Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Simmons Energy Conference 2020
14 slides from Zions Bancorporation N.a's conference presentation, Sep 3, 2020
Slide 1: Simmons Energy Conference
Simmons Energy Conference September 3, 2020
Slide 2: Forward-Looking Statements; Use of Non-GAAP Financial Measures
Forward-Looking Statements; Use of Non-GAAP Financial Measures Forward Looking Information These materials include “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and assumpt
Slide 3: Oil & Gas (O&G) Credit Quality
Oil & Gas (O&G) Credit Quality Oil and gas loans account for $2.5 billion or 5% of total loans, excluding PPP Loans Excluding PPP Loans and as of June 30, 2020: All Ratios Exclude ▪ Annualized NCOs equaled 0% of loans PPP Loans Oil and Gas 35% ▪ Classified loans equaled 8.8% of loans Key Credit Qual
Slide 4: Oil & Gas Portfolio
Oil & Gas Portfolio Significant realignment since downturn ▪ Services, which accounted for bulk of charge offs in the last cycle, Portfolio Trends accounts for 17% of the portfolio versus 42% going into the previous 3,500 14.0 Probibility of Default Risk Grade cycle (Dec 2014) 3,000 12.0 ▪ Using cur
Slide 5: OCC Guidelines for Reserve-based Loans (RBLs)
OCC Guidelines for Reserve-based Loans (RBLs) Issued in 2016, this is more conservative than what the market was doing at the time XXX RBL Loan Rating ▪ Test YYY Criticized Classified Pass Special Mention Substandard Doubtful Loss Repayment RBL <.60 Reserve Life .60 - .75 Reserve Life >.75 Reserve L
Slide 6: Loan Grading in the Upstream Lending Market
Loan Grading in the Upstream Lending Market Significant tightening of underwriting standards Lending Market, Prior to 2016 OCC Lending Market, After 2016 OCC Updated Guidance Updated Guidance Acceptable Loan: Acceptable Loan: ▪ Debt/EBITDA < 4.0x ▪ Debt/EBITDA < 3.5x ▪ Debt/Capital < 60% - 70% ▪ Deb
Slide 7: Upstream Loan Metrics
Upstream Loan Metrics Significant tightening of underwriting standards Lending Market, Prior to Pandemic Lending Market: Current Market Valuation Comps: Market Valuation Comps: ▪ PV9% of Proved Reserves ▪ PV20% - 30% of Proved Reserves ▪ EV/EBITDA 6.0x – 8.0x ▪ EV/EBITDA 3.5x – 4.5x Loan Metrics: Lo
Slide 8: Appendix
Appendix ▪ Company Abbreviation Key ▪ COVID-19 Elevated Risk vs. Oil and Gas Portfolio Detail ▪ GAAP to Non-GAAP Reconciliation 8
Slide 9: Company Abbreviation (Ticker Symbol) Key
Company Abbreviation (Ticker Symbol) Key ASB: Associated Banc-Corp JPM: JPMorgan Chase & Co. BAC: Bank of America KEY: KeyCorp BOKF: BOK Financial Corporation MTB: M&T Bank Corporation C: Citigroup, Inc. PBCT: People’s United Financial, Inc. CFG: Citizens Financial Group, Inc. RF: Regions Financial
Slide 10: Select Sub-Industries with Elevated Risk Related to COVID-19 (C19ER)
Select Sub-Industries with Elevated Risk Related to COVID-19 (C19ER) C19ER is less than 10% of loans and has strong collateral coverage Select sub-industries with elevated risk (C19ER) ▪ Portions of broad industry groups with significant growth in criticized rates $4.2 billion (8.6%) of 2Q20 non-PPP
Slide 11: Additional Recent Trends In Loan Balance, Credit Quality and Line Utilization
Additional Recent Trends In Loan Balance, Credit Quality and Line Utilization We have experienced generally stable credit quality trends outside of C19ER and Oil and Gas loans (data excludes PPP loans) Loan Balances by Portfolio and Weighted Average Risk Grades Classified and Nonaccruals 10.0 12.3%
Slide 12: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (Amounts in millions) 2Q20 1Q20 4Q19 3Q19 2Q19 Efficiency Ratio Noninterest expense (GAAP) (1) (a) $ 430 $ 408 $ 472 $ 415 $ 424 Adjustments: Severance costs - - 22 2 1 Other real estate expense - - - (2) - Debt extinguishment cost - - - - - Amortization of core depos
Slide 13: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ In millions except per share amounts 2Q20 1Q20 4Q19 3Q19 2Q19 Pre-Provision Net Revenue (PPNR) (a) Total noninterest expense $430 $408 $472 $415 $424 LESS adjustments: Severance costs - - 22 2 1 Other real estate expense - - - (2) - Restructuring costs - 1 15 - - Pe
Slide 14: TITLE
TITLE [TAKEAWAY] XXX YYY ZIONS BANCORPORATION
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