Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Morgan Stanley U.S. Financial Conference 2011
39 slides from Zions Bancorporation N.a's conference presentation, Jan 31, 2011
Slide 1: Morgan Stanley U.S. Financial Conference
February 1, 2011 Morgan Stanley U.S. Financial Conference
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements that relate to the projected performance of Zions Bancorporation and elements of or affecting such performance, including statements with respect to the beliefs, plans, objectives, goals, guidelines, expectations, anticipations and est
Slide 3: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 4: A Collection of Great Banks
A Collection of Great Banks Asset and deposit balances as of 3Q 2010
Slide 5: Multi-Bank Business Model: Competitive Strengths
Multi-Bank Business Model: Competitive Strengths § Direct customer access to local decision makers § Cross-pollination of ideas between banks – CEOs & division managers meet frequently to compare best practices, opportunities, and resolve “intramural” issues § Community bank feel - local marketing a
Slide 6: What Others Say About Us: Greenwich Excellence Awards
Small Business Banking: National Awards: • Overall Satisfaction • Overall Treasury Management Regional Awards: • Overall Satisfaction - West • Overall Satisfaction - Treasury Management - West What Others Say About Us 2010 Greenwich Excellence Awards in Small Business and Middle Market Banking Middl
Slide 7: Strong Focus on Business Banking - Loan Mix
*Includes FDIC supported assets Strong Focus on Business Banking - Loan Mix Loan Portfolio as of 4Q10 § Commercial and CRE Loans: 80% § Retail & Other Loans: 20%
Slide 8: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 9: Capital vs. peers
Zion as of 4Q 2010, peers as of 3Q 2010 Note: Peer group includes U.S. regional banks with assets greater than $20 billion and less than $200 billion plus footprint competitors WFC and USB Source: SNL
Slide 10: Basel III New Capital Proposal
Tier 1 Common 9.08% Total RBC 17.36% Tier 1 RBC 15.01% 7.8% 15.0% 12.6% 7.6% 9.3% 7.0% 10.5% 8.5% 11.7% Basel III New Capital Proposal B3 estimated capital ratios for Zions assumes elimination of trust preferred securities and other comprehensive income from Tier 1 capital, and adjusts for deferred
Slide 11: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 12: Credit Quality Trends
Credit Quality Trends *Annualized Zions excludes FDIC supported assets Note: Peer group includes U.S. publicly traded regional banks with assets greater than $20 billion and less than $200 billion plus footprint competitors WFC and USB Source: SNL NPAs + Greater than 90 Days Delinquent / Loans + ORE
Slide 13: Nonaccrual Inflows
Source: SNL. Peer data as of 3Q10. Nonaccrual inflows from Form FR Y-9C, schedule HC-N, line M.7. Nonaccrual Inflows Millions
Slide 14: Net Charge Offs - By Loan Type
Note: Peer group includes U.S. publicly traded regional banks with assets greater than $20 billion and less than $200 billion plus footprint competitors WFC and USB Source: ZION, company documents as of YTD 2010, Peer group, SNL YTD 3Q10 Net Charge Offs - By Loan Type Percentage of Zions Total Loans
Slide 15: SCAP Completed: ZION vs. More Adverse Scenario
SCAP Completed: ZION vs. More Adverse Scenario • Although ZION was not officially subject to the SCAP stress tests, we applied the midpoint of ratios given to the largest 19 banks to our loan portfolio. • While the credit cycle is not complete, the two- year period for SCAP is complete. • Results ar
Slide 16: Trends: Nonaccrual and Net Charge-Offs
Source: Company earnings press release Trends: Nonaccrual and Net Charge-Offs Construction & Land Development § Fourth quarter charge-offs elevated due to total resolution volume 1.5x higher than historical quarterly resolution rate (36% of beginning classified loan balance versus average of 23%).
Slide 17: Favorable Resolutions vs. Net Charge-Offs
Source: Company earnings press release Favorable Resolutions vs. Net Charge-Offs Construction & Land Development
Slide 18: Trends: Nonaccrual and Net Charge Offs
Source: Company earnings press release Trends: Nonaccrual and Net Charge Offs Term CRE & Owner Occupied § Fourth quarter charge-offs elevated due to total resolution volume 1.5x higher than historical quarterly resolution rate (36% of beginning classified loan balance versus average of 23%).
Slide 19: Updated LTV Stratification
Percentage of Loans within each bucket that are Non-Accrual 2.2% 3.2% 1.7% 4.4% 6.2% 3.8% 5.8% Term CRE Updated LTV Stratification The MIT Transaction Based Index is a national index that has been applied to Zions’ mostly regional CRE Portfolio Zions loan data as of 4Q10 and TBI data as of 3Q10 • By
Slide 20: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 21: Generally Stable Core Pre-Tax, Pre-Credit Income
Core net income excludes items that are one time or non-recurring in nature. Incorporated in the Appendix of this presentation is the detail which supports our core net income before tax calculations. 2Q09 - 4Q09 included material gains from loan portfolio swaps. Swaps are used to manage interest ra
Slide 22: Core Net Interest Margin - 4Q10
Core Net Interest Margin - 4Q10 Zions’ net interest margin excludes non-cash sub debt amortization expense and accretion on FDIC-acquired loans. Peer group net interest margin adjusted for accretion of interest income on FDIC acquired loans, where applicable. Source: SNL as of 4Q 2010, Zions calcula
Slide 23: Core NIM Trends
1Q0 9 2Q0 9 3Q0 9 4Q0 9 1Q1 0 2Q1 0 3Q1 0 4Q1 0 Cash Drag (1) 24 bps 17 bps 16 bps 24 bps 20 bps 35 bps 46 bps 45 bps Core NIM Trends • Zions expects net interest sensitive income to increase between an estimated 3.7% and 6.7% if interest rates were to rise 200 bps* in the first year • Core NIM (exc
Slide 24: Loans with Floors (as of 12/31/10)
Loans with Floors (as of 12/31/10) § The total amount of loans with floors that are in-the -money equal approximately $7.5B § Weighted average in-the- money floor: 148 bps
Slide 25: Interest Rate Risk Simulation - Slow Response
Interest Rate Risk Simulation - “Slow Response” § 12-month simulated impact - a static balance sheet, and is based on regression analysis comparing deposit repricing changes against similar duration benchmark indices (e.g. Libor, U.S. Treasuries); it also includes management input across all major g
Slide 26: Securities Portfolio Comparison
Securities Portfolio Comparison Source: SNL. Zion as of 4Q 2010, peer data as of 3Q 2010 MBS securities include residential mortgage pass-through investments that are not guaranteed by the U.S. Government Takeaway - no material NIM compression risk from MBS repricing
Slide 27: Zions' asset sensitivity
• Zions’ asset sensitivity implies a potentially stronger net interest margin in a rising rate environment • Near term pressure on loan pricing may adversely affect the net interest margin
Slide 28: Loan Growth Trend
Loan Growth Trend Excludes CRE C&D and FDIC-supported Loans
Slide 29: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 30: Near Term Objectives
Near Term Objectives § Reduce problem credits – Continued intense focus on workouts – On the margin, increase the use of A/B note structure § Increase lending activity – Additional emphasis on government guaranteed lending programs – C&I pipelines strengthening in most markets, particularly small an
Slide 31: Outlook Summary
Moderating Decline Loan Balances Declining Nonperforming Assets Declining Credit Costs Generally Low OTTI Generally Stable Core Net Interest Margin Generally Stable Core Non-interest Expense Generally Stable Capital Ratios Outlook Summary
Slide 32: Zions Bancorporation
ZIONS BANCORPORATION
Slide 33: Asset Sensitivity
Asset Sensitivity § Fixed-rate loans: – Approximately one quarter of portfolio – Duration of about 1.5 years § Variable-rate loans: – Approximately three quarters of portfolio – Roughly 30% of variable-rate loans are intermediate term resets (>12 months) – Floors on approximately 55% of variable-rat
Slide 34: CDO Portfolio Summary
CDO Portfolio Summary § Credit-related OTTI losses in 4Q10: $12.3 million – Credit-related impairment from bank and insurance trust preferred CDOs for 4Q10 was only $5.3 million (compared to $20.9 million in 3Q10 and $86.8 million in 4Q09). § Noncredit-related losses on securities in 4Q10: $2.9 mill
Slide 35: CDO Stress Testing - OTTI
CDO Stress Testing - OTTI § “Deterioration in PDs %” means that the default curve applied to the performing collateral of each deal is made worse by the percentage indicated. Thus a deal with a default curve of 5% stressed to a 25% “Deterioration in PDs %” would have a 6.25% default probability curv
Slide 36: CDO Stress Testing - Capital
CDO Stress Testing - Capital § Under various stress scenarios, Zions’ modeling indicates that OCI (accumulated other comprehensive income) would erode, although at a significantly lower amount than OTTI (other than temporary impairment). § Under the moderate stress scenario at 100% greater PDs, OTTI
Slide 37: History of Bank Deferrals & Defaults in Zions' CDOs
History of Bank Deferrals & Defaults in Zions’ CDOs Date of Deferral; Aggregate Collateral from Banks Deferring ($mm) 1400 Tlouarir Ia whieh bani dofered=and has ance recovered ae. (Quarter in which bank deferred \d has since defaulted nm 1900 | CQuararin which bank deterred -andhasnotdetauttea — |_
Slide 38: Core Net Income Before Tax Detail
Core Net Income Before Tax Detail
Slide 39: Zions Bancorporation
ZIONS BANCORPORATION
Zions Bancorporation — Morgan Stanley U.S. Financial Conference 2011 on 6ix