Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — FBR Capital Markets 2010 Fall Investor Conference
38 slides from Zions Bancorporation N.a's conference presentation, Nov 30, 2010
Slide 1: FBR Capital Markets 2010 Fall Investor Conference
November 30, 2010 FBR Capital Markets 2010 Fall Investor Conference
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: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 4: A Collection of Great Banks
A Collection of Great Banks Asset and deposit balances as of 3Q 2010; Deposit market share as of
Slide 5: Multi-Bank Business Model: Competitive Strengths
Multi-Bank Business Model: Competitive Strengths § Direct customer access to local decision makers § Cross-pollination of ideas between banks – CEOs & division managers meet frequently to compare best practices, opportunities, and resolve “intramural” issues § Community bank feel - local marketing a
Slide 6: Small Business Banking: What Others Say About Us
Small Business Banking: National Awards: • Overall Satisfaction • Relationship Manager Performance • Financial Stability • Overall Treasury Management Regional Awards: • Overall Satisfaction - West • Overall Satisfaction - Treasury Management - West What Others Say About Us 2009 Greenwich Excellence
Slide 7: Strong Focus on Business Banking - Loan Mix
*Includes FDIC supported assets Strong Focus on Business Banking - Loan Mix Loan Portfolio as of 3Q10 § Commercial and CRE Loans: 80% § Retail & Other Loans: 20%
Slide 8: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 9: Capital vs. peers
Source: SNL as of 3Q 2010 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
Slide 10: Tier 1 + Reserves as a Percentage of Risk-Weighted Assets
Tier 1 + Reserves as a Percentage of Risk-Weighted Assets Source: SNL as of 3Q 2010 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
Slide 11: Basel III New Capital Proposal
Tier 1 Common 8.66% Total RBC 16.54% Tier 1 RBC 13.97% 7.5% 14.3% 11.8% 7.4% 8.6% 7.0% 10.5% 8.5% 11.1% Basel III New Capital Proposal B3 estimated capital ratios for Zions assumes elimination of trust preferred securities and other comprehensive income from Tier 1 capital, and adjusts for deferred
Slide 12: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 13: Credit Quality Trends
Credit Quality Trends *Annualized Zions excludes FDIC supported assets 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 NPAs + Greater than 90 Days Delinquent / Loans + ORE
Slide 14: Nonaccrual Inflows - Percent of Nonaccrual Loans
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. Peer data as of 3Q10. Nonaccrual inflows from Form FR Y-9C, schedule HC-N, line M.7. Nonaccrual Inflows - Percent of Nonac
Slide 15: Net Charge Offs - By Loan Type
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 YTD 3Q10 Net Charge Offs - By Loan Type Percentage of Zions Total Loans 12.6% 10.7% 6.0% 2.8% 21.4% 18.3% 22.5% 5.7%
Slide 16: ZION vs. SCAP Scorecard - More Adverse Scenario
ZION vs. SCAP Scorecard - More Adverse Scenario First Lien Mortgages Closed-end Junior Liens HELOCs Cal es Construction Multifamily Nonfarm, Non-resi CRE Other Loans $0 $200 $400 ‘$600 $800 $1,000 $1,200 $1,400 $1,600 — SCAP--Mdpoint of Loss Ratio (2-yr cumloss) _7/8ths of SCAPTolal_—_ZIONNNet Charg
Slide 17: Change in CRE Loans Outstanding
Change in CRE Loans Outstanding From 4Q07 to 3Q10 Note: Approximately 2/5ths of the $2.2 billion increase in CRE Term loans are the result of reclassified Commercial Construction loans, generally when construction has been completed and the building qualified for a term loan. $’s in billions
Slide 18: Term CRE Updated LTV Stratification
Percentage of Loans within each bucket that are Non-Accrual 2.2% 1.8% 3.5% 3.0% 8.3% 5.3% 5.3% Term CRE Updated LTV Stratification The MIT Transaction Based Index is a national index that has been applied to Zions’ mostly regional CRE Portfolio Zions loan data and TBI data as of 3Q10 • By attaching
Slide 19: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 20: Generally Stable Core Pre-Tax, Pre-Credit Income
Core net income excludes items that are one time or non-recurring in nature. Incorporated in the Appendix of this presentation is the detail which supports our core net income before tax calculations. 2Q09 - 4Q09 included material gains from loan portfolio swaps. Swaps are used to manage interest ra
Slide 21: Net Interest Margin - 3Q10
Net Interest Margin - 3Q10 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. Peer group not adjusted for accretion of interest income on FDIC acquired loans Source: SNL as of 3Q 2010 Strong
Slide 22: Core NIM Trends
1Q0 9 2Q0 9 3Q0 9 4Q0 9 1Q1 0 2Q1 0 3Q1 0 Cash Drag (1) 24 bps 17 bps 16 bps 24 bps 20 bps 35 bps 46 bps Core NIM Trends • Zions expects net interest sensitive income to increase between an estimated 5.4% and 8.6% if interest rates were to rise 200 bps* • Core NIM (excludes discount accretion) has b
Slide 23: Loans with Floors (as of 6/30/10)
Loans with Floors (as of 6/30/10) § The total amount of loans with floors that are in-the -money equal approximately $7.8B § Weighted average in-the- money floor: 156 bps
Slide 24: Interest Rate Risk Simulation - Slow Response
Interest Rate Risk Simulation - “Slow Response” § 12-month simulated impact - a static balance sheet, and is based on regression analysis comparing deposit repricing changes against similar duration benchmark indices (e.g. Libor, U.S. Treasuries); it also includes management input across all major g
Slide 25: Securities Portfolio Comparison
Securities Portfolio Comparison Source: SNL as of 3Q 2010 MBS securities include residential mortgage pass-through investments that are not guaranteed by the U.S. Government Takeaway - no material NIM compression risk from MBS repricing
Slide 26: Zions' asset sensitivity
• Zions’ asset sensitivity implies a potentially stronger net interest margin in a rising rate environment • Near term pressure on loan pricing may adversely affect the net interest margin
Slide 27: Loan Growth and Production Trends
Loan Growth and Production Trends (1) Linked quarter change in gross loan balance, excluding construction, land, development and FDIC-supported loans (2) Loan production includes originations and renewals
Slide 28: Agenda
Overview of Zions Key Performance Drivers – Capital – Credit Quality – Revenue Outlook Summary Agenda
Slide 29: Near Term Objectives
Near Term Objectives § Reduce problem credits – Continued intense focus on workouts – On the margin, increase the use of A/B note structure § Increase lending activity – Additional emphasis on government guaranteed lending programs – C&I pipelines strengthening in some markets, particularly small an
Slide 30: Outlook Summary
▼ Loans ▼ Nonperforming Assets ▼ Credit Costs Est. 3.40% - 3.50% 4Q10 GAAP Net Interest Margin (Reference: Oct 21 8-K) (1) ◄► 4Q10 Core Net Interest Margin (1) ◄► Core Non-interest Expense ◄► OTTI ◄ ▲ Capital Ratios Outlook Summary 1) Accelerated amortization of sub debt discount in 4Q10 (~$73.3 mil
Slide 31: Zions Bancorporation
ZIONS BANCORPORATION
Slide 32: Asset Sensitivity
Asset Sensitivity § Fixed-rate loans: – Approximately one quarter of portfolio – Duration of about 1.5 years § Variable-rate loans: – Approximately three quarters of portfolio – Floors on approximately 48% of variable-rate loans – Swaps: $520 million (Pay Floating, Receive Fixed), down from $545 mil
Slide 33: CDO Portfolio Summary
CDO Portfolio Summary § Credit-related OTTI losses in 3Q10: $23.7 million – The increase in impairment (compared to 2Q10 OTTI of $18.1 million) is primarily due to assumption changes in prepayment speeds on trust preferred securities, given the adoption of the Dodd-Frank Act. – Excluding that change
Slide 34: CDO Stress Testing - OTTI
CDO Stress Testing - OTTI § Deterioration in PDs % means that the default curve applied to the performing collateral of each deal is made worse by the percentage indicated. Thus a deal with a default curve of 5% stressed to a 25% “Deterioration in PDs %” would have a 6.25% default probability curve
Slide 35: CDO Stress Testing - Capital
CDO Stress Testing - Capital § Under various stress scenarios, Zions’ modeling indicates that OCI (accumulated other comprehensive income) would erode, although at a significantly lower amount than OTTI (other than temporary impairment). § Under the moderate stress scenario at 100% greater PDs, OTTI
Slide 36: History of Bank Deferrals & Defaults in Zions' CDOs
History of Bank Deferrals & Defaults in Zions’ CDOs Date of Deferral; Aggregate Collateral from Banks Deferring ($mm) 1.400 CiGuarior in which bank deferred -and has alnce recovered wae (Quarter in which bank deferred - and has since defaulted ry 4900 | Quarter in which bank deferred -and has not de
Slide 37: Core Net Income Before Tax Detail
Core Net Income Before Tax Detail
Slide 38: Zions Bancorporation
ZIONS BANCORPORATION
Zions Bancorporation — FBR Capital Markets 2010 Fall Investor Conference on 6ix