Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Lehman Brothers Global Financial Services Conference 2008
40 slides from Zions Bancorporation N.a's conference presentation, Sep 8, 2008
Slide 1: Lehman Brothers Global Financial Services Conference
Lehman Brothers Global Financial Services Conference 8 September 2008 ■ New York, NY
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: Today's Agenda
Today’s Agenda Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 4: Strong Asset Quality Relative to Peers: NPAs
Note: Peer group defined as bank holding companies with assets >= $10 billion. Peer data source: SNL NPAs as % of Total Assets Strong Asset Quality Relative to Peers
Slide 5: Strong Asset Quality Relative to Peers: NCOs
NCOs as % of Average Total Loans (Annualized) Note: Peer group defined as bank holding companies with assets >= $10 billion. Peer data source: SNL Strong Asset Quality Relative to Peers
Slide 6: Strong Asset Quality Relative to Peers
Strong Asset Quality Relative to Peers *Peer group defined as Bank Holding Companies with Total Assets between $10 and $200 billion (excluding State Street Corporation and Northern Trust Corporation) Source: SNL 2 nd Quarter NPA’s/Assets and NCO’s/Loans for Regional Peers*
Slide 7: Strong Asset Quality Relative to Peers: Reserves
Peers 1.5 Reserves / Net Charge Offs (Annualized) Note: Peer group defined as bank holding companies with assets >= $10 billion. Peer data source: SNL Zions 2.0 Strong Asset Quality Relative to Peers
Slide 8: Strong Asset Quality Relative to Peers
2 nd Quarter Reserves / Net Charge Offs (Annualized) Source: SNL As Reported NIM for selected banks ($5-$20 Billion Market Cap or Large Presence in the West) Strong Asset Quality Relative to Peers
Slide 9: Loan Portfolio Diversification
C&I 47% Consumer 18% CRE 34% Loan Portfolio Diversification Loans by Purpose - 6/30/2008
Slide 10: Residential Mortgage Loans
Total Outstanding: $1.9 billion (6/30/08) Residential Mortgage Loans
Slide 11: Bankcard
Total Outstanding: $0.2 billion (6/30/08) Bankcard
Slide 12: HECL Only
Total Outstanding: $1.8 billion (6/30/08) Average HECL FICO: 756 HECL Only
Slide 13: Commercial & Industrial Loans
Commercial & Industrial Loans
Slide 14: Commercial Real Estate Loans
Commercial Real Estate Loans
Slide 15: Residential Construction Components
Residential Construction Components Loans by Purpose - 6/30/2008
Slide 16: Land Acquisition & Development Components
Land Acquisition & Dev. Components Loans by Purpose by Geography - 6/30/2008
Slide 17: Diversified CRE Portfolio
Average LTV: 55.7% (as of 6/30/2008) Diversified CRE Portfolio Loans by Product Type and Location - 06/30/08
Slide 18: Actual CRE LTV Ratios
Average LTV: 55.7% (as of 6/30/2008) *LTVs for CRE loans with a commitment amount of $1MM or greater. Appraisals as of loan origination, or renewal (in a declining market), or upon adverse classification. Actual CRE LTV Ratios* Loans by Product Type and Location - 06/30/08
Slide 19: Loan-to-Value Comparison For Residential A&D & Lot Loans
*60 of the 216 updated appraisals come from affiliates not shown on the table above (UT, CO, and TX). **Jan-08 LTV’s based on initial appraisal or reappraisal prior to Jan. 2008 Jun-08 LTV’s based on most recent reappraisal post Jan. 2008 Loan-to-Value Comparison For Residential A&D & Lot Loans reap
Slide 20: Strong underwriting and credit management reduced losses almost by half
Strong underwriting and credit management reduced losses almost by half Note: Includes Top 20 substandard loans each quarter and all doubtful loans greater than $1 million. Impact of Re-Margining • In the 50 largest credits classified substandard or doubtful at any time during the past 9 months ther
Slide 21: Residential Land and Development Loans
Residential Land and Development Loans 6/30/2008
Slide 22: Select California Loan Exposures
Select California Loan Exposures: 6/30/2008
Slide 23: Credit Quality Outlook
Credit Quality Outlook • Weakness in residential construction activity and land values in the Southwest expected to persist into 2009 • No current evidence of material spread of credit problems to other geographies or loan categories • Some further increase in NPAs likely • Provisions and Net Losses
Slide 24: Loan Growth Outlook
Loan Growth Outlook • Loan pricing continues to strengthen • Managing balance sheet growth in the context of current capital generation and funding capabilities
Slide 25: Today's Agenda
Today’s Agenda Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 26: Lockhart Funding
As of 6/30/08 GAAP capital impact if remaining Net Lockhart exposure is brought on the balance sheet (including impact of fair value marks): -12 bps 10/31/07 Corporate Purch. & Paydowns 06/30/08 AAA MBIA insured (small business loans originated by Zions) $1.2B $-1.2B $0.0B AAA rated bank trust pref’
Slide 27: Today's Agenda
Today’s Agenda Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 28: Held to Maturity Securities
6/30/08 (in Billions) (1) Net unrealized gains (losses) are pre-tax (2) All fair value marks have been recognized through OCI Held to Maturity Securities
Slide 29: Available for Sale Securities
6/30/08 (in Billions) (1) Net unrealized gains (losses) are pre-tax (2) All fair value marks have been recognized through OCI Available for Sale Securities
Slide 30: Securities Transferred to Held To Maturity
Securities Transferred to Held To Maturity • $1.500 billion of predominantly A-rated (or higher) Bank & Insurance Trust Preferred CDO securities transferred from AFS to HTM on April 30, 2008 – $1.227 billion fair value – $273 million unrealized pre-tax losses from marks in OCI accrete back into tang
Slide 31: Today's Agenda
Today’s Agenda Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 32: A High Net Interest Margin
A High Net Interest Margin 2Q 2008 NIM for Selected Banks Source: SNL As Reported NIM for selected banks ($5-$20 Billion Market Cap or Large Presence in the West)
Slide 33: A Stable Net Interest Margin in a Volatile Environment
Zions NIM vs. 30-Day LIBOR A Stable Net Interest Margin in a Volatile Environment Source: SNL As Reported NIM (Top 50 Banks by Assets) LIBOR is Quarter Average
Slide 34: NIM Outlook
NIM Outlook • Positives – Loan pricing • Pressures – Continued strong competition for deposits – Weak core deposit growth – Adverse shifting of funding mix – Increasing NPA’s • Summary: Still some downward pressure
Slide 35: Today's Agenda
Today’s Agenda Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 36: Actual / Pro Forma Capital Ratios
Zions Bancorporation Actual / Pro Forma Capital Ratios
Slide 37: Dividends and Payout Ratio
120.0% 100.0% Gueoied o1ey snoAed) 80.0% 60.0% 40.0% 20.0% 0.0% oo 80-De ad soOL LOOP LODE L007 L0-OL 90°OF 90°OE 90° 90°O |, sor SOE SoD SOO) wor wove woe ODL e0-Or < £0 £0°De eels coor wODE TODE coo $50 $30 $25 $20 $15 $10 4 $5 $0 (Tota Dividend $M) —#— (Payout Ratio Percent)
Slide 38: Today's Agenda
Today’s Agenda Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 39: Outlook Summary
• Managing balance sheet growth in the context of current capital generation and funding capabilities • Low cost deposit growth: Continues to be weak • Security impairment charges may continue at 1H 2008 levels • Credit costs: Similar to 2Q through year end, perhaps slight increase • Net Interest Ma
Slide 40: Lehman Brothers Global Financial Services Conference
Lehman Brothers Global Financial Services Conference 8 September 2008
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