Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Barclays Capital Global Financial Services Conference 2012
32 slides from Zions Bancorporation N.a's conference presentation, Sep 11, 2012
Slide 1: Barclays Capital Global Financial Services Conference
September 12, 2012 Barclays Capital Global Financial Services Conference
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 Credit Quality Profitability Capital Financial Outlook Agenda
Slide 4: A Collection of Great Banks
$3.7 billion market capitalization as of 9/7/2012 Trading symbol: NASDAQ: ZION A Collection of Great Banks More than 70% of Assets in Utah / Texas / Coastal California *
Slide 5: Multi-Bank Model Competitive Strengths
Superior lending capacity relative to community banks Superior local customer access to bank decision makers relative to big nationals Sharing best practices among banks CEOs & division managers meet frequently Community bank feel – local marketing and branding Lower cost structure due to centraliza
Slide 6: Awards: Nationally Recognized for Excellence
Awards: Nationally Recognized for Excellence Thirteen 2011 Greenwich Excellence Awards in Small Business and Middle Market Banking Including: Excellence: Overall Satisfaction Excellence: Relationship Manager Performance – Small Businesses Excellence: Relationship Manager Performance – Middle-Market
Slide 7: Balance Sheet Overview
Balance Sheet Overview Strengths include a strong mix of loans and noninterest-bearing (DDA) funding * As of 2Q12
Slide 8: Strong Focus on Business Banking – Loan Mix
*Includes farm, home equity, consumer, and other loans Source: SNL as of 2Q12 Loan Portfolio as of 2Q12 Commercial and CRE Loans: 75% Retail & Other Loans: 25% * Strong Focus on Business Banking – Loan Mix
Slide 9: Agenda
Overview Credit Quality Profitability Capital Financial Outlook Agenda
Slide 10: 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: SNL *
Slide 11: Classified Loan Trends
Classified Loan Trends * (In millions) Increase in classified loans & inflows during 1Q12 due to grading methodology change to National Real Estate (division of Zions Bank) loans. (In millions)
Slide 12: Zions' Stress Scenario Losses Greatly Reduced
Zions’ Stress Scenario Losses Greatly Reduced Attributable to Numerous Enhanced Risk Management Practices, Including Concentration Risk Management (In millions) Actual Historical Loss Zions’ Stress Scenario Loss * (In millions)
Slide 13: Agenda
Overview Credit Quality Profitability Capital Financial Outlook Agenda
Slide 14: Consistently Profitable and Improving Earnings Quality
Consistently Profitable and Improving Earnings Quality * * Excludes regular and accelerated discount amortization on sub debt and additional accretion of interest income on FDIC loans, and other items considered non-recurring in nature, such as accretion of discount on TARP CPP shares in 1Q12. (In m
Slide 15: Net Interest Income Headwinds Due to Loan Yield Compression
Net Interest Income Headwinds Due to Loan Yield Compression But May be Offset by Loan Growth, Deposit Cost Reduction * (In millions) (In billions)
Slide 16: Moderating Decline in New Loan Spread
Moderating Decline in New Loan Spread Versus matched-maturity funds at transfer pricing rate Cost of Interest Bearing Deposits Spread on Production: New Business * Source: Company documents as of 2Q12
Slide 17: Net Interest Margin Remains Strong Relative to Peers
Net Interest Margin Remains Strong Relative to Peers Despite Zions’ Large Cash Balance (16% of Avg. Earning Assets) Source: ZION as of 2Q12; peers as of 1Q12 NIM adjusted for accretion of interest income on FDIC loans and sub debt amortization expense, where applicable Risk adjusted core NIM calcula
Slide 18: Net Interest Margin Pressure Primarily Due to Rate Floors
Net Interest Margin Pressure Primarily Due to Rate Floors Floors Are A Source of Support to Net Interest Income Today, But Eroding… * $8.0 billion of loans in-the-money, wtd avg 136 bps in the money Cumulative benefit to Net Interest Income: ~$109 million (pre-tax) Cumulative benefit to NIM: 23 bps
Slide 19: Securities & Cash Portfolio
Securities & Cash Portfolio ZION has the Smallest Securities (and MBS) Portfolio vs. its Peers; Securities Duration is ~ Source: SNL as of 2Q12 MBS securities include resi mortgage pass-through investments that are not guaranteed by the U.S. Government Estimated option-adjusted duration of loan port
Slide 20: Balance Sheet Remains Asset Sensitive
Balance Sheet Remains Asset Sensitive Zions estimates net interest sensitive income would increase between an estimated 12.2% and 14.0% if interest rates were to rise 200 bps* in the first year Assumes a 41% ($6.7 billion) attrition of noninterest bearing balances and a 24% ($1.8 billion) attrition
Slide 21: Loan Growth Concentration in Less Risky Types
(In millions) (In millions) Loan Growth Concentration in Less Risky Types Source: Company documents *
Slide 22: Core Net Interest Income Relatively Stable
(In millions) Putting it all Together: Core Net Interest Income Relatively Stable * * 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 debt and additional accretion of interest income on FDIC
Slide 23: 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 24: Agenda
Overview Credit Quality Net Interest Income Capital Financial Outlook Agenda
Slide 25: Capital Levels are Now Strong Relative to Peers
Capital Levels are Now Strong Relative to Peers Source: ZION as of 2Q12. 1. Cash consists of cash & equivalents *
Slide 26: Loan Loss Coverage is Also Strong Comparatively
Source: ZION as of 2Q12. Annualized charge-off ratio. Reserves include loan loss reserve plus reserve for unfunded lending commitments. CYN excluded in reserve/NCO ratio comparison due to a net recovery and BOKF excluded due to unavailable data. * Loan Loss Coverage is also Strong Comparatively
Slide 27: Capital & Funding Actions
Capital & Funding Actions * 1H 2012 $700 million repayment of TARP preferred equity on March 28th $558 million of new senior debt issuance Capital plan to Federal Reserve included issuance of $600 million Repayment of $255 million of TLGP debt in June Called 11.0% Series E preferred shares Issued $1
Slide 28: Impact of Capitalization Changes
Impact of Capitalization Changes Assumes no change to revenue and noninterest expense * $8,500 Not updated for Basel III NPR Key Assumptions for long term target capital stack: Preferred Stock dividend: 7.5% (after tax); Subordinated Debt interest rate: 6% (pre-tax); Senior Debt interest rate: 4.75%
Slide 29: Agenda
Overview Credit Quality – Still The Most Sensitive Driver of EPS Growth Capital and TARP Net Interest Income Financial Outlook Agenda
Slide 30: One-Year Outlook Summary
One-Year Outlook Summary Topic Outlook Loan Balances Moderately Higher Stronger than 2Q Core Net Interest Income Stable to Slightly Lower Core Noninterest Income1 Stable to Slightly Higher Net Income Increasing Noninterest Expense Slightly Declining Credit Trends Improving Reserve Release Continue a
Slide 31: Appendix
Appendix ZIONS BANCORPORATION
Slide 32: What Happens if CDOs get Better?
What Happens if CDOs 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 TCE
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