Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Non-Deal Roadshow (November 2010)
34 slides from Zions Bancorporation N.a's roadshow presentation, Nov 4, 2010
Slide 1: Morgan Stanley - Non-Deal Roadshow
November 2010 Morgan Stanley - Non-Deal Roadshow
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 2Q 2010; Deposit market share as of 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
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: Strong Focus on Business Banking - Loan Mix
*Includes FDIC supported assets Strong Focus on Business Banking - Loan Mix Loan Portfolio as of 3Q10 § Commercial Loans: 80% § Retail & Other Loans: 20% Change in portfolio composition since December 2007
Slide 8: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 9: Tier Common + Reserves as a % of Risk-Weighted Assets
Tier 1 Common + Reserves as a % of Risk-Weighted Assets Source: SNL. ZION as of 3Q 2010; peer group as of 2Q10 (peer 3Q regulatory data not yet reported at time of presentation) Note: Peer group includes U.S. regional banks with assets greater than $20 billion and less than $200 billion plus footpri
Slide 10: Tier 1 + Reserves as a % of Risk-Weighted Assets
Source: SNL. ZION as of 3Q 2010; peer group as of 2Q10 (peer 3Q regulatory data not yet reported at time of presentation) 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 Tier 1 + Reserves as a % of R
Slide 11: Basel III New Capital Proposal
Tier 1 Common 8.77% Total RBC 16.73% Tier 1 RBC 14.15% 7.6% 14.5% 11.9% 7.4% 8.7% 7.0% 10.5% 8.5% 11.3% 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 12: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – 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: Peer group, SNL as of 2Q10. Zions, company documents as of 3Q10 Net Charge Offs - By Loan Type Percentage of Zions Total Loans
Slide 15: ZION vs. SCAP Scorecard
ZION vs. SCAP Scorecard - Mo First Lien Mortgages Closed-end Junior Liens HELOCs Cal es Construction Multifamily Nonfarm, Non-resi CRE Other Loans $0 $200 $400 ‘$600 $800 $1,000 $1,200 $1,400 $1,600 __ SCAP--Midpoint of Loss Ratio (2-yrcumloss) _7/8ths of SCAPTotal_--—_-ZIONNNet Charge-offs Thru 301
Slide 16: Change in CRE Loans Outstanding
Change in CRE Loans Outstanding (in $billions) From 4Q07 to 3Q10
Slide 17: Term CRE Updated LTV Stratification
Percentage of Loans within each bucket that are Non-Accrual 1.9% 1.7% 3.5% 5.6% 12.6% 0.7% 8.3% 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 3Q10; TBI data as of 2Q10 • By a
Slide 18: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 19: 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 20: Net Interest Margin - 3Q10
Net Interest Margin - 3Q10 Note: NIM of 4.19% used for Zions NIM, which excludes sub debt amortization expenses but includes FDIC discount accretion for comparison purposes. Excluding FDIC discount accretion, ZION reports a core NIM of 4.03% for 3Q10. Peer group includes U.S. publicly traded regiona
Slide 21: Core NIM Trends
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Cash Drag (1) 24 bps 17 bps 16 bps 24 bps 20 bps 35 bps 46 bps Core NIM Trends • Zions expects net interest sensitive income to increase between an estimated 4.2% and 7.2% if interest rates were to rise 200 bps* • Core NIM (excludes discount accretion) has been gen
Slide 22: Loan Growth and Production Trends
(1) Linked quarter change in gross loan balance, excluding construction, land, development and FDIC-supported loans (2) Loan production includes originations and renewals Loan Growth and Production Trends
Slide 23: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 24: 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 some markets, particularly small an
Slide 25: Outlook Summary
▼ ► Loans ◄► Deposits ▼ Nonperforming Assets ▼ Credit Costs ▼ GAAP Net Interest Margin (1) ◄► Core Net Interest Margin (1) ◄► Core Non-interest Expense ◄► OTTI ◄ ▲ Capital Ratios Outlook Summary 1) Accelerated amortization of sub debt discount in 4Q10 (~$73.3 million, or approximately 62 bps NIM pre
Slide 26: Zions Bancorporation
ZIONS BANCORPORATION
Slide 27: 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: $520 million (Pay Floating, Receive Fixed), down from $545 mil
Slide 28: Loans with Floors
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 29: CDO Portfolio Summary
CDO Portfolio Summary § Credit-related OTTI losses in 3Q10: $23.7 million – The increase in impairment (compared to 2Q10 OTTI of $18.1 million) is primarily due to assumption changes in prepayment speeds on trust preferred securities, given the adoption of the Dodd-Frank Act. – Excluding that change
Slide 30: 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 31: 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 32: History of Bank Deferrals & Defaults in Zions' CDOs
History of Bank Deferrals & Defaults in Zions’ CDOs As of 10-28-10
Slide 33: Core Net Income Before Tax Detail
Core Net Income Before Tax Detail
Slide 34: Zions Bancorporation
ZIONS BANCORPORATION
Zions Bancorporation — Non-Deal Roadshow (November 2010) on 6ix