Operating Segment Information

3 Months Ended

Mar. 31, 2017

Operating Segment Information [Abstract]

Operating Segment Information

. OPERATING SEGMENT INFORMATION

We manage our operations and prepare management reports and other information with a primary focus on geographical area. Our banking operations are managed under their own individual brand names, including Zions Bank, Amegy Bank, California Bank & Trust, National Bank of Arizona, Nevada State Bank, Vectra Bank Colorado, and The Commerce Bank of Washington. Performance assessment and resource allocation are based upon this geographical structure. We use an internal funds transfer pricing (“FTP”) allocation system to report results of operations for business segments. This process continues to be refined. Total average loans and deposits presented for the banking segments do not include intercompany amounts between banking segments, but may include deposits with the Other segment. Prior period amounts have been reclassified to reflect these changes.

As of March 31, 2017, Zions Bank operates 98 branches in Utah, 23 branches in Idaho, and one branch in Wyoming. Amegy operates 74 branches in Texas. CB&T operates 93 branches in California. NBAZ operates 58 branches in Arizona. NSB operates 50 branches in Nevada. Vectra operates 36 branches in Colorado and one branch in New Mexico. TCBW operates one branch in Washington and one branch in Oregon.

The operating segment identified as “Other” includes the Parent, Zions Management Services Company, certain nonbank financial service subsidiaries, centralized back-office functions, and eliminations of transactions between segments. The major components of net interest income at the Bank’s back office include the revenue associated with the investments securities portfolio and the offset of the FTP costs and benefits provided to the business segments. Throughout 2016 consolidation efforts continued, which resulted in transitioning full-time equivalents from the business segments to the Company’s back-office units. Due to the continuing nature and timing of this change, the Company’s back-office units retained more direct expenses in 2016 than in prior years. In the first quarter of 2017 we made changes to the FTP process and internal allocation of central expenses to better reflect the performance of business segments. Prior period amounts have been revised to reflect the impact of these changes had they been instituted in 2016.

The following schedule does not present total assets or income tax expense for each operating segment, but instead presents average loans, average deposits and net income before income taxes because these are the metrics that management uses when evaluating performance and making decisions pertaining to the operating segments. The Parent’s net interest income includes interest expense on other borrowed funds. The condensed statement of income identifies the components of income and expense which affect the operating amounts presented in the Other segment.

The accounting policies of the individual operating segments are the same as those of the Company. Transactions between operating segments are primarily conducted at fair value, resulting in profits that are eliminated for reporting consolidated results of operations.

The following schedule presents selected operating segment information for the three months ended March 31, 2017 and 2016:

(In millions)	Zions Bank						Amegy						CB&T						NBAZ				NSB
	2017			2016			2017			2016			2017			2016			2017		2016		2017			2016
SELECTED INCOME STATEMENT DATA
Net interest income	$	155		$	150		$	114		$	113		$	110		$	103		$	50	$	45	$	32		$	30
Provision for loan losses	35			(31		)	1			104			(5		)	(3		)	1		2		(4		)	(26		)
Net interest income after provision for loan losses	120			181			113			9			115			106			49		43		36			56
Noninterest income	35			36			29			29			17			16			9		10		10			9
Noninterest expense	113			105			85			86			75			72			37		35		35			33
Net Income (loss) before taxes	$	42		$	112		$	57		$	(48	)	$	57		$	50		$	21	$	18	$	11		$	32
SELECTED AVERAGE BALANCE SHEET DATA
Total loans	$	12,488		$	12,306		$	10,637		$	10,370		$	9,306		$	8,905		$	4,262	$	3,863	$	2,338		$	2,263
Total deposits	16,268			15,700			11,318			11,274			10,921			10,479			4,661		4,445		4,211			4,011
(In millions)	Vectra						TCBW						Other						Consolidated Company
	2017			2016			2017			2016			2017			2016			2017		2016
SELECTED INCOME STATEMENT DATA
Net interest income	$	30		$	30		$	11		$	9		$	(13	)	$	(27	)	$	489	$	453
Provision for loan losses	(3		)	(3		)	(1		)	(2		)	(1		)	1			23		42
Net interest income after provision for loan losses	33			33			12			11			(12		)	(28		)	466		411
Noninterest income	6			6			1			1			25			10			132		117
Noninterest expense	25			23			5			5			39			37			414		396
Net Income (loss) before taxes	$	14		$	16		$	8		$	7		$	(26	)	$	(55	)	$	184	$	132
SELECTED AVERAGE BALANCE SHEET DATA
Total loans	$	2,535		$	2,453		$	877		$	733		$	123		$	110		$	42,566	$	41,003
Total deposits	2,791			2,783			1,100			953			942			(90		)	52,212		49,555