Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Credit Suisse 2013 Financial Services Forum
33 slides from Zions Bancorporation N.a's conference presentation, Feb 12, 2013
Slide 1: Credit Suisse 2013 Financial Services Forum
February 11 - 14, 2013 Credit Suisse - 2013 Financial Services Forum
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements that relate to the projected or modeled performance or condition of Zions Bancorporation and elements of or affecting such performance or condition, including statements with respect to forecasts, opportunities, models, illustrations,
Slide 3: Agenda
Overview Capital Capital Adequacy Allowance For Credit Losses Improvements to Profitability From Expected Capital Actions Profitability Net Interest Income Drivers Volume Rate/Spread Floors Cash/MBS Exposure Asset Sensitivity Fee Income and Non-interest Expense Financial Outlook Appendix Credit Qual
Slide 4: A Collection of Great Banks
$4.4 billion market capitalization as of 2/7/2012 Trading symbol: NASDAQ: ZION A Collection of Great Banks More than 70% of Assets in Utah / Texas / Coastal California * Subsidiary information as of 3Q12
Slide 5: Awards: Nationally Recognized for Excellence
Awards: Nationally Recognized for Excellence Thirteen 2012 Greenwich Excellence Awards in Small Business and Middle Market Banking Including: Excellence: Overall Satisfaction Excellence: Likelihood to Recommend Excellence: Treasury Management Excellence: Financial Stability The Reputation Institute
Slide 6: Agenda
Overview Capital Capital Adequacy Allowance For Credit Losses Improvements to Profitability From Expected Capital Actions Profitability Net Interest Income Drivers Volume Rate/Spread Floors Cash/MBS Exposure Asset Sensitivity Fee Income and Non-interest Expense Financial Outlook Appendix Credit Qual
Slide 7: Capital Levels are Strong Relative to Peers
Capital Levels are Strong Relative to Peers Source: SNL. Zion as of 4Q12; peers as of 3Q12. Loss absorbing capital defined to include tangible common equity, Basel III-qualifying non-common Tier 1 equity, and the allowance for credit losses *
Slide 8: Loan Loss Coverage is Also Strong Comparatively
Source: SNL. Zion as of 4Q12; peers as of 3Q12 CYN excluded from Reserve/NCO ratio due to ratio exceeding 2000% Annualized charge-off ratio. Reserves include loan loss reserve plus reserve for unfunded lending commitments. * Loan Loss Coverage is also Strong Comparatively
Slide 9: Capital & Funding Actions
Capital & Funding Actions * 2012 Capital Actions Redeemed $1.4 billion TARP preferred equity Repaid $255 million of TLGP debt Upstreamed more than $800 million of capital from subsidiaries and issued new senior debt to maintain liquidity ratios Redeemed 11.0% Series E preferred shares Issued $144 mi
Slide 10: Callable Capital and Debt Maturity Profile
Callable Capital and Debt Maturity Profile * Currently Callable
Slide 11: Restructuring Capital Profile: Significant Potential Earnings Improvement
Restructuring Capital Profile: Significant Potential Earnings Improvement Assumes no change to revenue and noninterest expense * Not updated for Basel III Notice of Proposed Rulemaking Key assumptions for medium-term target capital stack: preferred stock dividend: 6.5% (after tax); subordinated debt
Slide 12: Agenda
Overview Capital Capital Adequacy Allowance For Credit Losses Improvements to Profitability From Expected Capital Actions Profitability Net Interest Income Drivers Volume Rate/Spread Floors Cash/MBS Exposure Asset Sensitivity Fee Income and Non-interest Expense Financial Outlook Appendix Credit Qual
Slide 13: Loan Balance Trends
Loan Balance Trends Modest Overall Growth; Stronger Performance from Commercial & Industrial and Consumer Offset by Declines in Owner Occupied and Construction & Development * Indexed 4Q11 = 100 Source: company documents
Slide 14: Net Interest Income: Loan Balances vs. Commitments
Net Interest Income: Loan Balances vs. Commitments Favorable Trend in Commitments Source: company documents *
Slide 15: New Loan Spread Stabilizing
New Loan Spread Stabilizing Older 2009-2010 Vintage Loans Are Maturing and Are Generally Replaced at Lower Rates Cost of Interest Bearing Deposits Spread on Production: New Business * Source: Company documents as of 4Q12. Spreads are calculated using matched-maturity funds at transfer pricing rate
Slide 16: Cash Impact on Net Interest Margin is Significant
Cash Impact on Net Interest Margin is Significant The Result of a Disciplined Effort to Avoid Adding Assets with Duration Extension Risk * Core net interest income excludes items that are one time or non-recurring in nature such as regular and accelerated discount amortization on convertible sub deb
Slide 17: Net Interest Margin Remains Strong Relative to Peers
Source: SNL as of 4Q12. ZION w/Peer Median Securities NIM & RANIM is calculated assuming Zions had a median 22% securities as a percentage of earning assets, with a median yield of 2.6%. Risk adjusted NIM calculated as net interest income less net charge-offs divided by average earning assets. Synov
Slide 18: Securities & Cash Portfolio
Securities & Cash Portfolio ZION has the Smallest Securities (and MBS) Portfolio vs. its Peers; Securities Duration is ~1.8 years Source: SNL. ZION as of 4Q12; peers as of 3Q12 MBS securities include resi mortgage pass-through investments that are not guaranteed by the U.S. Government Estimated opti
Slide 19: Balance Sheet Remains Significantly Asset Sensitive
Balance Sheet Remains Significantly Asset Sensitive * Zions estimates net interest sensitive income would increase between an estimated 11.9% and 13.8% if interest rates were to rise 200 bps* in the first year. Rate sensitive income includes the expected impact on fee income due to interest rates ch
Slide 20: Noninterest Income & Expense Trends
Noninterest Income & Expense Trends * (In millions) Indexed as of 2Q11 * Credit category includes other real estate, credit related, and provision for unfunded lending commitment expenses. ** Regulatory & legal category includes legal & professional, FDIC premium and indemnification expenses. (In mi
Slide 21: Consistently Profitable and Improving Earnings Quality
Consistently Profitable and Improving Earnings Quality High Cost Capital at Parent is the Primary Difference vs. Healthy Profitability at Subsidiaries * Source: Company documents (In millions)
Slide 22: Agenda
Overview Capital Capital Adequacy Allowance For Credit Losses Improvements to Profitability From Expected Capital Actions Profitability Net Interest Income Drivers Volume Rate/Spread Floors Cash/MBS Exposure Asset Sensitivity Fee Income and Non-interest Expense Financial Outlook Appendix Credit Qual
Slide 23: One-Year Outlook Summary Vs. 4Q12 Results
Topic Outlook Comment Loan Balances Stable to Moderately Higher Strong year-end growth not reversed in 1Q2013 Growth Driven Primarily by C&I and Consumer Core Net Interest Income Stabilizing - Slightly improving loan growth; Loan yield pressures moderating after mid-year Provision for Loan Losses Ve
Slide 24: Agenda
Overview Capital Capital Adequacy Allowance For Credit Losses Improvements to Profitability From Expected Capital Actions Profitability Net Interest Income Drivers Volume Rate/Spread Floors Cash/MBS Exposure Asset Sensitivity Fee Income and Non-interest Expense Financial Outlook Appendix Credit Qual
Slide 25: Credit Quality is Improving and Losses are Better Than Peers
Credit Quality is Improving and Losses are Better Than Peers For Zions, Net Charge-offs Have Returned to Pre-Crisis Levels Nonperforming ratio does not include accrual TDRs. Source: Company Documents & SNL Financial Net charge-off ratios annualized. * (In millions) (In millions)
Slide 26: Credit Quality Continues to Improve
* Credit Quality Continues to Improve Loss Absorbing Capital defined as Common Equity Tier 1, Perpetual Preferred Equity, and Allowance for Credit Losses
Slide 27: Term CRE Metrics are Solid
(In billions) Weighted Average LTV = 60.2% Left - Sample data: As of 12/31/12; non-FDIC supported term loans > $500k balance; 76% of term loan dollars outstanding Right - As of 12/31/12; LTV’s were adjusted using PPR’s market level/property type value trend indices * Term CRE Metrics are Solid Perce
Slide 28: Bank CDOs: Fundamental Trends are Improving
Bank CDOs: Fundamental Trends are Improving Failures and Deferrals Have Declined Sharply * As of 2-8-13 (“quarterized”) (1) Last 12 months. Prior to 3Q09, averages were predominately large banks, significantly skewing the data. New Bank Deferrals in Zions’ CDOs are Trending Downward (Aggregate Under
Slide 29: Bank CDOs: Deferring Bank Re-performance has Increased
Bank CDOs: Fundamental Trends are Improving Deferring Bank Re-performance has Increased * As of 2-8-13 (“quarterized”) * (In millions) Net of $220 million of re-deferrals from 8 banks Total underlying collateral supporting Zions’ bank CDOs: $17 billion Peak dollar value of deferring collateral: $3.5
Slide 30: Bank CDOs: What To Expect Should the Environment Continue to Improve
Bank CDOs: What To Expect Should the Environment Continue to Improve A Net Positive Impact to Tangible Common Equity per Share Prepayments Increase... As banks become more healthy and as Trust Preferred is considered to be a weaker form of capital, the more healthy banks are prepaying principal and
Slide 31: What Happens if Things get Better?
What Happens if Things get Better? A Net Positive Impact to TCE/Share Bank & Ins. CDO Portfolio Scenario Assumptions Bank & Ins. CDO Portfolio Scenario Assumptions Bank & Ins. CDO Portfolio Scenario Assumptions Bank & Ins. CDO Portfolio Scenario Assumptions After-tax TCE per Share Impact After-tax T
Slide 32: Capital Structure Cost Savings Opportunities: 2013-2015
Capital Structure Cost Savings Opportunities: 2013-2015 Capital Issue ($ in millions, except per share figures) Earliest Call or Maturity Date AFTER-Tax Rate Par Amount Out Book Amount Out Current Expense EPS Impact AFTER-Tax Replace-ment Cost Potential EPS Savings High Cost Issues High Cost Issues
Slide 33: Capital Structure Cost Savings Opportunities: 2013-2015
Capital Structure Cost Savings Opportunities: 2013-2015 Capital Issue ($ in millions, except per share figures) Earliest Call or Maturity Date AFTER-Tax Rate Par Amount Out Book Amount Out Current Expense EPS Impact AFTER-Tax Replace-ment Cost Potential EPS Savings Additional Select Issues Outstandi
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