EX-99.1 2 exh991earningsrelease8-k20.htm PRESS RELEASE DATED JULY 22, 2019 Exhibit

ZIONS BANCORPORATION, N.A.
Press Release – Page 1
July 22, 2019


Zions Bancorporation, N.A.
One South Main
Salt Lake City, UT 84133
July 22, 2019
zions2019331aaa01.jpg
www.zionsbancorporation.com
Second Quarter 2019 Financial Results: FOR IMMEDIATE RELEASE
 
Investor and Media Contact: James Abbott (801) 844-7637
Zions Bancorporation, N.A. Reports: 2Q19 Net Earnings¹ of $189 million, diluted EPS of $0.99
compared with 2Q18 Net Earnings¹ of $187 million, diluted EPS of $0.89,
and 1Q19 Net Earnings¹ of $205 million, diluted EPS of $1.04

SECOND QUARTER RESULTS
$0.99
 
$189 million
 
3.54%
 
10.8%
Earnings per diluted common share
 
Net Earnings 1
 
Net interest margin (“NIM”)
 
Common Equity
Tier 1
SECOND QUARTER HIGHLIGHTS²
 
 
 
Net Interest Income and NIM
•
Net interest income was $569 million, up 4%
•
NIM was 3.54%, compared with 3.56%
•
Average noninterest-bearing deposits declined to $23.1 billion, compared with $23.6 billion
 
 
 
Operating Performance
•
Pre-provision net revenue ("PPNR") was $284 million, up 5%
•
Adjusted PPNR³ was $294 million, up 9%
•
Noninterest expense was $424 million, up less than 1%
•
Adjusted noninterest expense³ was $423 million, up less than 1%
•
Efficiency ratio³ was 59.0%, compared with 60.9%
 
 
 
Loans and Credit Quality
•
Net loans and leases were $48.6 billion, up $3.4 billion, or 7%
•
Classified loans were $770 million, down 19%; and nonperforming assets were $253 million, down 27%
•
Provision for credit losses was $21 million, compared with $12 million
•
Net charge-offs of 0.12% of average loans, compared with net credit recoveries of 0.11% of average loans
 
 
 
Capital Returns
•
Return on average tangible common equity³ was 12.7%, compared with 12.4%
•
Common stock repurchases of $275 million, 5.8 million shares, or 3.2% of shares outstanding as of March 31, 2019
•
Common dividend increased to $0.30 per share from $0.24 per share
 
 
 
Notable Items
•
Derivative valuation loss of $6 million on client-related interest rate swaps
 
CEO COMMENTARY
 
Harris H. Simmons, Chairman and CEO, commented, “Net earnings available to common shareholders was up only slightly from last year, reflecting relatively strong loan growth coupled with margin compression resulting from a challenging interest rate environment. Second quarter earnings per share of $0.99 increased 11% from the prior year period, largely the result of a share count that was 9% lower than last year.” Mr. Simmons continued, “Operating expenses continued to be well controlled, rising less than 1% from the prior year’s second quarter, and credit quality remained very clean with annualized net charge-offs totaling only 0.12% of average loans and leases, as economic conditions remain strong throughout the western United States.”
OPERATING PERFORMANCE3

chart-5ae33f078f735a9a86da01.jpgchart-be761f3e826d57d8aa4a01.jpg
¹ Net Earnings is net earnings applicable to common shareholders.
² Comparisons noted in the bullet points are calculated for the current quarter versus the same prior-year period, unless otherwise specified.
³ For information on non-GAAP financial measures and the reasons for which the Bank presents these numbers, see pages 16-19.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 2
July 22, 2019

Comparisons noted in the sections below are calculated for the current quarter versus the same prior-year period, unless otherwise specified. Growth rates of 100% or more are rendered as not meaningful as they are generally reflective of a low initial starting point.
RESULTS OF OPERATIONS
Net Interest Income and Margin
 
 
 
 
 
 
 
2Q19 - 1Q19
 
2Q19 - 2Q18
(In millions)
2Q19
 
1Q19
 
2Q18
 
$
 
%
 
$
 
%
Interest and fees on loans
$
581

 
$
570

 
$
514

 
$
11

 
2
 %
 
$
67

 
13
%
Interest on money market investments
8

 
9

 
7

 
(1
)
 
(11
)
 
1

 
14

Interest on securities
95

 
96

 
85

 
(1
)
 
(1
)
 
10

 
12

Total interest income
684

 
675

 
606

 
9

 
1

 
78

 
13

Interest on deposits
66

 
57

 
29

 
9

 
16

 
37

 
NM

Interest on short and long-term borrowings
49

 
42

 
29

 
7

 
17

 
20

 
69

Total interest expense
115

 
99

 
58

 
16

 
16

 
57

 
98

Net interest income
$
569

 
$
576

 
$
548

 
$
(7
)
 
(1
)
 
$
21

 
4

 
 
 
 
 
 
 
bps
 
 
 
bps
 
 
Yield on interest-earning assets
4.24
%
 
4.31
%
 
3.93
%
 
(7
)
 
 
 
31

 
 
Rate paid on total deposits and interest-bearing liabilities
0.75
%
 
0.67
%
 
0.40
%
 
8

 
 
 
35

 
 
Cost of total deposits
0.49
%
 
0.43
%
 
0.22
%
 
6

 
 
 
27

 
 
Net interest margin
3.54
%
 
3.68
%
 
3.56
%
 
(14
)
 
 
 
(2
)
 
 
Net interest income increased $21 million, or 4%, to $569 million in the second quarter of 2019 from $548 million in the second quarter of 2018. Total interest income increased $78 million primarily due to a $67 million increase in interest and fees on loans, resulting from growth across all loan segments. Interest expense increased $57 million primarily due to increases in the rate paid on deposits and short and long-term borrowings, reflecting the increase in short-term interest rates, in addition to a $1.7 billion, or 32%, increase in average short and long-term borrowings.
The yield on interest earning assets was 4.24%, a decrease of 7 basis points compared with the first quarter of 2019, and an increase of 31 basis points compared with the second quarter of 2018. When adjusted for interest recoveries of $1 million in the second quarters of 2019 and 2018, respectively, using $1 million per loan as the reporting threshold, the yield on interest earning assets for each of those periods would be 1 basis point lower. During the first quarter of 2019 the Bank did not experience any interest income recoveries of at least $1 million per loan.
The rate paid on total deposits and interest-bearing liabilities increased to 0.75% for the second quarter of 2019, from 0.67% for the first quarter of 2019, and 0.40% for the second quarter of 2018. The total annualized cost of total deposits for the second quarter of 2019 was 0.49%, compared with 0.43% for the first quarter of 2019, and 0.22% for the second quarter of 2018.
The net interest margin decreased to 3.54% in the second quarter of 2019, compared with 3.68% in the first quarter of 2019, and 3.56% in the same prior year period primarily due to the increase in the cost of deposits and a decline in loan yields, both of which were due to changes in portfolio composition and competitive pricing pressure.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 3
July 22, 2019

Noninterest Income
 
 
 
 
 
 
 
2Q19 - 1Q19
 
2Q19 - 2Q18
(In millions)
2Q19
 
1Q19
 
2Q18
 
$
 
%
 
$
 
%
Service charges and fees on deposit accounts
$
41

 
$
40

 
$
42

 
$
1

 
3
%
 
$
(1
)
 
(2
)%
Other service charges, commissions and fees
58

 
54

 
55

 
4

 
7

 
3

 
5

Wealth management and trust income
13

 
13

 
14

 
—

 
—

 
(1
)
 
(7
)
Loan sales and servicing income
9

 
5

 
7

 
4

 
80

 
2

 
29

Capital markets and foreign exchange
9

 
8

 
7

 
1

 
13

 
2

 
29

Customer-related fees
130

 
120

 
125

 
10

 
8

 
5

 
4

Dividends and other investment income
9

 
9

 
11

 
—

 
—

 
(2
)
 
(18
)
Securities gains (losses), net
(3
)
 
1

 
1

 
(4
)
 
NM

 
(4
)
 
NM

Other
(4
)
 
2

 
1

 
(6
)
 
NM

 
$
(5
)
 
NM

Total noninterest income
$
132

 
$
132

 
$
138

 
$
—

 
—

 
$
(6
)
 
(4
)
Total noninterest income for the second quarter of 2019 decreased by $6 million, or 4%, to $132 million from $138 million for the second quarter of 2018. Customer-related fees increased $5 million, which was largely attributable to an increase of $3 million in other service charges, commissions and fees as a result of increased lending activity, including syndication fees. Other noninterest income decreased by $5 million, primarily due to a $6 million valuation adjustment on client-related interest rate swaps in the second quarter of 2019. As a result of the decline in interest rates during the second quarter of 2019, these client-related interest rate swaps significantly increased in value, resulting in a larger exposure to the Bank and a $6 million valuation adjustment.
Noninterest Expense
 
 
 
 
 
 
 
2Q19 - 1Q19
 
2Q19 - 2Q18
(In millions)
2Q19
 
1Q19
 
2Q18
 
$
 
%
 
$
 
%
Salaries and employee benefits
$
274

 
$
287

 
$
266

 
$
(13
)
 
(5
)%
 
$
8

 
3
 %
Occupancy, net
32

 
33

 
32

 
(1
)
 
(3
)
 
—

 
—

Furniture, equipment and software, net
35

 
32

 
32

 
3

 
9

 
3

 
9

Other real estate expense, net
—

 
(1
)
 
—

 
1

 
NM

 
—

 
NM

Credit-related expense
8

 
6

 
7

 
2

 
33

 
1

 
14

Professional and legal services
13

 
11

 
14

 
2

 
18

 
(1
)
 
(7
)
Advertising
5

 
5

 
7

 
—

 
—

 
(2
)
 
(29
)
FDIC premiums
6

 
6

 
14

 
—

 
—

 
(8
)
 
(57
)
Other
51

 
51

 
49

 
—

 
—

 
2

 
4

Total noninterest expense
$
424

 
$
430

 
$
421

 
$
(6
)
 
(1
)
 
$
3

 
1

Adjusted noninterest expense 1
$
423

 
$
431

 
$
420

 
$
(8
)
 
(2
)
 
$
3

 
1

1 
For information on non-GAAP financial measures, see pages 16-19.
Noninterest expense for the second quarter of 2019 was $424 million, an increase of less than 1%, when compared with $421 million for the second quarter of 2018. Salaries and employee benefits increased $8 million, primarily due to a $7 million increase in base salaries resulting from annual salary merit increases and employee headcount and a $3 million decline in deferred salaries. The increase was partially offset by a $2 million decrease in incentive compensation. Furniture, equipment and software, net, increased by $3 million primarily due to increased

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ZIONS BANCORPORATION, N.A.
Press Release – Page 4
July 22, 2019

amortization of capitalized software related to our Core Transformation Project to replace our commercial loan systems.
The aforementioned increases in noninterest expense were offset by a $8 million decrease in FDIC premiums. The decrease in FDIC premiums is primarily due to the elimination of the FDIC surcharge for large banks because the required Deposit Insurance Fund reserve ratio has been met.
Our efficiency ratio was 59.0% in the second quarter of 2019, compared with 60.2% in the first quarter of 2019, and 60.9% in the second quarter of 2018. Adjusted noninterest expense for the second quarter of 2019 increased $3 million, or less than 1%, to $423 million, compared with $420 million for the same prior year period. For information on non-GAAP financial measures, including differences between noninterest expense and adjusted noninterest expense, see pages 16-19.
Income Taxes
Our effective income tax rate was 22.7% for the second quarter of 2019, compared with 22.3% for the first quarter of 2019 and 22.1% for the second quarter of 2018.
BALANCE SHEET ANALYSIS
Asset Quality
 
 
 
 
 
 
 
2Q19 - 1Q19
 
2Q19 - 2Q18
(In millions)
2Q19
 
1Q19
 
2Q18
 
bps
 
 
 
bps
 
 
Ratio of nonperforming assets to loans and leases and other real estate owned
0.52
%
 
0.50
%
 
0.77
 %
 
2

 
 
 
(25
)

 
Annualized ratio of net loan and lease charge-offs (recoveries) to average loans
0.12
%
 
—
%
 
(0.11
)%
 
12

 
 
 
23

 
 
Ratio of allowance for loan losses to loans and leases, at period end
1.03
%
 
1.04
%
 
1.08
 %
 
(1
)
 
 
 
(5
)
 
 
 
 
 
 
 
 
 
$
 
%
 
$
 
%
Classified loans
$
770

 
$
729

 
$
947

 
$
41

 
6
%
 
$
(177
)
 
(19
)%
Nonperforming assets
253

 
240

 
347

 
13

 
5

 
(94
)
 
(27
)
Net loan and lease charge-offs (recoveries)
14

 
—

 
(12
)
 
14

 
NM

 
26

 
NM

Provision for credit losses
21

 
4

 
12

 
17

 
NM

 
9

 
75
 %
Asset quality improved when compared with the same prior year period. Nonperforming assets declined 27% from the second quarter of 2018, largely due to continued improvements in the oil and gas-related portfolio. The ratio of nonaccrual loans and accruing loans past due 90 days or more to loans and leases was 0.54%, compared with 0.77% in the second quarter of 2018, a reflection of a relatively benign credit environment and continued disciplined underwriting.
The Bank recorded a $21 million provision for credit losses during the second quarter of 2019, compared with $4 million during the first quarter of 2019, and $12 million for the second quarter of 2018. The increased provision for credit losses reflects loan growth, increased net charge-offs, and an increase in the qualitative portion related to

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ZIONS BANCORPORATION, N.A.
Press Release – Page 5
July 22, 2019

general economic indicators. The allowance for loan losses was $503 million at June 30, 2019, compared with $490 million at June 30, 2018, or 1.03% and 1.08% of loans and leases, respectively.
Loans and Leases
 
 
 
 
 
 
 
2Q19 - 1Q19
 
2Q19 - 2Q18
(In millions)
2Q19
 
1Q19
 
2Q18
 
$
 
%
 
$
 
%
Loans held for sale
$
105

 
$
69

 
$
84

 
$
36

 
52
%
 
$
21

 
25
%
Loans and leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
25,107

 
24,598

 
23,245

 
509

 
2

 
1,862

 
8

Commercial real estate
11,827

 
11,530

 
10,973

 
297

 
3

 
854

 
8

Consumer
11,683

 
11,478

 
11,012

 
205

 
2

 
671

 
6

Loans and leases, net of unearned income and fees
48,617

 
47,606

 
45,230

 
1,011

 
2

 
3,387

 
7

Less allowance for loan losses
503

 
497

 
490

 
6

 
1

 
13

 
3

Loans held for investment, net of allowance
$
48,114

 
$
47,109

 
$
44,740

 
$
1,005

 
2

 
$
3,374

 
8

Loans and leases, net of unearned income and fees, increased $3.4 billion, or 7%, to $48.6 billion at June 30, 2019 from $45.2 billion at June 30, 2018. Within commercial loans, municipal and commercial and industrial loans increased $671 million and $749 million, respectively. Term commercial real estate loans increased $447 million. The growth in consumer loans was primarily due to a $579 million increase in 1-4 family residential loans. Unfunded lending commitments and letters of credit increased to $23.3 billion at June 30, 2019, compared with $21.2 billion at June 30, 2018.
Deposits and Borrowed Funds
 
 
 
 
 
 
 
2Q19 - 1Q19
 
2Q19 - 2Q18
(In millions)
2Q19
 
1Q19
 
2Q18
 
$
 
%
 
$
 
%
Noninterest-bearing demand
$
22,947

 
$
23,259

 
$
24,007

 
$
(312
)
 
(1
)%
 
$
(1,060
)
 
(4
)%
Interest-bearing:
 
 
 
 
 
 
 
 
 
 
 
 
 
Savings and money market
26,470

 
26,348

 
25,562

 
122

 
—

 
908

 
4

Time
4,915

 
4,928

 
4,011

 
(13
)
 
—

 
904

 
23

Total deposits
$
54,332

 
$
54,535

 
$
53,580

 
$
(203
)
 
—

 
$
752

 
1

Borrowed funds:
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds purchased and other short-term borrowings
$
6,023

 
$
4,944

 
$
4,158

 
1,079

 
22

 
1,865

 
45

Long-term debt
$
1,236

 
$
1,228

 
$
383

 
8

 
1

 
853

 
NM
Total borrowed funds
$
7,259

 
$
6,172

 
$
4,541

 
$
1,087

 
18

 
$
2,718

 
60

Total deposits increased by $0.8 billion, or 1%, in the second quarter of 2019 to $54.3 billion, while noninterest bearing deposits decreased $1.1 billion, or 4%, over the same period. Average total deposits increased to $54.3 billion for the second quarter of 2019, compared with $52.9 billion for the second quarter of 2018. Average noninterest bearing deposits declined 2% to $23.1 billion for the second quarter of 2019, compared with $23.6 billion for the second quarter of 2018, and were 42% and 45% of average total deposits, respectively, for the same periods.
Total borrowed funds increased $2.7 billion, in the second quarter of 2019 to $7.3 billion, from $4.5 billion in the second quarter of 2018. Average borrowed funds increased to $7.0 billion for the second quarter of 2019, compared

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ZIONS BANCORPORATION, N.A.
Press Release – Page 6
July 22, 2019

with $5.3 billion for the second quarter of 2018. The increase in both end of period and average borrowed funds reflects recent loan growth, which has exceeded deposit growth.
Shareholders’ Equity
 
 
 
 
 
 
 
2Q19 - 1Q19
 
2Q19 - 2Q18
(In millions)
2Q19
 
1Q19
 
2Q18
 
$
 
%
 
$
 
%
Shareholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
$
566

 
$
566

 
$
566

 
$
—

 
—
 %
 
$
—

 
—
 %
Common stock and additional paid-in capital
3,271

 
3,541

 
4,231

 
(270
)
 
(8
)
 
(960
)
 
(23)
Retained earnings
3,737

 
3,603

 
3,139

 
134

 
4

 
598

 
19

Accumulated other comprehensive income (loss)
25

 
(122
)
 
(315
)
 
147

 
NM
 
340

 
NM
Total shareholders' equity
$
7,599

 
$
7,588

 
$
7,621

 
$
11

 
—

 
$
(22
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital distributions:
 
 
 
 
 
 
 
 
 
 
 
 
 
Common dividends paid
$
54

 
$
56

 
$
47

 
(2
)
 
(4
)
 
7

 
15

Bank common stock repurchased
275

 
275

 
120

 
—

 
—

 
155

 
NM
Total capital distributed to common shareholders
329

 
331

 
167

 
(2
)
 
(1
)
 
162

 
97

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital distributed as a percentage of net earnings applicable to common shareholders
174
%
 
161
%
 
89
%
 

 

 

 


During the second quarter of 2019, the Bank’s common stock dividend was $0.30 per share, compared with $0.24 per share in the second quarter of 2018. Common stock repurchases during the current quarter totaled $275 million, or 5.8 million shares, which is equivalent to 3.2% of common stock outstanding as of March 31, 2019. During the last four quarters, the Bank repurchased $985 million, or 20.0 million shares, of common stock which is equivalent to 10.2% of common stock outstanding as of June 30, 2018. As of June 30, 2019, the Bank had 29.3 million ZIONW warrants outstanding with a strike price of $34.41 per share that expire on May 22, 2020.
Common stock and additional paid-in capital decreased $960 million, or 23%, from the second quarter of 2018, primarily due to the previously mentioned share repurchases. Accumulated other comprehensive income improved $340 million from a negative $315 million as of June 30, 2018, to $25 million as of June 30, 2019. The improvement was primarily a result of fair value increases of the available-for-sale securities due to changes in interest rates.
Tangible book value per common share increased to $34.02 at June 30, 2019, compared with $30.91 at June 30, 2018 primarily due to a 9.4% decrease in common shares outstanding over the same period. Basel III common equity tier 1 (“CET1”) capital was $6.0 billion at June 30, 2019 and $6.4 billion at June 30, 2018. The estimated Basel III CET1 capital ratio was 10.8% at June 30, 2019 compared with 12.2% at June 30, 2018. For information on non-GAAP financial measures, see pages 16-19.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 7
July 22, 2019

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 22, 2019). 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 3068219 or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation website at zionsbancorporation.com. The webcast of the conference call will also be archived and available for 30 days.
About Zions Bancorporation, N.A.
Zions Bancorporation, N.A. is one of the nation's premier financial services companies with total assets of $70 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 Bank is a national leader in Small Business Administration lending and public finance advisory services. The Bank has been the recipient of many local and national awards, primarily reflecting its strong customer service and products. The Bank has a strong commitment to the communities in which it operates. In addition, Zions is included in the S&P 500 and NASDAQ Financial 100 indices. Investor information and links to local banking brands can be accessed at zionsbancorporation.com.
Forward-Looking Information
This earnings release includes “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations regarding future events or determinations, all of which are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, market trends, industry results or regulatory outcomes to differ materially from those expressed or implied by such forward-looking statements.
Without limiting the foregoing, the words “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “would,” “targets,” “will” and the negative thereof and similar words and expressions are intended to identify forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about future financial and operating results. Actual results and outcomes may differ materially from those presented, either expressed or implied, in the release. Important risk factors that may cause such material differences include, but are not limited to, the Bank’s ability to meet operating leverage goals; the rate of change of interest-sensitive assets and liabilities relative to changes in benchmark interest rates; the ability of the Bank to upgrade its core deposit system and implement new digital products in order to remain competitive; risks associated with information security, such as systems breaches and failures; and legislative, regulatory and economic developments. These risks, as well as other factors, are discussed in the Bank’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (SEC) and available at the SEC’s Internet site (https://www.sec.gov/). In addition, you may obtain documents filed with the SEC by the Bank free of charge by contacting:

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ZIONS BANCORPORATION, N.A.
Press Release – Page 8
July 22, 2019

Investor Relations, Zions Bancorporation, N.A., One South Main Street, 11th Floor, Salt Lake City, Utah 84133, (801) 844-7637.
Except as required by law, Zions Bancorporation, N.A. specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.



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ZIONS BANCORPORATION, N.A.
Press Release – Page 9
July 22, 2019

FINANCIAL HIGHLIGHTS
(Unaudited)
 
Three Months Ended
(In millions, except share, per share, and ratio data)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
BALANCE SHEET 1
 
 
 
 
 
 
 
 
 
Loans held for investment, net of allowance
$
48,114

 
$
47,109

 
$
46,219

 
$
45,330

 
$
44,740

Total assets
70,065

 
69,195

 
68,746

 
66,731

 
66,457

Deposits
54,332

 
54,535

 
54,101

 
53,785

 
53,580

Total shareholders’ equity
7,599

 
7,588

 
7,578

 
7,553

 
7,621

STATEMENT OF INCOME
 
 
 
 
 
 
 
 
 
Net earnings applicable to common shareholders
$
189

 
$
205

 
$
217

 
$
215

 
$
187

Net interest income
569

 
576

 
576

 
565

 
548

Taxable-equivalent net interest income 2
576

 
582

 
582

 
570

 
553

Total noninterest income
132

 
132

 
140

 
136

 
138

Total noninterest expense
424

 
430

 
420

 
420

 
421

Adjusted pre-provision net revenue 2
294

 
285

 
305

 
291

 
270

Provision for credit losses
21

 
4

 
6

 
(11
)
 
12

SHARE AND PER COMMON SHARE AMOUNTS
 
 
 
 
 
 
 
 
 
Net earnings per diluted common share
$
0.99

 
$
1.04

 
$
1.08

 
$
1.04

 
$
0.89

Dividends
0.30

 
0.30

 
0.30

 
0.30

 
0.24

Book value per common share 1
39.75

 
38.47

 
37.39

 
36.36

 
36.11

Tangible book value per common share 1, 2
34.02

 
32.92

 
31.97

 
31.08

 
30.91

Weighted average share price
46.11

 
47.71

 
46.61

 
52.80

 
55.19

Weighted average diluted common shares outstanding (in thousands)
189,098

 
195,241

 
199,048

 
205,765

 
209,247

Common shares outstanding (in thousands) 1
176,935

 
182,513

 
187,554

 
192,169

 
195,392

SELECTED RATIOS AND OTHER DATA
 
 
 
 
 
 
 
 
 
Return on average assets
1.14
%
 
1.26
%
 
1.34
 %
 
1.33
 %
 
1.19
 %
Return on average common equity
10.8
%
 
11.9
%
 
12.4
 %
 
12.1
 %
 
10.6
 %
Return on average tangible common equity 2
12.7
%
 
13.9
%
 
14.5
 %
 
14.2
 %
 
12.4
 %
Net interest margin
3.54
%
 
3.68
%
 
3.67
 %
 
3.63
 %
 
3.56
 %
Cost of total deposits, annualized
0.49
%
 
0.43
%
 
0.35
 %
 
0.28
 %
 
0.22
 %
Efficiency ratio 2
59.0
%
 
60.2
%
 
57.8
 %
 
58.8
 %
 
60.9
 %
Effective tax rate
22.7
%
 
22.3
%
 
22.1
 %
 
23.6
 %
 
22.1
 %
Ratio of nonperforming assets to loans and leases and other real estate owned
0.52
%
 
0.50
%
 
0.55
 %
 
0.64
 %
 
0.77
 %
Annualized ratio of net loan and lease charge-offs (recoveries) to average loans
0.12
%
 
—
%
 
(0.07
)%
 
(0.01
)%
 
(0.11
)%
Ratio of total allowance for credit losses to loans and leases outstanding 1
1.16
%
 
1.17
%
 
1.18
 %
 
1.17
 %
 
1.21
 %
Full-time equivalent employees
10,326

 
10,204

 
10,201

 
10,143

 
10,217

CAPITAL RATIOS AND DATA 1
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
$
5,987

 
$
6,124

 
$
6,245

 
$
6,331

 
$
6,360

Risk-weighted assets
55,427

 
54,404

 
53,591

 
52,493

 
52,012

Tangible common equity ratio
8.7
%
 
8.8
%
 
8.9
 %
 
9.1
 %
 
9.2
 %
Common equity tier 1 capital ratio
10.8
%
 
11.3
%
 
11.7
 %
 
12.1
 %
 
12.2
 %
Tier 1 leverage ratio
9.5
%
 
9.9
%
 
10.3
 %
 
10.5
 %
 
10.5
 %
Tier 1 risk-based capital ratio
11.8
%
 
12.3
%
 
12.7
 %
 
13.1
 %
 
13.3
 %
Total risk-based capital ratio
13.0
%
 
13.5
%
 
13.9
 %
 
14.6
 %
 
14.8
 %
1 
At period end.
2 
For information on non-GAAP financial measures, see pages 16-19.

- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 10
July 22, 2019

CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, shares in thousands)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
(Unaudited)
 
(Unaudited)
 
 
 
(Unaudited)
 
(Unaudited)
ASSETS
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
538

 
$
536

 
$
614

 
$
517

 
$
468

Money market investments:
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
634

 
702

 
619

 
590

 
698

Federal funds sold and security resell agreements
620

 
438

 
1,461

 
560

 
558

Investment securities:
 
 
 
 
 
 
 
 
 
Held-to-maturity1, at amortized cost
695

 
764

 
774

 
751

 
878

Available-for-sale, at fair value
14,672

 
14,904

 
14,737

 
14,625

 
14,627

Trading account, at fair value
148

 
316

 
106

 
176

 
207

Total investment securities
15,515

 
15,984

 
15,617

 
15,552

 
15,712

Loans held for sale
105

 
69

 
93

 
61

 
84

Loans and leases, net of unearned income and fees
48,617

 
47,606

 
46,714

 
45,810

 
45,230

Less allowance for loan losses
503

 
497

 
495

 
480

 
490

Loans held for investment, net of allowance
48,114

 
47,109

 
46,219

 
45,330

 
44,740

Other noninterest-bearing investments
1,056

 
993

 
1,046

 
1,027

 
1,054

Premises, equipment and software, net
1,133

 
1,125

 
1,124

 
1,111

 
1,099

Goodwill and intangibles
1,014

 
1,014

 
1,015

 
1,015

 
1,015

Other real estate owned
5

 
6

 
4

 
4

 
5

Other assets
1,331

 
1,219

 
934

 
964

 
1,024

Total assets
$
70,065

 
$
69,195

 
$
68,746

 
$
66,731

 
$
66,457

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
22,947

 
$
23,259

 
$
23,645

 
$
24,067

 
$
24,007

Interest-bearing:
 
 
 
 
 
 
 
 
 
Savings and money market
26,470

 
26,348

 
26,120

 
25,462

 
25,562

Time
4,915

 
4,928

 
4,336

 
4,256

 
4,011

Total deposits
54,332

 
54,535

 
54,101

 
53,785

 
53,580

Federal funds purchased and other short-term borrowings
6,023

 
4,944

 
5,653

 
3,780

 
4,158

Long-term debt
1,236

 
1,228

 
724

 
879

 
383

Reserve for unfunded lending commitments
60

 
59

 
57

 
58

 
58

Other liabilities
815

 
841

 
633

 
676

 
657

Total liabilities
62,466

 
61,607

 
61,168

 
59,178

 
58,836

Shareholders’ equity:
 
 
 
 
 
 
 
 
 
Preferred stock, without par value; authorized 4,400 shares
566

 
566

 
566

 
566

 
566

Common stock2 ($0.001 par value; authorized 350,000 shares) and additional paid-in capital
3,271

 
3,541

 
3,806

 
4,052

 
4,231

Retained earnings
3,737

 
3,603

 
3,456

 
3,296

 
3,139

Accumulated other comprehensive income (loss)
25

 
(122
)
 
(250
)
 
(361
)
 
(315
)
Total shareholders’ equity
7,599

 
7,588

 
7,578

 
7,553

 
7,621

Total liabilities and shareholders’ equity
$
70,065

 
$
69,195

 
$
68,746

 
$
66,731

 
$
66,457

1 Held-to-maturity (approximate fair value)
698

 
762

 
767

 
734

 
866

2 Common stock (issued and outstanding)
176,935

 
182,513

 
187,554

 
192,169

 
195,392


- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 11
July 22, 2019

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
Three Months Ended
(In millions, except share and per share amounts)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Interest income:
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
581

 
$
570

 
$
555

 
$
537

 
$
514

Interest on money market investments
8

 
9

 
8

 
8

 
7

Interest on securities
95

 
96

 
93

 
86

 
85

Total interest income
684

 
675

 
656

 
631

 
606

Interest expense:
 
 
 
 
 
 
 
 
 
Interest on deposits
66

 
57

 
48

 
38

 
29

Interest on short- and long-term borrowings
49

 
42

 
32

 
28

 
29

Total interest expense
115

 
99

 
80

 
66

 
58

Net interest income
569

 
576

 
576

 
565

 
548

Provision for credit losses:
 
 
 
 
 
 
 
 
 
Provision for loan losses
20

 
2

 
7

 
(11
)
 
5

Provision for unfunded lending commitments
1

 
2

 
(1
)
 
—

 
7

Total provision for credit losses
21

 
4

 
6

 
(11
)
 
12

Net interest income after provision for loan losses
548

 
572

 
570

 
576

 
536

Noninterest income:
 
 
 
 
 
 
 
 
 
Service charges and fees on deposit accounts
41

 
40

 
41

 
42

 
42

Other service charges, commissions and fees
58

 
54

 
59

 
59

 
55

Wealth management and trust income
13

 
13

 
13

 
12

 
14

Loan sales and servicing income
9

 
5

 
6

 
5

 
7

Capital markets and foreign exchange
9

 
8

 
9

 
7

 
7

Customer-related fees
130

 
120


128

 
125

 
125

Dividends and other investment income
9

 
9

 
10

 
11

 
11

Securities gains (losses), net
(3
)
 
1

 
2

 
(1
)
 
1

Other
(4
)
 
2

 
—

 
1

 
1

Total noninterest income
132

 
132

 
140

 
136

 
138

Noninterest expense:
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
274

 
287

 
270

 
264

 
266

Occupancy, net
32

 
33

 
35

 
33

 
32

Furniture, equipment and software, net
35

 
32

 
31

 
30

 
32

Other real estate expense, net
—

 
(1
)
 
—

 
1

 
—

Credit-related expense
8

 
6

 
6

 
5

 
7

Professional and legal services
13

 
11

 
15

 
12

 
14

Advertising
5

 
5

 
6

 
8

 
7

FDIC premiums
6

 
6

 
6

 
18

 
14

Other
51

 
51

 
51

 
49

 
49

Total noninterest expense
424

 
430

 
420

 
420

 
421

Income before income taxes
256

 
274

 
290

 
292

 
253

Income taxes
58

 
61

 
64

 
69

 
56

Net income
198

 
213

 
226

 
223

 
197

Preferred stock dividends
(9
)
 
(8
)
 
(9
)
 
(8
)
 
(10
)
Net earnings applicable to common shareholders
$
189

 
$
205

 
$
217

 
$
215

 
$
187

Weighted average common shares outstanding during the period:
 
 
 
 
 
 
 
 
Basic shares (in thousands)
179,156

 
184,767

 
189,169

 
192,973

 
195,583

Diluted shares (in thousands)
189,098

 
195,241

 
199,048

 
205,765

 
209,247

Net earnings per common share:
 
 
 
 
 
 
 
 
 
Basic
$
1.05

 
$
1.10

 
$
1.14

 
$
1.11

 
$
0.95

Diluted
0.99

 
1.04

 
1.08

 
1.04

 
0.89


- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 12
July 22, 2019

Loan Balances Held for Investment by Portfolio Type
(Unaudited)
(In millions)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
14,883

 
$
14,758

 
$
14,513

 
$
14,096

 
$
14,134

Leasing
337

 
312

 
327

 
332

 
358

Owner occupied
7,828

 
7,754

 
7,661

 
7,548

 
7,365

Municipal
2,059

 
1,774

 
1,661

 
1,563

 
1,388

Total commercial
25,107

 
24,598

 
24,162

 
23,539

 
23,245

Commercial real estate:
 
 
 
 
 
 
 
 
 
Construction and land development
2,609

 
2,343

 
2,186

 
2,295

 
2,202

Term
9,218

 
9,187

 
8,939

 
8,752

 
8,771

Total commercial real estate
11,827

 
11,530

 
11,125

 
11,047

 
10,973

Consumer:
 
 
 
 
 
 
 
 
 
Home equity credit line
2,929

 
2,884

 
2,937

 
2,884

 
2,825

1-4 family residential
7,440

 
7,294

 
7,176

 
7,039

 
6,861

Construction and other consumer real estate
644

 
636

 
643

 
644

 
661

Bankcard and other revolving plans
502

 
489

 
491

 
483

 
490

Other
168

 
175

 
180

 
174

 
175

Total consumer
11,683

 
11,478

 
11,427

 
11,224

 
11,012

Loans and leases, net of unearned income and fees
$
48,617

 
$
47,606

 
$
46,714

 
$
45,810

 
$
45,230


Nonperforming Assets
(Unaudited)
(In millions)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans1
$
248

 
$
234

 
$
252

 
$
288

 
$
342

Other real estate owned
5

 
6

 
4

 
4

 
5

Total nonperforming assets
$
253

 
$
240

 
$
256

 
$
292

 
$
347

Ratio of nonperforming assets to loans1 and leases and other real estate owned
0.52
%
 
0.50
%
 
0.55
%
 
0.64
%
 
0.77
%
Accruing loans past due 90 days or more
$
17

 
$
8

 
$
10

 
$
12

 
$
5

Ratio of accruing loans past due 90 days or more to loans1 and leases
0.03
%
 
0.02
%
 
0.02
%
 
0.03
%
 
0.01
%
Nonaccrual loans and accruing loans past due 90 days or more
$
265

 
$
242

 
$
262

 
$
300

 
$
347

Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans1 and leases
0.54
%
 
0.51
%
 
0.56
%
 
0.65
%
 
0.77
%
Accruing loans past due 30-89 days
$
99

 
$
142

 
$
65

 
$
87

 
$
119

Restructured loans included in nonaccrual loans
79

 
76

 
90

 
90

 
77

Restructured loans on accrual
97

 
98

 
112

 
114

 
104

Classified loans
770

 
729

 
698

 
784

 
947

1 Includes loans held for sale.

- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 13
July 22, 2019

Allowance for Credit Losses
(Unaudited)
 
Three Months Ended
(In millions)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Allowance for Loan Losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
497

 
$
495

 
$
480

 
$
490

 
$
473

Provision for loan losses
20

 
2

 
7

 
(11
)
 
5

Loan and lease charge-offs
23

 
12

 
13

 
17

 
13

Less: Recoveries
9

 
12

 
21

 
18

 
25

Net loan and lease charge-offs (recoveries)
14

 
—

 
(8
)
 
(1
)
 
(12
)
Balance at end of period
$
503

 
$
497

 
$
495

 
$
480

 
$
490

Ratio of allowance for loan losses to loans1 and leases, at period end
1.03
%
 
1.04
%
 
1.06
 %
 
1.05
 %
 
1.08
 %
Ratio of allowance for loan losses to nonaccrual loans1 at period end
203
%
 
212
%
 
201
 %
 
167
 %
 
143
 %
Annualized ratio of net loan and lease charge-offs (recoveries) to average loans
0.12
%
 
—
%
 
(0.07
)%
 
(0.01
)%
 
(0.11
)%
 
 
 
 
 
 
 
 
 
 
Reserve for Unfunded Lending Commitments
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
59

 
$
57

 
$
58

 
$
58

 
$
51

Provision for unfunded lending commitments
1

 
2

 
(1
)
 
—

 
7

Balance at end of period
$
60

 
$
59

 
$
57

 
$
58

 
$
58

 
 
 
 
 
 
 
 
 
 
Allowance for Credit Losses
 
 
 
 
 
 
 
 
 
Allowance for loan losses
$
503

 
$
497

 
$
495

 
$
480

 
$
490

Reserve for unfunded lending commitments
60

 
59

 
57

 
58

 
58

Total allowance for credit losses
$
563

 
$
556

 
$
552

 
$
538

 
$
548

Ratio of total allowance for credit losses to loans1 and leases outstanding, at period end
1.16
%
 
1.17
%
 
1.18
 %
 
1.17
 %
 
1.21
 %
1 Does not include loans held for sale.

- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 14
July 22, 2019

Nonaccrual Loans by Portfolio Type
(Unaudited)
(In millions)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
 
 
 
 
 
 
 
 
 
Loans held for sale
$
—

 
$
—

 
$
6

 
$
—

 
$
—

Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
85

 
$
72

 
$
82

 
$
112

 
$
142

Leasing
1

 
1

 
2

 
2

 
7

Owner occupied
69

 
69

 
67

 
66

 
63

Municipal
1

 
1

 
1

 
1

 
1

Total commercial
156

 
143

 
152

 
181

 
213

Commercial real estate:
 
 
 
 
 
 
 
 
 
Construction and land development
1

 
1

 
—

 
—

 
5

Term
31

 
32

 
38

 
46

 
53

Total commercial real estate
32

 
33

 
38

 
46

 
58

Consumer:
 
 
 
 
 
 
 
 
 
Home equity credit line
12

 
11

 
13

 
13

 
14

1-4 family residential
44

 
45

 
42

 
47

 
56

Construction and other consumer real estate
4

 
2

 
—

 
—

 
1

Bankcard and other revolving plans
—

 
—

 
1

 
1

 
—

Other
—

 
—

 
—

 
—

 
—

Total consumer
60

 
58

 
56

 
61

 
71

Total nonaccrual loans
$
248

 
$
234

 
$
252

 
$
288

 
$
342


Net Charge-Offs by Portfolio Type
(Unaudited)
(In millions)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
13

 
$
1

 
$
(10
)
 
$
(3
)
 
$
(10
)
Leasing
—

 
—

 
—

 
—

 
—

Owner occupied
—

 
1

 
—

 
(1
)
 
—

Municipal
—

 
—

 
—

 
—

 
—

Total commercial
13

 
2

 
(10
)
 
(4
)
 
(10
)
Commercial real estate:
 
 
 
 
 
 
 
 
 
Construction and land development
—

 
—

 
(1
)
 
(2
)
 
(1
)
Term
—

 
(2
)
 
—

 
4

 
(2
)
Total commercial real estate
—

 
(2
)
 
(1
)
 
2

 
(3
)
Consumer:
 
 
 
 
 
 
 
 
 
Home equity credit line
—

 
(1
)
 
—

 
(1
)
 
(1
)
1-4 family residential
(1
)
 
(1
)
 
—

 
—

 
—

Construction and other consumer real estate
—

 
—

 
—

 
—

 
—

Bankcard and other revolving plans
1

 
1

 
2

 
2

 
2

Other
1

 
1

 
1

 
—

 
—

Total consumer loans
1

 
—

 
3

 
1

 
1

Total net charge-offs (recoveries)
$
14

 
$
—

 
$
(8
)
 
$
(1
)
 
$
(12
)

- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 15
July 22, 2019

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
 
Three Months Ended
 
June 30, 2019
 
March 31, 2019
 
June 30, 2018
(In millions)
Average balance
 
Average
yield/rate 1
 
Average balance
 
Average
yield/rate 1
 
Average balance
 
Average
yield/rate 1
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Money market investments
$
1,261

 
2.64
%
 
$
1,268

 
2.73
%
 
$
1,317

 
2.02
%
Securities:
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity
687

 
3.69
%
 
829

 
3.72
%
 
780

 
3.60
%
Available-for-sale
14,750

 
2.43
%
 
14,724

 
2.49
%
 
14,745

 
2.14
%
Trading account
172

 
4.48
%
 
107

 
4.52
%
 
179

 
4.06
%
Total securities
15,609

 
2.51
%
 
15,660

 
2.57
%
 
15,704

 
2.23
%
Loans held for sale
71

 
2.18
%
 
63

 
1.70
%
 
72

 
4.18
%
Loans held for investment:2
 
 
 
 
 
 
 
 
 
 
 
Commercial
24,977

 
4.94
%
 
24,427

 
5.05
%
 
23,275

 
4.68
%
Commercial real estate
11,777

 
5.22
%
 
11,335

 
5.31
%
 
11,075

 
4.94
%
Consumer
11,570

 
4.28
%
 
11,409

 
4.30
%
 
10,892

 
3.98
%
Total loans held for investment
48,324

 
4.85
%
 
47,171

 
4.93
%
 
45,242

 
4.57
%
Total interest-earning assets
65,265

 
4.24
%
 
64,162

 
4.31
%
 
62,335

 
3.93
%
Cash and due from banks
592

 
 
 
554

 
 
 
546

 
 
Allowance for loan losses
(496
)
 
 
 
(499
)
 
 
 
(480
)
 
 
Goodwill and intangibles
1,014

 
 
 
1,014

 
 
 
1,016

 
 
Other assets
3,480

 
 
 
3,353

 
 
 
3,088

 
 
Total assets
$
69,855

 
 
 
$
68,584

 
 
 
$
66,505

 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Savings and money market
$
26,262

 
0.63
%
 
$
26,021

 
0.54
%
 
$
25,479

 
0.26
%
Time
5,025

 
2.02
%
 
4,674

 
1.90
%
 
3,807

 
1.27
%
Total interest-bearing deposits
31,287

 
0.85
%
 
30,695

 
0.75
%
 
29,286

 
0.39
%
Borrowed funds:
 
 
 
 
 
 
 
 
 
 
 
Federal funds purchased and other short-term borrowings
5,795

 
2.53
%
 
5,289

 
2.57
%
 
4,927

 
1.92
%
Long-term debt
1,230

 
3.84
%
 
880

 
4.08
%
 
383

 
5.77
%
Total borrowed funds
7,025

 
2.76
%
 
6,169

 
2.78
%
 
5,310

 
2.19
%
Total interest-bearing funds
38,312

 
1.20

 
36,864

 
1.09

 
34,596

 
0.67

Noninterest-bearing deposits
23,060

 
 
 
23,221

 
 
 
23,610

 
 
Other liabilities
929

 
 
 
928

 
 
 
661

 
 
Total liabilities
62,301

 
 
 
61,013

 
 
 
58,867

 
 
Shareholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
Preferred equity
566

 
 
 
566

 
 
 
566

 
 
Common equity
6,988

 
 
 
7,005

 
 
 
7,072

 
 
Total shareholders’ equity
7,554

 
 
 
7,571

 
 
 
7,638

 
 
Total liabilities and shareholders’ equity
$
69,855

 
 
 
$
68,584

 
 
 
$
66,505

 
 
Spread on average interest-bearing funds
 
 
3.04
%
 
 
 
3.22
%
 
 
 
3.26
%
Impact of net noninterest-bearing sources of funds
 
 
0.50

 
 
 
0.46

 
 
 
0.30

Net interest margin
 
 
3.54

 
 
 
3.68

 
 
 
3.56

Memo: total cost of deposits
 
 
0.49

 
 
 
0.43

 
 
 
0.22

Memo: total deposits and interest-bearing liabilities
61,372

 
0.75
%
 
60,085

 
0.67
%
 
58,206

 
0.40
%
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, N.A.
Press Release – Page 16
July 22, 2019

GAAP to Non-GAAP Reconciliations
(Unaudited)
This press release presents non-GAAP financial measures, in addition to GAAP financial measures, to provide investors with additional information. The adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are presented in the following schedules. The Bank considers these adjustments to be relevant to ongoing operating results and provide a meaningful base for period-to-period and company-to-company comparisons. These non-GAAP financial measures are used by management to assess the performance and financial position of the Bank and for presentations of Bank performance to investors. The Bank further believes that presenting these non-GAAP financial measures will permit investors to assess the performance of the Bank on the same basis as that applied by management.
Non-GAAP financial measures have inherent limitations, and are not required to be uniformly applied by individual entities. Although non-GAAP financial measures are frequently used by stakeholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.
The following are non-GAAP financial measures presented in this press release and a discussion of the reasons for which management uses these non-GAAP measures:
Tangible Book Value per Common Share – this schedule also includes “tangible common equity.” Tangible book value per common share is a non-GAAP financial measure that management believes provides additional useful information about the level of tangible equity in relation to outstanding shares of common stock. Management believes the use of ratios that utilize tangible equity provides additional useful information to management and others about capital adequacy because they present measures of those assets that can generate income.
(In millions, except shares and per share amounts)
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Tangible Book Value per Common Share
 
 
 
 
 
 
 
 
 
 
Total shareholders’ equity (GAAP)
 
$
7,599

 
$
7,588

 
$
7,578

 
$
7,553

 
$
7,621

Preferred stock
 
(566
)
 
(566
)
 
(566
)
 
(566
)
 
(566
)
Goodwill and intangibles
 
(1,014
)
 
(1,014
)
 
(1,015
)
 
(1,015
)
 
(1,015
)
Tangible common equity (non-GAAP)
(a)
$
6,019

 
$
6,008

 
$
5,997

 
$
5,972

 
$
6,040

Common shares outstanding (in thousands)
(b)
176,935

 
182,513

 
187,554

 
192,169

 
195,392

Tangible book value per common share (non-GAAP)
(a/b)
$
34.02

 
$
32.92

 
$
31.97

 
$
31.08

 
$
30.91


- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 17
July 22, 2019

GAAP to Non-GAAP Reconciliations
(Unaudited)
Return on Average Tangible Common Equity – this schedule also includes “net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax” and “average tangible common equity.” Return on average tangible common equity is a non-GAAP financial measure that management believes provides useful information to management and others about the Bank’s use of shareholders’ 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.
 
 
Three Months Ended
(Dollar amounts in millions)
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Return on Average Tangible Common Equity
 
 
 
 
 
 
 
 
 
Net earnings applicable to common shareholders (GAAP)
 
$
189

 
$
205

 
$
217

 
$
215

 
$
187

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

 
—

 
—

 
—

 
—

Net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax (non-GAAP)
(a)
$
189

 
$
205

 
$
217

 
$
215

 
$
187

Average common equity (GAAP)
 
$
6,988

 
$
7,005

 
$
6,938

 
$
7,024

 
$
7,072

Average goodwill and intangibles
 
(1,014
)
 
(1,014
)
 
(1,015
)
 
(1,015
)
 
(1,016
)
Average tangible common equity (non-GAAP)
(b)
$
5,974

 
$
5,991

 
$
5,923

 
$
6,009

 
$
6,056

Number of days in quarter
(c)
91

 
90

 
92

 
92

 
91

Number of days in year
(d)
365

 
365

 
365

 
365

 
365

Return on average tangible common equity (non-GAAP)
(a/b/c)*d
12.7
%
 
13.9
%
 
14.5
%
 
14.2
%
 
12.4
%



- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 18
July 22, 2019

GAAP to Non-GAAP Reconciliations
(Unaudited)
Efficiency Ratio – this schedule also includes “adjusted noninterest expense,” “taxable-equivalent net interest income,” “adjusted taxable-equivalent revenue,” “pre-provision net revenue (PPNR)” and “adjusted PPNR).” The methodology of determining the efficiency ratio may differ among companies. Management makes adjustments to exclude certain items as identified in the subsequent schedules which it 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 Bank is managing its expenses, and adjusted PPNR enables management and others to assess the Bank’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.
Adjusted Pre-Provision Net Revenue per Common Share – this schedule uses “adjusted PPNR” as calculated in the efficiency ratio, which is divided by the weighted average diluted common shares for the period. As mentioned previously, Management believes that adjusted PPNR enables management and others to assess the Bank’s ability to generate capital to cover credit losses through a credit cycle. Dividing this amount by the weighted average diluted common shares outstanding provides a shareholder’s perspective of PPNR growth.
 
 
Three Months Ended
(In millions)
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Efficiency Ratio
 
 
 
 
 
 
 
 
 
 
Noninterest expense (GAAP)
(a)
$
424

 
$
430

 
$
420

 
$
420

 
$
421

Adjustments:
 
 
 
 
 
 
 
 
 
 
Severance costs
 
1

 
—

 
2

 
2

 
1

Other real estate expense, net
 
—

 
(1
)
 
—

 
1

 
—

Restructuring costs
 
—

 
—

 
—

 
1

 
—

Total adjustments
(b)
1

 
(1
)
 
2

 
4

 
1

Adjusted noninterest expense (non-GAAP)
(a-b)=(c)
$
423

 
$
431

 
$
418

 
$
416

 
$
420

Net interest income (GAAP)
(d)
$
569

 
$
576

 
$
576

 
$
565

 
$
548

Fully taxable-equivalent adjustments
(e)
7

 
6

 
6

 
5

 
5

Taxable-equivalent net interest income (non-GAAP)
(d+e)=(f)
576

 
582

 
582

 
570

 
553

Noninterest income (GAAP)
(g)
132

 
132

 
140

 
136

 
138

Combined income (non-GAAP)
(f+g)=(h)
708

 
714

 
722

 
706

 
691

Adjustments:
 
 
 
 
 
 
 
 
 
 
Fair value and nonhedge derivative loss
 
(6
)
 
(3
)
 
(3
)
 
—

 
—

Securities gains (losses), net
 
(3
)
 
1

 
2

 
(1
)
 
1

Total adjustments
(i)
(9
)
 
(2
)
 
(1
)
 
(1
)
 
1

Adjusted taxable-equivalent revenue
(non-GAAP)
(h-i)=(j)
$
717

 
$
716

 
$
723

 
$
707

 
$
690

Pre-provision net revenue (PPNR) (non-GAAP)
(h)-(a)
$
284

 
$
284

 
$
302

 
$
286

 
$
270

Adjusted PPNR (non-GAAP)
(j-c)=(k)
294

 
285

 
305

 
291

 
270

Efficiency ratio (non-GAAP)
(c/j)
59.0
%
 
60.2
%
 
57.8
%
 
58.8
%
 
60.9
%
 
 
 
 
 
 
 
 
 
 
 
Adjusted PPNR per common share
 
 
 
 
 
 
 
 
 
 
Adjusted PPNR (non-GAAP)
(k)
294

 
285

 
305

 
291

 
270

Weighted average diluted shares outstanding (in thousands)
(l)
189,098

 
195,241

 
199,048

 
205,765

 
209,247

Adjusted PPNR per common share (non-GAAP)
(k)/(l)
1.55

 
1.46

 
1.53

 
1.41

 
1.29



- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 19
July 22, 2019

 
 
Six Months Ended
(In millions)
 
June 30,
2019
 
June 30,
2018
Efficiency Ratio
 
 
 
 
Noninterest expense (GAAP)
(a)
$
854

 
$
840

Adjustments:
 
 
 
 
Severance costs
 
1

 
(1
)
Other real estate expense
 
(1
)
 
1

Debt extinguishment cost
 
—

 
—

Amortization of core deposit and other intangibles
 
1

 
1

Restructuring costs
 
—

 
—

Total adjustments
(b)
1

 
1

Adjusted noninterest expense (non-GAAP)
(a-b)=(c)
$
853

 
$
839

Net interest income (GAAP)
(d)
$
1,145

 
$
1,090

Fully taxable-equivalent adjustments
(e)
13

 
10

Taxable-equivalent net interest income (non-GAAP)
(d+e)=(f)
1,158

 
1,100

Noninterest income (GAAP)
(g)
264

 
276

Combined income (non-GAAP)
(f+g)=(h)
1,422

 
1,376

Adjustments:
 
 
 
 
Fair value and nonhedge derivative income (loss)
 
(8
)
 
2

Securities gains (losses), net
 
(2
)
 
1

Total adjustments
(i)
(10
)
 
3

Adjusted taxable-equivalent revenue (non-GAAP)
(h-i)=(j)
$
1,432

 
$
1,373

Pre-provision net revenue (PPNR)
(h)-(a)
$
568

 
$
536

Adjusted PPNR (non-GAAP)
(j-c)=(k)
579

 
534

Efficiency ratio (non-GAAP)
(c/j)
59.6
%
 
61.1
%
 
 
 
 
 
Adjusted PPNR per common share
 
 
 
 
Adjusted PPNR (non-GAAP)
(k)
579

 
534

Weighted average diluted shares outstanding (in thousands)
(l)
192,206

 
209,859

Adjusted PPNR per common share (non-GAAP)
(k)/(l)
3.01

 
2.54



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