Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Q2 2021 Earnings Presentation
24 slides from Zions Bancorporation N.a's earnings presentation, Jul 19, 2021
Slide 1: Second Quarter 2021 Financial Review
Second Quarter 2021 Financial Review July 19, 2021
Slide 2: Forward-Looking Statements; Use of Non-GAAP Financial Measures
Forward-Looking Statements; Use of Non-GAAP Financial Measures Forward Looking Information This presentation includes “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 assu
Slide 3: Second Quarter 2021 Financial Highlights
Second Quarter 2021 Financial Highlights Vs. 1Q21, improved earnings due to the net gain on an investment in the SBIC portfolio and the acceleration of PPP income recognition due to forgiveness lead to stronger capital ratios ✓ Earnings and Profitability: ✓ Loans and Deposits: ▪ $2.08 diluted earnin
Slide 4: Diluted Earnings Per Share
Diluted Earnings Per Share Vs. 1Q21, EPS positively impacted primarily by securities gains and accelerated recognition of PPP income Diluted Earnings per Share Notable Items: ▪ 2Q21: $2.08 ▪ $0.25 per share benefit from IPO of an SBIC investment (Recursion Pharmaceuticals, Inc.) $1.90 ▪ $0.02 per sh
Slide 5: Balance Sheet Profitability
Balance Sheet Profitability Profitability in 2Q21 improved predominantly due to securities gains and accelerated recognition of PPP income Return on Assets Return on Tangible Common Equity 21.60% 20.20% 17.80% 1.65% 1.57% 1.41% 10.96% 0.89% 0.35% 3.81% 2Q20 3Q20 4Q20 1Q21 2Q21 2Q20 3Q20 4Q20 1Q21 2Q
Slide 6: Credit Quality
Credit Quality Credit quality continues to show improvement, with YTD annualized net charge-offs at just 0.03% of loans All Ratios Exclude PPP Loans Credit Quality Ratios 4.0% 3.5% Key Credit Metrics: Classified / Loans 3.0% ▪ Classified loans/loans: 3.3% NPAs +90/ Loans + OREO 2.5% ▪ NPAs+90(1)/loa
Slide 7: Capital Strength
Capital Strength Capital continues to strengthen as the economy rebounds, positioning Zions for more active capital management Common Equity Tier 1 Capital Return of Shareholder Equity Dividends (Common and Preferred(1)) and Share Repurchases ($ millions) 11.3% 11.2% Dividends Buybacks 10.8% $100 $5
Slide 8: Adjusted Pre-Provision Net Revenue
Adjusted Pre-Provision Net Revenue Adjusted PPNR aided by PPP related revenues (23% of adjusted PPNR) Adjusted PPNR(1) Notable Items: ▪ 2Q21 Adjusted PPNR excludes the net unrealized ($ millions) gain from the successful completion of an IPO of an $350 SBIC investment $300 $290 $300 ▪ Interest Incom
Slide 9: Success Story: Summary of Paycheck Protection Program Loans
Success Story: Summary of Paycheck Protection Program Loans PPP lending success from Zions’ ability to link front line 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 Lo
Slide 10: Success Story: Paycheck Protection Program Customers – Enhanced Relationships
Success Story: Paycheck Protection Program Customers – Enhanced Relationships Zions has focused on strengthening relationships and providing new services to customers PPP Loans New Services Utilized by PPP Customers (Prior to Forgiveness) 30,000 New-to-Bank Customers 25,000 20,000 Existing Customers
Slide 11: New Digital Capabilities
New Digital Capabilities We continue to invest in upgrades and additional digital products and services COMMERCIAL SMALL BUSINESS AFFLUENT CONSUMER Card– Digital Service Platform Upgrade >$1B Annual Spend and ~56,000 Accounts Treasury Internet Banking Upgrade Approximately 9,500 customers, 35,000 us
Slide 12: Average Loan and Deposit Growth
Average Loan and Deposit Growth Linked quarter average non-PPP loans declined 1.5% in 2Q21; average deposits increased 4.5% Average Total Loans Average Total Deposits Loan Yields Cost of Total Deposits Average Noninterest-bearing Deposits ($ billions) ($ billions) Average Total Loans Excluding PPP L
Slide 13: Securities, Money Market Investments and Interest Rate Swaps
Securities, Money Market Investments and Interest Rate Swaps Zions increased the securities portfolio by $1.6 B in 2Q21; money market growth reflects deposit growth Total Securities Portfolio ($ billions) ▪ Strong deposit growth has significantly increased the bank’s and Money Market Investments ove
Slide 14: Net Interest Income
Net Interest Income Net interest income stability assisted by PPP success Net Interest Income Net Interest Margin Net Interest Margin Average money market investments increased to 12.7% of average interest-earning assets in 2Q21, compared with 10.0% in 1Q21, $563 $555 $555 ($ millions) $550 $545 whi
Slide 15: Interest Rate Sensitivity
Interest Rate Sensitivity The low interest rate environment and surge in deposits has resulted in increased asset sensitivity Net Interest Income Sensitivity (1) Loans: Rate Reset and Cash Flow Profile −100 bps +100 bps +200 bps 24% 48% In the down 100 scenario, models assume rates do 12% not fall b
Slide 16: Noninterest Income
Noninterest Income Total customer-related fee income increased 5% from 1Q21 primarily due to an increase in card fee income Customer-Related Fee Income (1) Customer-related fee income increased from the prior ($ millions) quarter due to: $139 $139 $139 $130 $133 ▪ Increased card fee income, up $3 mi
Slide 17: Noninterest Expense
Noninterest Expense Decline in expense in 2Q21 reflects decreases in seasonal compensation and professional services Noninterest Expense (NIE) ▪ Total noninterest expense decreased 2% over the prior quarter, primarily due to seasonally high levels in 1Q ($ millions) ▪ Total adjusted noninterest expe
Slide 18: Allowance for Credit Loss ("ACL")
Allowance for Credit Loss (“ACL”) Reserve decrease from 1Q21 reflects improvement in experienced and expected economic conditions Allowance for Credit Loss The change in 2Q21 ACL from 1Q21 reflects: ACL (%) ex-PPP 1.88 1.91 ▪ Continued improvement in economic outlook and credit ($ millions) 1.74 qua
Slide 19: Financial Outlook (2Q 2022E vs 2Q 2021A)
Financial Outlook (2Q 2022E vs 2Q 2021A) Outlook Comments Slightly to Loan Balances Moderately ▪ Slight to moderate growth in the next twelve months, excluding PPP loans Increasing Net Interest Income Moderately ▪ Assumes benchmark rates generally consistent with the forward curve Increasing ▪ Exclu
Slide 20: Appendix
Appendix ▪ Financial Results Summary ▪ Loan Growth ▪ GAAP to Non-GAAP Reconciliation 20
Slide 21: Financial Results Summary
Financial Results Summary Solid and improving fundamental performance Three Months Ended (Dollar amounts in millions, except per share data) June 30, March 31, December 31, 2021 2021 2020 Earnings Results: Diluted Earnings Per Share $ 2.08 $ 1.90 $ 1.66 Net Earnings Applicable to Common Shareholders
Slide 22: Loan Growth - by Bank Brand and Loan Type
Loan Growth - by Bank Brand and Loan Type Period-End Year over Year Loan Growth (2Q21 vs. 2Q20) (in millions) Zions Bank Amegy CB&T NBAZ NSB Vectra CBW Other Total C&I (ex-Oil & Gas) (195) (157) 46 (182) (14) (53) (1) - (556) SBA PPP (754) (431) (309) (290) (212) (80) (153) - (2,229) Owner occupied
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (Amounts in millions) 2Q21 1Q21 4Q20 3Q20 2Q20 Efficiency Ratio Noninterest expense (GAAP) (1) (a) $ 428 $ 435 $ 424 $ 442 $ 430 Adjustments: Severance costs - - 1 1 - Other real estate expense - - 1 - - Debt extinguishment cost - - - - - Amortization of core deposit
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ In millions except per share amounts 2Q21 1Q21 4Q20 3Q20 2Q20 Pre-Provision Net Revenue (PPNR) (a) Total noninterest expense $428 $435 $424 $442 $430 LESS adjustments: Severance costs - - 1 1 - Other real estate expense - - 1 - - Restructuring costs - - (1) 1 - Pens