
1.37
%
 
1.34
%
 
1.37
%
 
1.30
%
 
1.33
%
Accruing loans past due 90 days or more
$
30

 
$
36

 
$
29

 
$
29

 
$
37

Ratio of accruing loans past due 90 days or more to loans1 and leases
0.07
%
 
0.08
%
 
0.07
%
 
0.07
%
 
0.09
%
Nonaccrual loans and accruing loans past due 90 days or more
$
616

 
$
605

 
$
608

 
$
576

 
$
579

Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans1 and leases
1.44
%
 
1.41
%
 
1.42
%
 
1.35
%
 
1.39
%
Accruing loans past due 30-89 days
$
137

 
$
126

 
$
164

 
$
133

 
$
100

Restructured loans included in nonaccrual loans
131

 
100

 
125

 
143

 
133

Restructured loans on accrual
167

 
151

 
170

 
172

 
195

Classified loans
1,464

 
1,577

 
1,615

 
1,610

 
1,532

1 Includes loans held for sale.

- more -

ZIONS BANCORPORATION
Press Release – Page 13
April 24, 2017

Allowance for Credit Losses
(Unaudited)
 
Three Months Ended
(In millions)
March 31,
2017
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
 
March 31,
2016
Allowance for Loan Losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
567

 
$
597

 
$
608

 
$
612

 
$
606

Add:
 
 
 
 
 
 
 
 
 
Provision for losses
23

 
(3
)
 
19

 
35

 
42

Deduct:
 
 
 
 
 
 
 
 
 
Gross loan and lease charge-offs
(57
)
 
(38
)
 
(54
)
 
(58
)
 
(48
)
Recoveries
11

 
11

 
24

 
19

 
12

Net loan and lease charge-offs
(46
)
 
(27
)
 
(30
)
 
(39
)
 
(36
)
Balance at end of period
$
544

 
$
567

 
$
597

 
$
608

 
$
612

Ratio of allowance for loan losses to loans1 and leases, at period end
1.27
%
 
1.33
%
 
1.40
%
 
1.43
%
 
1.48
%
Ratio of allowance for loan losses to nonaccrual loans1 at period end
98.55
%
 
107.18
%
 
108.74
%
 
113.86
%
 
112.92
%
Annualized ratio of net loan and lease charge-offs to average loans
0.43
%
 
0.25
%
 
0.28
%
 
0.37
%
 
0.35
%
Reserve for Unfunded Lending Commitments
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
65

 
$
62

 
$
65

 
$
69

 
$
75

Provision charged (credited) to earnings
(5
)
 
3

 
(3
)
 
(4
)
 
(6
)
Balance at end of period
$
60

 
$
65

 
$
62

 
$
65

 
$
69

Total Allowance for Credit Losses
 
 
 
 
 
 
 
 
 
Allowance for loan losses
$
544

 
$
567

 
$
597

 
$
608

 
$
612

Reserve for unfunded lending commitments
60

 
65

 
62

 
65

 
69

Total allowance for credit losses
$
604

 
$
632

 
$
659

 
$
673

 
$
681

Ratio of total allowance for credit losses to loans1 and leases outstanding, at period end
1.41
%
 
1.48
%
 
1.55
%
 
1.58
%
 
1.64
%
1 Does not include loans held for sale.



- more -

ZIONS BANCORPORATION
Press Release – Page 14
April 24, 2017

Nonaccrual Loans by Portfolio Type
(Unaudited)
(In millions)
March 31,
2017
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
 
March 31,
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for sale
 
$
34

 
 
 
$
40

 
 
 
$
29

 
 
 
$
13

 
 
 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
358

 
 
 
$
354

 
 
 
$
387

 
 
 
$
341

 
 
 
$
356

 
Leasing
 
13

 
 
 
14

 
 
 
14

 
 
 
14

 
 
 
14

 
Owner occupied
 
89

 
 
 
74

 
 
 
66

 
 
 
69

 
 
 
74

 
Municipal
 
1

 
 
 
1

 
 
 
1

 
 
 
1

 
 
 
1

 
Total commercial
 
461

 
 
 
443

 
 
 
468

 
 
 
425

 
 
 
445

 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 
7

 
 
 
7

 
 
 
4

 
 
 
5

 
 
 
6

 
Term
 
38

 
 
 
29

 
 
 
28

 
 
 
51

 
 
 
33

 
Total commercial real estate
 
45

 
 
 
36

 
 
 
32

 
 
 
56

 
 
 
39

 
Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity credit line
 
9

 
 
 
11

 
 
 
11

 
 
 
12

 
 
 
11

 
1-4 family residential
 
35

 
 
 
36

 
 
 
36

 
 
 
39

 
 
 
44

 
Construction and other consumer real estate
 
1

 
 
 
2

 
 
 
1

 
 
 
1

 
 
 
1

 
Bankcard and other revolving plans
 
—

 
 
 
1

 
 
 
2

 
 
 
1

 
 
 
2

 
Total consumer
 
45

 
 
 
50

 
 
 
50

 
 
 
53

 
 
 
58

 
Total nonaccrual loans
 
$
585

 
 
 
$
569

 
 
 
$
579

 
 
 
$
547

 
 
 
$
542

 


Net Charge-Offs by Portfolio Type
(Unaudited)
 
Three Months Ended
(In millions)
March 31,
2017
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
 
March 31,
2016
Commercial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
45

 
 
 
$
25

 
 
 
$
33

 
 
 
$
32

 
 
 
$
37

 
Leasing
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
Owner occupied
 
1

 
 
 
(1
)
 
 
 
—

 
 
 
—

 
 
 
(1
)
 
Municipal
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
Total commercial
 
46

 
 
 
24

 
 
 
33

 
 
 
32

 
 
 
36

 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 
(2
)
 
 
 
—

 
 
 
(1
)
 
 
 
(1
)
 
 
 
(2
)
 
Term
 
1

 
 
 
1

 
 
 
(5
)
 
 
 
7

 
 
 
—

 
Total commercial real estate
 
(1
)
 
 
 
1

 
 
 
(6
)
 
 
 
6

 
 
 
(2
)
 
Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity credit line
 
(1
)
 
 
 
—

 
 
 
1

 
 
 
—

 
 
 
1

 
1-4 family residential
 
(1
)
 
 
 
—

 
 
 
—

 
 
 
(1
)
 
 
 
1

 
Construction and other consumer real estate
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
Bankcard and other revolving plans
 
3

 
 
 
2

 
 
 
2

 
 
 
1

 
 
 
—

 
Total consumer loans
 
1

 
 
 
2

 
 
 
3

 
 
 
—

 
 
 
2

 
Total net charge-offs (recoveries)
 
$
46

 
 
 
$
27

 
 
 
$
30

 
 
 
$
38

 
 
 
$
36

 

- more -

ZIONS BANCORPORATION
Press Release – Page 15
April 24, 2017

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
 
Three Months Ended
 
March 31, 2017
 
December 31, 2016
 
March 31, 2016
(In millions)
Average balance
 
Average
yield/rate 1
 
Average balance
 
Average
yield/rate 1
 
Average balance
 
Average
yield/rate 1
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Money market investments
$
1,983

 
0.93
%
 
$
2,367

 
0.70
%
 
$
5,122

 
0.55
%
Securities:
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity
847

 
3.90
%
 
762

 
4.09
%
 
562

 
4.86
%
Available-for-sale
14,024

 
2.14
%
 
11,501

 
1.89
%
 
8,109

 
2.11
%
Trading account
61

 
3.75
%
 
120

 
4.04
%
 
53

 
3.56
%
Total securities
14,932

 
2.24
%
 
12,383

 
2.04
%
 
8,724

 
2.30
%
Loans held for sale
132

 
3.22
%
 
162

 
2.73
%
 
140

 
3.95
%
Loans held for investment 2:
 
 
 
 
 
 
 
 
 
 
 
Commercial
21,606

 
4.22
%
 
21,618

 
4.21
%
 
21,624

 
4.20
%
Commercial real estate
11,241

 
4.27
%
 
11,463

 
4.24
%
 
10,556

 
4.23
%
Consumer
9,719

 
3.82
%
 
9,558

 
3.73
%
 
8,823

 
3.90
%
Total loans held for investment
42,566

 
4.14
%
 
42,639

 
4.11
%
 
41,003

 
4.14
%
Total interest-earning assets
59,613

 
3.56
%
 
57,551

 
3.52
%
 
54,989

 
3.51
%
Cash and due from banks
974

 
 
 
894

 
 
 
728

 
 
Allowance for loan losses
(566
)
 
 
 
(589
)
 
 
 
(600
)
 
 
Goodwill
1,014

 
 
 
1,014

 
 
 
1,014

 
 
Core deposit and other intangibles
8

 
 
 
10

 
 
 
15

 
 
Other assets
2,952

 
 
 
2,866

 
 
 
2,680

 
 
Total assets
$
63,995

 
 
 
$
61,746

 
 
 
$
58,826

 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Savings and money market
$
25,896

 
0.14
%
 
$
25,873

 
0.14
%
 
$
25,350

 
0.15
%
Time
2,856

 
0.59
%
 
2,638

 
0.54
%
 
2,088

 
0.44
%
Foreign
—

 

 
21

 
0.31
%
 
235

 
0.26
%
Total interest-bearing deposits
28,752

 
0.19
%
 
28,532

 
0.18
%
 
27,673

 
0.17
%
Borrowed funds:
 
 
 
 
 
 
 
 
 
 
 
Federal funds and other short-term borrowings
2,924

 
0.71
%
 
665

 
0.36
%
 
268

 
0.18
%
Long-term debt
521

 
5.92
%
 
537

 
5.71
%
 
809

 
5.02
%
Total borrowed funds
3,445

 
1.50
%
 
1,202

 
2.75
%
 
1,077

 
3.82
%
Total interest-bearing liabilities
32,197

 
0.33
%
 
29,734

 
0.28
%
 
28,750

 
0.31
%
Noninterest-bearing deposits
23,460

 
 
 
23,648

 
 
 
21,882

 
 
Other liabilities
632

 
 
 
656

 
 
 
579

 
 
Total liabilities
56,289

 
 
 
54,038

 
 
 
51,211

 
 
Shareholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
Preferred equity
710

 
 
 
710

 
 
 
828

 
 
Common equity
6,996

 
 
 
6,998

 
 
 
6,787

 
 
Total shareholders’ equity
7,706

 
 
 
7,708

 
 
 
7,615

 
 
Total liabilities and shareholders’ equity
$
63,995

 
 
 
$
61,746

 
 
 
$
58,826

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Spread on average interest-bearing funds
 
 
3.23
%
 
 
 
3.24
%
 
 
 
3.20
%
Net yield on interest-earning assets
 
 
3.38
%
 
 
 
3.37
%
 
 
 
3.35
%
1 Rates are calculated using amounts in thousands and 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
April 24, 2017

GAAP to Non-GAAP Reconciliations
(Unaudited)
This press release presents both GAAP and non-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 tables. 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. These non-GAAP financial measures are used by management to assess the performance and financial position of the Company and for presentations of Company performance to investors. 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.
The following are the non-GAAP financial measures presented in this Earnings Release and a discussion of why management uses these non-GAAP measures:
•
Tangible Book Value per Common Share - this table also includes “Tangible common equity.” Tangible book value per common share is a non-GAAP financial measure that management believes provides additional useful information about the level of tangible assets in relation to outstanding shares of common stock. Management believes the use of ratios that utilize tangible equity provides additional useful information because they present measures of those assets that can generate income.
•
Tangible Return on Average Tangible Common Equity - this table also includes “Net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax” and “Average tangible common equity.” Tangible return on average tangible common equity is a non-GAAP financial measure that management believes provides useful information about the Company’s use of equity. Management believes the use of ratios that utilize tangible equity provides additional useful information because they present measures of those assets that can generate income.
•
Efficiency Ratio - this table also includes “Adjusted noninterest expense,” “Taxable-equivalent net interest income,” “Adjusted tax-equivalent revenue,” and “Adjusted pre-provision net revenue (“PPNR”).” The methodology of determining the efficiency ratio may differ among companies. Management makes adjustments to exclude certain items as identified in the subsequent schedule which management believes allows for more consistent comparability among periods. Management believes the efficiency ratio provides useful information regarding the cost of generating revenue. Adjusted noninterest expense provides a measure as to how well the Company is managing its expenses, and adjusted PPNR enables management and others to assess the Company’s ability to generate capital to cover credit losses through a credit cycle. Taxable-equivalent net interest income allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The efficiency ratio and adjusted noninterest expense are the key metrics to which the Company announced it would hold itself accountable in its June 1, 2015 efficiency initiative, and to which executive compensation is tied.


- more -

ZIONS BANCORPORATION
Press Release – Page 17
April 24, 2017

GAAP to Non-GAAP Reconciliations
(Unaudited)
(In millions, except shares and per share amounts)
 
March 31,
2017
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
 
March 31,
2016
Tangible Book Value per Common Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shareholders’ equity (GAAP)
 
$
7,730

 
$
7,634

 
$
7,679

 
$
7,626

 
$
7,625

Preferred stock
 
(710
)
 
(710
)
 
(710
)
 
(710
)
 
(828
)
Goodwill
 
(1,014
)
 
(1,014
)
 
(1,014
)
 
(1,014
)
 
(1,014
)
Core deposit and other intangibles
 
(7
)
 
(8
)
 
(10
)
 
(12
)
 
(14
)
Tangible common equity (non-GAAP)
(a)
$
5,999

 
$
5,902

 
$
5,945

 
$
5,890

 
$
5,769

Common shares outstanding (in thousands)
(b)
202,595

 
203,085

 
203,850

 
205,104

 
204,544

Tangible book value per common share (non-GAAP)
(a/b)
$
29.61

 
$
29.06

 
$
29.16

 
$
28.72

 
$
28.20

 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
(Dollar amounts in millions)
 
March 31,
2017
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
 
March 31,
2016
Tangible Return on Average Tangible Common Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings applicable to common shareholders (GAAP)
 
$
129

 
$
125

 
$
117

 
$
91

 
$
79

Adjustments, net of tax:
 
 
 
 
 
 
 
 
 
 
Amortization of core deposit and other intangibles
 
1

 
1

 
1

 
1

 
1

Net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax (non-GAAP)
(a)
$
130

 
$
126

 
$
118

 
$
92

 
$
80

Average common equity (GAAP)
 
$
6,996

 
$
6,998

 
$
6,986

 
$
6,883

 
$
6,787

Average goodwill
 
(1,014
)
 
(1,014
)
 
(1,014
)
 
(1,014
)
 
(1,014
)
Average core deposit and other intangibles
 
(8
)
 
(10
)
 
(11
)
 
(14
)
 
(15
)
Average tangible common equity (non-GAAP)
(b)
$
5,974

 
$
5,974

 
$
5,961

 
$
5,855

 
$
5,758

Number of days in quarter
(c)
90

 
92

 
92

 
91

 
91

Number of days in year
(d)
365

 
366

 
366

 
366

 
366

Tangible return on average tangible common equity (non-GAAP)
(a/b/c)*d
8.8
%
 
8.4
%
 
7.9
%
 
6.3
%
 
5.6
%

- more -

ZIONS BANCORPORATION
Press Release – Page 18
April 24, 2017

GAAP to Non-GAAP Reconciliations
(Unaudited)
 
 
Three Months Ended
(In millions)
 
March 31,
2017
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
 
March 31,
2016
Efficiency Ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest expense (GAAP)
(a)
$
414

 
$
404

 
$
403

 
$
382

 
$
396

Adjustments:
 
 
 
 
 
 
 
 
 
 
Severance costs
 
5

 
1

 
—

 
—

 
4

Other real estate expense
 
—

 
—

 
—

 
(1
)
 
(1
)
Provision for unfunded lending commitments
 
(5
)
 
3

 
(3
)
 
(4
)
 
(6
)
Debt extinguishment cost
 
—

 
—

 
—

 
—

 
—

Amortization of core deposit and other intangibles
 
2

 
2

 
2

 
2

 
2

Restructuring costs 1
 
1

 
3

 
—

 
—

 
1

Total adjustments
(b)
3

 
9

 
(1
)
 
(3
)
 
—

Adjusted noninterest expense (non-GAAP)
(a-b)=(c)
$
411

 
$
395

 
$
404

 
$
385

 
$
396

Net interest income (GAAP)
(d)
$
489

 
$
480

 
$
469

 
$
465

 
$
453

Fully taxable-equivalent adjustments
(e)
8

 
8

 
7

 
6

 
5

Taxable-equivalent net interest income (non-GAAP)
(d+e)=(f)
497

 
488

 
476

 
471

 
458

Noninterest income (GAAP)
(g)
132

 
128

 
145

 
126

 
117

Combined income
(f+g)=(h)
629

 
616

 
621

 
597

 
575

Adjustments:
 
 
 
 
 
 
 
 
 
 
Fair value and nonhedge derivative income (loss)
 
—

 
7

 
—

 
(2
)
 
(3
)
Securities gains (losses), net
 
5

 
(3
)
 
8

 
3

 
—

Total adjustments
(i)
5

 
4

 
8

 
1

 
(3
)
Adjusted taxable-equivalent revenue (non-GAAP)
(h-i)=(j)
$
624

 
$
612

 
$
613

 
$
596

 
$
578

Pre-provision net revenue (PPNR)
(h)-(a)
$
215

 
$
212

 
$
218

 
$
215

 
$
179

Adjusted PPNR
(j-c)
213

 
217

 
209

 
211

 
182

Efficiency ratio
(c/j)
65.9
%
 
64.5
%
 
65.9
%
 
64.6
%
 
68.5
%
1 The restructuring costs in the fourth quarter of 2016 are primarily related to the termination of the Zions Direct auction platform and changes to create a simplified lending approach for our business banking customers.

 

# # #