Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Q3 2015 Earnings Presentation
18 slides from Zions Bancorporation N.a's earnings presentation, Oct 19, 2015
Slide 1: Third Quarter 2015 Financial Review
October 19, 2015 Third Quarter 2015 Financial Review
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: Chairman's Message
Chairman’s Message 3 What is working within expectations: Charter consolidation Tracking on efficiency initiative • Zions is on track to achieve the committed one-half of the gross $120 million expense reduction by the end of 2015 • Efficiency ratio on track to be below 70% for 2H15 Systems re
Slide 4: Efficiency Initiative
Efficiency Initiative Expense progress is tracking well 4 Noninterest Expense: • Commitment to hold expenses below $1.6 billion in 2015 (and 2016). • Status: On track Cost savings: • Commitment to achieve a gross $120 million of savings, half of which targeted to be realized by the end of 2015. • St
Slide 5: Efficiency Ratio: Sharp focus leading to substantial improvement
Efficiency Ratio: Sharp focus leading to substantial improvement 5 The efficiency ratio improved to 69.5%, from 73.0% a year ago. Reiterating the commitment to drive the efficiency ratio to: • Less than or equal to 70% for the second half of 2015 • Less than or equal to 66% for 2016 • The low 60s fo
Slide 6: Investing in the Business: Major Investment
Investing in the Business: Major Investment Substantial planning and effort has resulted in an on-track outcome 6 Chart of Accounts / Financial Reporting Simplification • GL transition and new reporting tool conversion complete • Phase 2 support of core systems will rollout in 2016 & 2017 Credit
Slide 7: Total Loan and Deposit Growth
$36,000 $39,000 $42,000 $45,000 3Q14 4Q14 1Q15 2Q15 3Q15 Total Loans 35% 40% 45% 50% $40,000 $42,000 $44,000 $46,000 $48,000 $50,000 3Q14 4Q14 1Q15 2Q15 3Q15 Total Deposits Total Deposits (left) Non-Interest Bearing Deposits as a % of Total (right) Total Loan and Deposit Growth 7 In Millions In Mill
Slide 8: Financial Results
Financial Results 8 Three Months Ended (Dollar amounts in millions, except per share data) September 30, 2015 June 30, 2015 September 30, 2014 Earnings Results: Diluted Earnings Per Share 0.41 (0.01) 0.40 Adjusted Earnings Per Share* NA 0.41 NA Net Interest Income 425 424 417 Provision for Loan Loss
Slide 9: Securities Portfolio Growth
Securities Portfolio Growth Short-to-medium duration portfolio; limited duration extension risk 9 In Millions Added net $1.4B of high quality liquid assets during 3Q15 Portfolio Duration • Status quo: 2.6 years • Rates +200 bps: 2.7 years Modeled Annual Change in a +200 Interest Rate Environment Fas
Slide 10: Loan Growth by Affiliate and Type
Loan Growth by Affiliate and Type: Pockets of Strength offset by National Real Estate and Energy 10 Source: Company documents;); NRE = National Real Estate Group, a division of Zions Bank that focuses on small business loans generally underwritten using SBA 504 guidelines. Year-over-Year Loan Growth
Slide 11: Net Interest Income Drivers
Net Interest Income Drivers Loan yield is relatively stable; margin down in part due to mix shift 11 • Mix shift pressure: Continued growth of average deposits without commensurate increase of average loans resulted in slight NIM pressure • Decline in income from loans purchased from FDIC in 2009 ac
Slide 12: Net Interest Income: Loan pricing discipline supports NIM stability
Net Interest Income: Loan pricing discipline supports NIM stability 12 3.0% 3.5% 4.0% 4.5% 5.0% 3Q14 4Q14 1Q15 2Q15 3Q15 Portfolio Yield vs. Production Yield • Stable linked-quarter loan yield • Coupon rate of new loan production (green) decreased to 3.65% from 3.74% in the prior quarter, primarily
Slide 13: Credit Quality: Overall Credit Quality Remains Generally Strong
Credit Quality: Overall Credit Quality Remains Generally Strong 13 -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 3Q14 4Q14 1Q15 2Q15 3Q15 Key Credit Quality Ratios Classifieds / Loans Nonperforming Assets / Loans Net Charge-offs / Loans Net Charge-offs / Loans annualized • Continued strong credit qu
Slide 14: Energy Portfolio Detail
Energy Portfolio Detail 14 *Because many borrowers operate in multiple businesses, judgment has been applied in characterizing a borrower as energy-related, including a particular segment of energy-related activity, e.g., upstream or downstream. Continued attrition of loan balances, generally driven
Slide 15: Houston Economic Data
Houston Economic Data: Employment remains stronger than national levels; housing indicators show healthy volume and inventory 15 -10 -5 0 5 10 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 2Q1 4 3Q1 4 4Q1 4 1Q1 5 2Q1 5 Business Economic Statistics: Houston PMI less National PMI 0 1 2 3 4 5 6
Slide 16: Houston Commercial Real Estate Data
Houston Commercial Real Estate Data Moderate weakness realized and expected in vacancy rates; rents still above 2012 levels 16 0% 5% 10% 15% 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 2Q1 4 3Q1 4 4Q1 4 1Q1 5 2Q1 5 Vacancy Rate - Houston 100 110 120 130 140 150 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1
Slide 17: Zions' Commercial Real Estate Portfolio in Texas
17 Zions’ Commercial Real Estate Portfolio in Texas Houston is approximately 3/5ths of total Texas exposure; increase from 2Q in part due to new commitments in Term, draws on C&D and conversion to Term from C&D $0 $50 $100 $150 $200 $250 $300 $350 $400 Other Industrial Hospitality Office Retail Apar
Slide 18: Next 12-Month Outlook Summary Relative to 3Q15 Results
Next 12-Month Outlook Summary Relative to 3Q15 Results Topic Outlook Comment Loan Balances Slightly to Moderately Increasing • Loan growth is difficult to forecast, as prepayments remain volatile, along with softness from energy lending. Net Interest Income Moderately Increasing • Driven by loan gro