Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — 2021 RBC Capital Markets Global Financials Conference
35 slides from Zions Bancorporation N.a's conference presentation, Mar 9, 2021
Slide 1: 2021 RBC Capital Markets Global Financials Conference
2021 RBC Capital Markets Global Financials Conference March 9, 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: Zions' Business Banking Reputation is Highly Ranked
Zions’ Business Banking Reputation is Highly Ranked Zions compares favorably to key competitors (JPMorgan, Bank of America, US Bank, Wells Fargo) Overall Satisfaction Customer Satisfaction With Our Bankers Customer Satisfaction - Credit Process % of "Excellent" Customer Citations 90 90 90 80 80 80 M
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 CMA ASB RF BAC FHN SNV C BOKF EWBC
Slide 7: Success Story: Summary of Paycheck Protection Program Loans
Success Story: Summary of Paycheck Protection Program Loans PPP lending success relied on Zions’ ability to link frontline bankers and borrowers with an agile technology deployment Round 1: Ranked ▪ Zions ranked 9th in PPP lending and is ranked 37th in U.S. Deposit Market Share(1) 9th ▪ Helped 47,00
Slide 8: Success Story: Zions Recognized for Leading Bank Response During COVID-19 Pandemic
Success Story: Zions Recognized for Leading Bank Response During COVID-19 Pandemic Named as a standout small business bank amid crisis Commercial Banking Standouts in COVID-19 Crisis ▪ Zions was named one of only seven Small Business Banking Standout Commercial Banks Amid Crisis ▪ Greenwich Crisis R
Slide 9: Success Story: Paycheck Protection Program Customers – Enhanced Relationships
Success Story: Paycheck Protection Program Customers – Enhanced Relationships Zions is highly successful at strengthening relationships and growing customer utilization of revenue generating services ~ 31% of Round One PPP Loans Were New Services Utilized by PPP Customers New-To-Bank Customers 20,00
Slide 10: Success Story: Mortgage Banking
Success Story: Mortgage Banking Successes amid COVID-19 pandemic: very strong mortgage revenue 2019 2020 Record Mortgage Funding ▪ Roll-out ▪ Enhanced Digital Fulfillment Process $843 million $791 million ▪ 87% of all applications taken digitally 40% 59% 31% 47% ▪ 25% reduction in turn-time allowing
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 >$1B Annual Spend and ~56,000 Accounts Treasury Internet Banking Upgrade Approximately 9,500 customers, 35,000 us
Slide 12: Long-term Focus on PPNR Growth and Expense Control
Long-term Focus on PPNR Growth and Expense Control Positive operating leverage achieved through revenue growth and expense control Net Revenue Noninterest Expense Adjusted Pre-Provision Net Revenue Indexed: 1H14 = 100 Indexed: 1H14 = 100 Indexed: 1H14 = 100 250 250 250 230 230 230 ZION 210 Peer Top
Slide 13: Profitability
Profitability Efficiency and ROA improvement linked to relatively stable noninterest expense and revenue growth 80 % Return on Assets (modified)(2) 1.8% Efficiency Ratio(1) Substitutes 1.6% 75 Net Charge-Offs for Provision for Credit Losses 1.4% 70 1.2% 1.0% 65 0.8% 60 0.6% 0.4% 55 0.2% 50 0.0% 1H14
Slide 14: Net Interest Income
Net Interest Income Changes in interest rates and balance sheet composition impact net interest income performance Net Interest Income Net Interest Margin Net Interest Margin Average money market investments increased to 7.2% of interest- earning assets in 4Q20, compared with 4.3% in the 3Q20, which
Slide 15: Average Loan and Deposit Growth
Average Loan and Deposit Growth Average non-PPP loans declined slightly in 4Q20 compared to 3Q20 and deposit growth remained very strong Average Total Loans Average Total Deposits ($ millions) Loan Yields Cost of Total Deposits ($ millions) $75,000 $75,000 Average Total Loans Excluding PPP Loans, Yi
Slide 16: Interest Rate Sensitivity
Interest Rate Sensitivity The low and relatively flat interest rate environment and surge in deposits has resulted in increased asset sensitivity ▪ Interest rate sensitivity reduced through interest rate hedges(2): Net Interest Income Sensitivity (1) $ millions Swaps Maturing Average Receive Fixed R
Slide 17: Credit Quality Overview
Credit Quality Overview Zions entered the COVID-19 economic downturn with very clean credit quality All Ratios Exclude PPP Loans Credit Quality Ratios 14.00% Key Credit Metrics: ▪ Classified loans/loans: 3.4% 12.00% ▪ NPAs+90(1)/loans + OREO: 0.80% ▪ Annualized net loan losses: NCOs / Loans (annuali
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: Deferrals and Delinquencies: A Positive Outcome Thus Far
Deferrals and Delinquencies: A Positive Outcome Thus Far Deferrals have receded from the 2Q20 high by more than 90%; nonaccrual and delinquency rates remain stable Total Deferrals Loans 90+ Days Past Due relative to total non-PPP loans relative to total non-PPP loans 6.3% Accruing 90+ Days Past Due
Slide 20: Select Sub-Industries with Elevated Risk Related to COVID-19
Select Sub-Industries 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: ▪ Portions of broad industry groups with significant growth in criticized rates $4.0 billion (8.4%) of 4Q20 non
Slide 21: Additional Recent Trends In Loan Balance, Credit Quality and Line Utilization
Additional Recent Trends In Loan Balance, Credit Quality and Line Utilization In 4Q, Zions experienced generally stable credit quality trends outside of COVID-19 Elevated Risk and Oil and Gas loans (excluding PPP loans) Loan Balances by Portfolio Classified (larger ratio) and and Weighted Average Ri
Slide 22: Allowance for Credit Loss ("ACL")
Allowance for Credit Loss (“ACL”) ACL decrease from 3Q20 reflects portfolio changes and a slight improvement in credit quality Allowance for Credit Loss The change in 4Q20 ACL from 3Q20 reflects: ACL (%) ACL (%) ex-PPP 1.88 1.91 1.74 ▪ Economic improvement in line with previous 1.68 ($ millions) 1.5
Slide 23: 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 1.6% CET1 Ratio ACL/RWA 1.2% 12.7% 12.7% 1.6% 11.9% 11.9% 1.7% 1.5% 1.4% 2.
Slide 24: Diversified, High Quality Deposit Portfolio
Diversified, High Quality Deposit Portfolio Strong concentration of granular retail and small business deposits; small businesses are net contributors of stable deposits Portfolio Composition By Account Type Noninterest-Bearing Deposits / Average Deposits Time 3.5 Deposits NonInterest 60% 3.7% Beari
Slide 25: Financial Outlook (4Q 2021E vs 4Q 2020A)
Financial Outlook (4Q 2021E vs 4Q 2020A) Outlook Comments Slightly ▪ Slight to moderate growth activity in the next twelve months, excluding PPP Loan Balances loans Increasing Slightly ▪ Assumes benchmark rates generally consistent with the forward curve Net Interest Income Increasing ▪ Excludes PPP
Slide 26: Appendix
Appendix ▪ Company Abbreviation Key ▪ 4Q20 Financial Results Highlights and Summary ▪ Loan Growth by Brand and Loan Type ▪ Oil and Gas Portfolio Detail ▪ Greenwich Associates Market Tracking Program Nationwide Data ▪ GAAP to Non-GAAP Reconciliation 26
Slide 27: 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 28: Fourth Quarter 2020 Financial Highlights
Fourth Quarter 2020 Financial Highlights Vs. 3Q20, strength in earnings due to reserve release, strengthening in capital ratios, credit quality stable to improved ✓ Earnings and Profitability: ✓ Credit quality (excluding PPP Loans): ▪ $1.66 diluted earnings/share compared to $1.01 in 3Q20 ▪ Stabilit
Slide 29: Financial Results Summary
Financial Results Summary Solid and improving fundamental performance Three Months Ended (Dollar amounts in millions, except per share data) December 31, September 30, June 30, 2020 2020 2020 Earnings Results: Diluted Earnings Per Share $ 1.66 $ 1.01 $ 0.34 Net Earnings Applicable to Common Sharehol
Slide 30: Loan Growth - by Bank Brand and Loan Type
Loan Growth - by Bank Brand and Loan Type Period-End Year over Year Loan Growth (4Q20 vs. 4Q19) (in millions) Zions Bank Amegy CB&T NBAZ NSB Vectra CBW Other Total C&I (ex-Oil & Gas) (494) (558) 251 (157) (22) (110) (58) - (1,148) SBA PPP 1,379 1,114 1,330 574 500 379 296 - 5,572 Owner occupied (28)
Slide 31: Oil & Gas (O&G) Credit Quality
Oil & Gas (O&G) Credit Quality Oil and gas loans account for $2.1 billion or 5% of total loans, excluding PPP Loans Excluding PPP Loans and as of December 31, 2020: All Ratios Exclude ▪ Annualized NCOs equaled 2.2% of loans PPP Loans Oil and Gas 35% ▪ Classified loans equaled 12.8% of loans Key Cred
Slide 32: Oil & Gas Portfolio
Oil & Gas Portfolio Significant realignment since downturn ▪ Oilfield Services, which accounted for bulk of charge offs in the last Portfolio Trends cycle, accounts for 17% of the portfolio versus 45% going into the 3,500 14 previous cycle (Dec 2014) 3,000 12 ▪ Major differences today vs. then: Stro
Slide 33: 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 34: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (Amounts in millions) 4Q20 3Q20 2Q20 1Q20 4Q19 Efficiency Ratio Noninterest expense (GAAP) (1) (a) $ 424 $ 442 $ 430 $ 408 $ 472 Adjustments: Severance costs 1 1 - - 22 Other real estate expense 1 - - - - Debt extinguishment cost - - - - - Amortization of core deposit
Slide 35: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ In millions except per share amounts 4Q20 3Q20 2Q20 1Q20 4Q19 Pre-Provision Net Revenue (PPNR) (a) Total noninterest expense $424 $442 $430 $408 $472 LESS adjustments: Severance costs 1 1 - - 22 Other real estate expense 1 - - - - Restructuring costs (1) 1 - 1 15 Pe
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