Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — FBR Capital Markets 2007 Investors Conference
38 slides from Zions Bancorporation N.a's conference presentation, Nov 26, 2007
Slide 1: FBR Capital Markets, November 2007
28 November 2007 FBR Capital Markets Exhibit 99.1
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 Outlook Summary Lockhart Funding Net Interest Margin Credit Current Issues Overview
Slide 4: The Intermountain West's Largest Banking Company
The Intermountain West’s Largest Banking Company Over 500 Offices and 600 ATMs in 10 Western States NASDAQ Financial 100 Index S&P 500 Index Total Assets of $50 Billion
Slide 5: Our Growth Engine: Population Growth Estimates
Our Growth Engine Population Growth Estimates from US Census (2000-2030) 114% 108% 60% 56% 52% 51% 46% 41% 37% 35% 29% 0% 20% 40% 60% 80% 100% 120% NV AZ TX UT ID ZION WA OR CA CO US Growing 75% faster than the national average
Slide 6: Our Growth Engine: Projected Population Growth 2006-2011
Our Growth Engine Projected Population Growth 2006-2011 #1 Ranking Among 40 Largest Banks Source: Lehman Brothers 14.2% 12.5% 11.2% 11.0% 10.0% 10.0% 8.1% 7.8% 7.2% 3.8% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%
Slide 7: A Collection of Great Banks
A Collection of Great Banks Bank Headquarters Offices ATMs Assets Deposits Zions Bank Salt Lake City 138 166 $15.8B $10.9B CB&T San Diego 91 103 $10.1B $8.2B Amegy Houston 80 129 $10.3B $7.0B NBA Phoenix 88 73 $5.5B $4.2B NSB Las Vegas 74 80 $3.9B $3.4B Vectra Denver 40 47 $2.5B $1.7B Commerce-WA Se
Slide 8: Long-Term Growth
Long-Term Growth Source: SNL *Through 3Q 2007 (annualized where applicable) Net Income (millions) $598 $0 $100 $200 $300 $400 $500 $600 $700 Total Assets (millions) $50,045 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000
Slide 9: Per Share Growth
Per Share Growth Source: SNL *Through 3Q 2007 (annualized where applicable) Revenue per Share (diluted) $22.44 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 Earnings Per Share (diluted) $5.35 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00
Slide 10: Today's Agenda
Today’s Agenda Outlook Summary Lockhart Funding Net Interest Margin Overview Credit Current Issues
Slide 11: Strong Asset Quality Relative to Peers: Non-Performing Assets
Note: Peer group defined as bank holding companies with assets > $10 billion. Peer data source: FFIEC Strong Asset Quality Relative to Peers Non-Performing Assets as % of Total Assets 0.39% 0.43% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% ZIONS Peers
Slide 12: Strong Asset Quality Relative to Peers: Net Charge-Offs
Strong Asset Quality Relative to Peers Source: SNL -- Peer group is defined as U.S. bank holding companies with assets > $10 billion. 0.19% 0.43% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% Zions Peers NCOs as % of Average Total Loans (Annualized)
Slide 13: Loan Portfolio Diversification
Loan Portfolio Diversification Loans by Purpose – 9/30/2007 C&I 26% Owner Occ 20% CRE Term 13% Other Consumer 7% Consumer 1-4 Family 11% Residential Construction 12% Comm Construction 11% C&I 46% Consumer 18% CRE 36%
Slide 14: Residential Mortgage Exposure
Residential Mortgage Exposure On Balance Sheet $1.9B HECL Avg FICO at origination 752 Avg FICO today 757 Avg LTV at origination 60.6% $0 Securities backed by subprime mortgages $0 Direct exposure to subprime & Alt-A mortgages
Slide 15: Residential Construction Components
Residential Construction Components Loans by Purpose – 9/30/2007 Residential Construction 12% Single Family Housing 5% Land Acquisition & Dev. 6%
Slide 16: Land Acquisition & Development Components
Land Acquisition & Dev. Components Loans by Purpose – 9/30/2007 Land Acquisition & Dev. 6% Other 3.3% NV 0.6% Single Family Housing 5% So. CA 0.8% AZ 1.7%
Slide 17: Diversified CRE Portfolio
Diversified CRE Portfolio Loans by Product Type and Location – 9/30/07 Average LTV: 59.5% (6/30/2007) Collateral Location Arizona Northern California Southern California Nevada Colorado Texas Utah/ Idaho Washington/ Oregon Other Total Product as % Loan Type Product as % Total CRE Commercial Term Ind
Slide 18: CRE Loan-to-Value Ratios By Product Type and Location
CRE Loan-to-Value Ratios By Product Type and Location – 6/30/07 Appraisals as of loan origination, or renewal (in a declining market), or upon adverse classification Collateral Location Amegy Bank of Texas (ABT) California Bank & Trust (CB&T) Commerce Bank of Oregon (CBO) Commerce Bank of Washington
Slide 19: On Balance Sheet Investment Securities Available for Sale
On Balance Sheet Investment Securities Available for Sale – 9-30-07 (in Billions) .80 SBA Loan-backed Securities .80 Agency Guaranteed MBS .13 Mutual Funds & Stock $4.55 .29 Municipal Securities .19 Small Business Loan-backed & Other ABS .14 REIT Trust Preferred 1.55 Bank & Insurance Trust Preferred
Slide 20: Summary of Key Assets
Summary of Key Assets 2.9% 3.1% 4.1% - 0.4% - PERCENT OF ASSETS - Sec’s backed by subprime mortgages 63-71% Res’l Const in So. CA, AZ, NV 49-60% Res’l A&D in So. CA, AZ, NV 60.6% HECL - Subprime/Alt-A loans - Sec’s backed by REIT trust pref’d AVG LTV CATEGORY
Slide 21: Credit Quality Outlook
Credit Quality Outlook • Significant weakening has occurred in residential construction activity and land values in the Southwest • Weakness expected to persist through 2008 • Expect some further increase from historically low levels of NPAs and NCOs • Provision likely to remain higher than last sev
Slide 22: Loan Growth Outlook
Loan Growth Outlook • Slow in CA, AZ, NV • Strong in Texas and Intermountain West • Stronger in C&I than CRE • Opportunities for balance sheet lenders
Slide 23: Today's Agenda
Today’s Agenda Outlook Summary Lockhart Funding Credit Overview Net Interest Margin Current Issues
Slide 24: A High Net Interest Margin
A High Net Interest Margin 3Q 2007 NIM for Selected Banks 4.55 4.44 4.02 3.66 3.65 3.52 3.50 3.44 3.40 3.13 3.10 2.87 2.61 2.57 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Source: SNL As Reported NIM for selected banks ($5-$20 Billion Market Cap or Large Presence in the West)
Slide 25: 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 4.44% 5.43% 3.46% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% ZION NIM Libor Top 50 Bank NIM Avg
Slide 26: NIM Outlook
NIM Outlook • Positives – Loan growth relatively strong – Better loan pricing for larger loans • Pressures – Weak core deposit growth – Significant pricing pressure on interest-bearing deposits – Adverse shifting of funding mix
Slide 27: Today's Agenda
Today’s Agenda Outlook Summary Net Interest Margin Credit Overview Lockhart Funding Current Issues
Slide 28: Lockhart Funding Structure
Lockhart Funding Structure • Off-balance sheet QSPE sponsored by Zions First National Bank • Created in 2000 to enable securitization of SBA 504 and similar loans • Assets: agencies and AAA-rated floating rate securities
Slide 29: SIV vs. QSPE
SIV vs. QSPE Minimal equity Capital (6-10% of assets) provided by junior notes (BBB) Funded with ABCP (A1/F1/P1) Funded with ABCP and medium term notes (AAA) 100% Liquidity/credit backstop from sponsor – ABCP buyers protected by sponsoring bank Limited backstop from sponsor (5-7%) – additional losse
Slide 30: Lockhart Funding Structure (cont)
Lockhart Funding Structure (cont) • Funding: P1 / F1 commercial paper • Multiple CP Dealers – Zions – Lehman Brothers – Goldman Sachs • Liquidity Agreement: 100% back-up liquidity provided by Zions Bank
Slide 31: Lockhart Funding Liquidity Agreement
Lockhart Funding Liquidity Agreement • Provided by Zions Bank • Maximum of 100% of Lockhart assets ($3.1B) • Zions Bank buys assets from Lockhart if: – Security downgraded below AA- – Lockhart is unable to issue CP
Slide 32: Lockhart Funding Summary of Assets
Lockhart Funding Summary of Assets 31 October 2007 $3.1B Total $0.2B Other AAA rated, structured** $0.2B Other AAA rated, insured $0.3B US gov’t and agencies $1.2B AAA rated, MBIA insured (small business loans originated by Zions)* $1.1B AAA rated bank trust preferred pools Balances at 10/31/07 (Tot
Slide 33: Lockhart Funding Assets
Lockhart Funding Assets • AAA rated, structured includes: – $136 million with some RMBS exposure* • $33 million of subprime exposure (originally purchased in 2001-2004) • $18 million of home equity loan exposure • One security ($30 million) downgraded to B+ by Fitch on November 20 and repurchased un
Slide 34: Lockhart Funding Impact if Brought On Balance Sheet
Lockhart Funding Impact if Brought On Balance Sheet • Funding/Liquidity – Zions has $7B of borrowing capacity at FHLB – Assets pledgeable at Fed Discount Window • Capital (excluding impact of mark-to-market) – Tangible equity ratio reduced about 40bps – Risk Based Capital ratios reduced about 15-25
Slide 35: Lockhart Funding Summary
Lockhart Funding Summary • Seasoned program with high quality assets • CP rated P1 / F1 • ABCP market remains very risk averse • Zions affiliate banks continue to purchase some Lockhart CP • One security ($30 million) recently purchased under the liquidity agreement as a result of a downgrade
Slide 36: Today's Agenda
Today’s Agenda Lockhart Funding Net Interest Margin Credit Current Issues Overview Outlook Summary
Slide 37: Earnings Drivers
Earnings Drivers (2 nd Half 2007 & 2008 vs. 1 st Half 2007) Efficiency Ratio Stock Buybacks Net Interest Margin Credit Costs Low-Cost Deposit Growth Loan Growth
Slide 38: FBR Capital Markets, November 2007
FBR Capital Markets 28 November 2007
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