Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Goldman Sachs Financial Services Conference 2009
43 slides from Zions Bancorporation N.a's conference presentation, Dec 7, 2009
Slide 1: Goldman Sachs Financial Services Conference, December 2009
Goldman Sachs Financial Services Conference 8 December 2009 ■ New York
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: Bank Headquarters, Offices, Assets, Deposits
Bank Headquarters Offices __Assets _Deposits Zions Bank Salt Lake City 128 $20.38 $15.3B CBaT San Diego 706___$11.58 39.18 “Amegy Houston 4 Si14B 39.58 NBA Phoenix 76 $4.8B $3.9B NSB Tas Vegas 58 $438 35.88 Vectra Denver EX $2.5B $2.0B ‘Commerce WA Seattle 7 30.88 30.68 Commerce-OR Portland 4 $0.07B
Slide 4: Zions' Strengths
• Annual pretax, pre-credit earnings of ~$1billion – NIM: 3.91%, ranked #2 of regional banks/peers. – Best among peers for non-interest bearing deposits as a percent of earning assets • Strong allowance for credit loss: 3.9% of loans • Low LTV ratios on term commercial real estate loans • Successful
Slide 5: Zions' Challenges
• Rising NPAs, to 5.4% of loans from 4.7% in prior quarter – Total delinquent + NPA was up 13% in 3Q09 compared to the prior quarter • YTD net charge-off rate of 2.8% • Continued securities impairments (OTTI), primarily on bank/insurance CDOs - $56.5 million in 3Q Zions’ Challenges
Slide 6: Our Growth Engine: Footprint Population Growth
Footprint Population Growth Estimates from SNL Financial (2009-2014) Our Growth Engine
Slide 7: Agenda: Key Issues Going Forward
Agenda Key Issues Going Forward – Net Interest Margin – Credit Quality – Term CRE – Securities Portfolio – Capital & Deferred Tax Asset Outlook Summary
Slide 8: Net Interest Margin (Regional Bank Peers)
Source: SNL Source: SNL 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. • Excluding the effects of the 2Q09 sub debt modification, NIM increased 9 basis points • A 200 basis point rise in interest r
Slide 9: Risk Adjusted NIM (Regional Bank Peers)
Risk Adjusted NIM (Regional Bank Peers) Risk Adjusted NIM YTD 2009 3.0% 2.5% + 2.0% 4 1.5% 4 om Lit 0.5% 1 1 oo, a BBP eI saa E TT | r 0.5% 1.0% 4 1.5% -2.0% SePPoaasEsSernetiRsaegF =e 9s 29705N 0 kif ae oe an Note: Peer group includes US. regional banks with assets greater than §20 billion and less
Slide 10: Source: SNL - Estimated where data was unavailable
Source: SNL - Estimated where data was unavailable
Slide 11: Agenda: Key Issues Going Forward
Agenda Key Issues Going Forward – Net Interest Margin – Credit Quality – Term CRE – Securities Portfolio – Capital & Deferred Tax Asset Outlook Summary
Slide 12: Loan Portfolio Composition (9/30/2009)
46% 32% 22% *Includes FDIC Supported Assets Loan Portfolio Composition (9/30/2009)
Slide 13: CRE Portfolio Change Summary
Based on Total Loan Commitments CRE Portfolio Change Summary (Dollar Change from 4Q07 to 3Q09 in billions)
Slide 14: Loan Portfolio Performance (9/30/2009)
Loan Portfolio Performance (9/30/2009)
Slide 15: NPAs & Delinquency Trends (Regional Bank Peers)
NPAs + Greater than 90 Days Delinquent / Loans + OREO 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. Source: SNL NPAs & Delinquency Trends (Regional Bank Peers)
Slide 16: Net Charge-offs as % of Loans (Regional Bank Peers)
*Annualized 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. Source: SNL Net Charge-offs as % of Loans* (Regional Bank Peers)
Slide 17: Net Charge Offs (Regional Bank Peers)
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. Source: SNL *The C&I Loans category excludes the impact of Flying J. This $47.5 million loan was charged-off in 2Q09, but ZION anticipates a substanti
Slide 18: Reserves & Net Charge Offs (Regional Bank Peers)
Source: SNL Reserves & Net Charge Offs (Regional Bank Peers)
Slide 19: Credit Quality Outlook
Credit Quality Outlook • Residential construction problem credits stable to improving • Commercial construction problem credits rising, although at a slower rate • Classified loans are stabilizing • Continued elevated levels of NPAs, provisions and net losses • Continued ALLL build likely in 4Q09, b
Slide 20: Agenda: Key Issues Going Forward
Agenda Key Issues Going Forward – Net Interest Margin – Credit Quality – Term CRE – Securities Portfolio – Capital & Deferred Tax Asset Outlook Summary
Slide 21: Term CRE Deep Dive: LTV Stratification
Percentage of Loans within each bucket that are Non-Accrual Bucket <50% 50-59% 60-69% 70-79% 80-89% 90-99% 100%+ NALs 0.8% 1.4% 1.2% 4.6% 22.0% 6.6% 19.2% *Based on most recent LTV; loans are generally reappraised when downgraded to classified status Takeaway: Limited High LTV or “Tail Risk”
Slide 22: Term CRE Deep Dive: LTV Stratification
Percentage of Loans within each bucket that are Non-Accrual Bucket <50% 50-59% 60-69% 70-79% 80-89% 90-99% 100%+ NALs 1.1% 1.1% 2.5% 2.6% 7.2% 2.4% 7.9% *Based on most recent LTV; loans are generally reappraised when downgraded to classified status **The MIT Transaction Based Index is a national ind
Slide 23: Term CRE Deep Dive: Vintage Stratification
Percentage of Loans within each bucket that are Non-Accrual Bucket <= 2005 2006 2007 2008 2009 NALs 1.6% 6.7% 4.4% 2.4% 0.4% Term CRE Deep Dive Vintage Stratification (as of 10/31/09 & excluding all FDIC supported assets) Takeaway: Limited Exposure to 2007 Vintage
Slide 24: Term CRE Deep Dive: Maturity Stratification
Term CRE Deep Dive Maturity Stratification (as of 10/31/09) Percentage of Loan Balance by Maturity 30% 25% 20% 15% 10% 5% 0% + 2009 2010 2011 2012 2013 2014 2015- 2020- 2025+ 2019 2024 Avg Avg Takeaway: Even Annual Distribution of Maturities
Slide 25: Agenda: Key Issues Going Forward
Agenda Key Issues Going Forward – Net Interest Margin – Credit Quality – Term CRE – Securities Portfolio – Capital & Deferred Tax Asset Outlook Summary
Slide 26: Bank & Insurance Trup CDOs 3% of Assets
Bank & Ins. Trup CDOs 3% of Assets
Slide 27: Investment Securities Performance 3Q09
• Credit-related OTTI losses $56.5 million in 3Q09 • Noncredit-related OTTI on securities of $141.9 million in 3Q09 recognized in OCI Investment Securities Performance 3Q09
Slide 28: Agenda: Key Issues Going Forward
Agenda Key Issues Going Forward – Net Interest Margin – Credit Quality – Term CRE – Securities Portfolio – Capital & Deferred Tax Asset Outlook Summary
Slide 29: ZION vs. SCAP More Adverse Stress Loss Projections
ZION vs. SCAP More Adverse Stress Loss Projections (ZION Actual Losses Thru3Q09 vs. SCAP More Adverse $ in millions) First Lien Mortgages Closed-end Junior Liens HELOCs C&l Loans* Construction Multifamily Nonfarm, Non-residential Other CRE Credit Cards Other Consumer Other Loans $0 $200 $400 $600 $8
Slide 30: Deferred Tax Asset
• DTA = $688 million in 3Q09 vs. $644 million in 2Q09 and $402 million in 3Q08 • Asset/liability management strategy announced on Monday, November 23 rd reduced net DTA by ~$148 million • No valuation allowance currently expected • Sources of Positive Evidence – Track record of earnings through prio
Slide 31: Source: SNL - Estimated where data was unavailable
Source: SNL - Estimated where data was unavailable
Slide 32: Capital Ratios
3Q08 2Q09 3Q09 Tangible Common Equity 6.05% 5.66% 5.43% Tier 1 Leverage 7.64% 9.89% 10.06% Tier 1 Risk Based 8.07% 9.66% 10.00% Total Risk Based 12.30% 12.87% 13.24% Minimum Regulatory Requirement for “well capitalized” Tier 1 Risk Based 6.0% Total Risk Based 10.0% Capital Ratios
Slide 33: Outlook Summary
Outlook Summary • Continued elevated levels of credit losses, loss provisions, and some reserve build in a weak economy; rate of deterioration slowing • Future OTTI losses likely stable, possibly declining • Estimated 4Q09 GAAP NIM ≈ 3.8% – continued strong core net interest margin – impacted by new
Slide 34: Outlook Summary
Outlook Summary Long-term outlook remains strong when economy begins to recover – Best long-term growth markets – Sustainable competitive advantage in operating model – Superior risk-adjusted NIM through the business cycle
Slide 35: Goldman Sachs Financial Services Conference, December 2009
Goldman Sachs Financial Services Conference 8 December, 2009 New York
Slide 36: Zions Bancorporation
ZIONS BANCORPORATION,
Slide 37: Q3 2009 Earnings Highlights
Million $ Per Share Net Income To Common ($179) ($1.41) OTTI Impairment on Securities ($57) Provisions For Credit Losses $566 Net Charge-offs $381 OREO Expense $30 Core Pretax Income (ex provision, impairment, OREO exp, & non-recurring items) $253 Q3 2009 Earnings Highlights
Slide 38: CRE Portfolio Composition
CRE Portfolio Composition Loans by Product Type and Location - 9/30/09
Slide 39: CRE Collateral Location by Product Type
Collateral Location Arizona Northern California Southern California Nevada Colorado Texas Utah/ Idaho Washington Other Total Commercial Term Arizona Industrial $30,953 $10,796 ($3,662) $10,679 ($6,260) $42,705 $26,238 $3,419 $36,357 $151,225 Office $44,352 $54,931 $84,313 ($6,233) ($52,341) ($27,283
Slide 40: Loan Portfolio Net Charge Offs (9/30/2009)
Loan Portfolio Net Charge Offs (9/30/2009)
Slide 41: ZION vs. SCAP Baseline Stress Loss Projections
ZION vs. SCAP Baseline Stress Loss Projections (ZION Actual Losses Thru 3Q09 vs. SCAP Baseline $ in millions) First Lien Mortgages Closed-end Junior Liens HELOCs C&l Loans* Construction Multifamily Nonfarm, Non-residential Other CRE Credit Cards Other Consumer Other Loans 0) $200 $400 $600 $800 $1,0
Slide 42: Asset Sensitivity
• Fixed-rate loans: – 26% of portfolio – Duration of about 1 year • Variable-rate loans: – 74% of portfolio – Floors on 42% of variable-rate loans (78% of those loans are at the floor rate) – Continual reduction of interest rate swaps (increasing asset sensitivity) • Non-interest bearing deposits to
Slide 43: Basis Points In the Money
Amount (in $Millions) P~ ° ° 1 (Ane 25 S50 75 100 125 150 175 200 225 250 275 300+ Basis Points “In the Money” ZIONS BANCORPORATION
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