Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — FBR Capital Markets 2008 Fall Investor Conference
36 slides from Zions Bancorporation N.a's conference presentation, Dec 2, 2008
Slide 1: FBR Capital Markets 2008 Fall Investor Conference
FBR Capital Markets 2008 Fall Investor Conference 2 December 2008 ■ New York City, NY
Slide 2: Forward-Looking Statements
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 est
Slide 3: Today's Agenda
Today’s Agenda Overview Key Performance Trends – Credit Quality – Net Interest Margin – TARP Capital Implications Outlook Summary
Slide 4: Total Assets of $54 Billion
Total Assets of $54 Billion S&P 500 Index NASDAQ Financial 100 Index 500 Offices in 10 Western States The Intermountain West’s Largest Banking Company
Slide 5: Strategic Overview
Strategic Overview • The best long-term growth footprint in the industry • A unique operating model that provides sustainable competitive advantage – Local brands and management – Centralized services and risk management
Slide 6: The Best Long-Term Growth Footprint in the Industry
Footprint Population Growth Estimates from SNL Financial (2008-2013) The Best Long-Term Growth Footprint in the Industry
Slide 7: A Unique Operating Model
“The best model [in the new environment] will be independent business units pursuing company -wide strategies, with centralized control systems.” - William M. Isaac, Chairman, Secura Group and Former Chairman, FDIC ( ABA Banking Journal , September, 2008) A Unique Operating Model
Slide 8: Performance in this Cycle
Performance in this Cycle • Avoided Major Industry Issues – No subprime loans – Almost no MBS exposure – No high-LTV HELOCS – No FNMA/FHLMC Preferred Shares • But… – Residential RE and consumer lot loans in the SW – Missed correlation between CDO risk and community bank real estate exposure – Not im
Slide 9: 2008 Premier Bank in the West for Small and Medium-Size Businesses
2008 Premier Bank in the West for Small and Medium-Size Businesses National Awards - Overall Satisfaction - Treasury Management - Overall Satisfaction - Customer Service Regional Awards - Overall Satisfaction (West) - Treasury Management (West) US Banker Magazine Awards - Women in Banking: 5 of top
Slide 10: Today's Agenda
Today’s Agenda Overview Key Performance Trends – Credit Quality – Net Interest Margin – TARP Capital Implications Outlook Summary
Slide 11: NPAs as a % of Total Assets
Note: Peer group defined as bank holding companies with assets >= $10 billion. Peer data source: SNL NPAs as a % of Total Assets
Slide 12: Non-performing Assets
Peer data source: SNL Non-performing Assets 3 rd Quarter, 2008
Slide 13: NCOs as % of Average Total Loans
Note: Peer group defined as bank holding companies with assets >= $10 billion. Peer data source: SNL NCOs as % of Average Total Loans (Annualized)
Slide 14: Reserves / Net Charge Offs (Annualized)
Peers 1.4 Note: Peer group defined as bank holding companies with assets >= $10 billion. Peer data source: SNL Zions 1.6 Reserves / Net Charge Offs (Annualized)
Slide 15: Reserves / Net Charge Offs (Annualized)
Source: SNL As Reported NIM for selected banks ($5-$20 Billion Market Cap or Large Presence in the West) 3rd Quarter Reserves / Net Charge Offs (Annualized)
Slide 16: Credit Performance Summary
Credit Performance Summary • Relatively – Larger secured commercial portfolio – Smaller, high performing consumer portfolio • Results in – Higher NPAs, but – Lower net charge-offs
Slide 17: Loan Portfolio Diversification
Loan Portfolio Diversification Loans by Geography & Purpose 9/30/2008
Slide 18: Residential Mortgage Loans (Excluding HECL)
Total Outstanding: $2.5 billion (9/30/08) Residential Mortgage Loans (Excluding HECL)
Slide 19: HECL Only
Total Outstanding: $1.9 billion (9/30/08) Average HECL FICO: 756 HECL Only
Slide 20: Bankcard
Total Outstanding: $0.2 billion (9/30/08) Bankcard
Slide 21: Commercial & Industrial
Commercial & Industrial 9/30/2008
Slide 22: Commercial & Industrial Loans
Total Outstanding: $22 billion (9/30/08) Commercial & Industrial Loans
Slide 23: Commercial Real Estate
Commercial Real Estate 9/30/2008
Slide 24: Commercial Real Estate Loans
Commercial Real Estate Loans
Slide 25: Residential Land and Development Loans
( millions ) Arizona Nevada California (total) CA Inland Empire CA Central Valley Outstandings $413 $160 $273 $40 $32 Criticized and Classified $236 $90 $105 $19 $29 % Criticized and Classified 57% 56% 38% 47% 90% Residential Land and Development Loans 9/30/2008
Slide 26: Credit Quality Outlook
Credit Quality Outlook • Weakness in residential construction activity and land values in the Southwest expected to persist through 2009 • Some evidence of spread of credit problems to other geographies and loan categories as economy weakens • Further increase in NPAs, provisions and net losses like
Slide 27: Net Interest Margin
Net Interest Margin • Net Interest Margin naturally high, but potentially volatile if not hedged – Earning assets dominated by variable rate commercial loans – Interest rate swaps and floors to reduce asset sensitivity without using expensive capital • Results: One of the highest and most stable net
Slide 28: A Stable Net Interest Margin in a Volatile Environment
Zions NIM vs. 30-Day LIBOR A Stable Net Interest Margin in a Volatile Environment Source: SNL As Reported NIM (Top 50 Banks by Assets) LIBOR is Quarter Average
Slide 29: Risk-adjusted Net Interest Margin
YTD 9/30/2008 *(Net Interest Income - Net Charge-offs)/Average Earning Assets Risk-adjusted Net Interest Margin*
Slide 30: Risk-adjusted Net Interest Margin: Historical
Historical *(Net Interest Income - Net Charge-offs)/Average Earning Assets Risk-adjusted Net Interest Margin*
Slide 31: Implications of TARP Capital
Implications of TARP Capital • Removes a major constraint to loan growth • Frees up existing capital for possible FDIC-assisted troubled-bank resolutions • Likely to mitigate but accelerate resolution of bank trust preferred CDO portfolio – Updated stress test estimates of $190-$400 million pretax t
Slide 32: Capital Ratios
2Q08 3Q08 3Q08 Pro Forma* Tangible Equity 5.97% 6.60% 9.30% Tier 1 Risk Based 7.45% 8.07% 10.90% Total Risk Based 11.58% 12.30% 15.13% *Includes of $1.4 billion of TARP capital Capital Ratios
Slide 33: Today's Agenda
Today’s Agenda Overview Key Performance Trends – Credit Quality – Net Interest Margin – TARP Capital Implications Outlook Summary
Slide 34: Outlook Summary
Outlook Summary • Loan Growth – Additional capital removes major constraint – Quarterly loan growth of $500MM-$750MM • Deposit Growth – Continues to be price sensitive • NIM – Loan spreads improving, but funding costs remain under pressure – Some continued downward pressure • Credit Quality – Weakne
Slide 35: Conclusion
Conclusion • Next several quarters expected to be challenging with credit costs and security losses significant and lumpy • Long-term outlook remains strong when economy begins to recover – Best long-term growth markets – Sustainable competitive advantage in operating model – Superior risk-adjusted
Slide 36: FBR 2008 Fall Investor Conference
FBR 2008 Fall Investor Conference 2 December 2008 New York City
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