Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Non-Deal Roadshow (April 2013)
37 slides from Zions Bancorporation N.a's roadshow presentation, Apr 29, 2013
Slide 1: Deutsche Bank Non-Deal Road Show Presentation
April, May 2013 Deutsche Bank Non-Deal Road Show Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements that relate to the projected or modeled performance or condition of Zions Bancorporation and elements of or affecting such performance or condition, including statements with respect to forecasts, opportunities, models, illustrations,
Slide 3: Agenda
Overview Capital Capital Adequacy Allowance For Credit Losses Improvements to Profitability From Expected Capital Actions Profitability Net Interest Income Drivers Volume Rate/Spread Cash/MBS Exposure Asset Sensitivity Fee Income and Non-interest Expense Financial Outlook Appendix CDOs Capital Compo
Slide 4: Zions Bancorporation Overview
Multi-bank holding company in the Western United States Assets: ~$54 billion Loans: ~$38 billion Market cap: ~$4.5 billion Exchange: NASDAQ Ticker: ZION Major stock indices: S&P 500 NASDAQ Financial 100 Rating Agency Ratings Zions Bancorporation Overview * S&P Moody’s Fitch DBRS Kroll Senior Debt BB
Slide 5: A Collection of Great Banks
A Collection of Great Banks More than 70% of Assets in Utah / Texas / Coastal California * Subsidiary information as of 4Q12 Superior lending capacity relative to community banks Superior local customer access to bank decision makers relative to big nationals Thirteen 2012 Greenwich Excellence Award
Slide 6: Stronger Economic Growth than Overall U.S.
Job Creation: Jobs grew in Zions' footprint by 11.4% during the last 10 years, a full 8 percentage points better than U.S. nonfarm payroll growth GDP Growth: GDP growth in our footprint exceeded nominal U.S. GDP by an average of 1.1 percentage points per year (compounded) over the last ten years Str
Slide 7: Balance Sheet Mix
Balance Sheet Mix Strengths include a high mix of loans and DDA funding * Source: Company documents as of 1Q13
Slide 8: Strong Focus on Business Banking – Loan Mix
Data for peers and all U.S. commercial banks as of 4Q12 *Includes farm, home equity, consumer, and other loans Loan Portfolio as of 1Q13 Commercial and CRE Loans: 78% Retail & Other Loans: 22% * Strong Focus on Business Banking – Loan Mix
Slide 9: Liquidity Profile: Superior Funding Mix
Liquidity Profile: Superior Funding Mix Zions ranks among the best of its peers for its noninterest bearing deposit concentration Improved Funding Composition Source: SNL and company documents. ZION as of 1Q13; peers as of 4Q12 Off balance sheet liabilities refers to Lockhart Funding, a QSPE that is
Slide 10: Credit Portfolio Risk has been Reduced
Credit Portfolio Risk has been Reduced and Credit Management has been Significantly Enhanced (In millions) * (In millions)
Slide 11: Credit Quality is Improving and Losses are Better Than Peers
Credit Quality is Improving and Losses are Better Than Peers For Zions, Net Charge-offs Have Returned to Pre-Crisis Levels 1. Nonperforming ratio does not include accrual TDRs. Source: Company Documents & SNL Financial Net charge-off ratios annualized. * (In millions) (In millions)
Slide 12: Credit Quality Continues to Improve
* Credit Quality Continues to Improve Source: Company documents
Slide 13: Consistently Profitable and Improving Earnings Quality
Consistently Profitable and Improving Earnings Quality High Cost Capital at Parent is the Primary Difference vs. Healthy Profitability at Subsidiaries * Source: Company documents (In millions) (In millions)
Slide 14: Agenda
Overview Capital Capital Adequacy Allowance For Credit Losses Improvements to Profitability From Expected Capital Actions Profitability Net Interest Income Drivers Volume Rate/Spread Cash/MBS Exposure Asset Sensitivity Fee Income and Non-interest Expense Financial Outlook Appendix CDOs Capital Compo
Slide 15: Capital Levels are Strong Relative to Peers
Capital Levels are Strong Relative to Peers Source: SNL and Company documents. Zion data as of 1Q13; peer and U.S. data as of 4Q12. Loss absorbing capital defined to include tangible common equity, Basel III-qualifying non-common Tier 1 equity, and the allowance for credit losses *
Slide 16: Loan Loss Coverage is Also Strong Comparatively
Source: SNL and Company documents. ZION as of 1Q13; peers as of 4Q12 CYN excluded from Reserve/NCO ratio due to a net recovery for 4Q12 Annualized charge-off ratio. Reserves include loan loss reserve plus reserve for unfunded lending commitments. * Loan Loss Coverage is also Strong Comparatively
Slide 17: Capital & Funding Actions
Capital & Funding Actions * 2012 Capital Actions Redeemed $1.4 billion TARP preferred equity Repaid $255 million of TLGP debt Upstreamed more than $800 million of capital from subsidiaries and issued new senior debt to maintain liquidity ratios Redeemed 11.0% Series E preferred shares Issued $144 mi
Slide 18: Callable Capital and Debt Maturity Profile
Callable Capital and Debt Maturity Profile * Currently Callable Total Maturing & Callable Capital & Financing 2013-2015: Preferred Stock: $798M Trust Preferred Stock: $294M Subordinated Debt: $593M Senior Debt: $500M Total: $2.2 billion (In millions)
Slide 19: Restructuring Capital Profile: Significant Potential Earnings Improvement
Restructuring Capital Profile: Significant Potential Earnings Improvement Assumes no change to revenue and noninterest expense * Not updated for Basel III Notice of Proposed Rulemaking Key assumptions for medium-term target capital stack: preferred stock dividend: 6.5% (after tax); subordinated debt
Slide 20: Agenda
Overview Capital Capital Adequacy Allowance For Credit Losses Improvements to Profitability From Expected Capital Actions Profitability Net Interest Income Drivers Volume Rate/Spread Floors Cash/MBS Exposure Asset Sensitivity Fee Income and Non-interest Expense Financial Outlook Appendix Credit Qual
Slide 21: Summary View of Profitability
Summary View of Profitability Further improvement expected in 2013 from capital actions * (In millions) ROAA and reserve release adjusted ROAA based on net income available to common. Source: SNL and Company documents.
Slide 22: Loans: Loan Growth and Pricing Trends
Loans: Loan Growth and Pricing Trends Favorable Trend in Commitments * Cost of Interest Bearing Deposits Spread on Production New Business Source: Company documents as of 1Q13. Spreads are calculated using matched-maturity funds at transfer pricing rate The above chart shows only new business to the
Slide 23: Net Interest Margin Remains Strong Relative to Peers
Source: SNL and Company documents. ZION as of 1Q13; peers as of 4Q12. ZION with peer median securities NIM & RANIM is calculated assuming Zions had a median 22% securities as a percentage of earning assets, with a median yield of 2.6%. Risk adjusted NIM calculated as net interest income less net cha
Slide 24: Securities & Cash Portfolio
Securities & Cash Portfolio ZION has the Smallest Securities (and MBS) Portfolio vs. its Peers; Securities Duration is ~1.7 years Chart data as of 4Q12; duration data as of February 2013 MBS securities include resi mortgage pass-through investments that are not guaranteed by the U.S. Government Esti
Slide 25: Balance Sheet Remains Significantly Asset Sensitive
Balance Sheet Remains Significantly Asset Sensitive * Zions estimates net interest sensitive income would increase between an estimated 11.9% and 13.8% if interest rates were to rise 200 bps* in the first year. Rate sensitive income includes the expected impact on fee income due to interest rates ch
Slide 26: Agenda
Overview Capital Capital Adequacy Allowance For Credit Losses Improvements to Profitability From Expected Capital Actions Profitability Net Interest Income Drivers Volume Rate/Spread Cash/MBS Exposure Asset Sensitivity Fee Income and Non-interest Expense Financial Outlook Appendix CDOs Capital Compo
Slide 27: One-Year Outlook Summary
Topic Outlook Comment Loan Balances Stable to Moderately Higher Core Net Interest Income Stabilizing Moderate loan growth likely to largely offset asset yield pressure. Some increase in loan pricing pressure from competitors noted in March Provision for Loan Losses Remain Low/ Negative Core Noninter
Slide 28: Zions' Investment Thesis
Zions’ Investment Thesis: Zions issued expensive capital and debt in 2009 and 2010 during the global financial crisis. This capital and debt is callable or refinancable within the next 1 to 2 ½ years, at much lower current costs. Zions’ credit quality continues to improve; strong reserves relative t
Slide 29: Zions' Investment Thesis: Scenarios
If the economy maintains sluggish improvement (and the Fed keeps interest rates low and flat): Significant improvement from restructuring and lowering costs of non-common capital and debt financing If interest rates rise and yield curve steepens: Less impact from financial re-engineering, but signif
Slide 30: Agenda
Overview Capital Capital Adequacy Allowance For Credit Losses Improvements to Profitability From Expected Capital Actions Profitability Net Interest Income Drivers Volume Rate/Spread Cash/MBS Exposure Asset Sensitivity Fee Income and Non-interest Expense Financial Outlook Appendix CDOs Capital Compo
Slide 31: Term CRE Metrics are Solid
(In billions) Weighted Average LTV = 57.7% Left - Sample data: As of 12/31/12; non-FDIC supported term loans > $500k balance; 76% of term loan dollars outstanding Right - As of 3/31/13; LTV’s were adjusted using PPR’s market level/property type value trend indices * Term CRE Metrics are Solid Percen
Slide 32: Bank CDOs: Fundamental Trends are Improving
Bank CDOs: Fundamental Trends are Improving Failures and Deferrals Have Declined Sharply * As of 03-31-2013 (1) Last 12 months. Prior to 3Q09, averages were predominately large banks, significantly skewing the data. New Bank Deferrals in Zions’ CDOs are Trending Downward (Aggregate Underlying Collat
Slide 33: Bank CDOs: Deferring Bank Re-performance has Increased
Bank CDOs: Fundamental Trends are Improving Deferring Bank Re-performance has Increased * As of 3-31-2013 * (In millions) Net of $216 million of re-deferrals from 7 banks Total underlying collateral supporting Zions’ bank CDOs: $16.8 billion Peak dollar value of deferring collateral: $3.5 billion (2
Slide 34: Bank CDOs: What To Expect Should the Environment Continue to Improve
Bank CDOs: What To Expect Should the Environment Continue to Improve A Net Positive Impact to Tangible Common Equity per Share Prepayments Increase... As banks become more healthy and as Trust Preferred is considered to be a weaker form of capital, the more healthy banks are prepaying principal and
Slide 35: What Happens if Things get Better?
What Happens if Things get Better? A Net Positive Impact to TCE/Share Bank & Ins. CDO Portfolio Scenario Assumptions Bank & Ins. CDO Portfolio Scenario Assumptions Bank & Ins. CDO Portfolio Scenario Assumptions Bank & Ins. CDO Portfolio Scenario Assumptions After-tax TCE per Share Impact After-tax T
Slide 36: Capital Structure Cost Savings Opportunities: 2013-2015
Capital Structure Cost Savings Opportunities: 2013-2015 Capital Issue ($ in millions, except per share figures) Earliest Call or Maturity Date AFTER-Tax Rate Par Amount Out Book Amount Out Current Expense EPS Impact AFTER-Tax Replace-ment Cost Potential EPS Savings High Cost Issues High Cost Issues
Slide 37: Capital Structure Cost Savings Opportunities: 2013-2015 (Additional Issues)
Capital Structure Cost Savings Opportunities: 2013-2015 Capital Issue ($ in millions, except per share figures) Earliest Call or Maturity Date AFTER-Tax Rate Par Amount Out Book Amount Out Current Expense EPS Impact AFTER-Tax Replace-ment Cost Potential EPS Savings Additional Select Issues Outstandi
Zions Bancorporation — Non-Deal Roadshow (April 2013) on 6ix