Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Barclays Capital 2010 Global Financial Services Conference
38 slides from Zions Bancorporation N.a's conference presentation, Sep 13, 2010
Slide 1: Barclays Capital 2010 Global Financial Services Conference
September 13, 2010 Barclays Capital 2010 Global Financial Services 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 – Term Commercial Real Estate – Revenue Outlook Summary Agenda
Slide 4: A Collection of Great Banks
A Collection of Great Banks Asset and deposit balances as of 2Q 2010; Deposit market share as of 2009
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 • Relationship Manager Performance • Financial Stability • Overall Treasury Management Regional Awards: • Overall Satisfaction - West • Overall Satisfaction - Treasury Management - West What Others Say About Us 2009 Greenwich Excellence
Slide 7: Core Net Income Before Tax
Core net income excludes items that are one time or non-recurring in nature. Examples include costs associated with subordinated debt conversion, special FDIC assessments, merger expenses, etc. Incorporated in the Appendix of this presentation is the detail which supports our Core Net Income Before
Slide 8: Strong Focus on Business Banking - Loan & Profit Mix
C&I 48% Consumer 17% CRE 32% *Includes FDIC supported assets Strong Focus on Business Banking - Loan & Profit Mix Loan Portfolio as of 2Q10 § Commercial Loans: 80% § Retail & Other Loans: 20%
Slide 9: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Term Commercial Real Estate – Revenue Outlook Summary Agenda
Slide 10: Tier 1 + Reserves as a % of Risk-Weighted Assets
Source: SNL as of 2Q 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 ZION Pro-Forma ratio incorporates effect of lower regulatory risk weighting on the banks trust preferred CDOs per the total r
Slide 11: Tier Common + Reserves as a % of Risk-Weighted Assets
Tier 1 Common + Reserves as a % of Risk-Weighted Assets Source: SNL as of 2Q 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 ZION Pro-Forma ratio incorporates effect of lower regulatory risk wei
Slide 12: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Term Commercial Real Estate – Revenue Outlook Summary Agenda
Slide 13: 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 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: SNL as of YTD 2Q10 Net Charge Offs - By Loan Type Percentage of Zions Total Loans
Slide 15: ZION vs. SCAP - More Adverse Scenario
ZION vs. SCAP - More Adverse Scenario First Lien Mortgages Closed-end Junior Liens HELOCs C&I Loans Construction Multifamily Nonfarm, Non-resi CRE Other CRE Credit Cards Other Consumer Other Loans $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 SCAP More Adverse--Midpoint 2-year Total 75% of SCAP
Slide 16: Consolidated Non-Accrual Loans
Consolidated Non-Accrual Loans *September 2010 data reflects actual data from July and August 2010 grossed up to quarterly equivalent
Slide 17: Gross New Non-Accrual Loans
Gross New Non-Accrual Loans Total & Products Based on Outstanding Balance *September 2010 data reflects actual data from July and August 2010 grossed up to quarterly equivalent Excludes FDIC supported loans
Slide 18: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Term Commercial Real Estate – Revenue Outlook Summary Agenda
Slide 19: Change in CRE Loans Outstanding (4Q07 to 2Q10)
Change in CRE Loans Outstanding in $billions (4Q07 to 2Q10)
Slide 20: Term CRE Maturity Stratification
Term CRE Maturity Stratification
Slide 21: Non-Accrual Percentage by LTV Bucket
Percentage of Loans within each bucket that are Non-Accrual 2.3% 1.7% 2.0% 5.9% 21.6% 4.1% 20.3% reappraisals are by policy conducted when a loan is downgraded to special mention and periodically thereafter as warranted by market conditions • Zions rarely approves loans with LTV ratios > 80%; most l
Slide 22: Macroeconomic Data - MIT's Transaction Based Index
Macroeconomic Data - MIT’s Transaction Based Index • Property prices have appreciated at a CAGR of 3.1% during the past 10 years • Prices are now back to 2Q05 levels
Slide 23: Term CRE Updated LTV Stratification (2Q10)
Percentage of Loans within each bucket that are Non-Accrual 2.9% 2.6% 3.6% 5.6% 6.7% 2.5% 9.6% Term CRE Updated LTV Stratification (2Q10) The MIT Transaction Based Index is a national index that has been applied to Zions’ mostly regional CRE Portfolio • By attaching each loan to the TBI index as of
Slide 24: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Term Commercial Real Estate – Revenue Outlook Summary Agenda
Slide 25: Net Interest Margin
Net Interest Margin Note: Core NIM of 4.14% used for Zions NIM, which excludes sub debt amortization expense and accretion of interest income on acquired loans Peer group includes U.S. publicly traded regional banks with assets greater than $20 billion and less than $200 billion plus footprint compe
Slide 26: Core NIM Trends
Core NIM Trends • Zions expects net interest sensitive income to increase between 4.2% and 7.2% if interest rates were to rise 200 bps* Core NIM (excludes discount accretion) has been generally stable • 1Q09 experienced a temporary dip partially due to an intentional build-up of excess liquidity dur
Slide 27: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Term Commercial Real Estate – Revenue Outlook Summary Agenda
Slide 28: 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 – Marginally increase consumer lending (e.g. jumbo mortgage) § Reduc
Slide 29: Outlook Summary
▼ ► Loans ▼ Deposits (1) ▼ Nonperforming Assets ▼ Credit Costs ▲ GAAP Net Interest Margin (2) ◄ ▼ Core Net Interest Margin (2) ◄► Core Non-interest Expense (3) ◄► OTTI ◄ ▲ Capital Ratios Outlook Summary 1) Reduction of non-interest bearing DDA via use of sweep accounts and reduction of highest cost
Slide 30: Zions Bancorporation
ZIONS BANCORPORATION
Slide 31: 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 – Floors on approximately 48% of variable-rate loans – Swaps: $545 million (Pay Floating, Receive Fixed) • Continual reducti
Slide 32: Loans with Floors (as of 6/30/10)
Loans with Floors (as of 6/30/10) § The total amount of loans with floors that are in-the-money equal approximately $7.8B
Slide 33: CDO Portfolio Summary
CDO Portfolio Summary § Credit-related OTTI losses in 2Q10: $18.1 million – Approximately 90% of these losses came from original A and BBB rated CDOs § Noncredit-related losses on securities in 2Q10: $1.5 million – Recognized in OCI *Table includes $2.2 billion par value of CDOs that are backed pred
Slide 34: 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 curve
Slide 35: 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 36: History of Bank Deferrals & Defaults in Zions' CDOs
History of Bank Deferrals & Defaults in Zions’ CDOs As of 9-9-10
Slide 37: Core Net Income Before Tax Detail
Core Net Income Before Tax Detail
Slide 38: Zions Bancorporation
ZIONS BANCORPORATION
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