Zions Bancorporation N.a. · NASDAQ:ZION
Zions Bancorporation N.a — Zions Bancorporation — Fox-Pitt Kelton Cochran Caronia Waller Small Mid-Cap Bank and Insurance Conference 2008
47 slides from Zions Bancorporation N.a's conference presentation, Jun 17, 2008
Slide 1: Fox-Pitt Kelton Small Mid-Cap Bank and Insurance Conference
Fox-Pitt Kelton Cochran Caronia Waller Small Mid-Cap Bank and Insurance Conference 17 June 2008 ■ New York
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 1 st Quarter 2008 Performance Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 4: Total Assets of $53 Billion
Total Assets of $53 Billion S&P 500 Index NASDAQ Financial 100 Index Over 500 Offices and 600 ATMs in 10 Western States The Intermountain West’s Largest Banking Company
Slide 5: Our Growth Engine: Population Growth
Population Growth Estimates from US Census (2000-2030) Growing 75% faster than the national average Our Growth Engine
Slide 6: Projected Population Growth 2006-2011
Projected Population Growth 2006-2011 #1 Ranking Among 40 Largest Banks Source: Lehman Brothers Our Growth Engine
Slide 7: Bank Headquarters, Offices, ATMs, Assets, Deposits
Bank Headquarters Gttices _ATHs __ Assets Deposits Zions Bank Salt Lake City 138 184 $18.66 $11.38 CB&aT San Diego 90 103 $10.26 $8.08 Amegy Houston 87 142 $11.76 $8.18 NBA. Phoenix 76 69 $5.3B $3.98 NSB. Las Vegas i4 81 $3.98 $3.38 Vectra Denver Al AS $2.78 $1.78 Commerce-WA Seattle 1 0 $0.98 $0.68
Slide 8: Long-Term Growth
Source: SNL Long-Term Growth
Slide 9: Revenue per Share and Earnings per Share
Revenue per Share (diluted) Earnings Per Share (diluted) $25.00 $6.00 $21.38) re 4.42 $20.00 oo $4.00 $15.00 $3.00 $10.00 $2.00 86.00 $1.00 $0.00 $0.00 SF SG & § ES gsggeEe§ S & 8 € ¥egs g S SFE ESEEESES SF FETEESEES
Slide 10: Today's Agenda
Today’s Agenda Overview 1 st Quarter 2008 Performance Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 11: 1Q08 Performance
1Q08 Performance • Net Income - $104.3 million, $0.98 per share • Key Drivers – Moderate Loan Growth for Capital Conservation – Better Loan Spreads – Some Improvement in Funding Costs – Careful Expense Management • Drags – Impairment & Valuation Charge of $46.0 million, $0.27 per share – Continued H
Slide 12: Today's Agenda
Today’s Agenda Overview 1 st Quarter 2008 Performance Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 13: Strong Asset Quality Relative to Peers
Note: Peer group defined as bank holding companies with assets >= $10 billion. Peer data source: SNL Strong Asset Quality Relative to Peers
Slide 14: NCOs as % of Average Total Loans
NCOs as % of Average Total Loans (Annualized) Note: Peer group defined as bank holding companies with assets >= $10 billion. Peer data source: SNL Strong Asset Quality Relative to Peers
Slide 15: Loan Portfolio Diversification
C&I 46% Consumer 18% CRE 35% Loan Portfolio Diversification Loans by Purpose - 3/31/2008
Slide 16: Total Delinquency % by Quarter
Total Delinquency % by Quarter 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% - 1.50% 1.00% - 2 ~~ ~ a PS a = - or 0.50% ~~ a * . Veal 0.00% LOPRPPPEPPPEEPPEPT ETT?)
Slide 17: Total Delinquency % by Quarter
5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Total Delinquency % by Quarter LPEIILESELESSEP ESE PL SSELISEPESIS
Slide 18: Total Delinquency % by Quarter
5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Total Delinquency % by Quarter
Slide 19: Commercial & Industrial Loans
Commercial & Industrial Loans
Slide 20: Commercial Real Estate Loans
Commercial Real Estate Loans
Slide 21: Residential Construction Components
Residential Construction Components Loans by Purpose - 3/31/2008
Slide 22: Land Acquisition & Development Components
Land Acquisition & Dev. Components Loans by Purpose - 3/31/2008
Slide 23: Diversified CRE Portfolio
Average LTV: 61.7% (as of 4/30/2008) Diversified CRE Portfolio Loans by Product Type and Location - 03/31/08
Slide 24: Loan-to-Value Comparison for Residential A&D Loans
Loan-to-Value Comparison For Residential A&D Loans reappraised between Aug. ‘07 to April ‘08
Slide 25: Credit Quality Outlook
Credit Quality Outlook • Weakness in residential construction activity and land values in the Southwest expected to persist into 2009 • Charge-offs in California likely to decline • Other C&I, consumer credit indicators remain relatively strong • Some further increase in NPAs likely • Provision like
Slide 26: Loan Growth Outlook
Loan Growth Outlook • Slow in CA, AZ, NV • Relatively strong in Texas and Intermountain West • Stronger in C&I than CRE • Taking steps to moderate growth, increase spreads
Slide 27: Today's Agenda
Today’s Agenda Overview 1 st Quarter 2008 Performance Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 28: Lockhart Funding Impact if Brought On Balance Sheet
As of 3-31-08 Total assets in Lockhart $1.75B Lockhart issued CP held by Zions $1.21B Net Lockhart assets not held on balance sheet $0.54B *Includes the estimated impact of ($30)mm after-tax loss on security marks under a full consolidation scenario Lockhart Funding Impact if Brought On Balance Shee
Slide 29: Today's Agenda
Today’s Agenda Overview 1 st Quarter 2008 Performance Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 30: Available for Sale Securities
Zions Bancorp Consolidated as of 3-31-08 (in Billions) Book Value Mark* Estimated Fair Value Treasuries & Agencies $.50 - $.50 Agency Guaranteed MBS .48 - .48 SBA Loan-backed Securities .76 -.02 .74 Bank & Insurance Trust Preferred 2.14 -.28 1.86 REIT Trust Preferred .09 -.02 .07 Small Business Loan
Slide 31: Update on AFS Portfolio
Update on AFS Portfolio Securities transferred to Held To Maturity • $1.500 billion of predominantly A-rated (or higher) Bank & Insurance Trust Preferred CDO securities transferred from AFS to HTM on April 30, 2008 – $1.227 billion fair value – $273 million unrealized pre-tax losses from marks in OC
Slide 32: Today's Agenda
Today’s Agenda Overview 1 st Quarter 2008 Performance Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 33: A High Net Interest Margin
A High Net Interest Margin 1Q 2008 NIM for Selected Banks Source: SNL As Reported NIM for selected banks ($5-$20 Billion Market Cap or Large Presence in the West)
Slide 34: 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 35: NIM Outlook
NIM Outlook • Positives – Loan growth relatively strong – Slightly better average loan pricing for larger loans – Some deposit re-pricing occurring • Pressures – Weak non-interest bearing deposit growth – Adverse shifting of funding mix • Summary: Pressure may be easing
Slide 36: Today's Agenda
Today’s Agenda Overview 1 st Quarter 2008 Performance Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 37: Tangible Equity
(at period end) Tangible Equity
Slide 38: Total Dividend and Dividend Payout Ratio
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Slide 39: Today's Agenda
Today’s Agenda Overview 1 st Quarter 2008 Performance Current Issues Credit Lockhart Funding Investment Portfolio Net Interest Margin Capital & Dividends Outlook Summary
Slide 40: Earnings Drivers (vs. 1Q 2008)
◄► Loan Growth ◄► Low-Cost Deposit Growth ▼ Credit Costs ◄► Net Interest Margin ◄► Efficiency Ratio ◄► Capital & Dividend Actions Earnings Drivers (vs. 1Q 2008)
Slide 41: Fox-Pitt Kelton Cochran Caronia Waller June 2008
Fox-Pitt Kelton Cochran Caronia Waller 17 June 2008
Slide 42: Appendix: Additional Lockhart Information
APPENDIX Additional Lockhart Information
Slide 43: Lockhart Funding Structure
Lockhart Funding Structure • Off-balance sheet QSPE sponsored by Zions Bank • Created in 2000 to enable securitization of SBA 504 and similar loans • Assets: agencies and AAA-rated floating rate securities
Slide 44: SIV vs. QSPE
SIV QSPE - Commercial Paper Conduit Limited backstop from sponsor (5-7%) - additional losses absorbed by capital and debt holders 100% Liquidity/credit backstop from sponsor - ABCP buyers protected by sponsoring bank Funded with ABCP and medium term notes (AAA) Funded with ABCP (A1/F1/P1) Capital (6
Slide 45: Lockhart Funding Structure (cont)
Lockhart Funding Structure (cont) • Funding: P1 / F1 commercial paper • Multiple CP Dealers – Zions – Lehman Brothers – Goldman Sachs • Liquidity Agreement: 100% back-up liquidity provided by Zions Bank
Slide 46: Lockhart Funding Liquidity Agreement
Lockhart Funding Liquidity Agreement • Provided by Zions Bank • Maximum of 100% of Lockhart assets • Zions Bank buys assets from Lockhart if: – Security downgraded below AA- – Lockhart is unable to issue sufficient CP • Both conditions triggered in 4Q07 • Both conditions triggered in 1Q08 – Security
Slide 47: Lockhart Funding Summary of Assets
*Subordinated tranches held by Zions on balance sheet **Includes 2 split-rated securities with both AAA and either AA or Aa1 rating 12/31/07 Corp. Purch. & Paydowns 03/31/08 AAA MBIA insured (small business loans originated by Zions)* $1.13B $-0.27B $0.86B AAA rated bank trust pref’d pools $0.58B $-