Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Investor Presentation (November 2009)
25 slides from Zions Bancorporation N.a's investor presentation, Nov 30, 2009
Slide 1: Portfolio and Performance Update
David Blackford CEO & President California Bank & Trust December 1, 2009 Portfolio and Performance Update
Slide 2: CB&T Overview
CB&T Overview ® $11 billion in assets ® 116 branches throughout California ® $9.2 billion in loans ® $9.4 billion in deposits ® Accomplished management team in place for last 10 years
Slide 3: Bank Performance
Bank Performance ® Loans: Ø Modest growth since 2004 (less than 3% organic CAGR) ® Deposits: Ø 32% DDA, 80% core deposits 1 Ø Stable, low cost deposit base to relationship customers ® Profitability: Ø YTD NIM of 4.76% - -among the highest in the country (92 nd percentile ) (2) Ø Flat expenses since
Slide 4: Credit Metrics
2008 Sept. 2009 YTD Non-accrual Loans / Loans 1.72 2.75 Net Charge-offs / Avg Loans 0.78 1.79 Provision 156 bp higher than NCO: Result = $95MM reserve build 2009 Loan Loss Provision / Avg Loans 1.05 3.35 ACL / NPLs 98.6 107.0 Over 100% coverage ACL / Loans 1.69 2.94 Credit Metrics ® Strong core oper
Slide 5: California Housing Overview
California Housing Overview ® Improving demand for finished lots in all Western markets Ø Lot prices increasing as inventory contracts ® Very recent signs of SFR stabilization appearing Ø October 2009 year over year SFR price increase for Orange County, San Diego, and the Bay Area, with LA decline i
Slide 6: California Commercial Overview
California Commercial Overview ® Valuation declines driven by: Ø Rising Cap rates Ø Increase in vacancy rates across all product types Ø Rental rate declines and larger concessions ® Current prices off 40% from 2007 peak ( Moody’s REAL Cml. PPI Index) ® No safe haven - all product types affected ® H
Slide 7: CBT's Lending Philosophy
® Lending practices have constrained problem loan migration and limited loss exposure ® Careful Loan Origination Ø Strong initial underwriting Ø LTV maintenance Ø Remargin requirements Ø Market and loan diversification Ø Borrower financial capacity to support project ® Rigorous Loan Management Ø Ear
Slide 8: Loan Growth
Loan Growth Average loans ($MM)
Slide 9: CBT Loan Portfolio
CBT Loan Portfolio Outstandings of 9/30/09* Mortgage 1st TD 13% C&l 23% Home Equity 5% Residential Construction 6% Total Loan outstandings= 3 $7.7 billion Conetata 9% Owner Occupied RE 22% Commercial Term 22% * Excludes FDIC supported assets
Slide 10: CBT Loan Portfolio: Mortgages
CBT Loan Portfolio Outstandings of 9/30/09 1 st TD Mortgages
Slide 11: CBT Loan Portfolio: Owner Occupied Real Estate
CBT Loan Portfolio Outstandings of 9/30/09 Owner Occupied Real Estate Ø Well secured smaller loans Ø Diversification by product and geography Ø Largely plain vanilla RE SBA Ø Problems arising from business failures Ø 504 NPLs to total at 9/30 = 6.2%. Ø Loss content mitigated by 60% LTV/LTC at origin
Slide 12: CBT Loan Portfolio: Commercial Real Estate
CBT Loan Portfolio Outstandings of 9/30/09 Commercial Real Estate Ø Specialized RE lending group for construction and larger term Ø Branch and Cml. network originations small investor miniperms with strong guarantees Ø Portfolio within targets for market and product diversification Ø Substantial red
Slide 13: Commercial RE Loan Portfolio
CBT Commercial RE Loan Portfolio Product Outstandings as of 9/30/09 * Excludes FDIC supported assets Well Diversified Product Mix
Slide 14: Commercial RE Loan Portfolio: CRE as % of Total Loans
CBT Commercial RE Loan Portfolio CRE as a % of Total Loans
Slide 15: Residential Lot and Home Builder Portfolio
CBT Residential Lot and Home Builder Portfolio Outstandings as of 9/30/09 Residential Builder portfolio = $467M OS Ø Current market conditions showing improvement Ø Growing demand for finished developed lots Ø Multiple offers from major homebuilders on lot sales Ø Significant success in managing thr
Slide 16: Residential Construction Commitment Declines
Residential Construction Commitment Declines $2.1 billion ê
Slide 17: Commercial Construction and Term Real Estate
Commercial Construction and Term Real Estate ® CBT’s commercial strategy has mitigated impact Ø Utilize refinancing interest rates for initial underwriting Ø 55-70% LTV at origination - Sponsorship with solid equity and remargin requirements ® Originations spread over 10 year period ® Reappraisal st
Slide 18: Capitalization Rate Trends
Capitalization Rate Trends Source: CB Richard Ellis, Inc., Market View
Slide 19: Commercial Term Originations
Commercial Term Originations Asset value declines = opportunity for better structure and pricing = increase in CBT loan originations 2 nd half 2008
Slide 20: Commercial Construction Real Estate
Commercial Construction Real Estate ® Completed cash-flowing projects represent bulk of commercial construction exposure (which is less than 10% CBT loan total) Ø Interest reserve use limited to construction period Ø Cash flow sweeps or out-of-pocket payments cover interest for completed projects Ø
Slide 21: Product Summary - Commercial RE
Product Summary - Commercial RE Outstandings as of 9/30/09 David note: Construction “Other” comprised of Cml. land = $103MM
Slide 22: OREO
OREO CBT OREO exposure low due to ability and willingness to react at market clearing prices via note sales prior to foreclosure or rapidly following transfer to OREO 3Q 09 exposure reduced by $8MM 11/09
Slide 23: FDIC Failed Bank Acquisitions
FDIC Failed Bank Acquisitions ® February 2009 - Alliance Bank headquartered in Culver City, CA Ø $925MM loans, five branches Ø Successful integration onto CBT platform Ø Removed brokered and money desk CDs Ø $264MM or 28% resolved in first seven months ® July 2009 - Vineyard Bank HQ in Corona, CA Ø
Slide 24: Conclusion
Conclusion ® Core franchise operating very profitability ® One of the highest NIMs for a bank our size , coupled with a low efficiency ratio, results in high pre- tax, pre-provision operating income to absorb credit costs Ø Significant reserve build 2009 ($94MMM Sept YTD) ® CBT business strategy eff
Slide 25: Look forward 2010
2010 Look forward ® 2010 expected to be transitional year ® However, scrubbed real estate portfolio and commercial loan growth sets stage for improvement late 2010 and into 2011 ® Counter-cyclical lending opportunities provide excellent structure and improved pricing ® CBT projected to emerge early
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