-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L9icTmw+FqZ7PbsEJq0xToDr+3gT+IndxZv5O8eLSJ/ZEXCl8aVnZxVJbAeGFwDi iWjMsSNH5M2/RA+wSW1Rxg== 0000930661-02-003569.txt : 20021021 0000930661-02-003569.hdr.sgml : 20021021 20021021172405 ACCESSION NUMBER: 0000930661-02-003569 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021017 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20021021 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZIONS BANCORPORATION /UT/ CENTRAL INDEX KEY: 0000109380 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 870227400 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12307 FILM NUMBER: 02794277 BUSINESS ADDRESS: STREET 1: ONE SOUTH MAIN STREET STREET 2: SUITE 1380 CITY: SALT LAKE CITY STATE: UT ZIP: 84111 BUSINESS PHONE: 8015244787 MAIL ADDRESS: STREET 1: ONE SOUTH MAIN STREET STREET 2: SUITE 1380 CITY: SALT LAKE CITY STATE: UT ZIP: 84111 FORMER COMPANY: FORMER CONFORMED NAME: ZIONS FIRST NATIONAL INVESTMENT CO DATE OF NAME CHANGE: 19660921 FORMER COMPANY: FORMER CONFORMED NAME: ZIONS UTAH BANCORPORATION DATE OF NAME CHANGE: 19870615 8-K 1 d8k.htm FORM 8-K DATED 10-21-02 Form 8-K dated 10-21-02
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
October 21, 2002 (October 17, 2002)
Date of Report (Date of earliest event reported)
 
Zions Bancorporation
(Exact name of registrant as specified in its charter)
 
Utah
  
0-2610
  
87-0227400
(State of incorporation)
  
(Commission File Number)
  
(IRS Employer Identification No.)
 
One South Main, Suite 1134, Salt Lake City, Utah
  
84111
(Address of principal executive offices)
  
(Zip Code)
(801) 524-4787
(Registrant’s telephone number, including area code)
 
N/A
(Former name or former address, if changed since last report)
 

 
Item 5.    Other Events.
 
On October 17, 2002, Zions Bancorporation issued a press release announcing its third quarter earnings. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference in its entirety herein. Also included is an additional schedule titled “Consolidated Statements of Income by Quarter” that shows five quarters of income statement information consistently reflecting operations discontinued in the third quarter of 2002.
 
Item 7.    Financial Statements and Exhibits.
 
 
(a)
 
Not Applicable.
 
 
(b)
 
Not Applicable.
 
 
(c)
 
Exhibits.
 
The following exhibits are filed with this Current Report on Form 8-K:
 
Exhibit Number
   
Description
99.1
   
Press Release, dated October 17, 2002 with additional Consolidated Statements of Income by Quarter

2

SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ZIONS BANCORPORATION
By:
  
/s/    DOYLE L. ARNOLD        
   
Doyle L. Arnold
Executive Vice President & Chief Financial Officer
 
Date:  October 21, 2002

3
EX-99.1 3 dex991.htm PRESS RELEASE Press Release
 
Exhibit 99.1
***FOR IMMEDIATE RELEASE***
 
FOR: ZIONS BANCORPORATION
  
Contact: Clark Hinckley
One South Main, Suite 1134
  
Tel: (801) 524-4787
Salt Lake City, Utah
  
October 17, 2002
Harris H. Simmons
    
President/Chief Executive Officer
    
 
ZIONS BANCORPORATION REPORTS 2002 THIRD
QUARTER EARNINGS OF $0.43 PER DILUTED SHARE
AFTER CHARGES RELATED TO EXPENSE REDUCTION PLANS
AND IMPAIRED INVESTMENTS
 
SALT LAKE CITY, October 17, 2002—Zions Bancorporation (“Zions” or “the Company”) (Nasdaq: ZION) today reported third-quarter net income of $39.4 million, or $0.43 per diluted share. As noted by the Company in its 8-K filed on October 3, 2002, third quarter results included a number of nonrecurring items, most of which related to previously announced restructuring efforts, asset impairments and venture capital investment write-downs. The impact of these items, and the income statement line items affected, are summarized as follows:
 
    
Pretax
Amount
       
Tax-Effected
Amount
     
Per Diluted
Avg. Share
  
    
($ millions)
       
($ millions)
         
Noninterest income:
                         
Equity securities gains (losses), net
                         
Impairment charges related to venture fund investments and minority interest in investment banking firm
   
(27.1
)
     
(16.7
)
   
($
0.182
)
    
    
  
Total noninterest income
   
(27.1
)
     
(16.7
)
   
($
0.182
)
    
    
  
Noninterest expense:
                         
Restructuring charges
   
(2.7
)
     
(1.6
)
   
($
0.018
)
Impairment losses on long-lived assets
   
(4.0
)
     
(2.5
)
   
($
0.027
)
    
    
  
Total noninterest expense
   
(6.7
)
     
(4.1
)
   
($
0.045
)
    
    
  
Net income from continuing operations
   
(33.8
)
     
(20.8
)
   
($
0.227
)
Discontinued operations:
                         
Loss from operations of discontinued subsidiaries
   
(5.2
)
     
(3.1
)
   
($
0.034
)
Impairment losses
   
(28.7
)
     
(22.8
)
   
($
0.248
)
    
    
  
Net impact from discontinued operations
   
(33.9
)
     
(25.9
)
   
($
0.282
)
    
    
  
Net impact of nonrecurring items
   
(67.7
)
     
(46.7
)
   
($
0.509
)

ZIONS BANCORPORATION
Press Release—Page 2
October 17, 2002

 
“The Company took a number of actions this quarter to deal with under-performing businesses and improve its operating efficiency,” remarked Harris H. Simmons, chairman and chief executive officer. “I am pleased that GAAP noninterest expense, excluding the impact of restructuring charges and impairment losses, declined during the quarter. We are confident we will meet our announced target to reduce the run rate of operating expenses by $50 million by the middle of next year, without impacting our ability to grow the business. Deposit growth was particularly strong during the quarter, and we maintained reasonable, although slowed, loan growth in a difficult environment. Finally, while credit costs and nonperforming loans increased moderately, we are pleased with the overall performance of the portfolio and expect a decline in credit costs in the fourth quarter.”
 
GAAP net income of $39.4 million and earnings per share of $0.43 per diluted share for the third quarter of 2002, including the impact of all items noted above, decreased 45.8% and 44.9%, respectively, from the $72.8 million, or $0.78 per diluted share earned for the third quarter of 2001. Net income for the third quarter of 2001, as adjusted for the add back of goodwill amortization (under Statement of Financial Accounting Standards (“SFAS”) No.142) not included in 2002 earnings, was $81.5 million, or $0.87 per share. Net income for the third quarter of 2002 compared to net income, as adjusted, for the third quarter of 2001 decreased 51.6% and per share decreased 50.6%.
 
As previously announced last quarter the Company completed the sale of an e-commerce related business, Digital Signature Trust, in exchange for a 33% ownership interest in Identrus. During the third quarter the Company decided to further curtail its e-commerce related business activities, by restructuring and/or offering for sale parts of its Lexign and Phaos subsidiaries. Accordingly, impairment and restructuring charges were recognized related to these subsidiaries. In accordance with SFAS No. 144, these subsidiaries were treated as discontinued operations. The $22.8 million ($.25 per diluted share) after-tax impairment charge results from the SFAS No. 144 requirement that such discontinued operations be carried at the lower of their carrying amount or fair value less costs to sell. During the third quarter of 2002, the Company recognized additional losses from operations of $3.1 million ($.03 per diluted share) related to these discontinued operations. For the third quarter of 2002 the Company also incurred a loss of $0.8 million (slightly less than $.01 per diluted share) related to its investment in Identrus.
 
Year-to-date net income for 2002 was $168.8 million or $1.83 per share including the cumulative effect of a change in accounting principle (for SFAS No. 142) of $32.4 million ($0.35 per share).

ZIONS BANCORPORATION
Press Release—Page 3
October 17, 2002

 
Year-to-date income for 2002 before the cumulative effect of the change in accounting principle was $201.2 million, or $2.18 per share. Year-to-date income for 2001, before the cumulative effect of a change in accounting principle (for SFAS No. 133) and adjusted for the add back of goodwill amortization, was $242.8 million, or $2.64 per share.
 
Operating cash earnings for the third quarter were $76.2 million or $0.83 per diluted share, a decrease of 12.8% and 10.8%, respectively, from the $87.3 million or $0.93 per diluted share earned in the same quarter last year. Operating cash return on equity (“ROE”) was 19.7% and operating cash return on assets (“ROA”) was 1.18%. Year-to-date 2002 operating cash earnings were $244.4 million or $2.64 per share compared to $253.9 million or $2.76 per share earned during the same period last year. Year-to-date operating cash ROE for 2002 was 22.1% and operating cash ROA was 1.29%. Operating cash earnings are earnings before amortization of core deposit and other intangible assets, restructuring and merger-related charges, impairment charges, goodwill allocated to the carrying value of branches sold, and the cumulative effect of changes in accounting principles. Operating cash performance ratios are determined as if these items have not been recognized in the financial statements.
 
Net Interest Income
 
At September 30, 2002, on-balance-sheet and sold and serviced loans increased 12.1% to $21.3 billion from the balances reported one year ago, and 6.4% annualized from balances reported in the second quarter 2002. Deposits increased 11.7% to $19.5 billion over the balances reported one year ago, and 14.7% annualized from balances reported in the second quarter 2002. Core deposits, which exclude time deposits over $100,000, increased 14.4% year-over-year, and at an annualized rate of 16.9% in the quarter.
 
For the quarter, taxable-equivalent net interest income increased 5.7% to $266.7 million compared to the third quarter of 2001. For the third quarter of 2002, the net interest margin was 4.53%, compared to 4.61% for the second quarter of 2002, and 4.65% for the third quarter of 2001.

ZIONS BANCORPORATION
Press Release—Page 4
October 17, 2002

 
Noninterest Income
 
For the third quarter of 2002, noninterest income, excluding equity securities gains and losses, increased $5.5 million or 5.7% to $101.3 million compared to the third quarter of 2001. The increase included growth in service charges on deposit accounts of 17.9% and other service charges, commissions and fees of 9.5%. Loan sales and servicing income decreased $3.6 million or 15.4% compared to the third quarter of 2001, but increased $0.4 million or 2.3% from the second quarter of 2002. In light of significant declines in interest rates and other changes in market factors during the quarter, the Company reviewed values of assets related to prior securitizations. As a result of these reviews, the Company wrote down these values by a net amount of $5.8 million, before tax effects. In addition, the Company recorded a $6.7 million pre-tax gain on sale related to a new SBA loan securitization completed during the quarter.
 
Noninterest Expense
 
For the third quarter of 2002, noninterest expense, excluding restructuring and impairment charges, was $212.5 million, as compared to $222.9 million for the second quarter 2002 and $223.4 million for the third quarter of 2001, as originally reported. This is a decrease of $10.4 million ($41.1 million on an annualized basis) or 4.7%, and $10.9 million or 4.9%, respectively. It reflects both the Company’s ongoing expense containment efforts as well as the impact of discontinued operations.
 
The reported operating cash efficiency ratio was 60.4% for the third quarter compared to 59.3% for the second quarter of 2002 and 56.9% for the third quarter of 2001. However, the Company believes that, adjusted for all nonrecurring items, its run-rate operating efficiency ratio now is under 57%.
 
Asset Quality
 
The ratio of nonperforming assets to total loans and other real estate was 0.72% at September 30, 2002, compared to 0.63% at June 30, 2002 and 0.65% at September 30, 2001. For the third quarter of 2002, net loan and lease losses were $21.3 million or 0.46% annualized of average loans, compared to $15.4 million or 0.34% annualized for the second quarter of 2002 and $5.5 million or 0.13% annualized for the third quarter of 2001. The increase in nonperforming assets and loan losses during the quarter reflects primarily the impact of two closely watched, major credits that the Company has discussed previously. At $265.4 million on September 30, 2002, the allowance for loan losses was 1.45% of total loans and 222% of nonperforming loans.

ZIONS BANCORPORATION
Press Release—Page 5
October 17, 2002

 
Provision for Loan Losses
 
For the third quarter of 2002 the provision for loan losses was $22.3 million compared to $15.7 million provided during the second quarter of 2002 and $21.5 million provided during the third quarter of 2001. Year-to-date for 2002 the provision was $56.1 million compared to $46.5 million year-to-date 2001. The provision reflects management’s evaluation of its various portfolios, statistical trends and other economic factors, and its desire to maintain a strong coverage of nonperforming assets in a continued uncertain economic environment in the markets in which it operates.
 
Tangible Equity Ratio Improves
 
During the third quarter of 2002, Zions repurchased 592,193 shares of common stock at an average price of $45.58 per share. Year-to-date the Company has repurchased 1,635,173 shares at an average price of $51.04. Weighted average common and common equivalent shares outstanding for the third quarter of 2002 were 92,017,388, compared to 92,628,770 for the second quarter of 2002 and 93,509,495 for the third quarter of 2001. The Company’s tangible common equity ratio was 6.09% at September 30, 2002 compared to 6.03% at June 30, 2002 and 5.98% at December 31, 2001.
 
Conference Call
 
Zions will host a conference call to discuss these third quarter results at 5:30 p.m. EDT this afternoon (October 17, 2002). Media representatives, analysts and the public are invited to listen to this discussion by calling 1-888-277-8128, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation Web site at www.zionsbancorporation.com. A replay of the call will be available from approximately 8:30 p.m. EDT on Thursday, October 17 through midnight EDT on Tuesday, October 22, by dialing 1-877-519-4471 and entering the conference ID number (4620114). The webcast of the conference call will also be archived and available through Thursday, October 31.
 
About Zions Bancorporation
 
Zions Bancorporation is one of the nation’s premier financial services companies, consisting of a collection of great banks in select high growth markets. Under local management teams and community identities, Zions operates over 400 full-service banking offices in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Utah and Washington. In addition, Zions is a national leader in SBA lending, public finance advisory services, agricultural finance and electronic bond trading. The Company is included in the S&P 500 Index. Investor information and links to subsidiary banks can be accessed at www.zionsbancorporation.com.

ZIONS BANCORPORATION
Press Release—Page 6
October 17, 2002

 
Forward-Looking Information
 
This news release contains statements regarding the projected performance of Zions and its subsidiaries. These statements constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act. Actual results of achievements may differ materially from the projections provided in this release since such projections involve significant known and unknown risks and uncertainties. Factors that might cause such differences include, but are not limited to: competitive pressures among financial institutions increasing significantly; economic conditions, either nationally or locally, in areas in which the Company conducts operations being less favorable than expected; and legislation or regulatory changes which adversely affect the ability of the combined Company to conduct business combinations or new operations. The Company disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments.

ZIONS BANCORPORATION AND SUBSIDIARIES
Press Release—Page 7
FINANCIAL HIGHLIGHTS
(Unaudited)

 
    
Three Months Ended
September 30,
     
Nine Months Ended
September 30,
  
    
2002
     
2001
     
% Change
     
2002
     
2001
     
% Change
  
    
(In thousands, except per share and ratio data)
  
EARNINGS (4)
                            
(Adjusted)(3)
       
Taxable-equivalent net interest income
   
$
266,660
 
   
$
252,214
 
   
5.73
%
   
$
792,247
 
   
$
713,074
 
   
11.10 
%
Net interest income
   
 
261,306
 
   
 
247,118
 
   
5.74
%
   
 
776,560
 
   
 
697,969
 
   
11.26 
%
Noninterest income
   
 
74,815
 
   
 
106,044
 
   
(29.45
)%
   
 
270,246
 
   
 
310,412
 
   
(12.94
)%
Provision for loan losses
   
 
22,309
 
   
 
21,470
 
   
3.91
%
   
 
56,104
 
   
 
46,477
 
   
20.71 
%
Noninterest expense
   
 
219,158
 
   
 
214,582
 
   
2.13
%
   
 
640,120
 
   
 
622,047
 
   
2.91
%
Income before income taxes and minority interest
   
 
94,654
 
   
 
117,110
 
   
(19.18
)%
   
 
350,582
 
   
 
339,857
 
   
3.16
%
Income taxes
   
 
31,772
 
   
 
43,031
 
   
(26.16
)%
   
 
120,744
 
   
 
122,816
 
   
(1.69
)%
Minority interest
   
 
(2,486
)
   
 
(3,251
)
   
(23.53
)%
   
 
(3,211
)
   
 
(6,638
)
   
(51.63
)%
Income from continuing operations
   
 
65,368
 
   
 
77,330
 
   
(15.47
)%
   
 
233,049
 
   
 
223,679
 
   
4.19
%
Loss from discontinued operations
   
 
(25,922
)
   
 
(4,533
)
   
471.85
%
   
 
(31,897
)
   
 
(5,386
)
   
492.22 
%
Cumulative effect adjustments
   
 
—  
 
   
 
—  
 
          
 
(32,369
)
   
 
(7,159
)
   
352.14 
%
Net income
   
 
39,446
 
   
 
72,797
 
   
(45.81
)%
   
 
168,783
 
   
 
211,134
 
   
(20.06
)%
Income before cumulative effect, as adjusted (1)
   
 
39,446
 
   
 
81,549
 
   
(51.63
)%
   
 
201,152
 
   
 
242,795
 
   
(17.15
)%
Net income, as adjusted (1)
   
 
39,446
 
   
 
81,549
 
   
(51.63
)%
   
 
168,783
 
   
 
235,636
 
   
(28.37
)%
PER COMMON SHARE (4)
                                                  
Net income (diluted)
   
 
0.43
 
   
 
0.78
 
   
(44.87
)%
   
 
1.83
 
   
 
2.29
 
   
(20.09
)%
Income from continuing operations (diluted), as adjusted (1)
   
 
0.71
 
   
 
0.92
 
   
(22.83
)%
   
 
2.52
 
   
 
2.70
 
   
(6.67
)%
Loss from discontinued operations (diluted)
   
 
(0.28
)
   
 
(0.05
)
   
460.00 
%
   
 
(0.34
)
   
 
(0.06
)
   
466.67 
%
Income before cumulative effect (diluted), as adjusted (1)
   
 
0.43
 
   
 
0.87
 
   
(50.57
)%
   
 
2.18
 
   
 
2.64
 
   
(17.42
)%
Net income (diluted), as adjusted (1)
   
 
0.43
 
   
 
0.87
 
   
(50.57
)%
   
 
1.83
 
   
 
2.56
 
   
(28.52
)%
Dividends
   
 
0.20
 
   
 
0.20
 
   
—  
 
   
 
0.60
 
   
 
0.60
 
   
—  
 
Book value
                            
 
25.86
 
   
 
24.29
 
   
6.46
%
SELECTED RATIOS (1)
                                                  
Return on average assets
   
 
0.59
%
   
 
1.32
%
          
 
0.87
%
   
 
1.34
%
       
Return on average common equity
   
 
6.51
%
   
 
14.51
%
          
 
9.68
%
   
 
15.07
%
       
Efficiency ratio
   
 
74.23
%
   
 
59.43
%
          
 
64.57
%
   
 
59.16
%
       
Net interest margin
   
 
4.53
%
   
 
4.65
%
          
 
4.61
%
   
 
4.63
%
       
OPERATING CASH EARNINGS (2)
                                                  
Taxable-equivalent net interest income
   
$
266,660
 
   
$
252,214
 
   
5.73
%
   
$
792,247
 
   
$
713,074
 
   
11.10 
%
Net interest income
   
 
261,306
 
   
 
247,113
 
   
5.74
%
   
 
776,560
 
   
 
697,968
 
   
11.26 
%
Noninterest income
   
 
86,724
 
   
 
108,544
 
   
(20.10
)%
   
 
287,617
 
   
 
314,478
 
   
(8.54
)%
Provision for loan losses
   
 
22,309
 
   
 
21,470
 
   
3.91
%
   
 
56,104
 
   
 
46,477
 
   
20.71 
%
Noninterest expense
   
 
213,496
 
   
 
205,372
 
   
3.96
%
   
 
639,619
 
   
 
589,818
 
   
8.44
%
Income before income taxes and minority interest
   
 
112,225
 
   
 
128,815
 
   
(12.88
)%
   
 
368,454
 
   
 
376,151
 
   
(2.05
)%
Income taxes
   
 
38,561
 
   
 
44,750
 
   
(13.83
)%
   
 
127,285
 
   
 
128,652
 
   
(1.06
)%
Minority interest
   
 
(2,486
)
   
 
(3,251
)
   
(23.53
)%
   
 
(3,211
)
   
 
(6,438
)
   
(50.12
)%
Income before cumulative effect adjustments
   
 
76,150
 
   
 
87,316
 
   
(12.79
)%
   
 
244,380
 
   
 
253,937
 
   
(3.76
)%
PER COMMON SHARE
                                                  
Net income (diluted)
   
 
0.83
 
   
 
0.93
 
   
(10.75
)%
   
 
2.64
 
   
 
2.76
 
   
(4.35
)%
Dividends
   
 
0.20
 
   
 
0.20
 
   
—  
 
   
 
0.60
 
   
 
0.60
 
   
—  
 
Book value
                            
 
17.02
 
   
 
14.95
 
   
13.85 
%
SELECTED RATIOS
                                                  
Return on average assets
   
 
1.18
%
   
 
1.46
%
          
 
1.29
%
   
 
1.50
%
       
Return on average common equity
   
 
19.69
%
   
 
25.48
%
          
 
22.06
%
   
 
25.71
%
       
Efficiency ratio
   
 
60.41
%
   
 
56.93
%
          
 
59.23
%
   
 
57.40
%
       
Net interest margin
   
 
4.53
%
   
 
4.65
%
          
 
4.61
%
   
 
4.63
%
       
 
(1)
 
Adjusted according to SFAS No. 142 for the add back of goodwill amortization, net of income tax benefit.
(2)
 
Before amortization of goodwill in prior period, amortization of core deposit and other intangible assets, merger expense, restructuring charges, impairment losses, goodwill allocated to the carrying value of branches sold, and the cumulative effect of the adoption of SFAS Nos. 133 and 142.
(3)
 
Adjusted according to SFAS No. 142 for the impairment to goodwill and reflected as a cumulative effect adjustment, net of income tax benefit.
(4)
 
Adjusted according to SFAS No. 144 for discontinued operations, net of income tax benefit.
 

ZIONS BANCORPORATION AND SUBSIDIARIES
Press Release—Page 8
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)

 
    
Three Months Ended
September 30,
     
Nine Months Ended
September 30,
  
    
2002
     
2001
     
% Change
     
2002
     
2001
     
% Change
  
    
(In thousands, except share and ratio data)
  
AVERAGE BALANCES
       
Total assets
   
$
26,429,054
 
   
$
24,518,033
 
   
7.79 
%
   
$
26,081,737
 
   
$
23,459,391
 
   
11.18 
%
Securities
   
 
3,788,158
 
   
 
4,004,646
 
   
(5.41
)%
   
 
3,922,040
 
   
 
3,927,668
 
   
(0.14
)%
Net loans and leases
   
 
18,442,768
 
   
 
16,545,117
 
   
11.47 
%
   
 
18,024,954
 
   
 
15,726,967
 
   
14.61 
%
Goodwill
   
 
772,439
 
   
 
753,783
 
   
2.47 
%
   
 
747,888
 
   
 
673,389
 
   
11.06 
%
Core deposit and other intangibles
   
 
98,032
 
   
 
116,178
 
   
(15.62
)%
   
 
102,559
 
   
 
96,726
 
   
6.03 
%
Total deposits
   
 
18,851,300
 
   
 
17,182,559
 
   
9.71 
%
   
 
18,252,378
 
   
 
16,426,779
 
   
11.11 
%
Minority interest
   
 
22,234
 
   
 
20,688
 
   
7.47 
%
   
 
20,725
 
   
 
34,278
 
   
(39.54
)%
Shareholders’ equity
   
 
2,404,871
 
   
 
2,229,326
 
   
7.87 
%
   
 
2,331,357
 
   
 
2,090,680
 
   
11.51 
%
Weighted average common and common-equivalent shares outstanding
   
 
92,017,388
 
   
 
93,509,495
 
   
(1.60
)%
   
 
92,423,909
 
   
 
92,042,138
 
   
0.41 
%
AT PERIOD END
                                                  
Total assets
                            
 
26,289,314
 
   
 
24,255,570
 
   
8.38 
%
Securities
                            
 
3,426,574
 
   
 
3,680,612
 
   
(6.90
)%
Net loans and leases
                            
 
18,321,351
 
   
 
16,776,620
 
   
9.21 
%
Sold loans being serviced (1)
                            
 
3,012,780
 
   
 
2,256,379
 
   
33.52 
%
Allowance for loan losses
                            
 
265,406
 
   
 
245,862
 
   
7.95 
%
Goodwill
                            
 
724,353
 
   
 
744,033
 
   
(2.65
)%
Core deposit and other intangibles
                            
 
82,146
 
   
 
115,666
 
   
(28.98
)%
Total deposits
                            
 
19,481,032
 
   
 
17,434,450
 
   
11.74 
%
Minority interest
                            
 
23,028
 
   
 
13,614
 
   
69.15 
%
Shareholders’ equity
                            
 
2,357,601
 
   
 
2,235,167
 
   
5.48 
%
Common shares outstanding
                            
 
91,154,578
 
   
 
92,001,233
 
   
(0.92
)%
Average equity to average assets
   
 
9.10
%
   
 
9.09
%
          
 
8.94
%
   
 
8.91
%
       
Common dividend payout
   
 
46.39
%
   
 
25.36
%
          
 
32.62
%
   
 
26.26
%
       
Nonperforming assets
                            
 
131,969
 
   
 
108,602
 
   
21.52 
%
Loans past due 90 days or more
                            
 
35,443
 
   
 
46,780
 
   
(24.23
)%
Nonperforming assets to net loans and leases, other real estate owned and other nonperforming assets at period end
                            
 
0.72
%
   
 
0.65
%
       
(1)
 
Amount represents the outstanding balance of loans sold and being serviced by the Company, excluding conforming first mortgage residential real estate loans.

ZIONS BANCORPORATION AND SUBSIDIARIES
Press Release—Page 9
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)

 
   
Three Months Ended
  
   
September 30,
     
June 30,
     
March 31,
     
December 31,
     
September 30,
  
   
2002
     
2001
  
   
(In thousands, except per share and ratio data)
  
EARNINGS (4)
                
(Adjusted)(3)
                
Taxable-equivalent net interest income
  
$
266,660
 
   
$
264,282
 
   
$
261,305
 
   
$
256,931
 
   
$
252,214
 
Net interest income
  
 
261,306
 
   
 
259,044
 
   
 
256,210
 
   
 
251,795
 
   
 
247,118
 
Noninterest income
  
 
74,815
 
   
 
101,605
 
   
 
93,826
 
   
 
101,776
 
   
 
106,044
 
Provision for loan losses
  
 
22,309
 
   
 
15,705
 
   
 
18,090
 
   
 
26,714
 
   
 
21,470
 
Noninterest expenses
  
 
219,158
 
   
 
215,708
 
   
 
205,254
 
   
 
214,046
 
   
 
214,582
 
Income before income taxes and minority interest
  
 
94,654
 
   
 
129,236
 
   
 
126,692
 
   
 
112,811
 
   
 
117,110
 
Income taxes
  
 
31,772
 
   
 
44,947
 
   
 
44,025
 
   
 
39,051
 
   
 
43,031
 
Minority interest
  
 
(2,486
)
   
 
(575
)
   
 
(150
)
   
 
(1,160
)
   
 
(3,251
)
Income from continuing operations
  
 
65,368
 
   
 
84,864
 
   
 
82,817
 
   
 
74,920
 
   
 
77,330
 
Loss from discontinued operations
  
 
(25,922
)
   
 
(2,789
)
   
 
(3,186
)
   
 
(3,034
)
   
 
(4,533
)
Cumulative effect adjustment
  
 
—  
 
   
 
—  
 
   
 
(32,369
)
   
 
—  
 
   
 
—  
 
Net income
  
 
39,446
 
   
 
82,075
 
   
 
47,262
 
   
 
71,886
 
   
 
72,797
 
Income before cumulative effect, as adjusted (1)
  
 
39,446
 
   
 
82,075
 
   
 
79,631
 
   
 
80,440
 
   
 
81,549
 
Net income, as adjusted (1)
  
 
39,446
 
   
 
82,075
 
   
 
47,262
 
   
 
80,440
 
   
 
81,549
 
PER COMMON SHARE (4)
                                            
Net income (diluted)
  
 
0.43
 
   
 
0.89
 
   
 
0.51
 
   
 
0.78
 
   
 
0.78
 
Income from continuing operations (diluted), as adjusted (1)
  
 
0.71
 
   
 
0.92
 
   
 
0.89
 
   
 
0.90
 
   
 
0.92
 
Loss from discontinued operations (diluted)
  
 
(0.28
)
   
 
(0.03
)
   
 
(0.03
)
   
 
(0.03
)
   
 
(0.05
)
Income before cumulative effect (diluted), as
    adjusted (1)
  
 
0.43
 
   
 
0.89
 
   
 
0.86
 
   
 
0.87
 
   
 
0.87
 
Net income (diluted), as adjusted (1)
  
 
0.43
 
   
 
0.89
 
   
 
0.51
 
   
 
0.87
 
   
 
0.87
 
Dividends
  
 
0.20
 
   
 
0.20
 
   
 
0.20
 
   
 
0.20
 
   
 
0.20
 
Book value
  
 
25.86
 
   
 
25.49
 
   
 
24.82
 
   
 
24.74
 
   
 
24.29
 
SELECTED RATIOS (1)
                                            
Return on average assets
  
 
0.59
%
   
 
1.26
%
   
 
0.75
%
   
 
1.28
%
   
 
1.32
%
Return on average common equity
  
 
6.51
%
   
 
14.21
%
   
 
8.44
%
   
 
14.16
%
   
 
14.51
%
Efficiency ratio
  
 
74.23
%
   
 
60.51
%
   
 
59.48
%
   
 
59.14
%
   
 
59.43
%
Net interest margin
  
 
4.53
%
   
 
4.61
%
   
 
4.70
%
   
 
4.66
%
   
 
4.65
%
OPERATING CASH EARNINGS (2)
                                            
Taxable-equivalent net interest income
  
$
266,660
 
   
$
264,282
 
   
$
261,305
 
   
$
256,931
 
   
$
252,214
 
Net interest income
  
 
261,306
 
   
 
259,038
 
   
 
256,215
 
   
 
251,821
 
   
 
247,113
 
Noninterest income
  
 
86,724
 
   
 
104,014
 
   
 
96,880
 
   
 
104,907
 
   
 
108,544
 
Provision for loan losses
  
 
22,309
 
   
 
15,705
 
   
 
18,090
 
   
 
26,714
 
   
 
21,470
 
Noninterest expenses
  
 
213,496
 
   
 
218,287
 
   
 
207,836
 
   
 
207,716
 
   
 
205,372
 
Income before income taxes and minority interest
  
 
112,225
 
   
 
129,060
 
   
 
127,169
 
   
 
122,298
 
   
 
128,815
 
Income taxes
  
 
38,561
 
   
 
44,859
 
   
 
43,865
 
   
 
39,639
 
   
 
44,750
 
Minority interest
  
 
(2,486
)
   
 
(575
)
   
 
(150
)
   
 
(1,160
)
   
 
(3,251
)
Income before cumulative effect adjustment
  
 
76,150
 
   
 
84,776
 
   
 
83,454
 
   
 
83,819
 
   
 
87,316
 
PER COMMON SHARE
                                            
Net income (diluted)
  
 
0.83
 
   
 
0.92
 
   
 
0.90
 
   
 
0.90
 
   
 
0.93
 
Dividends
  
 
0.20
 
   
 
0.20
 
   
 
0.20
 
   
 
0.20
 
   
 
0.20
 
Book value
  
 
17.02
 
   
 
16.37
 
   
 
15.70
 
   
 
15.19
 
   
 
14.95
 
SELECTED RATIOS
                                            
Return on average assets
  
 
1.18
%
   
 
1.34
%
   
 
1.36
%
   
 
1.39
%
   
 
1.46
%
Return on average common equity
  
 
19.69
%
   
 
22.99
%
   
 
23.70
%
   
 
24.67
%
   
 
25.48
%
Efficiency ratio
  
 
60.41
%
   
 
59.27
%
   
 
58.02
%
   
 
57.41
%
   
 
56.93
%
Net interest margin
  
 
4.53
%
   
 
4.61
%
   
 
4.70
%
   
 
4.66
%
   
 
4.65
%
(1)
 
Adjusted according to SFAS No. 142 for the add back of goodwill amortization, net of income tax benefit.
(2)
 
Before amortization of goodwill in prior period, amortization of core deposit and other intangible assets, merger expense, restructuring charges, impairment losses, goodwill allocated to the carrying value of branches sold, and the cumulative effect of the adoption of SFAS Nos. 133 and 142.
(3)
 
Adjusted according to SFAS No. 142 for the impairment to goodwill and reflected as a cumulative effect adjustment, net of income tax benefit.
(4)
 
Adjusted according to SFAS No. 144 for discontinued operations, net of income tax benefit.

 
ZIONS BANCORPORATION AND SUBSIDIARIES
Press Release—Page 10
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)
 
    
Three Months Ended
  
    
September 30,
     
June 30,
     
March 31,
     
December 31,
     
September 30,
  
    
2002
     
2001
  
    
(In thousands, except share and ratio data)
  
AVERAGE BALANCES
   
(Adjusted)(2)
  
Total assets
   
$
26,429,054
 
   
$
26,128,886
 
   
$
25,679,029
 
   
$
24,899,883
 
   
$
24,518,033
 
Securities
   
 
3,788,158
 
   
 
3,901,341
 
   
 
4,079,827
 
   
 
4,103,800
 
   
 
4,004,646
 
Net loans and leases
   
 
18,442,768
 
   
 
18,083,224
 
   
 
17,538,937
 
   
 
16,878,995
 
   
 
16,545,117
 
Goodwill
   
 
772,439
 
   
 
735,622
 
   
 
735,194
 
   
 
790,313
 
   
 
753,783
 
Core deposit and other intangibles
   
 
98,032
 
   
 
102,544
 
   
 
107,202
 
   
 
114,926
 
   
 
116,178
 
Total deposits
   
 
18,851,300
 
   
 
18,217,798
 
   
 
17,675,111
 
   
 
17,736,835
 
   
 
17,182,559
 
Minority interest
   
 
22,234
 
   
 
21,354
 
   
 
18,546
 
   
 
14,810
 
   
 
20,688
 
Shareholders’ equity
   
 
2,404,871
 
   
 
2,317,029
 
   
 
2,270,697
 
   
 
2,253,096
 
   
 
2,229,326
 
Weighted average common and common-equivalent shares outstanding
   
 
92,017,388
 
   
 
92,628,770
 
   
 
92,813,828
 
   
 
92,685,437
 
   
 
93,509,495
 
AT PERIOD END
                                             
Total assets
   
$
26,289,314
 
   
$
25,734,714
 
   
$
24,804,578
 
   
$
24,304,164
 
   
$
24,255,570
 
Securities
   
 
3,426,574
 
   
 
3,609,416
 
   
 
3,503,789
 
   
 
3,466,357
 
   
 
3,680,612
 
Net loans and leases
   
 
18,321,351
 
   
 
18,452,554
 
   
 
17,854,168
 
   
 
17,310,838
 
   
 
16,776,620
 
Sold loans being serviced (1)
   
 
3,012,780
 
   
 
2,543,887
 
   
 
2,526,076
 
   
 
2,648,270
 
   
 
2,256,379
 
Allowance for loan losses
   
 
265,406
 
   
 
264,432
 
   
 
264,107
 
   
 
260,483
 
   
 
245,862
 
Goodwill
   
 
724,353
 
   
 
736,524
 
   
 
734,334
 
   
 
770,763
 
   
 
744,033
 
Core deposit and other intangibles
   
 
82,146
 
   
 
100,003
 
   
 
104,576
 
   
 
109,148
 
   
 
115,666
 
Total deposits
   
 
19,481,032
 
   
 
18,788,429
 
   
 
18,000,342
 
   
 
17,841,690
 
   
 
17,434,450
 
Minority interest
   
 
23,028
 
   
 
22,782
 
   
 
20,769
 
   
 
16,322
 
   
 
13,614
 
Shareholders’ equity
   
 
2,357,601
 
   
 
2,337,278
 
   
 
2,283,000
 
   
 
2,280,869
 
   
 
2,235,167
 
Common shares outstanding
   
 
91,154,578
 
   
 
91,701,887
 
   
 
91,986,436
 
   
 
92,208,736
 
   
 
92,001,233
 
Average equity to average assets
   
 
9.10
%
   
 
8.87
%
   
 
8.84
%
   
 
9.05
%
   
 
9.09
%
Common dividend payout
   
 
46.39
%
   
 
22.36
%
   
 
38.93
%
   
 
25.67
%
   
 
25.36
%
Nonperforming assets
   
 
131,969
 
   
 
115,513
 
   
 
131,154
 
   
 
120,372
 
   
 
108,602
 
Loans past due 90 days or more
   
 
35,443
 
   
 
32,332
 
   
 
37,371
 
   
 
46,201
 
   
 
46,780
 
Nonperforming assets to net loans and leases, other real estate owned and other nonperforming assets at period end
   
 
0.72
%
   
 
0.63
%
   
 
0.73
%
   
 
0.69
%
   
 
0.65
%
(1)
 
Amount represents the outstanding balance of loans sold and being serviced by the Company, excluding conforming first mortgage residential real estate loans.
(2)
 
Adjusted according to SFAS No. 142 for the impairment to goodwill, net of income tax benefit.

ZIONS BANCORPORATION AND SUBSIDIARIES
Press Release—Page 11
CONSOLIDATED BALANCE SHEETS

 
      
September 30, 2002
     
December 31, 2001
     
September 30, 2001
      
(Unaudited)
            
(Unaudited)
      
(In thousands, except share amounts)
ASSETS
                           
Cash and due from banks
     
$
1,025,447
     
$
978,609
     
$
910,465
Money market investments:
                           
Interest-bearing deposits
     
 
1,091
     
 
2,780
     
 
2,169
Federal funds sold
     
 
239,055
     
 
57,653
     
 
125,112
Security resell agreements
     
 
958,098
     
 
222,147
     
 
507,536
Investment securities:
                           
Held to maturity, at cost (approximate market value $0, $79,752, and $53,918)
     
 
—  
     
 
79,546
     
 
53,880
Available for sale, at market
     
 
3,060,160
     
 
3,283,915
     
 
3,249,657
Trading account, at market (includes $274,031, $87,612, and $277,358 transferred as collateral under repurchase agreements)
     
 
366,414
     
 
102,896
     
 
377,075
      
    
    
      
 
3,426,574
     
 
3,466,357
     
 
3,680,612
Loans:
                           
Loans held for sale
     
 
250,062
     
 
297,959
     
 
260,698
Loans, leases and other receivables
     
 
18,165,833
     
 
17,115,485
     
 
16,618,504
      
    
    
      
 
18,415,895
     
 
17,413,444
     
 
16,879,202
Less:
                           
Unearned income and fees, net of related costs
     
 
94,544
     
 
102,606
     
 
102,582
Allowance for loan losses
     
 
265,406
     
 
260,483
     
 
245,862
      
    
    
Net loans
     
 
18,055,945
     
 
17,050,355
     
 
16,530,758
Premises and equipment, net
     
 
386,730
     
 
368,076
     
 
354,637
Goodwill
     
 
724,353
     
 
770,763
     
 
744,033
Core deposit and other intangibles
     
 
82,146
     
 
109,148
     
 
115,666
Other real estate owned
     
 
12,625
     
 
10,302
     
 
15,073
Other assets
     
 
1,377,250
     
 
1,267,974
     
 
1,269,509
      
    
    
      
$
26,289,314
     
$
24,304,164
     
$
24,255,570
      
    
    
LIABILITIES AND SHAREHOLDERS’ EQUITY
                           
Deposits:
                           
Noninterest-bearing demand
     
$
4,932,736
     
$
4,480,669
     
$
4,145,951
Interest-bearing:
                           
Savings and money market
     
 
11,138,714
     
 
9,507,817
     
 
9,482,004
Time under $100,000
     
 
1,834,638
     
 
2,055,087
     
 
2,025,674
Time $100,000 and over
     
 
1,459,621
     
 
1,664,829
     
 
1,688,343
Foreign
     
 
115,323
     
 
133,288
     
 
92,478
      
    
    
      
 
19,481,032
     
 
17,841,690
     
 
17,434,450
Securities sold, not yet purchased
     
 
209,540
     
 
87,255
     
 
206,638
Federal funds purchased
     
 
672,962
     
 
1,203,764
     
 
1,032,613
Security repurchase agreements
     
 
756,426
     
 
933,973
     
 
1,091,266
Accrued liabilities
     
 
634,334
     
 
428,225
     
 
739,628
Commercial paper
     
 
339,575
     
 
309,000
     
 
429,297
Federal Home Loan Bank advances and other borrowings:
                           
One year or less
     
 
512,793
     
 
181,266
     
 
249,779
Over one year
     
 
241,135
     
 
240,458
     
 
241,770
Long-term debt
     
 
1,060,888
     
 
781,342
     
 
581,348
      
    
    
Total liabilities
     
 
23,908,685
     
 
22,006,973
     
 
22,006,789
      
    
    
Minority interest
     
 
23,028
     
 
16,322
     
 
13,614
Shareholders’ equity:
                           
Capital stock:
                           
Preferred stock, without par value; authorized 3,000,000 shares; issued and outstanding, none
     
 
—  
     
 
—  
     
 
—  
Common stock, without par value; authorized 350,000,000 shares; issued and outstanding 91,154,578, 92,208,736, and 92,001,233 shares
     
 
1,048,803
     
 
1,111,214
     
 
1,104,278
Accumulated other comprehensive income
     
 
85,361
     
 
59,951
     
 
74,618
Retained earnings
     
 
1,223,437
     
 
1,109,704
     
 
1,056,271
      
    
    
Total shareholders' equity
     
 
2,357,601
     
 
2,280,869
     
 
2,235,167
      
    
    
      
$
26,289,314
     
$
24,304,164
     
$
24,255,570
      
    
    

ZIONS BANK CORPORATION AND SUBSIDIARIES
Press Release—Page 12
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

 
    
Three Months Ended September 30,
     
Nine Months Ended September 30,
  
    
2002
     
2001
     
2002
     
2001
  
    
(In thousands, except per share amounts)
  
Interest income:
                                    
Interest and fees on loans
   
$
310,914
 
   
$
329,761
 
   
$
926,621
 
   
$
983,280
 
Interest on loans held for sale
   
 
1,802
 
   
 
2,905
 
   
 
6,729
 
   
 
9,147
 
Lease financing
   
 
5,146
 
   
 
5,918
 
   
 
15,948
 
   
 
16,835
 
Interest on money market investments
   
 
4,507
 
   
 
8,382
 
   
 
12,403
 
   
 
30,043
 
Interest on securities:
                                    
Held to maturity—taxable
   
 
—  
 
   
 
744
 
   
 
2,292
 
   
 
2,525
 
Available for sale—taxable
   
 
31,669
 
   
 
40,347
 
   
 
99,797
 
   
 
130,227
 
Available for sale—nontaxable
   
 
6,816
 
   
 
6,137
 
   
 
19,823
 
   
 
18,260
 
Trading account
   
 
5,766
 
   
 
7,026
 
   
 
16,679
 
   
 
25,221
 
    
  
  
  
Total interest income
   
 
366,620
 
   
 
401,220
 
   
 
1,100,292
 
   
 
1,215,538
 
    
  
  
  
Interest expense:
                                    
Interest on savings and money market deposits
   
 
42,948
 
   
 
59,842
 
   
 
124,431
 
   
 
205,765
 
Interest on time and foreign deposits
   
 
27,353
 
   
 
46,609
 
   
 
89,605
 
   
 
146,022
 
Interest on borrowed funds
   
 
35,013
 
   
 
47,651
 
   
 
109,696
 
   
 
165,782
 
    
  
  
  
Total interest expense
   
 
105,314
 
   
 
154,102
 
   
 
323,732
 
   
 
517,569
 
    
  
  
  
Net interest income
   
 
261,306
 
   
 
247,118
 
   
 
776,560
 
   
 
697,969
 
Provision for loan losses
   
 
22,309
 
   
 
21,470
 
   
 
56,104
 
   
 
46,477
 
    
  
  
  
Net interest income after provision for loan losses
   
 
238,997
 
   
 
225,648
 
   
 
720,456
 
   
 
651,492
 
    
  
  
  
Noninterest income:
                                    
Service charges on deposit accounts
   
 
30,368
 
   
 
25,762
 
   
 
88,154
 
   
 
73,221
 
Loan sales and servicing income
   
 
19,792
 
   
 
23,383
 
   
 
46,066
 
   
 
65,155
 
Other service charges, commissions and fees
   
 
20,469
 
   
 
18,699
 
   
 
60,829
 
   
 
54,025
 
Trust income
   
 
4,447
 
   
 
4,158
 
   
 
14,025
 
   
 
13,588
 
Income from securities conduit
   
 
5,188
 
   
 
4,542
 
   
 
13,850
 
   
 
8,590
 
Market making, trading and nonhedge derivative income
   
 
7,427
 
   
 
7,892
 
   
 
31,328
 
   
 
28,801
 
Equity securities gains (losses), net
   
 
(26,452
)
   
 
10,267
 
   
 
(25,268
)
   
 
40,159
 
Fixed income securities gains (losses), net
   
 
327
 
   
 
158
 
   
 
387
 
   
 
(3,940
)
Other
   
 
13,249
 
   
 
11,183
 
   
 
40,875
 
   
 
30,813
 
    
  
  
  
Total noninterest income
   
 
74,815
 
   
 
106,044
 
   
 
270,246
 
   
 
310,412
 
    
  
  
  
Noninterest expense:
                                    
Salaries and employee benefits
   
 
124,978
 
   
 
110,735
 
   
 
358,708
 
   
 
324,212
 
Occupancy, net
   
 
17,117
 
   
 
16,203
 
   
 
51,163
 
   
 
46,524
 
Furniture and equipment
   
 
15,609
 
   
 
15,643
 
   
 
47,762
 
   
 
44,547
 
Legal and professional services
   
 
5,639
 
   
 
9,278
 
   
 
17,883
 
   
 
23,195
 
Postage and supplies
   
 
6,377
 
   
 
7,154
 
   
 
20,461
 
   
 
20,526
 
Advertising
   
 
3,631
 
   
 
4,933
 
   
 
15,933
 
   
 
17,144
 
Merger related expense
   
 
—  
 
   
 
2,902
 
   
 
—  
 
   
 
6,173
 
Restructuring charges
   
 
2,691
 
   
 
—  
 
   
 
2,691
 
   
 
—  
 
Impairment losses on long-lived assets
   
 
3,977
 
   
 
—  
 
   
 
3,977
 
   
 
—  
 
Amortization of goodwill
   
 
—  
 
   
 
8,370
 
   
 
—  
 
   
 
23,151
 
Amortization of core deposit and other intangibles
   
 
3,336
 
   
 
3,526
 
   
 
10,008
 
   
 
9,345
 
Other
   
 
35,803
 
   
 
35,838
 
   
 
111,534
 
   
 
107,230
 
    
  
  
  
Total noninterest expense
   
 
219,158
 
   
 
214,582
 
   
 
640,120
 
   
 
622,047
 
    
  
  
  
Income from continuing operations before income taxes and minority interest
   
 
94,654
 
   
 
117,110
 
   
 
350,582
 
   
 
339,857
 
Income taxes
   
 
31,772
 
   
 
43,031
 
   
 
120,744
 
   
 
122,816
 
Minority interest
   
 
(2,486
)
   
 
(3,251
)
   
 
(3,211
)
   
 
(6,638
)
    
  
  
  
Income from continuing operations
   
 
65,368
 
   
 
77,330
 
   
 
233,049
 
   
 
223,679
 
    
  
  
  

ZIONS BANCORPORATION AND SUBSIDIARIES
Press Release—Page 13
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Unaudited)

 
    
Three Months Ended
September 30,
     
Nine Months Ended
September 30,
  
    
2002
     
2001
     
2002
     
2001
  
    
(In thousands, except per share amounts)
  
Discontinued operations (2):
                                    
Loss from operations of discontinued subsidiaries
   
 
(5,199
)
   
 
(6,357
)
   
 
(15,125
)
   
 
(6,903
)
Impairment losses
   
 
(28,691
)
   
 
—  
 
   
 
(28,691
)
   
 
—  
 
Income tax benefit
   
 
(7,968
)
   
 
(1,824
)
   
 
(11,919
)
   
 
(1,517
)
    
  
  
  
Loss from discontinued operations
   
 
(25,922
)
   
 
(4,533
)
   
 
(31,897
)
   
 
(5,386
)
    
  
  
  
Income before cumulative effect of change in accounting principle
   
 
39,446
 
   
 
72,797
 
   
 
201,152
 
   
 
218,293
 
Cumulative effect of change in accounting principle, net of tax (1)
   
 
—  
 
   
 
—  
 
   
 
(32,369
)
   
 
(7,159
)
    
  
  
  
Net income
   
$
39,446
 
   
$
72,797
 
   
$
168,783
 
   
$
211,134
 
    
  
  
  
Income before cumulative effect, as adjusted
   
$
39,446
 
   
$
81,549
 
   
$
201,152
 
   
$
242,795
 
    
  
  
  
Net income, as adjusted
   
$
39,446
 
   
$
81,549
 
   
$
168,783
 
   
$
235,636
 
    
  
  
  
Weighted average shares outstanding during the period:
                                    
Basic shares
   
 
91,499
 
   
 
92,306
 
   
 
91,775
 
   
 
90,921
 
Diluted shares
   
 
92,017
 
   
 
93,509
 
   
 
92,424
 
   
 
92,042
 
Net income per common share:
                                    
Basic:
                                    
Income from continuing operations
   
$
0.71
 
   
$
0.84
 
   
$
2.54
 
   
$
2.46
 
Loss from discontinued operations (2)
   
 
(0.28
)
   
 
(0.05
)
   
 
(0.35
)
   
 
(0.06
)
    
  
  
  
Income before cumulative effect of change in accounting principle
   
 
0.43
 
   
 
0.79
 
   
 
2.19
 
   
 
2.40
 
Add back—goodwill amortization net of income tax benefit
   
 
—  
 
   
 
0.09
 
   
 
—  
 
   
 
0.27
 
    
  
  
  
Income before cumulative effect of change in accounting principle, as adjusted
   
 
0.43
 
   
 
0.88
 
   
 
2.19
 
   
 
2.67
 
Cumulative effect of change in accounting principle (1)
   
 
—  
 
   
 
—  
 
   
 
(0.35
)
   
 
(0.08
)
    
  
  
  
Net income, as adjusted
   
$
0.43
 
   
$
0.88
 
   
$
1.84
 
   
$
2.59
 
    
  
  
  
Diluted:
                                    
Income from continuing operations
   
$
0.71
 
   
$
0.83
 
   
$
2.52
 
   
$
2.43
 
Loss from discontinued operations (2)
   
 
(0.28
)
   
 
(0.05
)
   
 
(0.34
)
   
 
(0.06
)
    
  
  
  
Income before cumulative effect of change in accounting principle
   
 
0.43
 
   
 
0.78
 
   
 
2.18
 
   
 
2.37
 
Add back—goodwill amortization net of income tax benefit
   
 
—  
 
   
 
0.09
 
   
 
—  
 
   
 
0.27
 
    
  
  
  
Income before cumulative effect of change in accounting principle, as adjusted
   
 
0.43
 
   
 
0.87
 
   
 
2.18
 
   
 
2.64
 
Cumulative effect of change in accounting principle (1)
   
 
—  
 
   
 
—  
 
   
 
(0.35
)
   
 
(0.08
)
    
  
  
  
Net income, as adjusted
   
$
0.43
 
   
$
0.87
 
   
$
1.83
 
   
$
2.56
 
    
  
  
  
(1)
 
For the nine months ended September 30, 2001, the cumulative effect adjustment relates to the adoption of Statement of Financial Accounting Standards ("SFAS") No. 133, net of income tax benefit of $4,521. For the nine months ended September 30, 2002, the cumulative effect adjustment relates to the impairment in carrying value of the Company's investment in certain of its e-commerce subsidiaries, measured as of January 1, 2002, net of income tax benefit of $2,676. This adjustment resulted from the completion of the required impairment tests of goodwill as provided under SFAS No. 142, which became effective for the Company beginning January 1, 2002.
(2)
 
During the three months ended September 30, 2002, the Company determined that its plan to discontinue the operations of the e-commerce subsidiaries discussed in Note (1) met the held for sale and discontinued operations criteria of SFAS No. 144, which became effective for the Company beginning January 1, 2002. Additional impairment losses for these subsidiaries were recorded in the third quarter and are included with discontinued operations.

ZIONS BANCORPORATION AND SUBSIDIARIES
Press Release—Page 14
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
 
    
Nine Months Ended September 30, 2002
  
           
Accumulated Other Comprehensive
                
           
Income (Loss)
                
    
Common Stock
     
Net Unrealized Gains (Losses) on Investments and Retained Interests
     
Net Unrealized Gains (Losses) on Derivative Instruments
     
Subtotal
     
Retained Earnings
     
Total Shareholders’ Equity
  
    
(In thousands)
  
Balance, January 1, 2002
   
$
1,111,214
 
   
$
31,774
 
   
$
28,177
 
   
$
59,951
 
   
$
1,109,704
 
   
$
2,280,869
 
Comprehensive income:
                                                      
Net income for the period
                                       
 
168,783
 
   
 
168,783
 
Other comprehensive income:
                                                      
Net realized and unrealized holding gains during the period, net of income tax expense of $22,355
            
 
36,089
 
            
 
36,089
 
                  
Reclassification for net realized gains recorded in operations, net of income tax expense of $1,306
            
 
(2,109
)
            
 
(2,109
)
                  
Change in net unrealized losses on derivative instruments, net of reclassification to operations of $27,907 and income tax benefit of $5,309
                     
 
(8,570
)
   
 
(8,570
)
                  
             
  
  
                 
Other comprehensive income (loss)
            
 
33,980
 
   
 
(8,570
)
   
 
25,410
 
            
 
25,410
 
                                                 
Total comprehensive income
                                                
 
194,193
 
Cash dividends—common, $.60 per share
                                       
 
(55,050
)
   
 
(55,050
)
Stock redeemed and retired
   
 
(83,452
)
                                       
 
(83,452
)
Stock options exercised, net of shares tendered and retired
   
 
21,041
 
                                       
 
21,041
 
    
  
  
  
  
  
Balance, September 30, 2002
   
$
1,048,803
 
   
$
65,754
 
   
$
19,607
 
   
$
85,361
 
   
$
1,223,437
 
   
$
2,357,601
 
    
  
  
  
  
  
 
    
Nine Months Ended September 30, 2001
  
           
Accumulated Other Comprehensive
                
           
Income (Loss)
                
    
Common
Stock
     
Net Unrealized
Gains (Losses)
on Investments
and Retained
Interests
     
Net
Unrealized
Gains on Derivative
Instruments
   
Subtotal
     
Retained
Earnings
     
Total
Shareholders'
Equity
  
    
(In thousands)
  
Balance, January 1, 2001
   
$
907,604
 
   
$
(3,644
)
          
$
(3,644
)
   
$
874,884
 
   
$
1,778,844
 
Comprehensive income:
                                                    
Net income for the period
                                     
 
211,134
 
   
 
211,134
 
Other comprehensive income:
                                                    
Net realized and unrealized holding gains during the period, net of income tax expense of $26,626
            
 
42,985
 
          
 
42,985
 
                  
Reclassification for net realized gains recorded in operations, net of income tax expense of $6,628
            
 
(10,702
)
          
 
(10,702
)
                  
Change in net unrealized gains on derivative instruments, net of reclassification to operations of $12,856 and income tax expense of $7,095
                     
$
11,454
   
 
11,454
 
                  
Cumulative effect of change in accounting principle, adoption of FASB Statement No. 133, net of income tax expense of $21,245
            
 
13,259
 
   
 
21,266
   
 
34,525
 
                  
             
  
  
                 
Other comprehensive income
            
 
45,542
 
   
 
32,720
   
 
78,262
 
            
 
78,262
 
                                               
Total comprehensive income
                                              
 
289,396
 
Cash dividends—common, $.60 per share
                                     
 
(55,446
)
   
 
(55,446
)
Issuance of common shares for acquisitions
   
 
206,663
 
                            
 
25,699
 
   
 
232,362
 
Stock redeemed and retired
   
 
(28,987
)
                                     
 
(28,987
)
Stock options exercised, net of shares tendered and retired
   
 
18,998
 
                                     
 
18,998
 
    
  
  
  
  
  
Balance, September 30, 2001
   
$
1,104,278
 
   
$
41,898
 
   
$
32,720
   
$
74,618
 
   
$
1,056,271
 
   
$
2,235,167
 
    
  
  
  
  
  
Total comprehensive income for the three months ended September 30, 2002 and 2001 was $61,824 and $72,619 respectively.

ZIONS BANCORPORATION AND SUBSIDIARIES
Press Release—Page 15
 
Sold Loans Being Serviced*
(Unaudited)

 
      
Three Months
Ended
September 30,
2002
     
Three Months
Ended
June 30,
2002
     
Three Months
Ended
March 31,
2002
     
Three Months
Ended
December 31,
2001
       
Three Months
Ended
September 30,
2001
  
      
(In thousands)
  
Balance at beginning of period
     
$
2,543,887
 
   
$
2,526,076
 
   
$
2,648,270
 
   
$
2,256,379
 
     
$
1,794,063
 
Add:
                                                 
Sold loans of company acquired
     
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
     
 
154,150
 
New loans sold
     
 
742,419
 
   
 
284,888
 
   
 
178,705
 
   
 
673,924
 
     
 
556,785
 
Deduct:
                                                 
Payments and other reductions
     
 
(273,526
)
   
 
(267,077
)
   
 
(300,899
)
   
 
(282,033
)
     
 
(248,619
)
      
  
  
  
    
Balance at end of period
     
$
3,012,780
 
   
$
2,543,887
 
   
$
2,526,076
 
   
$
2,648,270
 
     
$
2,256,379
 
      
  
  
  
    
*  Amount represents the outstanding balance of loans and receivables sold and being serviced by the company, excluding conforming first mortgage residential real estate loans.
 
 
Nonperforming Assets
(Unaudited)
 
      
September 30, 2002
     
June 30, 2002
     
March 31, 2002
     
December 31, 2001
       
September 30, 2001
  
      
(In thousands)
  
Nonaccrual loans
     
$
117,211
 
   
$
100,344
 
   
$
116,246
 
   
$
108,637
 
     
$
92,006
 
Restructured loans
     
 
2,133
 
   
 
1,355
 
   
 
1,418
 
   
 
1,433
 
     
 
1,523
 
Other real estate owned and other nonperforming assets
     
 
12,625
 
   
 
13,814
 
   
 
13,490
 
   
 
10,302
 
     
 
15,073
 
      
  
  
  
    
Total
     
$
131,969
 
   
$
115,513
 
   
$
131,154
 
   
$
120,372
 
     
$
108,602
 
      
  
  
  
    
% of net loans and leases*, other real estate owned and other nonperforming assets
     
 
0.72
%
   
 
0.63
%
   
 
0.73
%
   
 
0.69
%
     
 
0.65
%
Accruing loans past due 90 days or more
     
$
35,443
 
   
$
32,332
 
   
$
37,371
 
   
$
46,201
 
     
$
46,780
 
      
  
  
  
    
% of net loans and leases*
     
 
0.19
%
   
 
0.18
%
   
 
0.21
%
   
 
0.27
%
     
 
0.28
%
*  Includes loans held for sale.
 
 
Allowance for Loan Losses
(Unaudited)
                                                 
      
Three Months
Ended
September 30,
2002
     
Three Months
Ended
June 30,
2002
     
Three Months
Ended
March 31,
2002
     
Three Months
Ended
December 31,
2001
       
Three Months
Ended
September 30,
2001
  
      
(In thousands)
  
Balance at beginning of period
     
$
264,432
 
   
$
264,107
 
   
$
260,483
 
   
$
245,862
 
     
$
229,865
 
Allowance for loan losses of companies acquired
     
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
6,106
 
     
 
—  
 
Add:
                                                 
Provision for losses
     
 
22,309
 
   
 
15,705
 
   
 
18,090
 
   
 
26,714
 
     
 
21,470
 
Deduct:
                                                 
Loan and lease charge-offs
     
 
(25,240
)
   
 
(18,734
)
   
 
(18,788
)
   
 
(22,533
)
     
 
(11,062
)
Recoveries
     
 
3,905
 
   
 
3,354
 
   
 
4,322
 
   
 
4,334
 
     
 
5,589
 
      
  
  
  
    
Net loan and lease charge-offs
     
 
(21,335
)
   
 
(15,380
)
   
 
(14,466
)
   
 
(18,199
)
     
 
(5,473
)
      
  
  
  
    
Balance at end of period
     
$
265,406
 
   
$
264,432
 
   
$
264,107
 
   
$
260,483
 
     
$
245,862
 
      
  
  
  
    
Ratio of allowance for loan losses to net loans and leases outstanding at period end
     
 
1.45
%
   
 
1.43
%
   
 
1.48
%
   
 
1.50
%
     
 
1.47
%
Ratio of allowance for loan losses to nonperforming loans at period end
     
 
222.39
%
   
 
260.01
%
   
 
224.46
%
   
 
236.65
%
     
 
262.87
%

ZIONS BANCORPORATION AND SUBSIDIARIES
Press Release—Page 16
LOAN BALANCES BY PORTFOLIO TYPE
(Unaudited)

 
    
September 30, 2002
   
June 30,
2002
    
(In millions)
Types
              
Loans held for sale
   
$
250
   
$
165
Commercial:
              
Commercial and industrial
   
 
4,010
   
 
3,990
Leasing
   
 
386
   
 
409
Owner occupied
   
 
2,857
   
 
3,030
    
  
Total commercial
   
 
7,253
   
 
7,429
Commercial real estate:
              
Construction
   
 
3,080
   
 
2,968
Term
   
 
3,083
   
 
3,071
    
  
Total commercial real estate
   
 
6,163
   
 
6,039
Consumer:
              
Home equity credit line
   
 
679
   
 
582
1-4 family residential
   
 
3,222
   
 
3,380
Bankcard and other revolving plans
   
 
123
   
 
121
Other
   
 
631
   
 
743
    
  
Total consumer
   
 
4,655
   
 
4,826
Foreign loans
   
 
25
   
 
25
Other receivables
   
 
70
   
 
68
    
  
Total loans
   
$
18,416
   
$
18,552
    
  

ZIONS BANCORPORATION AND SUBSIDIARIES
Press Release—Page 17
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)

 
    
Three Months Ended
September 30, 2002
     
Three Months Ended
September 30, 2001
  
    
Average
Balance
     
Amount of
Interest (1)
   
Average
Rate
     
Average
Balance
     
Amount of
Interest (1)
   
Average
Rate
  
    
(In thousands)
  
ASSETS
                                              
Money market investments
   
$
1,105,924
 
   
$
4,502
   
1.62
%
   
$
951,542
 
   
$
8,400
   
3.50
%
Securities:
                                              
Held to maturity
   
 
—  
 
   
 
—  
          
 
51,934
 
   
 
744
   
5.68
%
Available for sale
   
 
3,137,559
 
   
 
42,155
   
5.33
%
   
 
3,303,907
 
   
 
49,788
   
5.98
%
Trading account
   
 
650,599
 
   
 
5,766
   
3.52
%
   
 
648,805
 
   
 
7,026
   
4.30
%
    
  
         
  
      
Total securities
   
 
3,788,158
 
   
 
47,921
   
5.02
%
   
 
4,004,646
 
   
 
57,558
   
5.70
%
    
  
         
  
      
Loans:
                                              
Loans held for sale
   
 
185,021
 
   
 
1,802
   
3.86
%
   
 
223,267
 
   
 
2,905
   
5.16
%
Net loans and leases (2)
   
 
18,257,747
 
   
 
317,743
   
6.90
%
   
 
16,321,850
 
   
 
337,476
   
8.20
%
    
  
         
  
      
Total loans
   
 
18,442,768
 
   
 
319,545
   
6.87
%
   
 
16,545,117
 
   
 
340,381
   
8.16
%
    
  
         
  
      
Total interest-earning assets
   
 
23,336,850
 
   
 
371,968
   
6.32
%
   
 
21,501,305
 
   
 
406,339
   
7.50
%
    
  
                  
      
Cash and due from banks
   
 
897,370
 
                 
 
844,534
 
              
Allowance for loan losses
   
 
(265,656
)
                 
 
(235,062
)
              
Goodwill
   
 
772,439
 
                 
 
753,783
 
              
Core deposit and other intangibles
   
 
98,032
 
                 
 
116,178
 
              
Other assets
   
 
1,590,019
 
                 
 
1,537,295
 
              
    
                
             
Total assets
   
$
26,429,054
 
                 
$
24,518,033
 
              
    
                
             
LIABILITIES
                                              
Interest-bearing deposits:
                                              
Savings and NOW deposits
   
$
2,629,700
 
   
 
7,140
   
1.08
%
   
$
2,121,213
 
   
 
8,022
   
1.50
%
Money market super NOW deposits
   
 
8,228,171
 
   
 
35,808
   
1.73
%
   
 
7,209,070
 
   
 
51,820
   
2.85
%
Time under $100,000
   
 
1,879,858
 
   
 
14,790
   
3.12
%
   
 
2,165,461
 
   
 
26,740
   
4.90
%
Time $100,000 and over
   
 
1,453,814
 
   
 
12,200
   
3.33
%
   
 
1,564,209
 
   
 
19,142
   
4.86
%
Foreign deposits
   
 
103,723
 
   
 
363
   
1.39
%
   
 
101,392
 
   
 
727
   
2.84
%
    
  
         
  
      
Total interest-bearing deposits
   
 
14,295,266
 
   
 
70,301
   
1.95
%
   
 
13,161,345
 
   
 
106,451
   
3.21
%
    
  
         
  
      
Borrowed funds:
                                              
Securities sold, not yet purchased
   
 
389,643
 
   
 
4,082
   
4.16
%
   
 
317,852
 
   
 
3,587
   
4.48
%
Federal funds purchased and security repurchase agreements
   
 
2,166,959
 
   
 
8,461
   
1.55
%
   
 
2,770,058
 
   
 
22,898
   
3.28
%
Commercial paper
   
 
360,023
 
   
 
1,903
   
2.10
%
   
 
352,106
 
   
 
3,511
   
3.96
%
FHLB advances and other borrowings:
                                              
One year or less
   
 
751,162
 
   
 
3,701
   
1.95
%
   
 
320,339
 
   
 
3,270
   
4.05
%
Over one year
   
 
239,955
 
   
 
3,126
   
5.17
%
   
 
231,360
 
   
 
2,935
   
5.03
%
Long-term debt
   
 
895,611
 
   
 
13,734
   
6.08
%
   
 
623,715
 
   
 
11,473
   
7.30
%
    
  
         
  
      
Total borrowed funds
   
 
4,803,353
 
   
 
35,007
   
2.89
%
   
 
4,615,430
 
   
 
47,674
   
4.10
%
    
  
         
  
      
Total interest-bearing liabilities
   
 
19,098,619
 
   
 
105,308
   
2.19
%
   
 
17,776,775
 
   
 
154,125
   
3.44
%
    
  
         
  
      
Noninterest-bearing deposits
   
 
4,556,034
 
                 
 
4,021,214
 
              
Other liabilities
   
 
347,296
 
                 
 
470,030
 
              
    
                
             
Total liabilities
   
 
24,001,949
 
                 
 
22,268,019
 
              
Minority interest
   
 
22,234
 
                 
 
20,688
 
              
Total shareholders’ equity
   
 
2,404,871
 
                 
 
2,229,326
 
              
    
                
             
Total liabilities and shareholders' equity
   
$
26,429,054
 
                 
$
24,518,033
 
              
    
                
             
Spread on average interest-bearing funds
                   
4.13
%
                   
4.06
%
Net interest income and net yield on interest-earning assets
            
$
266,660
   
4.53
%
            
$
252,214
   
4.65
%
             
                  
      
(1)
 
Taxable-equivalent rates used where applicable.
(2)
 
Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.

ZIONS BANCORPORATION AND SUBSIDIARIES
Press Release—Page 18
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)

 
    
Nine Months Ended
September 30, 2002
     
Nine Months Ended
September 30, 2001
  
    
Average Balance
     
Amount of Interest (1)
   
Average Rate
     
Average Balance
     
Amount of Interest (1)
   
Average Rate
  
    
(In thousands)
  
ASSETS
                                              
Money market investments
   
$
1,021,794
 
   
$
12,403
   
1.62
%
   
$
935,236
 
   
$
30,065
   
4.30
%
Securities:
                                              
Held to maturity
   
 
57,351
 
   
 
2,292
   
5.34
%
   
 
51,758
 
   
 
2,525
   
6.52
%
Available for sale
   
 
3,233,715
 
   
 
130,294
   
5.39
%
   
 
3,226,011
 
   
 
158,319
   
6.56
%
Trading account
   
 
630,974
 
   
 
16,679
   
3.53
%
   
 
649,899
 
   
 
25,221
   
5.19
%
    
  
         
  
      
Total securities
   
 
3,922,040
 
   
 
149,265
   
5.09
%
   
 
3,927,668
 
   
 
186,065
   
6.33
%
    
  
         
  
      
Loans:
                                              
Loans held for sale
   
 
191,563
 
   
 
6,729
   
4.70
%
   
 
203,235
 
   
 
9,147
   
6.02
%
Net loans and leases (2)
   
 
17,833,391
 
   
 
947,582
   
7.10
%
   
 
15,523,732
 
   
 
1,005,389
   
8.66
%
    
  
         
  
      
Total loans
   
 
18,024,954
 
   
 
954,311
   
7.08
%
   
 
15,726,967
 
   
 
1,014,536
   
8.62
%
    
  
         
  
      
Total interest-earning assets
   
 
22,968,788
 
   
 
1,115,979
   
6.50
%
   
 
20,589,871
 
   
 
1,230,666
   
7.99
%
             
                  
      
Cash and due from banks
   
 
930,865
 
                 
 
822,712
 
              
Allowance for loan losses
   
 
(265,465
)
                 
 
(221,474
)
              
Goodwill
   
 
747,888
 
                 
 
673,389
 
              
Core deposit and other intangibles
   
 
102,559
 
                 
 
96,726
 
              
Other assets
   
 
1,597,102
 
                 
 
1,498,167
 
              
    
                
             
Total assets
   
$
26,081,737
 
                 
$
23,459,391
 
              
    
                
             
LIABILITIES
                                              
Interest-bearing deposits:
                                              
Savings and NOW deposits
   
$
2,504,196
 
   
 
20,177
   
1.08
%
   
$
2,001,993
 
   
 
25,393
   
1.70
%
Money market super NOW deposits
   
 
7,793,899
 
   
 
104,254
   
1.79
%
   
 
6,920,012
 
   
 
180,372
   
3.48
%
Time under $100,000
   
 
1,939,379
 
   
 
49,051
   
3.38
%
   
 
2,052,569
 
   
 
78,285
   
5.10
%
Time $100,000 and over
   
 
1,509,383
 
   
 
39,403
   
3.49
%
   
 
1,552,073
 
   
 
65,164
   
5.61
%
Foreign deposits
   
 
103,044
 
   
 
1,151
   
1.49
%
   
 
107,172
 
   
 
2,573
   
3.21
%
    
  
         
  
      
Total interest-bearing deposits
   
 
13,849,901
 
   
 
214,036
   
2.07
%
   
 
12,633,819
 
   
 
351,787
   
3.72
%
    
  
         
  
      
Borrowed funds:
                                              
Securities sold, not yet purchased
   
 
386,686
 
   
 
12,087
   
4.18
%
   
 
344,302
 
   
 
13,434
   
5.22
%
Federal funds purchased and security
                                              
repurchase agreements
   
 
2,646,221
 
   
 
32,227
   
1.63
%
   
 
2,684,572
 
   
 
82,835
   
4.13
%
Commercial paper
   
 
362,870
 
   
 
5,821
   
2.14
%
   
 
323,244
 
   
 
11,853
   
4.90
%
FHLB advances and other borrowings:
                                              
One year or less
   
 
648,690
 
   
 
9,267
   
1.91
%
   
 
474,405
 
   
 
19,909
   
5.61
%
Over one year
   
 
240,282
 
   
 
9,316
   
5.18
%
   
 
178,118
 
   
 
7,171
   
5.38
%
Long-term debt
   
 
815,816
 
   
 
40,978
   
6.72
%
   
 
536,181
 
   
 
30,603
   
7.63
%
    
  
         
  
      
Total borrowed funds
   
 
5,100,565
 
   
 
109,696
   
2.88
%
   
 
4,540,822
 
   
 
165,805
   
4.88
%
    
  
         
  
      
Total interest-bearing liabilities
   
 
18,950,466
 
   
 
323,732
   
2.28
%
   
 
17,174,641
 
   
 
517,592
   
4.03
%
             
                  
      
Noninterest-bearing deposits
   
 
4,402,477
 
                 
 
3,792,960
 
              
Other liabilities
   
 
376,712
 
                 
 
366,832
 
              
    
                
             
Total liabilities
   
 
23,729,655
 
                 
 
21,334,433
 
              
Minority interest
   
 
20,725
 
                 
 
34,278
 
              
Total shareholders’ equity
   
 
2,331,357
 
                 
 
2,090,680
 
              
    
                
             
Total liabilities and shareholders’ equity
   
$
26,081,737
 
                 
$
23,459,391
 
              
    
                
             
Spread on average interest-bearing funds
                   
4.22
%
                   
3.96
%
Net interest income and net yield on interest-earning assets
            
$
792,247
   
4.61
%
            
$
713,074
   
4.63
%
             
                  
      
(1)
 
Taxable-equivalent rates used where applicable.
(2)
 
Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.

ZIONS BANCORPORATION AND SUBSIDIARIES
Page 19
CONSOLIDATED STATEMENTS OF INCOME BY QUARTER
(Unaudited)

 
    
Three Months Ended
  
    
September 30, 2002
     
June 30, 2002
     
March 31, 2002
     
December 31, 2001
     
September 30, 2001
  
    
(In thousands, except per share amounts)
(Adjusted)(3)
  
Interest income:
                                             
Interest and fees on loans
   
$
310,914
 
   
$
310,002
 
   
$
305,705
 
   
$
309,675
 
   
$
329,761
 
Interest on loans held for sale
   
 
1,802
 
   
 
2,191
 
   
 
2,736
 
   
 
3,933
 
   
 
2,905
 
Lease financing
   
 
5,146
 
   
 
5,134
 
   
 
5,668
 
   
 
5,970
 
   
 
5,918
 
Interest on money market investments
   
 
4,507
 
   
 
4,217
 
   
 
3,679
 
   
 
4,836
 
   
 
8,382
 
Interest on securities:
                                             
Held to maturity—taxable
   
 
—  
 
   
 
1,494
 
   
 
798
 
   
 
836
 
   
 
744
 
Available for sale—taxable
   
 
31,669
 
   
 
33,500
 
   
 
34,628
 
   
 
38,997
 
   
 
40,347
 
Available for sale—nontaxable
   
 
6,816
 
   
 
6,665
 
   
 
6,342
 
   
 
6,453
 
   
 
6,137
 
Trading account
   
 
5,766
 
   
 
5,479
 
   
 
5,434
 
   
 
5,682
 
   
 
7,026
 
    
  
  
  
  
Total interest income
   
 
366,620
 
   
 
368,682
 
   
 
364,990
 
   
 
376,382
 
   
 
401,220
 
    
  
  
  
  
Interest expense:
                                             
Interest on savings and money market deposits
   
 
42,948
 
   
 
43,028
 
   
 
38,455
 
   
 
45,805
 
   
 
59,842
 
Interest on time and foreign deposits
   
 
27,353
 
   
 
28,862
 
   
 
33,390
 
   
 
41,690
 
   
 
46,609
 
Interest on borrowed funds
   
 
35,013
 
   
 
37,748
 
   
 
36,935
 
   
 
37,092
 
   
 
47,651
 
    
  
  
  
  
Total interest expense
   
 
105,314
 
   
 
109,638
 
   
 
108,780
 
   
 
124,587
 
   
 
154,102
 
    
  
  
  
  
Net interest income
   
 
261,306
 
   
 
259,044
 
   
 
256,210
 
   
 
251,795
 
   
 
247,118
 
Provision for loan losses
   
 
22,309
 
   
 
15,705
 
   
 
18,090
 
   
 
26,714
 
   
 
21,470
 
    
  
  
  
  
Net interest income after provision for loan losses
   
 
238,997
 
   
 
243,339
 
   
 
238,120
 
   
 
225,081
 
   
 
225,648
 
    
  
  
  
  
Noninterest income:
                                             
Service charges on deposit accounts
   
 
30,368
 
   
 
29,366
 
   
 
28,420
 
   
 
27,812
 
   
 
25,762
 
Loan sales and servicing income
   
 
19,792
 
   
 
19,348
 
   
 
6,926
 
   
 
31,599
 
   
 
23,383
 
Other service charges, commissions and fees
   
 
20,469
 
   
 
20,723
 
   
 
19,637
 
   
 
18,971
 
   
 
18,699
 
Trust income
   
 
4,447
 
   
 
5,165
 
   
 
4,413
 
   
 
4,710
 
   
 
4,158
 
Income from securities conduit
   
 
5,188
 
   
 
4,523
 
   
 
4,139
 
   
 
3,672
 
   
 
4,542
 
Market making, trading and nonhedge derivative income
   
 
7,427
 
   
 
8,466
 
   
 
15,435
 
   
 
5,335
 
   
 
7,892
 
Equity securities gains (losses), net
   
 
(26,452
)
   
 
563
 
   
 
621
 
   
 
(2,920
)
   
 
10,267
 
Fixed income securities gains (losses), net
   
 
327
 
   
 
17
 
   
 
43
 
   
 
159
 
   
 
158
 
Other
   
 
13,249
 
   
 
13,434
 
   
 
14,192
 
   
 
12,438
 
   
 
11,183
 
    
  
  
  
  
Total noninterest income
   
 
74,815
 
   
 
101,605
 
   
 
93,826
 
   
 
101,776
 
   
 
106,044
 
    
  
  
  
  
Noninterest expense:
                                             
Salaries and employee benefits
   
 
124,978
 
   
 
119,845
 
   
 
113,885
 
   
 
108,725
 
   
 
110,735
 
Occupancy, net
   
 
17,117
 
   
 
17,397
 
   
 
16,649
 
   
 
17,076
 
   
 
16,203
 
Furniture and equipment
   
 
15,609
 
   
 
15,925
 
   
 
16,228
 
   
 
16,283
 
   
 
15,643
 
Legal and professional services
   
 
5,639
 
   
 
6,642
 
   
 
5,602
 
   
 
7,337
 
   
 
9,278
 
Postage and supplies
   
 
6,377
 
   
 
6,920
 
   
 
7,164
 
   
 
7,227
 
   
 
7,154
 
Advertising
   
 
3,631
 
   
 
6,639
 
   
 
5,663
 
   
 
5,200
 
   
 
4,933
 
Merger-related expense
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
1,175
 
   
 
2,902
 
Restructuring charges
   
 
2,691
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
Impairment losses on long-lived assets
   
 
3,977
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
Amortization of goodwill
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
8,375
 
   
 
8,370
 
Amortization of core deposit and other intangibles
   
 
3,336
 
   
 
3,337
 
   
 
3,335
 
   
 
3,425
 
   
 
3,526
 
Other
   
 
35,803
 
   
 
39,003
 
   
 
36,728
 
   
 
39,223
 
   
 
35,838
 
    
  
  
  
  
Total noninterest expense
   
 
219,158
 
   
 
215,708
 
   
 
205,254
 
   
 
214,046
 
   
 
214,582
 
    
  
  
  
  
Income from continuing operations before income taxes and minority interest
   
 
94,654
 
   
 
129,236
 
   
 
126,692
 
   
 
112,811
 
   
 
117,110
 
Income taxes
   
 
31,772
 
   
 
44,947
 
   
 
44,025
 
   
 
39,051
 
   
 
43,031
 
Minority interest
   
 
(2,486
)
   
 
(575
)
   
 
(150
)
   
 
(1,160
)
   
 
(3,251
)
    
  
  
  
  
Income from continuing operations
   
 
65,368
 
   
 
84,864
 
   
 
82,817
 
   
 
74,920
 
   
 
77,330
 
    
  
  
  
  

ZIONS BANCORPORATION AND SUBSIDIARIES
Page 20
CONSOLIDATED STATEMENTS OF INCOME
BY QUARTER (Continued)
(Unaudited)

 
    
Three Months Ended
  
    
September 30,
2002
     
June 30,
2002
     
March 31,
2002
     
December 31,
2001
     
September 30,
2001
  
    
(In thousands, except per share amounts)
(Adjusted)(3)
  
Discontinued operations (2):
                                             
Loss from operations of discontinued subsidiaries
   
$
(5,199
)
   
$
(4,750
)
   
$
(5,176
)
   
$
(5,584
)
   
$
(6,357
)
Impairment losses
   
 
(28,691
)
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
Income tax benefit
   
 
(7,968
)
   
 
(1,961
)
   
 
(1,990
)
   
 
(2,550
)
   
 
(1,824
)
    
  
  
  
  
Loss from discontinued operations
   
 
(25,922
)
   
 
(2,789
)
   
 
(3,186
)
   
 
(3,034
)
   
 
(4,533
)
    
  
  
  
  
Income before cumulative effect of change in accounting principle
   
 
39,446
 
   
 
82,075
 
   
 
79,631
 
   
 
71,886
 
   
 
72,797
 
Cumulative effect of change in accounting principle, net of tax (1)
   
 
—  
 
   
 
—  
 
   
 
(32,369
)
   
 
—  
 
   
 
—  
 
    
  
  
  
  
Net income
   
$
39,446
 
   
$
82,075
 
   
$
47,262
 
   
$
71,886
 
   
$
72,797
 
    
  
  
  
  
Income before cumulative effect, as adjusted
   
$
39,446
 
   
$
82,075
 
   
$
79,631
 
   
$
80,440
 
   
$
81,549
 
    
  
  
  
  
Net income, as adjusted
   
$
39,446
 
   
$
82,075
 
   
$
47,262
 
   
$
80,440
 
   
$
81,549
 
    
  
  
  
  
Weighted average shares outstanding during the period:
                                             
Basic shares
   
 
91,499
 
   
 
91,779
 
   
 
92,055
 
   
 
92,036
 
   
 
92,306
 
Diluted shares
   
 
92,017
 
   
 
92,629
 
   
 
92,814
 
   
 
92,685
 
   
 
93,509
 
Net income per common share:
                                             
Basic:
                                             
Income from continuing operations
   
$
0.71
 
   
$
0.92
 
   
$
0.90
 
   
$
0.81
 
   
$
0.84
 
Loss from discontinued operations (2)
   
 
(0.28
)
   
 
(0.03
)
   
 
(0.03
)
   
 
(0.03
)
   
 
(0.05
)
    
  
  
  
  
Income before cumulative effect of change in accounting principle
   
 
0.43
 
   
 
0.89
 
   
 
0.87
 
   
 
0.78
 
   
 
0.79
 
Add back—goodwill amortization net of income tax benefit
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
0.09
 
   
 
0.09
 
    
  
  
  
  
Income before cumulative effect of change in accounting principle, as adjusted
   
 
0.43
 
   
 
0.89
 
   
 
0.87
 
   
 
0.87
 
   
 
0.88
 
Cumulative effect of change in accounting principle (1)
   
 
—  
 
   
 
—  
 
   
 
(0.35
)
   
 
—  
 
   
 
—  
 
    
  
  
  
  
Net income, as adjusted
   
$
0.43
 
   
$
0.89
 
   
$
0.52
 
   
$
0.87
 
   
$
0.88
 
    
  
  
  
  
Diluted:
                                             
Income from continuing operations
   
$
0.71
 
   
$
0.92
 
   
$
0.89
 
   
$
0.81
 
   
$
0.83
 
Loss from discontinued operations (2)
   
 
(0.28
)
   
 
(0.03
)
   
 
(0.03
)
   
 
(0.03
)
   
 
(0.05
)
    
  
  
  
  
Income before cumulative effect of change in accounting principle
   
 
0.43
 
   
 
0.89
 
   
 
0.86
 
   
 
0.78
 
   
 
0.78
 
Add back—goodwill amortization net of income tax benefit
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
0.09
 
   
 
0.09
 
    
  
  
  
  
Income before cumulative effect of change in accounting principle, as adjusted
   
 
0.43
 
   
 
0.89
 
   
 
0.86
 
   
 
0.87
 
   
 
0.87
 
Cumulative effect of change in accounting principle (1)
   
 
—  
 
   
 
—  
 
   
 
(0.35
)
   
 
—  
 
   
 
—  
 
    
  
  
  
  
Net income, as adjusted
   
$
0.43
 
   
$
0.89
 
   
$
0.51
 
   
$
0.87
 
   
$
0.87
 
    
  
  
  
  
(1)
 
For the nine months ended September 30, 2001, the cumulative effect adjustment relates to the adoption of Statement of Financial Accounting Standards ("SFAS") No. 133, net of income tax benefit of $4,521. For the nine months ended September 30, 2002, the cumulative effect adjustment relates to the impairment in carrying value of the Company's investment in certain of its e-commerce subsidiaries, measured as of January 1, 2002, net of income tax benefit of $2,676. This adjustment resulted from the completion of the required impairment tests of goodwill as provided under SFAS No. 142, which became effective for the Company beginning January 1, 2002.
(2)
 
During the three months ended September 30, 2002, the Company determined that its plan to discontinue the operations of the e-commerce subsidiaries discussed in Note (1) met the held for sale and discontinued operations criteria of SFAS No. 144, which became effective for the Company beginning January 1, 2002. Additional impairment losses for these subsidiaries were recorded in the third quarter and are included with discontinued operations.
(3)
 
Adjusted according to SFAS No. 142 for the impairment to goodwill and reflected as a cumulative effect adjustment, net of income tax benefit.
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