EX-99.1 2 dex991.htm PRESS RELEASE Press Release

EXHIBIT 99.1

 

LOGO

 

***FOR IMMEDIATE RELEASE***

 

For: ZIONS BANCORPORATION    Contact: Clark Hinckley
One South Main, 15th Floor    Tel: (801) 524-4787
Salt Lake City, Utah    April 19, 2007
Harris H. Simmons     
Chairman/Chief Executive Officer     

 

ZIONS BANCORPORATION REPORTS EARNINGS OF $1.36 PER

DILUTED COMMON SHARE FOR FIRST QUARTER 2007

 

SALT LAKE CITY, April 19, 2007 – Zions Bancorporation (Nasdaq: ZION) (“Zions” or “the Company”) today reported first quarter net earnings applicable to common shareholders of $149.7 million, or $1.36 per diluted common share. This represents an increase of 8.7% and 6.3% over the $137.6 million, or $1.28 per diluted common share, for the first quarter of 2006. The return on average common equity was 12.25% compared to 12.08% for the fourth quarter of 2006 and 12.92% for the first quarter of 2006.

 

The Company completed its acquisition of The Stockmen’s Bancorp, Inc. effective January 17, 2007. Certain comparisons to 2006 periods reflect the impact of this acquisition.

 

First Quarter 2007 Key Performance Highlights

 

  •  

Loan growth of $1.3 billion ($547 million excluding Stockmen’s).

 

  •  

Core deposits increased $559 million (decreased $365 million excluding Stockmen’s).

 

  •  

Net interest margin of 4.51%, down nine basis points from fourth quarter 2006.

 

  •  

Continued strong credit quality.

 

  •  

Efficiency ratio of 57.8%.

 

  •  

Net earnings reduced $0.03 per share from the surrender of certain bank-owned life insurance.

 

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ZIONS BANCORPORATION

Press Release – Page 2

April 19, 2007

 

“In January, we closed on the acquisition of The Stockmen’s Bancorp and successfully converted Stockmen’s systems in February,” said Harris H. Simmons, chairman and chief executive officer. “We welcome the wonderful clients and employees of Stockmen’s into National Bank of Arizona.”

 

Loan Growth

 

On-balance-sheet net loans and leases were $35.9 billion at March 31, 2007, an increase of approximately $1.3 billion or 14.7% annualized from $34.7 billion at December 31, 2006, and an increase of approximately $4.8 billion or 15.4% from $31.1 billion at March 31, 2006. Excluding $730 million of loans acquired from Stockmen’s, on-balance-sheet net loans and leases increased approximately $547 million or 6.3% annualized during the quarter. Loan growth was concentrated primarily in the commercial and commercial real estate categories principally at Zions Bank and Amegy Bank of Texas.

 

Deposit Growth

 

Total deposits at March 31, 2007 increased $1.3 billion to $36.3 billion, an annualized increase of 15.4%, from $35.0 billion at December 31, 2006, and increased $3.5 billion or 10.5% from $32.9 billion at March 31, 2006. Excluding $1.1 billion acquired from Stockmen’s, total deposits increased $249 million or 2.8% annualized during the quarter.

 

Core deposits increased $559 million or 7.3% annualized during the quarter to $31.2 billion compared to $30.7 billion at December 31, 2006, and increased $1.1 billion or 3.5% compared to $30.2 billion at March 31, 2006. Excluding $924 million acquired from Stockmen’s, core deposits decreased $365 million during the quarter. Noninterest-bearing demand deposits decreased $249 million to $9.8 billion at March 31, 2007 compared to $10.0 billion at December 31, 2006. Excluding $258 million acquired from Stockmen’s, noninterest-bearing demand deposits decreased approximately $507 million.

 

Net Interest Income

 

Net interest income for the first quarter of 2007 decreased $2.0 million or 1.7% annualized to $457.1 million compared to $459.0 million for the fourth quarter of 2006, and increased $34.2 million or 8.1%

 

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ZIONS BANCORPORATION

Press Release – Page 3

April 19, 2007

 

compared to $422.8 million for the first quarter of 2006. Taxable-equivalent net interest income for the first quarter of 2007 was $463.7 million compared to $465.3 million for the fourth quarter of 2006 and $428.8 million for the first quarter of 2006. The net interest margin was 4.51% for the first quarter of 2007 compared to 4.60% for the fourth quarter of 2006 and 4.69% for the first quarter of 2006. The margin compression for the quarter resulted from competitive pricing pressures, a continued shift in the interest-bearing deposit mix to more expensive products, and the decline in noninterest-bearing demand deposits, which necessitated funding virtually the entire growth in earning assets with higher cost interest-bearing liabilities.

 

Noninterest Income

 

Noninterest income for the first quarter of 2007 was $145.4 million compared to $139.9 million for the fourth quarter of 2006 and $128.5 million for the first quarter of 2006. Loan sales and servicing income for the first quarter included a pretax impairment charge of $4.2 million on retained interests from certain previous small business loan securitizations due to accelerated prepayment speeds. A pretax impairment charge of $1.9 million for the same reason was included in the fourth quarter of 2006. Other noninterest income included a pretax gain of approximately $3.2 million from the previously announced sale of the Company’s Grant Hatch insurance agency and certain other insurance assets.

 

Noninterest Expense

 

Noninterest expense for the first quarter of 2007 was $352.0 million compared to $342.9 million for the fourth quarter of 2006 and $324.5 million for the first quarter of 2006. The $16.0 million increase during the quarter in salaries and employee benefits primarily included $5.9 million from increased payroll taxes, $3.3 million from the Stockmen’s acquisition, and $5.0 million from the impact of favorable employee benefits and bonus adjustments recorded and discussed in the previous quarter.

 

The efficiency ratio for the first quarter of 2007 was 57.8% compared to 56.7% for the fourth quarter of 2006 and 58.2% for the first quarter of 2006.

 

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ZIONS BANCORPORATION

Press Release – Page 4

April 19, 2007

 

Income Taxes

 

Income taxes for the first quarter of 2007 included approximately $2.9 million of taxes and penalties to surrender certain bank-owned life insurance contracts, which reduced net earnings by approximately $0.03 per diluted share.

 

Effective January 1, 2007, the Company adopted FASB Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109, Accounting for Income Taxes. As a result of adopting this new accounting guidance, the Company reduced existing reserves for uncertain tax positions by approximately $10.4 million at January 1, 2007 and recognized a cumulative effect adjustment as an increase to retained earnings.

 

Asset Quality

 

Nonperforming assets were $82.5 million at March 31, 2007 compared to $82.0 million at December 31, 2006 and $96.6 million at March 31, 2006. The ratio of nonperforming assets to net loans and leases and other real estate owned was 0.23% at March 31, 2007 compared to 0.24% at December 31, 2006 and 0.31% at March 31, 2006.

 

Net loan and lease charge-offs for the first quarter of 2007 were $10.1 million or 0.11% annualized of average loans. This compares with $17.9 million or 0.21% annualized of average loans for the fourth quarter of 2006, which included a $10.9 million loss on an equipment lease, and $11.7 million or 0.15% annualized of average loans for the first quarter of 2006.

 

The provision for loan losses was $9.1 million for the first quarter of 2007 compared to $26.7 million for the fourth quarter of 2006 and $14.5 million for the first quarter of 2006. The amount of the provision reflects continued strong credit quality and somewhat slower loan growth during the quarter. The combined provisions for loan losses and unfunded lending commitments were $9.4 million for the first quarter of 2007, $27.4 million for the fourth quarter of 2006, and $14.2 million for the first quarter of 2006.

 

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ZIONS BANCORPORATION

Press Release – Page 5

April 19, 2007

 

The total increase to the allowance for loan losses of $6.1 million to $371.2 million at March 31, 2007 included $7.1 million from the Stockmen’s acquisition. The allowance for loan losses as a percentage of net loans and leases was 1.03% at March 31, 2007 compared to 1.05% at December 31, 2006 and 1.10% at March 31, 2006. The allowance was 532.5% of nonperforming loans at March 31, 2007. The combined allowances for credit losses (allowance for loan losses plus the allowance for unfunded lending commitments) were $391.2 million or 1.09% of net loans and leases at March 31, 2007 compared to $384.5 million or 1.11% at December 31, 2006 and $359.1 million or 1.15% at March 31, 2006.

 

Capital Management

 

In December 2006 the Company resumed its stock repurchase plan, which had been suspended since July 2005 because of the Amegy acquisition. Under the $400 million repurchase authorization, the Company repurchased 1,210,114 common shares for $102.9 million during the first quarter of 2007 at an average price of $85.01 per share. At March 31, 2007, approximately $272.2 million of the repurchase authorization remained.

 

The Company’s tangible equity ratio was 6.59% at March 31, 2007 compared to 6.51% at December 31, 2006 and 5.51% at March 31, 2006. The increase year over year includes the effect of the issuance of preferred stock in December 2006, and both the year over year and quarterly increases include the effect of increased retained earnings and reduced accumulated other comprehensive loss.

 

Weighted average common and common-equivalent shares outstanding for the first quarter of 2007 were 110,106,637 compared to 108,221,096 for the fourth quarter of 2006 and 107,724,724 for the first quarter of 2006. Common shares outstanding at March 31, 2007 were 109,052,149 compared to 106,720,884 at December 31, 2006 and 106,070,045 at March 31, 2006. The increase for the quarter was primarily due to the issuance of approximately 2.6 million shares for the Stockmen’s acquisition.

 

Conference Call

 

Zions will host a conference call to discuss these first quarter results at 5:30 p.m. ET this afternoon (April 19, 2007). Media representatives, analysts and the public are invited to listen to this discussion by calling

 

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ZIONS BANCORPORATION

Press Release – Page 6

April 19, 2007

 

1-866-383-7998 and entering the passcode 78643026, 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 7:30 p.m. ET on Thursday, April 19, through midnight ET on Thursday, April 26, by dialing 1-888-286-8010 and entering the passcode 79865360. The webcast of the conference call will also be archived and available for 30 days.

 

About Zions Bancorporation

 

Zions Bancorporation is one of the nation’s premier financial services companies, consisting of a collection of great banks in select high growth markets. Zions operates its banking businesses under local management teams and community identities through over 500 offices and approximately 600 ATMs in ten Western and Southwestern states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah and Washington. The Company is a national leader in Small Business Administration lending and public finance advisory services. In addition, Zions is included in the S&P 500 and NASDAQ Financial 100 indices. Investor information and links to subsidiary banks can be accessed at www.zionsbancorporation.com.

 

FORWARD-LOOKING INFORMATION

 

Statements in this news release that are based on other than historical data are forward-looking, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations or forecasts of future events. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this news release. Factors that might cause such differences include, but are not limited to: the Company’s ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either nationally or locally in areas in which the Company conducts its operations; changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the

 

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ZIONS BANCORPORATION

Press Release – Page 7

April 19, 2007

 

Company’s operations or business; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.

 

Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the 2006 Annual Report on Form 10-K of Zions Bancorporation filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s Internet site ( http://www.sec.gov).

 

The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.

 

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ZIONS BANCORPORATION AND SUBSIDIARIES

Press Release – Page 8

FINANCIAL HIGHLIGHTS

(Unaudited)

 

     Three Months Ended
     March 31,
(In thousands, except per share and ratio data)    2007
    2006
    % Change

EARNINGS

                   

Taxable-equivalent net interest income

    $   463,721       $   428,824       8.14 %

Taxable-equivalent revenue

      609,135         557,312       9.30 %

Net interest income

      457,083         422,847       8.10 %

Noninterest income

      145,414         128,488       13.17 %

Provision for loan losses

      9,111         14,512       (37.22)%

Noninterest expense

      351,979         324,455       8.48 %

Income before income taxes and minority interest

      241,407         212,368       13.67 %

Income taxes

      88,854         75,258       18.07 %

Minority interest

      (705)        (523)      (34.80)%

Net income

      153,258         137,633       11.35 %

Net earnings applicable to common shareholders

      149,655         137,633       8.73 %

PER COMMON SHARE

                   

Net earnings (diluted)

      1.36         1.28       6.25 %

Dividends

      0.39         0.36       8.33 %

Book value per common share

      46.04         40.95       12.43 %

SELECTED RATIOS

                   

Return on average assets

      1.31%      1.31%     

Return on average common equity

      12.25%      12.92%     

Efficiency ratio

      57.78%      58.22%     

Net interest margin

      4.51%      4.69%     

 

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ZIONS BANCORPORATION AND SUBSIDIARIES

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FINANCIAL HIGHLIGHTS (Continued)

(Unaudited)

 

     Three Months Ended
     March 31,
(In thousands, except share and ratio data)    2007
    2006
      % Change  

AVERAGE BALANCES

                   

Total assets

    $ 47,478,985       $   42,646,242       11.33 %

Securities

      5,797,856         6,073,692       (4.54)%

Net loans and leases

      35,406,094         30,468,784       16.20 %

Goodwill

      1,983,765         1,887,551       5.10 %

Core deposit and other intangibles

      194,124         196,551       (1.23)%

Total deposits

      35,075,369         32,023,293       9.53 %

Core deposits (1)

      30,252,240         29,453,658       2.71 %

Minority interest

      40,741         28,223       44.35 %

Shareholders’ equity:

                   

Preferred equity

      240,000         –           –       

Common equity

      4,954,400         4,321,311       14.65 %

Weighted average common and common-equivalent shares outstanding

      110,106,637         107,724,724       2.21 %

AT PERIOD END

                   

Total assets

    $ 48,558,866       $ 43,318,029       12.10 %

Securities

      5,608,927         5,984,115       (6.27)%

Net loans and leases

      35,944,848         31,140,326       15.43 %

Sold loans being serviced (2)

      2,401,355         3,183,992       (24.58)%

Allowance for loan losses

      371,213         341,261       8.78 %

Allowance for unfunded lending commitments

      20,000         17,841       12.10 %

Goodwill

      2,011,889         1,884,225       6.78 %

Core deposit and other intangibles

      192,677         188,384       2.28 %

Total deposits

      36,325,739         32,872,708       10.50 %

Core deposits (1)

      31,238,791         30,179,291       3.51 %

Minority interest

      38,691         28,895       33.90 %

Shareholders’ equity:

                   

Preferred equity

      240,000         –           –       

Common equity

      5,021,170         4,343,816       15.59 %

Common shares outstanding

      109,052,149         106,070,045       2.81 %

Average equity to average assets

      10.94%      10.13%     

Common dividend payout

      28.57%      27.71%     

Tangible equity ratio

      6.59%      5.51%     

Nonperforming assets

      82,524         96,556       (14.53)%

Accruing loans past due 90 days or more

      56,880         10,299       452.29 %

Nonperforming assets to net loans and leases and other real estate owned at period end

      0.23%      0.31%     

 

(1) Amount consists of total deposits excluding time deposits $100,000 and over.
(2) Amount represents the outstanding balance of loans sold and being serviced by the Company, excluding conforming first mortgage residential real estate loans.

 

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ZIONS BANCORPORATION AND SUBSIDIARIES

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FINANCIAL HIGHLIGHTS (Continued)

(Unaudited)

 

     Three Months Ended
     March 31,
    December 31,
    September 30,
    June 30,
    March 31,
(In thousands, except per share and ratio data)    2007
    2006

EARNINGS

                                   

Taxable-equivalent net interest income

    $   463,721       $   465,267       $   452,606       $   442,261       $   428,824   

Taxable-equivalent revenue

      609,135         605,148         597,935         579,772         557,312   

Net interest income

      457,083         459,039         446,511         436,327         422,847   

Noninterest income

      145,414         139,881         145,329         137,511         128,488   

Provision for loan losses

      9,111         26,675         14,363         17,022         14,512   

Noninterest expense

      351,979         342,926         330,028         333,028         324,455   

Income before income taxes and minority interest

      241,407         229,319         247,449         223,788         212,368   

Income taxes

      88,854         80,081         83,790         78,821         75,258   

Minority interest

      (705)        2,730         9,985         (343)        (523)  

Net income

      153,258         146,508         153,674         145,310         137,633   

Net earnings applicable to common shareholders

      149,655         142,673         153,674         145,310         137,633   

PER COMMON SHARE

                                   

Net earnings (diluted)

      1.36         1.32         1.42         1.35         1.28   

Dividends

      0.39         0.39         0.36         0.36         0.36   

Book value per common share

      46.04         44.48         43.47         41.72         40.95   

SELECTED RATIOS

                                   

Return on average assets

      1.31%      1.27%      1.36%      1.33%      1.31%

Return on average common equity

      12.25%      12.08%      13.41%      13.20%      12.92%

Efficiency ratio

      57.78%      56.67%      55.19%      57.44%      58.22%

Net interest margin

      4.51%      4.60%      4.58%      4.64%      4.69%

 

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ZIONS BANCORPORATION AND SUBSIDIARIES

Press Release – Page 11

FINANCIAL HIGHLIGHTS (Continued)

(Unaudited)

 

     Three Months Ended
     March 31,
    December 31,
    September 30,
    June 30,
    March 31,
(In thousands, except share and ratio data)    2007
    2006

AVERAGE BALANCES

                                   

Total assets

    $   47,478,985       $   45,818,165       $   44,680,382       $   43,782,622       $   42,646,242   

Securities

      5,797,856         5,627,906         5,605,249         5,876,065         6,073,692   

Net loans and leases

      35,406,094         34,059,617         33,105,716         31,900,053         30,468,784   

Goodwill

      1,983,765         1,895,860         1,881,708         1,884,192         1,887,551   

Core deposit and other intangibles

      194,124         168,547         175,259         185,281         196,551   

Total deposits

      35,075,369         33,853,608         32,964,029         32,175,202         32,023,293   

Core deposits (1)

      30,252,240         29,763,841         29,427,975         29,303,520         29,453,658   

Minority interest

      40,741         40,471         37,854         28,486         28,223   

Shareholders’ equity:

                                   

Preferred equity

      240,000         65,216         –           –           –     

Common equity

      4,954,400         4,685,507         4,545,990         4,414,775         4,321,311   

Weighted average common and common-
equivalent shares outstanding

      110,106,637         108,221,096         108,061,423         107,883,374         107,724,724   

AT PERIOD END

                                   

Total assets

    $ 48,558,866       $ 46,970,226       $ 45,777,747       $ 45,142,086       $ 43,318,029   

Securities

      5,608,927         5,767,467         5,817,571         5,797,079         5,984,115   

Net loans and leases

      35,944,848         34,667,556         33,706,110         32,682,335         31,140,326   

Sold loans being serviced (2)

      2,401,355         2,586,451         2,796,644         3,003,101         3,183,992   

Allowance for loan losses

      371,213         365,150         356,342         348,475         341,261   

Allowance for unfunded lending commitments

      20,000         19,368         18,637         17,592         17,841   

Goodwill

      2,011,889         1,900,517         1,884,328         1,881,256         1,884,225   

Core deposit and other intangibles

      192,677         162,134         168,135         177,692         188,384   

Total deposits

      36,325,739         34,981,746         33,640,991         33,254,210         32,872,708   

Core deposits (1)

      31,238,791         30,679,690         30,027,827         29,851,896         30,179,291   

Minority interest

      38,691         42,791         41,158         28,619         28,895   

Shareholders’ equity:

                                   

Preferred equity

      240,000         240,000         –           –           –     

Common equity

      5,021,170         4,747,023         4,643,166         4,447,330         4,343,816   

Common shares outstanding

      109,052,149         106,720,884         106,804,606         106,611,731         106,070,045   

Average equity to average assets

      10.94%      10.37%      10.17%      10.08%      10.13%

Common dividend payout

      28.57%      29.51%      25.00%      26.37%      27.71%

Tangible equity ratio

      6.59%      6.51%      5.92%      5.54%      5.51%

Nonperforming assets

      82,524         81,994         74,815         73,475         96,556   

Accruing loans past due 90 days or more

      56,880         43,727         20,407         29,434         10,299   

Nonperforming assets to net loans and leases and other real estate owned at period end

      0.23%      0.24%      0.22%      0.22%      0.31%

 

(1) Amount consists of total deposits excluding time deposits $100,000 and over.
(2) Amount represents the outstanding balance of loans sold and being serviced by the Company, excluding conforming first mortgage residential real estate loans.

 

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ZIONS BANCORPORATION AND SUBSIDIARIES

Press Release – Page 12

CONSOLIDATED BALANCE SHEETS

 

(In thousands, except share amounts)   

March 31,

2007

   

December 31,

2006

   

September 30,

2006

   

June 30,

2006

   

March 31,

2006

     (Unaudited)         (Unaudited)    (Unaudited)    (Unaudited)

ASSETS

                                   

Cash and due from banks

    $ 1,574,519     $   1,938,810     $ 1,616,910     $ 1,773,829     $ 1,584,857 

Money market investments:

                                   

Interest-bearing deposits

      17,325       43,203       39,882       87,512       51,942 

Federal funds sold

      527,691       55,658       72,036       262,959       178,406 

Security resell agreements

      439,722       270,415       272,643       225,160       238,762 

Investment securities:

                                   

Held to maturity, at cost (approximate market value $663,474, $648,828, $655,170, $620,786 and $633,784)

      667,269       653,124       662,547       639,593       644,212 

Available for sale, at market

      4,909,220       5,050,907       5,062,409       5,086,840       5,187,979 

Trading account, at market (includes $1,095, $34,494, $60,331, $50,684 and $34,340 transferred as collateral under repurchase agreements)

      32,438       63,436       92,615       70,646       151,924 
    
  
  
  
  
       5,608,927       5,767,467       5,817,571       5,797,079       5,984,115 

Loans:

                                   

Loans held for sale

      266,880       252,818       268,305       248,948       311,655 

Loans and leases

      35,832,061       34,566,118       33,583,499       32,576,017       30,958,190 
    
  
  
  
  
       36,098,941       34,818,936       33,851,804       32,824,965       31,269,845 

Less:

                                   

Unearned income and fees, net of related costs

      154,093       151,380       145,694       142,630       129,519 

Allowance for loan losses

      371,213       365,150       356,342       348,475       341,261 
    
  
  
  
  

Loans and leases, net of allowance

      35,573,635       34,302,406       33,349,768       32,333,860       30,799,065 

Other noninterest-bearing investments

      988,015       1,022,383       1,005,989       993,379       971,569 

Premises and equipment, net

      645,391       609,472       587,807       574,154       565,327 

Goodwill

      2,011,889       1,900,517       1,884,328       1,881,256       1,884,225 

Core deposit and other intangibles

      192,677       162,134       168,135       177,692       188,384 

Other real estate owned

      9,682       9,250       9,986       16,024       24,964 

Other assets

      969,393       888,511       952,692       1,019,182       846,413 
    
  
  
  
  
     $   48,558,866     $   46,970,226     $   45,777,747     $ 45,142,086     $ 43,318,029 
    
  
  
  
  

LIABILITIES AND SHAREHOLDERS’ EQUITY

                                   

Deposits:

                                   

Noninterest-bearing demand

    $   9,761,255     $   10,010,310     $ 9,750,064     $ 10,163,834     $ 9,953,003 

Interest-bearing:

                                   

Savings and money market

      16,467,626       15,858,887       15,824,048       15,814,128       16,354,901 

Time under $100,000

      2,485,720       2,257,967       2,154,894       2,030,717       1,959,351 

Time $100,000 and over

      5,086,948       4,302,056       3,613,164       3,402,314       2,693,417 

Foreign

      2,524,190       2,552,526       2,298,821       1,843,217       1,912,036 
    
  
  
  
  
       36,325,739       34,981,746       33,640,991       33,254,210       32,872,708 

Securities sold, not yet purchased

      190,878       50,416       53,802       27,388       55,577 

Federal funds purchased

      2,132,682       1,993,483       2,286,561       1,397,694       1,484,049 

Security repurchase agreements

      924,922       934,057       1,108,771       1,169,296       1,096,420 

Other liabilities

      662,589       747,499       657,657       789,222       677,495 

Commercial paper

      186,978       220,507       265,769       245,126       153,286 

Federal Home Loan Bank advances and other borrowings:

                                   

One year or less

      323,598       517,925       313,259       1,216,848       4,264 

Over one year

      129,446       137,058       132,854       133,450       134,043 

Long-term debt

      2,382,173       2,357,721       2,633,759       2,432,903       2,467,476 
    
  
  
  
  

Total liabilities

      43,259,005       41,940,412       41,093,423       40,666,137       38,945,318 
    
  
  
  
  

Minority interest

      38,691       42,791       41,158       28,619       28,895 

Shareholders’ equity:

                                   

Capital stock:

                                   

Preferred stock, without par value, authorized 3,000,000 shares:

                                   

Series A (liquidation preference $1,000 per share); issued and outstanding 240,000 shares

      240,000       240,000       –         –          –   

Common stock, without par value; authorized 350,000,000 shares; issued and outstanding 109,052,149, 106,720,884, 106,804,606, 106,611,731 and 106,070,045 shares

      2,381,509       2,230,303       2,240,458       2,218,711       2,197,245 

Retained earnings

      2,719,502       2,602,189       2,501,625       2,386,369       2,279,383 

Accumulated other comprehensive loss

      (69,257)      (75,849)      (89,292)      (148,327)      (123,099)

Deferred compensation

      (10,584)      (9,620)      (9,625)      (9,423)      (9,713)
    
  
  
  
  

Total shareholders’ equity

      5,261,170       4,987,023       4,643,166       4,447,330       4,343,816 
    
  
  
  
  
     $ 48,558,866     $   46,970,226     $ 45,777,747     $   45,142,086     $   43,318,029 
    
  
  
  
  

 

- more -

ZIONS BANCORPORATION AND SUBSIDIARIES

Press Release – Page 13

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

     Three Months Ended
     March 31,    December 31,    September 30,    June 30,    March 31,
(In thousands, except per share amounts)    2007
    2006
    2006
    2006
    2006

Interest income:

                                   

Interest and fees on loans

    $   674,577     $   665,791     $   638,610     $   591,139     $   542,784 

Interest on loans held for sale

      3,875       4,066       4,275       4,055       4,046 

Lease financing

      5,206       4,974       4,690       4,496       4,130 

Interest on money market investments

      6,342       6,116       6,241       5,925       6,432 

Interest on securities:

                                   

Held to maturity – taxable

      2,203       2,220       2,217       2,209       2,215 

Held to maturity – nontaxable

      6,091       5,963       5,732       5,683       5,531 

Available for sale – taxable

      68,507       68,075       66,078       68,995       69,104 

Available for sale – nontaxable

      2,458       2,083       2,089       2,119       2,339 

Trading account

      1,192       2,009       1,621       1,995       2,074 
    
  
  
  
  

Total interest income

      770,451       761,297       731,553       686,616       638,655 
    
  
  
  
  

Interest expense:

                                   

Interest on savings and money market deposits

      113,103       112,105       109,410       97,131       86,623 

Interest on time and foreign deposits

      112,885       102,025       86,635       67,424       59,485 

Interest on short-term borrowings

      48,692       45,504       46,778       43,490       28,563 

Interest on long-term debt

      38,688       42,624       42,219       42,244       41,137 
    
  
  
  
  

Total interest expense

      313,368       302,258       285,042       250,289       215,808 
    
  
  
  
  

Net interest income

      457,083       459,039       446,511       436,327       422,847 

Provision for loan losses

      9,111       26,675       14,363       17,022       14,512 
    
  
  
  
  

Net interest income after provision for loan losses

      447,972       432,364       432,148       419,305       408,335 
    
  
  
  
  

Noninterest income:

                                   

Service charges and fees on deposit accounts

      43,726       43,201       41,991       41,414       40,038 

Loan sales and servicing income

      9,258       12,332       10,972       15,421       15,468 

Other service charges, commissions and fees

      43,671       44,182       43,425       41,038       38,179 

Trust and wealth management income

      7,697       7,538       6,835       6,690       6,448 

Income from securities conduit

      6,515       7,567       7,741       8,492       8,406 

Dividends and other investment income

      11,093       10,360       10,403       9,946       9,209 

Trading and nonhedge derivative income

      5,200       4,991       3,641       5,444       4,425 

Equity securities gains (losses), net

      5,198       5,875       13,180       (1,764)      550 

Fixed income securities gains (losses), net

      3,701       (554)      1,563       5,156       251 

Other

      9,355       4,389       5,578       5,674       5,514 
    
  
  
  
  

Total noninterest income

      145,414       139,881       145,329       137,511       128,488 
    
  
  
  
  

Noninterest expense:

                                   

Salaries and employee benefits

      205,587       189,627       190,554       185,643       185,855 

Occupancy, net

      26,589       25,170       25,807       24,549       24,081 

Furniture and equipment

      23,267       22,623       20,361       22,737       23,004 

Legal and professional services

      9,537       11,234       11,386       9,005       8,509 

Postage and supplies

      8,047       8,402       8,313       8,646       7,715 

Advertising

      6,457       7,100       6,566       6,814       5,985 

Debt extinguishment cost

      89       7,261       –         –         –   

Impairment losses on long-lived assets

      –         –         –         –         1,304 

Merger related expense

      2,406       2,199       2,549       8,906       6,807 

Amortization of core deposit and other intangibles

      11,129       10,899       10,716       10,692       10,693 

Provision for unfunded lending commitments

      306       731       1,045       (249)      (279)

Other

      58,565       57,680       52,731       56,285       50,781 
    
  
  
  
  

Total noninterest expense

      351,979       342,926       330,028       333,028       324,455 
    
  
  
  
  

Income before income taxes and minority interest

      241,407       229,319       247,449       223,788       212,368 

Income taxes

      88,854       80,081       83,790       78,821       75,258 

Minority interest

      (705)      2,730       9,985       (343)      (523)
    
  
  
  
  

Net income

      153,258       146,508       153,674       145,310       137,633 

Preferred stock dividend

      3,603       3,835       –         –         –   
    
  
  
  
  

Net earnings applicable to common shareholders

    $ 149,655     $ 142,673     $ 153,674     $ 145,310     $ 137,633 
    
  
  
  
  

Weighted average common shares outstanding during the period:

                                   

Basic shares

      108,414       106,457       106,285       106,001       105,472 

Diluted shares

      110,107       108,221       108,061       107,883       107,725 

Net earnings per common share:

                                   

Basic

    $ 1.38     $ 1.34     $ 1.45     $ 1.37     $ 1.30 

Diluted

      1.36       1.32       1.42       1.35       1.28 

 

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ZIONS BANCORPORATION AND SUBSIDIARIES

Press Release – Page 14

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

(Unaudited)

 

(In thousands, except per share amounts)

 

   

Preferred

stock

   

Common

stock

   

Retained

earnings

   

Accumulated

other

comprehensive

income (loss)

   

Deferred

compensation

   

Total

shareholders’

equity

Balance, December 31, 2006

    $   240,000     $   2,230,303     $   2,602,189     $   (75,849)    $   (9,620)    $   4,987,023 

Cumulative effect of change in accounting principle, adoption of FIN 48

                    10,408                     10,408 

Comprehensive income:

                                          

Net income for the period

                    153,258                     153,258 

Other comprehensive income, net of tax:

                                          

Net realized and unrealized holding losses on investments and retained interests

                            (1,503)              

Reclassification for net realized gains on investments recorded in operations

                            (3,845)              

Net unrealized gains on derivative instruments

                           11,940               
                         
             

Other comprehensive income

                           6,592              6,592 
                                       

Total comprehensive income

                                         159,850 

Stock redeemed and retired

              (103,242)                           (103,242)

Net stock options exercised

             42,139                            42,139 

Common stock issued in acquisition

             206,075                            206,075 

Share-based compensation

             6,234                            6,234 

Dividend declared on preferred stock

                     (3,603)                     (3,603)

Cash dividends on common stock, $.39 per share

                    (42,750)                     (42,750)

Change in deferred compensation

                                   (964)       (964)
    
  
  
  
  
  

Balance, March 31, 2007

    $ 240,000     $ 2,381,509     $ 2,719,502     $ (69,257)    $ (10,584)    $ 5,261,170 
    
  
  
  
  
  

Balance, December 31, 2005

    $ –       $ 2,156,732     $ 2,179,885     $ (83,043)    $   (16,310)    $ 4,237,264 

Comprehensive income:

                                          

Net income for the period

                    137,633                     137,633 

Other comprehensive loss, net of tax:

                                          

Net realized and unrealized holding losses on investments and retained interests

                            (19,962)              

Foreign currency translation

                           64               

Reclassification for net realized gains on investments recorded in operations

                            (28)              

Net unrealized losses on derivative instruments

                            (20,130)              
                         
             

Other comprehensive loss

                            (40,056)              (40,056)
                                       

Total comprehensive income

                                         97,577 

Stock redeemed and retired

              (28)                            (28)

Net stock options exercised

             46,754                            46,754 

Reclassification of deferred compensation, adoption of SFAS 123R

              (11,111)                    11,111       –   

Share-based compensation

             4,898                            4,898 

Cash dividends on common stock, $.36 per share

                     (38,135)                     (38,135)

Change in deferred compensation

                                   (4,514)       (4,514)
    
  
  
  
  
  

Balance, March 31, 2006

    $ –       $   2,197,245     $ 2,279,383     $   (123,099)    $ (9,713)    $ 4,343,816 
    
  
  
  
  
  

 

- more -

ZIONS BANCORPORATION AND SUBSIDIARIES

Press Release – Page 15

 

Nonperforming Assets

(Unaudited)

 

(In thousands)   

March 31,

2007

   

December 31,

2006

   

September 30,

2006

   

June 30,

2006

   

March 31,

2006

Nonaccrual loans

    $   69,580       $ 66,405       $ 64,650       $ 57,249       $ 71,376   

Restructured loans

      132         164         179         202         216   

Other real estate owned

      9,682         9,250         9,986         16,024         24,964   

Other assets

      3,130         6,175         –           –           –     
    
  
  
  
  

Total

    $ 82,524       $ 81,994       $ 74,815       $ 73,475       $ 96,556   
    
  
  
  
  

% of net loans and leases* and other real estate owned

         0.23%         0.24%         0.22%         0.22%         0.31%

Accruing loans past due 90 days or more

    $ 56,880       $ 43,727       $ 20,407       $ 29,434       $ 10,299   
    
  
  
  
  

% of net loans and leases*

         0.16%         0.13%         0.06%         0.09%         0.03%

*Includes loans held for sale.

                                   
Allowances for Credit Losses                                   
(Unaudited)                                   
     Three Months Ended
(In thousands)   

March 31,

2007

   

December 31,

2006

   

September 30,

2006

   

June 30,

2006

   

March 31,

2006

Allowance for Loan Losses

                                   

Balance at beginning of period

    $   365,150       $   356,342       $   348,475       $   341,261       $   338,399   

Allowance of company acquired

      7,061         –           –           –           –     

Add:

                                   

Provision for losses

      9,111         26,675         14,363         17,022         14,512   

Deduct:

                                   

Loan and lease charge-offs

      (14,079)        (23,219)        (10,882)        (16,082)        (15,609)  

Recoveries

      3,970         5,352         4,386         6,274         3,959   
    
  
  
  
  

Net loan and lease charge-offs

      (10,109)        (17,867)        (6,496)        (9,808)        (11,650)  
    
  
  
  
  

Balance at end of period

    $ 371,213       $ 365,150       $ 356,342       $ 348,475       $ 341,261   
    
  
  
  
  

Ratio of allowance for loan losses to net loans and leases outstanding at period end

      1.03%      1.05%      1.06%      1.07%      1.10%

Ratio of allowance for loan losses to nonperforming loans at period end

      532.50%      548.53%      549.66%      606.56%      476.67%

Allowance for Unfunded Lending Commitments

                                   

Balance at beginning of period

    $ 19,368       $ 18,637       $ 17,592       $ 17,841       $ 18,120   

Allowance of company acquired

      326         –           –           –           –     

Provision charged (credited) against earnings

      306         731         1,045         (249)        (279)  
    
  
  
  
  

Balance at end of period

    $ 20,000       $ 19,368       $ 18,637       $ 17,592       $ 17,841   
    
  
  
  
  

Total Allowances for Credit Losses

                                   

Allowance for loan losses

    $ 371,213       $ 365,150       $ 356,342       $ 348,475       $ 341,261   

Allowance for unfunded lending commitments

      20,000         19,368         18,637         17,592         17,841   
    
  
  
  
  

Total allowances for credit losses

    $ 391,213       $ 384,518       $ 374,979       $ 366,067       $ 359,102   
    
  
  
  
  

Ratio of total allowances for credit losses to net loans and leases outstanding at period end

      1.09%      1.11%      1.11%      1.12%      1.15%

 

- more -

ZIONS BANCORPORATION AND SUBSIDIARIES

Press Release – Page 16

 

Sold Loans Being Serviced

(Unaudited)

 

     Three Months Ended

(In thousands)

 

   

March 31,

2007

   

December 31,

2006

   

September 30,

2006

   

June 30,

2006

   

March 31,

2006

Balance at beginning of period

    $   2,586,451     $   2,796,644     $   3,003,101     $   3,183,992     $   3,382,603 

New loans sold

      10,931       30,061       46,073       82,553       59,417 

Payments and other reductions

      (196,027)      (240,254)      (252,530)      (263,444)      (258,028)
    
  
  
  
  

Balance at end of period

    $   2,401,355     $ 2,586,451     $ 2,796,644     $ 3,003,101     $ 3,183,992 
    
  
  
  
  

Loan Balances By Portfolio Type

(Unaudited)

                                   

(In millions)

 

   

March 31,

2007

   

December 31,

2006

   

September 30,

2006

   

June 30,

2006

   

March 31,

2006

Loans held for sale

    $ 267     $ 253     $ 268     $ 249     $ 312 

Commercial lending:

                                   

Commercial and industrial

      8,420       8,422       7,846       7,539       7,261 

Leasing

      447       443       420       407       383 

Owner occupied

      6,867       6,260       5,855       5,574       5,159 
    
  
  
  
  

Total commercial lending

      15,734       15,125       14,121       13,520       12,803 

Commercial real estate:

                                   

Construction and land development

      7,739       7,483       7,362       6,958       6,292 

Term

      5,215       4,952       4,960       4,981       4,847 
    
  
  
  
  

Total commercial real estate

      12,954       12,435       12,322       11,939       11,139 

Consumer:

                                   

Home equity credit line and other consumer real estate

      1,935       1,850       1,944       1,963       1,892 

1-4 family residential

      4,176       4,192       4,255       4,244       4,191 

Bankcard and other revolving plans

      289       295       281       279       254 

Other

      465       457       458       453       464 
    
  
  
  
  

Total consumer

      6,865       6,794       6,938       6,939       6,801 

Foreign loans

      3       3       3       3       3 

Other receivables

      276       209       200       175       212 
    
  
  
  
  

Total loans

    $ 36,099     $ 34,819     $ 33,852     $ 32,825     $ 31,270 
    
  
  
  
  

 

- more -

ZIONS BANCORPORATION AND SUBSIDIARIES

Press Release – Page 17

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES

(Unaudited)

 

    

Three Months Ended

March 31, 2007

   

Three Months Ended

March 31, 2006

(In thousands)

 

   

Average

balance

   

Amount of

interest (1)

   

Average

rate

   

Average

balance

   

Amount of

interest (1)

   

Average

rate

ASSETS

                                      

Money market investments

    $ 491,793     $   6,342    5.23%    $ 511,719     $ 5,847    4.63%

Securities:

                                      

Held to maturity

      669,113       11,574    7.02%      632,108       10,724    6.88%

Available for sale

      5,034,722       72,289    5.82%      5,272,575       72,702    5.59%

Trading account

      94,021       1,192    5.14%      169,009       2,074    4.98%
    
  
       
  
    

Total securities

      5,797,856       85,055    5.95%      6,073,692       85,500    5.71%
    
  
       
  
    

Loans:

                                      

Loans held for sale

      249,195       3,875    6.31%      272,628       4,046    6.02%

Net loans and leases (2)

      35,156,899       681,817    7.87%      30,196,156       548,654    7.37%
    
  
       
  
    

Total loans and leases

      35,406,094       685,692    7.85%      30,468,784       552,700    7.36%
    
  
       
  
    

Total interest-earning assets

      41,695,743       777,089    7.56%      37,054,195       644,047    7.05%
           
              
    

Cash and due from banks

      1,479,058                   1,538,376             

Allowance for loan losses

       (374,728)                   (340,754)            

Goodwill

      1,983,765                   1,887,551             

Core deposit and other intangibles

      194,124                   196,551             

Other assets

      2,501,023                   2,310,323             
    
              
           

Total assets

    $ 47,478,985                 $   42,646,242             
    
              
           

LIABILITIES

                                      

Interest-bearing deposits:

                                      

Savings and NOW

    $ 5,736,309       25,223    1.78%    $ 4,651,160       13,185    1.15%

Money market

      10,343,002       87,880    3.45%      11,363,810       73,438    2.62%

Time under $100,000

      2,433,788       25,726    4.29%      1,956,509       15,862    3.29%

Time $100,000 and over

      4,823,129       57,418    4.83%      2,569,635       23,322    3.68%

Foreign

      2,444,219       29,741    4.93%      1,979,293       20,301    4.16%
    
  
       
  
    

Total interest-bearing deposits

      25,780,447       225,988    3.56%      22,520,407       146,108    2.63%
    
  
       
  
    

Borrowed funds:

                                      

Securities sold, not yet purchased

      53,942       581    4.37%      57,330       631    4.46%

Federal funds purchased and security repurchase agreements

      2,995,220       35,477    4.80%      2,673,550       25,166    3.82%

Commercial paper

      178,743       2,365    5.37%      181,334       2,082    4.66%

FHLB advances and other borrowings:

                                      

One year or less

      775,200       10,269    5.37%      9,868       99    4.07%

Over one year

      136,586       1,971    5.85%      194,234       2,525    5.27%

Long-term debt

      2,374,422       36,717    6.27%      2,503,348       38,612    6.26%
    
  
       
  
    

Total borrowed funds

      6,514,113       87,380    5.44%      5,619,664       69,115    4.99%
    
  
       
  
    

Total interest-bearing liabilities

      32,294,560       313,368    3.94%      28,140,071       215,223    3.10%
           
              
    

Noninterest-bearing deposits

      9,294,922                   9,502,886             

Other liabilities

      654,362                   653,751             
    
              
           

Total liabilities

      42,243,844                   38,296,708             

Minority interest

      40,741                   28,223             

Shareholders’ equity:

                                      

Preferred equity

      240,000                   –               

Common equity

      4,954,400                   4,321,311             
    
              
           

Total shareholders’ equity

      5,194,400                   4,321,311             
    
              
           

Total liabilities and shareholders’ equity

    $   47,478,985                 $   42,646,242             
    
              
           

Spread on average interest-bearing funds

                  3.62%                  3.95%

Taxable-equivalent net interest income and net yield on interest-earning assets

           $   463,721    4.51%           $   428,824    4.69%
           
              
    

 

(1) Taxable-equivalent rates used where applicable.
(2) Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.

 

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