Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Barclays Americas Select Franchise Conference (May 2021)
33 slides from Zions Bancorporation N.a's conference presentation, May 18, 2021
Slide 1: 2021 Second Quarter Investor Update
2021 Second Quarter Investor Update May 2021
Slide 2: Forward-Looking Statements; Use of Non-GAAP Financial Measures
Forward-Looking Statements; Use of Non-GAAP Financial Measures Forward Looking Information These materials include “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and assumpt
Slide 3: Zions Is A Collection of Community Banks
Zions Is A Collection of Community Banks Key Differentiators: Local decision-making and top-notch service, commercial banking focus, granular and low-cost deposit base ▪ Strategic local “ownership” of market opportunities and Zions’ Markets1 challenges Bank Headquarters Deposits % of Total Zions Ban
Slide 4: Zions Receives National and Local Recognition for Excellence
Zions Receives National and Local Recognition for Excellence Affiliates have strong brands in their markets One of only five banks to have averaged 14 or more Greenwich Excellence Awards since 2009 Top team of women bankers (2015-2020) 1 Consistently Voted Best Bank in National Bank of Arizona San D
Slide 5: Middle Market and Small Business Research Feedback
Middle Market and Small Business Research Feedback Zions compares favorably to global competitors (JPMorgan, Bank of America, US Bank, Wells Fargo) Closest Zions Key Peers* Our Rank Competitor's Greenwich Associates Customer Satisfaction Categories Bancorporation (Average Score %) (2018) Score % Cli
Slide 6: Zions is a Leader in Small Business Lending
Zions is a Leader in Small Business Lending Zions punches above its weight Commercial Loans Commercial Loans ($ billion) sized $100k - $1M sized $100k - $1M $30 30% as a percent of total commercial loans $25 25% $20 20% $15 15% $10 10% $5 5% $0 0% ZION KEY JPM HBAN FHN ASB SNV CMA RF C BOKF BAC EWBC
Slide 7: Success Story: Summary of Paycheck Protection Program Loans
Success Story: Summary of Paycheck Protection Program Loans PPP lending success from Zions’ ability to link frontline bankers and borrowers with an agile technology deployment 10th Ranked 10th Nationally In PPP loan dollars originated of consolidated 2020 and 2021 SBA PPP loans Average PPP Loans Loa
Slide 8: Success Story: Paycheck Protection Program Customers – Enhanced Relationships
Success Story: Paycheck Protection Program Customers – Enhanced Relationships Zions has been highly successful at strengthening relationships and growing customer utilization of revenue generating services PPP Loans New Services Utilized by 2020 PPP Customers 25,000 > 55,000 Existing Customers 20,00
Slide 9: Key Corporate Objectives
Key Corporate Objectives Focus on four growth areas, supported by investments in key “enablers” driving robust financial performance Risk Management Data Small People & Business Commercial & Analytics Empowerment BALANCED GROWTH Capital Affluent Markets Operational Technology Excellence 9
Slide 10: Technology: On the Horizon
Technology: On the Horizon We continue to invest in upgrades and additional digital products and services COMMERCIAL SMALL BUSINESS AFFLUENT CONSUMER Card– Digital Service Platform Upgrade >$1B Annual Spend and ~56,000 Accounts Treasury Internet Banking Upgrade ~ 9,500 customers, 37,000 users, $14B
Slide 11: Long-term Focus on PPNR Growth and Expense Control
Long-term Focus on PPNR Growth and Expense Control Positive operating leverage achieved through revenue growth and expense control Net Revenue Noninterest Expense Adjusted Pre-Provision Net Revenue Indexed: 1H14 = 100 Indexed: 1H14 = 100 Indexed: 1H14 = 100 250 250 250 225 ZION 225 225 Peer Top Quar
Slide 12: Profitability
Profitability Efficiency and ROA improvement linked to relatively stable noninterest expense and revenue growth Efficiency Ratio(1) Return on Assets (modified)(2) Substitutes 75 % Net Charge-Offs 1.8% 70 for Provision for Credit Losses 65 1.6% 60 1.4% 55 50 1.2% 45 Zions ranked 13th 40 1.0% 35 0.8%
Slide 13: Average Loan and Deposit Growth
Average Loan and Deposit Growth Average non-PPP loans were generally stable in 1Q21 compared to 4Q20; average deposit growth continued to be strong Average Total Loans Average Total Deposits Loan Yields ($ billions) Cost of Total Deposits ($ billions) $75.0 $75.0 Average Total Loans Excluding PPP Lo
Slide 14: Securities, Money Market Investments and Interest Rate Swaps
Securities, Money Market Investments and Interest Rate Swaps The securities portfolio increased in 1Q21 as the yield curve steepened, and growth in money market investments was strong Total Securities Portfolio ($ billions) ▪ Strong deposit growth has significantly increased the bank’s and Money Mar
Slide 15: Net Interest Income
Net Interest Income Changes in interest rates and balance sheet composition continue to impact net interest income performance Net Interest Income Net Interest Margin Net Interest Margin Average money market investments increased to 10.0% of interest- $563 $555 earning assets in 1Q21, compared with
Slide 16: Interest Rate Sensitivity
Interest Rate Sensitivity The low interest rate environment and surge in deposits has resulted in increased asset sensitivity Net Interest Income Sensitivity (1) Loans: Estimated Rate Reset and Cash −100 bps +100 bps +200 bps Flow Profile 20% 45% In the down 100 scenario, models assume rates do 10%
Slide 17: Credit Quality
Credit Quality Credit quality continues to show improvement All Ratios Exclude PPP Loans Credit Quality Ratios 4.00% Key Credit Metrics: ▪ Classified loans/loans: 3.5% ▪ NPAs+90(1)/loans + OREO: 0.71% NCOs / Loans (ann.) 3.00% ▪ Annualized net loan losses: Classified / Loans ▪ 0.07% of average loans
Slide 18: Credit Quality Trends Relative to Peers
Credit Quality Trends Relative to Peers Zions’ NPAs are trending at levels near the top quartile of peers NPAs+90 DPD / NCOs / Loans (Excluding PPP) Loans (Excluding PPP) + OREO (Trailing 12-month Average) Oil and gas recession 1.70% 1.70% 1.50% 1.50% 1.30% 1.30% 1.10% 1.10% 0.90% 0.90% 0.70% Bump i
Slide 19: Allowance for Credit Loss ("ACL")
Allowance for Credit Loss (“ACL”) ACL decrease from 3Q20 reflects portfolio changes and a slight improvement in credit quality Allowance for Credit Loss The change in 4Q20 ACL from 3Q20 reflects: ACL (%) ACL (%) ex-PPP 1.88 1.91 1.74 ▪ Economic improvement in line with previous 1.68 ($ millions) 1.5
Slide 20: Capital and Profitability: Two Key Lines of Strength
Capital and Profitability: Two Key Lines of Strength Whether looking at capital coverage of loan losses, or earnings coverage of loan losses, Zions ranks superior to many peers Net Charge-Offs (LTM) / Pre-Provision Net Revenue less Net Charge Offs / Common Equity Tier 1+Allowance for Credit Losses R
Slide 21: Loss-Absorbing Capital
Loss-Absorbing Capital Common Equity Tier 1 capital plus the allowance for credit loss is strong relative to peers Common Equity Tier 1 Capital Ratio(1) CET1 Capital and Allowance for Credit Losses (2) / Risk Weighted Assets CET1 Ratio ACL/RWA 1.5% 1.1% 12.7% 12.7% 1.3% 1.2% 12.1% 12.1% 1.4% 0.9% 1.
Slide 22: Financial Outlook (1Q 2022E vs 1Q 2021A)
Financial Outlook (1Q 2022E vs 1Q 2021A) Outlook Comments Slightly ▪ Slight to moderate growth activity in the next twelve months, excluding PPP Loan Balances Increasing loans Stable to Net Interest Income ▪ Assumes benchmark rates generally consistent with the forward curve Slightly ▪ Excludes PPP
Slide 23: Appendix
Appendix ▪ Company Abbreviation Key ▪ 1Q21 Financial Results Highlights and Summary ▪ 2020 Greenwich Excellence Awards ▪ Loan Growth by Brand and Loan Type ▪ COVID-19 Elevated Risk Portfolio Detail ▪ Mortgage Lending Detail ▪ GAAP to Non-GAAP Reconciliation 23
Slide 24: Company Abbreviation (Ticker Symbol) Key
Company Abbreviation (Ticker Symbol) Key ASB: Associated Banc-Corp JPM: JPMorgan Chase & Co. BAC: Bank of America KEY: KeyCorp BOKF: BOK Financial Corporation MTB: M&T Bank Corporation C: Citigroup, Inc. PBCT: People’s United Financial, Inc. CFG: Citizens Financial Group, Inc. RF: Regions Financial
Slide 25: First Quarter 2021 Financial Highlights
First Quarter 2021 Financial Highlights Vs. 4Q20, improved earnings due to reserve release leading to stronger capital ratios ✓ Earnings and Profitability: ✓ Capital Strength: ▪ $1.90 diluted earnings/share compared to $1.66 ▪ 11.2% Common Equity Tier 1 Ratio (CET1), up from 10.8% ▪ $287 million Pre
Slide 26: Financial Results Summary
Financial Results Summary Solid and improving fundamental performance Three Months Ended (Dollar amounts in millions, except per share data) March 31, December 31, September 30, 2021 2020 2020 Earnings Results: Diluted Earnings Per Share $ 1.90 $ 1.66 $ 1.01 Net Earnings Applicable to Common Shareho
Slide 27: 2020 Greenwich Excellence Awards for Middle Market and Small Business
2020 Greenwich Excellence Awards for Middle Market and Small Business Zions is one of five U.S. banks to average 14 or more wins since the inception of the awards in 2009 Middle Market ($10-$500 million in annual sales) • Overall Client Satisfaction – National • Cash Management – Overall Satisfactio
Slide 28: Loan Growth - by Bank Brand and Loan Type
Loan Growth - by Bank Brand and Loan Type Period-End Year over Year Loan Growth (1Q21 vs. 1Q20) (in millions) Zions Bank Amegy CB&T NBAZ NSB Vectra CBW Other Total C&I (ex-Oil & Gas) (729) (776) (380) (164) (17) (136) (111) - (2,313) SBA PPP 1,442 1,319 1,706 609 557 482 350 - 6,465 Owner occupied (
Slide 29: Select Sub-Industries with Elevated Risk Related to COVID-19
Select Sub-Industries(1) with Elevated Risk Related to COVID-19 COVID-19 Elevated Risk loans are less than 10% of total loans and have strong collateral coverage COVID-19 Elevated Risk Loans ▪ Sub-segments withing broad industry groups with significant growth in $3.8 billion (8.2%) of 1Q21 non-PPP l
Slide 30: Additional Recent Trends In Loan Balance, Credit Quality and Line Utilization
Additional Recent Trends In Loan Balance, Credit Quality and Line Utilization We have experienced generally stable credit quality trends outside of COVID-19 Elevated Risk and Oil and Gas loans (data excludes PPP loans) Loan Balances by Portfolio $50.0 and Weighted Average Risk Grades 12.0 Classified
Slide 31: Mortgage Banking
Mortgage Banking Successes amid COVID-19 pandemic: very strong mortgage revenue 2019 2020 Record Mortgage Funding ▪ Roll-out ▪ Enhanced Digital Fulfillment Process $846 million ▪ 87% of all applications taken digitally $725 million 59% 47% 49% 49% ▪ 25% reduction in turn-time allowing 40% for record
Slide 32: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (Amounts in millions) 1Q21 4Q20 3Q20 2Q20 1Q20 Efficiency Ratio Noninterest expense (GAAP) (1) (a) $ 435 $ 424 $ 442 $ 430 $ 408 Adjustments: Severance costs - 1 1 - - Other real estate expense - 1 - - - Debt extinguishment cost - - - - - Amortization of core deposit
Slide 33: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ In millions except per share amounts 1Q21 4Q20 3Q20 2Q20 1Q20 Pre-Provision Net Revenue (PPNR) (a) Total noninterest expense $435 $424 $442 $430 $408 LESS adjustments: Severance costs - 1 1 - - Other real estate expense - 1 - - - Restructuring costs - (1) 1 - 1 Pens
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