Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Lehman Brothers Financial Services Conference 2007
34 slides from Zions Bancorporation N.a's conference presentation, Sep 11, 2007
Slide 1: Lehman Brothers Financial Services Conference
Lehman Brothers Financial Services Conference 12 September 2007 New York City Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements regarding the projected performance of Zions Bancorporation. These statements constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act. Actual results or achievements may differ material
Slide 3: Today's Agenda
Today’s Agenda Outlook Summary Lockhart Funding Net Interest Margin Credit Mid-Quarter Update 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 $49 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 Headquarters Offices ATMs Assets Deposits Salt Lake City 133 166 $15.1B $10.8B San Diego 91 103 $10.3B $8.2B Houston 80 129 $10.0B $6.9B Phoenix 88 73 $5.4B $4.3B Las Vegas 73 80 $3.9B $3.4B Denver 40 47 $2.4B $1.7B Seattle 1 0 $0.8B $0.5B Portland 1 0 $0.03B $0.01B 1Q 20
Slide 8: Long-Term Growth
Long-Term Growth Source: SNL Net Income (millions) $583 $0 $100 $200 $300 $400 $500 $600 $700 Total Assets (millions) $46,970 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000
Slide 9: Per Share Growth
Per Share Growth Source: SNL Revenue per Share (diluted) $21.44 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 Earnings Per Share (diluted) $5.36 $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 Mid-Quarter Update
Slide 11: Loan Portfolio Diversification
Loan Portfolio Diversification Loans by Purpose – 6/30/2007 C&I 25% Owner Occ 19% CRE Term 14% Consumer 1-4 Family 11% Other Consumer 7% Residential Construction 12% Comm Construction 12% C&I 46% Consumer 18% CRE 36%
Slide 12: Strong Asset Quality
Strong Asset Quality • Direct exposure to subprime & Alt-A mortgages.…………………………………… $0 • Securities backed by subprime mortgages……….…………………………… $0 • HECL………………………………..……. $1.9B – Avg FICO at origination 752 – Avg FICO today 757 – Avg LTV at origination 60.6% On-Balance Sheet Amounts of Selected Asse
Slide 13: Diversified CRE Portfolio
Diversified CRE Portfolio Loans by Product Type and Location – 6/30/07 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 % Product as % Loan Type Total CRE Commercial Term Ind
Slide 14: 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 15: 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 0.20% 0.37% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% ZIONS Peers
Slide 16: Strong Asset Quality Relative to Peers: NCOs
Strong Asset Quality Relative to Peers Source: SNL -- Peer group is defined as U.S. bank holding companies with assets > $10 billion. 0.10% 0.33% 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 17: Credit Quality Outlook
Credit Quality Outlook • Evidence of continued weakening in residential construction activity and land values in the Southwest • Expect increase from historically low levels of NPAs and NCOs • Provision increases driven by softening of residential real estate development
Slide 18: Loan Growth Outlook
Loan Growth Outlook • Slow in CA, AZ, NV • Relatively strong in Texas and Intermountain West • Concentrated in C&I rather than CRE • Opportunities for balance sheet lenders
Slide 19: On Balance Sheet Investment Securities Available for Sale
On Balance Sheet Investment Securities Available for Sale – 6-30-07 (in Billions) .19 Residuals (from ZFNB securitizations) $4.43 .25 Municipal Securities .82 FNMA / FHLMC / GNMA* .25 REIT Trust Preferred– Inv. Grade .41 Insurance Trust Preferred – Inv. Grade 1.05 Bank Trust Preferred – Inv. Grade $
Slide 20: Today's Agenda
Today’s Agenda Outlook Summary Lockhart Funding Credit Overview Net Interest Margin Mid-Quarter Update
Slide 21: A High Net Interest Margin
A High Net Interest Margin 2Q 2007 NIM for Selected Banks 4.89 4.53 4.05 3.76 3.67 3.56 3.46 3.44 3.27 3.22 3.17 2.79 2.59 2.35 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Source: SNL As Reported NIM for selected banks ($5-$20 Billion Market Cap or Large Presence in the West)
Slide 22: A Stable Net Interest Margin in a Volatile Environment
4.53% 5.32% 3.39% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% ZION NIM Libor Top 50 Bank NIM Avg 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 23: NIM Outlook
NIM Outlook • Positives – Loan growth relatively strong – Higher spread between LIBOR and Fed Funds – Better loan pricing • Pressures – Weak core deposit growth – Some adverse shifting of deposit mix
Slide 24: Today's Agenda
Today’s Agenda Outlook Summary Net Interest Margin Credit Overview Lockhart Funding Mid-Quarter Update
Slide 25: 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 26: 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 27: Lockhart Funding Summary of Assets
Lockhart Funding Summary of Assets $3.44B Total $0.27B Other AAA rated, structured** $0.23B Other AAA rated, insured $0.32B US gov’t and agencies $1.29B AAA rated, MBIA insured (small business loans originated by Zions)* $1.33B AAA rated bank trust preferred pools *Subordinated tranches held by Zion
Slide 28: Lockhart Funding Assets
Lockhart Funding Assets • AAA rated, structured includes: – $105 million of predominantly MBS • $32 million of subprime exposure (originally purchased in 2001-2004) • $15 million of home equity loan exposure – $81 million of REIT trust preferred
Slide 29: Lockhart Funding Liquidity Agreement
Lockhart Funding Liquidity Agreement • Provided by Zions Bank • Maximum of 100% of Lockhart assets ($3.44B) • Zions Bank buys assets from Lockhart if: – Security downgraded below AA- – Lockhart is unable to issue CP
Slide 30: 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) – GAAP capital ratios reduced about 45bps – Risk Based Capital ratios reduced about 15-25 bp
Slide 31: 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 have purchased some Lockhart CP on some days • Liquidity facility has not been triggered
Slide 32: Today's Agenda
Today’s Agenda Lockhart Funding Net Interest Margin Credit Mid-Quarter Update Overview Outlook Summary
Slide 33: Earnings Drivers 2007-2008
Earnings Drivers Stock Buybacks Efficiency Ratio Net Interest Margin Credit Costs Low-Cost Deposit Growth Loan Growth 2007-2008
Slide 34: Lehman Brothers New York City September 2007
Lehman Brothers New York City 12 September 2007
Zions Bancorporation — Lehman Brothers Financial Services Conference 2007 on 6ix