Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — BancAnalysts Association of Boston 2011 Conference
34 slides from Zions Bancorporation N.a's conference presentation, Nov 2, 2011
Slide 1: BancAnalysts Association of Boston 2011 Conference
1 November 3, 2011 BancAnalysts Association of Boston 2011 Conference
Slide 2: Forward-Looking Statements
2 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 e
Slide 3: Agenda
3 Agenda Overview of Zions Key Performance Drivers – Capital – Revenue – Credit Quality Outlook Summary
Slide 4: A Collection of Great Banks
4 A Collection of Great Banks Asset and deposit balances as of 3Q 2011 $51.5 billion in assets as of 9/30/2011 $3.1 billion market capitalization as of 11/1/2011 § §
Slide 5: Multi-Bank Model Competitive Strengths
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 brandi
Slide 6: What Others Say About Us
6 Small Business Banking: National Awards: Overall Satisfaction Overall Treasury Management Regional Awards: Overall Satisfaction - West Overall Satisfaction - Treasury Management - West What Others Say About Us Middle Market Banking National Awards: Overall Satisfaction Relationship Manager Perform
Slide 7: Strong Focus on Business Banking - Loan Mix
7 *Includes home equity, construction and other consumer real estate, bankcard and other revolving plans, FDIC and other loan types. Strong Focus on Business Banking - Loan Mix Commercial and CRE Loans: Retail & Other Loans: Change in portfolio composition since December 2007 Loan Portfolio as of 3Q
Slide 8: Agenda
8 Agenda Overview of Zions Key Performance Drivers – Capital – Revenue – Credit Quality Outlook Summary
Slide 9: Tier 1 Common + Reserves as a Percentage of Risk-Weighted Assets
9 Tier 1 Common + Reserves as a Percentage of Risk-Weighted Assets Note: Peer group includes U.S. regional banks with assets greater than $20 billion and less than $200 billion plus footprint competitors WFC and USB. Reserves include loan loss reserve plus reserve for unfunded lending commitments. S
Slide 10: Comparatively Stronger Loan Loss Coverage
10 Comparatively Stronger Loan Loss Coverage Source: Zions , company documents as of 3Q11; Peers, SNL as of 2Q11. Annualized charge-off ratio. Reserves include loan loss reserve plus reserve for unfunded lending commitments.
Slide 11: Capital Structure Cost Savings Opportunities: 2011-2015
11 Capital Structure Cost Savings Opportunities: 2011-2015 Targeted Capital Issue - Repayment or Refinance ($ in millions, except per share figures) Earliest Call or Maturity Date AFTER- Tax Rate Marginal Savings to EPS Cumulative Savings to EPS Cumulative Principal Outstanding Series D Preferred St
Slide 12: CCAR and TARP Repayment
12 CCAR and TARP Repayment Zions expects to be part of the CCAR 2011 Federal Reserve stress test process Capital plans and stress tests submitted are expected to frame capital actions for 2012, as they did for the 19 largest banks in 2011 Therefore, Zions does not expect to repay TARP until sometime
Slide 13: Agenda
13 Agenda Overview of Zions Key Performance Drivers – Capital – Revenue – Credit Quality Outlook Summary
Slide 14: Loan Growth Trend
14 Loan Growth Trend Excludes Construction and FDIC-supported Loans Source: Company earnings releases Excludes construction loans to both commercial and consumer borrowers
Slide 15: Core Net Interest Margin
15 Core Net Interest Margin Zions’ net interest margin excludes non-cash sub debt amortization expense and accretion on FDIC-acquired loans. Peer group net interest margin adjusted for accretion of interest income on FDIC acquired loans, where applicable. Source: Zions , company documents as of 3Q11
Slide 16: Core NIM Trends
16 Core NIM Trends Zions expects net interest sensitive income to increase between an estimated 6.2% and 9.4% if interest rates were to rise 200 bps* in the first year Core NIM (excludes discount accretion) has been generally stable 2010 core NIM compression attributable to a greater drag from cash
Slide 17: Loans with Floors
17 Loans with Floors As of 2Q 2011 Floors on loans added ~22 basis points to the NIM in 2Q11 The benefit to NIM declined ~3 basis points during 1H11 § §
Slide 18: Securities Portfolio Comparison
18 Securities Portfolio Comparison Source: Zions, company documents as of 3Q11; Peers, SNL as of 2Q11 MBS securities include residential mortgage pass-through investments that are not guaranteed by the U.S. Government Estimated option-adjusted duration of loan portfolio = Estimated option-adjusted d
Slide 19: Interest Rate Risk Simulation - Slow Response
19 Interest Rate Risk Simulation - “Slow Response” Assumes a 36% ($5.4 billion) attrition of non-interest bearing balances and a 12% ($0.8 billion) attrition of savings and NOW balances, with such funding replaced using simulated market rate funds. 12-month simulated impact using a static balance sh
Slide 20: Drivers of Core Net Interest Margin
20 Drivers of Core Net Interest Margin Drivers of Core NIM Stability / Expansion Drivers of NIM Contraction § Reduce deposit cost by product § Modest Loan Yield Compression – Recent compression primarily driven by: • more competitive loan pricing and • reduced presence of loan floors – Recent yield
Slide 21: Core Pre-Tax, Pre-Credit Income
21 Core net income excludes items that are one time or non-recurring in nature. 2Q09 - 4Q09 included material gains from loan portfolio related interest rate swaps. Swaps are used to manage interest rate risk and were generally added near the peak in the rate cycle. As hedges became ineffective, gai
Slide 22: Agenda
22 Agenda Overview of Zions Key Performance Drivers – Capital – Revenue – Credit Quality Outlook Summary
Slide 23: Credit Quality Trends
23 Credit Quality Trends *Annualized Note: Peer group includes U.S. publicly traded regional banks with assets greater than $20 billion and less than $200 billion plus footprint competitors WFC and USB Source: SNL Nonperforming assets as a % of Loans & OREO Net Charge-offs as a % of Loans* 4.56% 3.4
Slide 24: Nonaccrual Loan Inflows
24 Nonaccrual Loan Inflows Millions Source: Company documents
Slide 25: Problem Credit Resolution Trends
25 Problem Credit Resolution Trends Source: Company documents Note: Charts reflect problem credits that were $50k or greater in size; “Favorable” resolutions include loans changed to accrual status, loans paid down/paid off, or proceeds from real estate sales. Unfavorable resolutions include increas
Slide 26: Great Recession Cumulative Net Charge-Off Comparison
26 Great Recession 3 Year Cumulative Net Charge-Off Comparison Note: Peer group includes U.S. publicly traded regional banks with assets greater than $20 billion and less than $200 billion plus footprint competitors WFC and USB Source: SNL regulatory data; Years 2008 thru 2010.
Slide 27: Term CRE Updated LTV Stratification
27 Term CRE Updated LTV Stratification The NCREIF Property Index is a national index that has been applied to Zions’ mostly regional CRE Portfolio Zions loan data as of 3Q11; NCREIF Index as of 2Q11 Percentage of Loans within each bucket that are Nonaccrual 0.6% 2.8% 1.6% 3.6% 14.7% 10.0% 7.3% By at
Slide 28: Lessons Learned, Changes Made
28 Lessons Learned, Changes Made Significant enhancement to credit administrative staff Chief Credit Administrators: C&I CRE Consumer Concentration Risk Manager Data Quality Assurance Enhanced Systems Training Concentration Limits Implementing Additional Early Warning Indicators Comprehensive Stress
Slide 29: Agenda
29 Agenda Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary
Slide 30: Outlook Summary
30 Outlook Summary Topic Outlook Loan Balances Stable to Moderately Higher Credit Trends Improving Core Net Interest Income Stable to Moderately Higher Core Noninterest Income Moderately Declining (Durbin Impact) Core Noninterest Expense, excluding Credit- Related NIE Slightly Higher Credit-Related
Slide 31: Zions Bancorporation
ZIONS BANCORPORATION
Slide 32: Trends: Nonaccrual and Net Charge-Offs - Construction & Land Development
32 Source: Company 3Q11 earnings press release Trends: Nonaccrual and Net Charge-Offs Construction & Land Development
Slide 33: Trends: Nonaccrual and Net Charge-Offs - Term CRE & Owner Occupied
33 Source: Company 3Q11 earnings press release Trends: Nonaccrual and Net Charge-Offs Term CRE & Owner Occupied
Slide 34: Zions Bancorporation
ZIONS BANCORPORATION
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