OPERATING SEGMENT INFORMATION

We manage our operations and prepare management reports and other information with a primary focus on geographical area. Our banking operations are managed under their own individual brand names, including Zions Bank, Amegy Bank, California Bank & Trust, National Bank of Arizona, Nevada State Bank, Vectra Bank Colorado, and The Commerce Bank of Washington. Performance assessment and resource allocation are based upon this geographical structure. We use an internal funds transfer pricing (“FTP”) allocation system to report results of operations for business segments. This process continues to be refined. Total average loans and deposits presented for the banking segments do not include intercompany amounts between banking segments, but may include deposits with the Other segment. Prior period amounts have been reclassified to reflect these changes.

As of December 31, 2017, our banking business is conducted through 7 locally managed and branded segments in distinct geographical areas. Performance assessment and resource allocation are based upon this geographical structure. Zions Bank operates 97 branches in Utah, 23 branches in Idaho, and 1 branch in Wyoming. CB&T operates 92 branches in California. Amegy operates 73 branches in Texas. NBAZ operates 58 branches in Arizona. NSB operates 50 branches in Nevada. Vectra operates 36 branches in Colorado and 1 branch in New Mexico. TCBW operates 1 branch in Washington and 1 branch in Oregon.

The operating segment identified as “Other” includes the Parent, certain nonbank financial service subsidiaries, centralized back-office functions, and eliminations of transactions between segments. The major components of net interest income at the Bank’s back-office include the revenue associated with the investments securities portfolio and the offset of the FTP costs and benefits provided to the business segments. Throughout 2016 consolidation efforts continued, which resulted in transitioning full-time equivalents from the business segments to the Company’s back-office units. Due to the continuing nature and timing of this change, the Company’s back-office units retained more direct expenses in 2016 than in prior years. In the first quarter of 2017 we made changes to the FTP process and internal allocation of central expenses to better reflect the performance of business segments. Prior period amounts have been revised to reflect the impact of these changes had they been instituted in 2016.

The following schedule does not present total assets or income tax expense for each operating segment, but instead presents average loans, average deposits and income before income taxes because these are the metrics that management uses when evaluating performance and making decisions pertaining to the operating segments. The Parent’s net interest income includes interest expense on other borrowed funds. The Parent’s financial statements in Note 22 provide more information about the Parent’s activities. The condensed statement of income identifies the components of income and expense which affect the operating amounts presented in the Other segment.

The accounting policies of the individual operating segments are the same as those of the Company. Transactions between operating segments are primarily conducted at fair value, resulting in profits that are eliminated for reporting consolidated results of operations.

The following is a summary of selected operating segment information:



(In millions)	Zions Bank									Amegy									CB&T
(In millions)	2017			2016			2015			2017			2016			2015			2017			2016			2015
SELECTED INCOME STATEMENT DATA
Net interest income	$	650		$	624		$	544		$	483		$	460		$	387		$	476		$	434		$	377
Provision for loan losses	19			(22		)	(28		)	25			163			91			(5		)	(9		)	(4		)
Net interest income after provision for loan losses	631			646			572			458			297			296			481			443			381
Noninterest income	151			149			133			118			123			121			75			67			63
Noninterest expense	436			424			430			336			326			373			299			290			294
Income before income taxes	$	346		$	371		$	275		$	240		$	94		$	44		$	257		$	220		$	150
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	$	12,481		$	12,538		$	12,118		$	11,021		$	10,595		$	10,148		$	9,539		$	9,211		$	8,556
Total average deposits	15,986			15,991			15,688			11,096			11,130			11,495			11,030			10,827			10,063
(In millions)	NBAZ									NSB									Vectra
(In millions)	2017			2016			2015			2017			2016			2015			2017			2016			2015
SELECTED INCOME STATEMENT DATA
Net interest income	$	206		$	190		$	152		$	134		$	122		$	94		$	126		$	120		$	101
Provision for loan losses	(8		)	(3		)	8			(11		)	(28		)	(28		)	1			(8		)	5
Net interest income after provision for loan losses	214			193			144			145			150			122			125			128			96
Noninterest income	40			40			36			40			39			36			25			23			21
Noninterest expense	148			144			133			139			137			131			101			97			98
Income before income taxes	$	106		$	89		$	47		$	46		$	52		$	27		$	49		$	54		$	19
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	$	4,267		$	4,086		$	3,811		$	2,357		$	2,284		$	2,344		$	2,644		$	2,469		$	2,400
Total average deposits	4,762			4,576			4,311			4,254			4,137			3,891			2,756			2,720			2,792
(In millions)	TCBW									Other									Consolidated Company
(In millions)	2017			2016			2015			2017			2016			2015			2017			2016			2015
SELECTED INCOME STATEMENT DATA
Net interest income	$	46		$	38		$	28		$	(56	)	$	(121	)	$	32		$	2,065		$	1,867		$	1,715
Provision for loan losses	2			—			(3		)	1			—			(1		)	24			93			40
Net interest income after provision for loan losses	44			38			31			(57		)	(121		)	33			2,041			1,774			1,675
Noninterest income	5			5			4			90			70			(57		)	544			516			357
Noninterest expense	20			19			17			170			148			105			1,649			1,585			1,581
Income (loss) before income taxes	$	29		$	24		$	18		$	(137	)	$	(199	)	$	(129	)	$	936		$	705		$	451
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	$	926		$	791		$	707		$	266		$	88		$	87		$	43,501		$	42,062		$	40,171
Total average deposits	1,107			1,007			879			1,209			207			(481		)	52,200			50,595			48,638