EX-99.1 2 exh991earningsrelease8.htm 3Q19 EARNINGS RELEASE SLIDE PRESENTATION Exhibit

ZIONS BANCORPORATION, N.A.
Press Release – Page 1
October 21, 2019


Zions Bancorporation, N.A.
One South Main
Salt Lake City, UT 84133
October 21, 2019
zions20190930aaa.jpg
www.zionsbancorporation.com
Third Quarter 2019 Financial Results: FOR IMMEDIATE RELEASE
 
Investor and Media Contact: James Abbott (801) 844-7637
Zions Bancorporation, N.A. Reports: 3Q19 Net Earnings¹ of $214 million, diluted EPS of $1.17
compared with 3Q18 Net Earnings¹ of $215 million, diluted EPS of $1.04,
and 2Q19 Net Earnings¹ of $189 million, diluted EPS of $0.99

THIRD QUARTER RESULTS
$1.17
 
$214 million
 
3.48%
 
10.4%
Earnings per diluted common share
 
Net Earnings 1
 
Net interest margin (“NIM”)
 
Common Equity
Tier 1
THIRD QUARTER HIGHLIGHTS²
 
 
 
Net Interest Income and NIM
Net interest income was $567 million, compared with $565 million
NIM was 3.48%, compared with 3.63%
Total cost of deposits increased 22 basis points, while total cost of deposits from the second quarter of 2019 increased 1 basis point
Average total deposits increased to $55.3 billion, compared with $53.6 billion
 
 
 
Operating Performance
Pre-provision net revenue ("PPNR") was $305 million, up 7%
Adjusted PPNR³ was $309 million, up 6%
Noninterest expense was $415 million, down 1%
Adjusted noninterest expense³ was $415 million, stable from the prior year
Efficiency ratio³ was 57.3%, compared with 58.8%
 
 
 
Loans and Credit Quality
Net loans and leases were $48.8 billion, up $3.0 billion, or 7%
Nonperforming assets were $237 million, down 19%
Provision for credit losses was $10 million, compared with $(11) million
Net charge-offs of 0.01% of average loans, compared with net credit recoveries of 0.01% of average loans
 
 
 
Capital Returns
Return on average tangible common equity³ was 14.2% for both periods
Common stock repurchases of $275 million, 6.6 million shares, or 3.8% of shares outstanding as of June 30, 2019
Common dividend increased to $0.34 per share from $0.30 per share
 
 
 
Notable Items
Net charge-offs of 0.01% of average loans for the trailing 12 months
 
CEO COMMENTARY
 
Harris H. Simmons, Chairman and CEO, commented, “Given the challenging interest rate environment in which banks currently operate, we’re pleased with the quarter’s overall results. We achieved solid growth of both demand and interest-bearing deposits, moderate loan growth, strong customer-related fee income growth, and flat operating expenses. Credit quality also remained well-controlled, with annualized net charge-offs of only 0.01% of average loans, and nonperforming assets which declined to less than 0.5% of average loans. A 12% reduction in average outstanding diluted shares relative to last year’s third quarter helped produce a 13% increase in earnings per share.”

Mr. Simmons continued, “As we adjust to a lower interest rate environment and anticipate the resulting continued pressure on interest margins, we will continue to take steps to carefully manage operating expenses in the year ahead. We are optimistic that we will be able to manage 2020 operating expenses to a level that is no more than, and likely modestly reduced from, expected 2019 results.”
OPERATING PERFORMANCE3

chart-f4e8d21314915379919.jpgchart-54e5b360b71d57efa03.jpg
¹ Net Earnings is net earnings applicable to common shareholders.
² Comparisons noted in the bullet points are calculated for the current quarter versus the same prior-year period, unless otherwise specified.
³ For information on non-GAAP financial measures and the reasons for which the Bank presents these numbers, see pages 16-19.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 2
October 21, 2019

Comparisons noted in the sections below are calculated for the current quarter versus the same prior-year period, unless otherwise specified. Growth rates of 100% or more are rendered as not meaningful as they are generally reflective of a low initial starting point.
RESULTS OF OPERATIONS
Net Interest Income and Margin
 
 
 
 
 
 
 
3Q19 - 2Q19
 
3Q19 - 3Q18
(In millions)
3Q19
 
2Q19
 
3Q18
 
$
 
%
 
$
 
%
Interest and fees on loans
$
581

 
$
581

 
$
537

 
$

 
 %
 
$
44

 
8
%
Interest on money market investments
8

 
8

 
8

 

 

 

 

Interest on securities
88

 
95

 
86

 
(7
)
 
(7
)
 
2

 
2

Total interest income
677

 
684

 
631

 
(7
)
 
(1
)
 
46

 
7

Interest on deposits
69

 
66

 
38

 
3

 
5

 
31

 
82

Interest on short and long-term borrowings
41

 
49

 
28

 
(8
)
 
(16
)
 
13

 
46

Total interest expense
110

 
115

 
66

 
(5
)
 
(4
)
 
44

 
67

Net interest income
$
567

 
$
569

 
$
565

 
$
(2
)
 

 
$
2

 

 
 
 
 
 
 
 
bps
 
 
 
bps
 
 
Yield on interest-earning assets
4.15
%
 
4.24
%
 
4.06
%
 
(9
)
 
 
 
9

 
 
Rate paid on total deposits and interest-bearing liabilities
0.71
%
 
0.75
%
 
0.45
%
 
(4
)
 
 
 
26

 
 
Cost of total deposits
0.50
%
 
0.49
%
 
0.28
%
 
1

 
 
 
22

 
 
Net interest margin
3.48
%
 
3.54
%
 
3.63
%
 
(6
)
 
 
 
(15
)
 
 
Net interest income increased $2 million to $567 million in the third quarter of 2019 from $565 million in the third quarter of 2018. Total interest income increased $46 million due to a $44 million increase in interest and fees on loans, primarily resulting from average loan growth of $3.5 billion. Interest expense increased $44 million primarily due to increases in the rate paid on deposits and short and long-term borrowings, reflecting the increase in short-term interest rates, in addition to a $1.8 billion, or 41%, increase in average short and long-term borrowings.
The yield on interest earning assets was 4.15%, a decrease of 9 basis points compared with the second quarter of 2019, and an increase of 9 basis points compared with the third quarter of 2018. When adjusted for interest recoveries of $3 million in the third quarter of 2018, using $1 million per loan as the reporting threshold, the yield on interest earning assets increased 11 basis points. Relative to the prior quarter, there was no material change in the recovery of interest income from nonaccrual loans. The yield on securities increased modestly over the year ago rate; however, relative to the second quarter of 2019, the yield on securities declined somewhat due to increased premium amortization resulting from faster repayment speeds.
The rate paid on total deposits and interest-bearing liabilities was 0.71% for the third quarter of 2019, a decrease from 0.75% for the second quarter of 2019, and an increase from 0.45% for the third quarter of 2018. The decline from the second quarter of 2019 was primarily due to lower rates paid on federal funds purchased and other short-term borrowings in addition to strong deposit growth. The increase from the third quarter of 2018 was due to an increase in the cost of deposits and other borrowed funds. The annualized cost of total deposits for the third quarter of 2019 was 0.50%, compared with 0.49% for the second quarter of 2019, and 0.28% for the third quarter of 2018.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 3
October 21, 2019

The net interest margin decreased to 3.48% in the third quarter of 2019, compared with 3.54% in the second quarter of 2019, and 3.63% in the same prior year period. The decrease from the second quarter of 2019 was primarily due a decline in loan and securities yields. The decrease from the same prior year period was due to an increase in the cost of deposits, partially offset by an increase in yields on interest-earning assets.
Noninterest Income
 
 
 
 
 
 
 
3Q19 - 2Q19
 
3Q19 - 3Q18
(In millions)
3Q19
 
2Q19
 
3Q18
 
$
 
%
 
$
 
%
Commercial account fees
$
31

 
$
30

 
$
31

 
$
1

 
3
 %
 
$

 
 %
Card fees
24

 
23

 
24

 
1

 
4

 

 

Retail and business banking fees
20

 
20

 
19

 

 

 
1

 
5

Loan-related fees and income
21

 
17

 
17

 
4

 
24

 
4

 
24

Capital markets and foreign exchange fees
23

 
20

 
14

 
3

 
15

 
9

 
64

Wealth management and trust fees
16

 
15

 
14

 
1

 
7

 
2

 
14

Other customer-related fees
5

 
5

 
7

 

 

 
(2
)
 
(29
)
Customer-related fees
140

 
130

 
126

 
10

 
8

 
14

 
11

Dividends and other income
4

 
5

 
11

 
(1
)
 
(20
)
 
(7
)
 
(64
)
Securities gains (losses), net
2

 
(3
)
 
(1
)
 
5

 
NM

 
3

 
NM

Total noninterest income
$
146

 
$
132

 
$
136

 
$
14

 
11

 
$
10

 
7

Total noninterest income for the third quarter of 2019 increased by $10 million, or 7%, to $146 million from $136 million for the third quarter of 2018. Customer-related fees increased $14 million, which was largely attributable to a $7 million increase in fees for customer interest rate swap activity. Loan-related fees and income increased by $4 million, primarily due to an increase in volume of mortgage loan originations and sales to government-sponsored entities. Dividends and other income decreased by $7 million primarily due to a valuation adjustment on client-related interest rate swaps in the third quarter of 2019. As a result of the decline in interest rates during 2019 and increased client activity during the quarter, these client-related interest rate swaps significantly increased in value, resulting in the Bank having a larger exposure to the clients and a $6 million valuation adjustment in the third quarter of 2019, compared with $6 million in the second quarter of 2019, and less than $1 million in the third quarter of 2018.
Noninterest Expense
 
 
 
 
 
 
 
3Q19 - 2Q19
 
3Q19 - 3Q18
(In millions)
3Q19
 
2Q19
 
3Q18
 
$
 
%
 
$
 
%
Salaries and employee benefits
$
273

 
$
274

 
$
264

 
$
(1
)
 
 %
 
$
9

 
3
 %
Occupancy, net
34

 
32

 
33

 
2

 
6

 
1

 
3

Furniture, equipment and software, net
34

 
35

 
30

 
(1
)
 
(3
)
 
4

 
13

Other real estate expense, net
(2
)
 

 
1

 
(2
)
 
NM

 
(3
)
 
NM

Credit-related expense
2

 
8

 
5

 
(6
)
 
(75
)
 
(3
)
 
(60
)
Professional and legal services
10

 
13

 
12

 
(3
)
 
(23
)
 
(2
)
 
(17
)
Advertising
6

 
5

 
8

 
1

 
20

 
(2
)
 
(25
)
FDIC premiums
7

 
6

 
18

 
1

 
17

 
(11
)
 
(61
)
Other
51

 
51

 
49

 

 

 
2

 
4

Total noninterest expense
$
415

 
$
424

 
$
420

 
$
(9
)
 
(2
)
 
$
(5
)
 
(1
)
Adjusted noninterest expense 1
$
415

 
$
423

 
$
416

 
$
(8
)
 
(2
)
 
$
(1
)
 

1 
For information on non-GAAP financial measures, see pages 16-19.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 4
October 21, 2019

Noninterest expense for the third quarter of 2019 was $415 million, a decrease of 1% when compared with $420 million for the third quarter of 2018. FDIC premiums decreased $11 million primarily due to the elimination of the FDIC surcharge for large banks because the required Deposit Insurance Fund reserve ratio has been met, and the Bank issuing unsecured debt which results in lower FDIC premiums. Other real estate expense and credit-related expense both decreased by $3 million.
The aforementioned decreases in noninterest expense were partially offset by a $9 million increase in salaries and employee benefits and a $4 million increase in furniture, equipment and software expense. The increase in salaries and employee benefits was primarily due to a $13 million increase in base salaries, resulting from annual salary merit increases and employee headcount and a $2 million increase in employee benefits, partially offset by an $8 million decrease in incentive compensation. Furniture, equipment and software expense increased primarily as a result of the successful implementation of the second phase of our three-phase multi-year project to replace our core loan and deposit systems, which occurred in the first quarter of 2019, and has subsequently resulted in increased amortization expense.
Our efficiency ratio was 57.3% in the third quarter of 2019, compared with 59.0% in the second quarter of 2019, and 58.8% in the third quarter of 2018. Adjusted noninterest expense for the third quarter of 2019 decreased $1 million, or less than 1%, to $415 million, compared with $416 million for the same prior year period. For information on non-GAAP financial measures, including differences between noninterest expense and adjusted noninterest expense, see pages 16-19.
BALANCE SHEET ANALYSIS
Asset Quality
 
 
 
 
 
 
 
3Q19 - 2Q19
 
3Q19 - 3Q18
(In millions)
3Q19
 
2Q19
 
3Q18
 
bps
 
 
 
bps
 
 
Ratio of nonperforming assets to loans and leases and other real estate owned
0.48
%
 
0.52
%
 
0.64
 %
 
(4
)
 
 
 
(16
)

 
Annualized ratio of net loan and lease charge-offs (recoveries) to average loans
0.01
%
 
0.12
%
 
(0.01
)%
 
(11
)
 
 
 
2

 
 
Ratio of allowance for loan losses to loans and leases, at period end
1.04
%
 
1.03
%
 
1.05
 %
 
1

 
 
 
(1
)
 
 
 
 
 
 
 
 
 
$
 
%
 
$
 
%
Classified loans
$
799

 
$
770

 
$
784

 
$
29

 
4
 %
 
$
15

 
2
 %
Nonperforming assets
237

 
253

 
292

 
(16
)
 
(6
)
 
(55
)
 
(19
)
Net loan and lease charge-offs (recoveries)
1

 
14

 
(1
)
 
(13
)
 
(93
)
 
2

 
NM

Provision for credit losses
10

 
21

 
(11
)
 
(11
)
 
(52
)
 
21

 
NM

Asset quality improved slightly when compared with the same prior year period. Nonperforming assets declined 19% from the third quarter of 2018, largely due to improvements in the oil and gas-related and commercial real estate portfolios. The ratio of nonaccrual loans and accruing loans past due 90 days or more to loans and leases was 0.49%, compared with 0.65% in the third quarter of 2018, reflecting a continued benign credit environment and disciplined underwriting.
The Bank recorded a $10 million provision for credit losses during the third quarter of 2019, compared with $21 million during the second quarter of 2019, and $(11) million for the third quarter of 2018. The allowance for loan losses was $510 million at September 30, 2019, compared with $480 million at September 30, 2018, or 1.04% and 1.05% of loans and leases, respectively. The increased allowance for credit losses from the prior year period is primarily due to loan growth and an increase in the qualitative portion of the allowance related to general economic indicators.
Loans and Leases
 
 
 
 
 
 
 
3Q19 - 2Q19
 
3Q19 - 3Q18
(In millions)
3Q19
 
2Q19
 
3Q18
 
$
 
%
 
$
 
%
Loans held for sale
$
141

 
$
105

 
$
61

 
$
36

 
34
 %
 
$
80

 
NM
Loans and leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
25,287

 
25,107

 
23,539

 
180

 
1

 
1,748

 
7
Commercial real estate
11,816

 
11,827

 
11,047

 
(11
)
 

 
769

 
7
Consumer
11,732

 
11,683

 
11,224

 
49

 

 
508

 
5
Loans and leases, net of unearned income and fees
48,835

 
48,617

 
45,810

 
218

 

 
3,025

 
7
Less allowance for loan losses
510

 
503

 
480

 
7

 
1

 
30

 
6
Loans held for investment, net of allowance
$
48,325

 
$
48,114

 
$
45,330

 
$
211

 

 
$
2,995

 
7
Loans and leases, net of unearned income and fees, increased $3.0 billion, or 7%, to $48.8 billion at September 30, 2019 from $45.8 billion at September 30, 2018. Within commercial loans, commercial and industrial loans increased $750 million and municipal loans increased $622 million. Term commercial real estate loans increased $717 million.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 5
October 21, 2019

The growth in consumer loans was primarily due to a $467 million increase in 1-4 family residential loans. Unfunded lending commitments and letters of credit increased to $23.6 billion at September 30, 2019, compared with $21.9 billion at September 30, 2018.
Deposits and Borrowed Funds
 
 
 
 
 
 
 
3Q19 - 2Q19
 
3Q19 - 3Q18
(In millions)
3Q19
 
2Q19
 
3Q18
 
$
 
%
 
$
 
%
Noninterest-bearing demand
$
23,770

 
$
22,947

 
$
24,067

 
$
823

 
4
 %
 
$
(297
)
 
(1
)%
Interest-bearing:
 
 
 
 
 
 
 
 
 
 
 
 
 
Savings and money market
27,427

 
26,470

 
25,462

 
957

 
4

 
1,965

 
8

Time
4,942

 
4,915

 
4,256

 
27

 
1

 
686

 
16

Total deposits
$
56,139

 
$
54,332

 
$
53,785

 
$
1,807

 
3

 
$
2,354

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowed funds:
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds purchased and other short-term borrowings
$
4,579

 
$
6,023

 
$
3,780

 
(1,444
)
 
(24
)
 
799

 
21

Long-term debt
$
1,242

 
$
1,236

 
$
879

 
6

 

 
363

 
41
Total borrowed funds
$
5,821

 
$
7,259

 
$
4,659

 
$
(1,438
)
 
(20
)
 
$
1,162

 
25

Total deposits increased by $2.4 billion, or 4%, to $56.1 billion as of September 30, 2019, while noninterest bearing deposits decreased $0.3 billion, or 1%, over the same period. Average total deposits increased to $55.3 billion for the third quarter of 2019, compared with $53.6 billion for the third quarter of 2018. Average noninterest bearing deposits declined 3% to $23.4 billion for the third quarter of 2019, compared with $24.0 billion for the third quarter of 2018, and were 42% and 45% of average total deposits, respectively, for the same periods.
Total borrowed funds increased $1.2 billion, or 25%, to $5.8 billion as of September 30, 2019. Average borrowed funds increased to $6.3 billion for the third quarter of 2019, compared with $4.5 billion for the third quarter of 2018. The increase in both end of period and average borrowed funds reflects recent loan growth, which has exceeded deposit growth.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 6
October 21, 2019

Shareholders’ Equity
 
 
 
 
 
 
 
3Q19 - 2Q19
 
3Q19 - 3Q18
(In millions)
3Q19
 
2Q19
 
3Q18
 
$
 
%
 
$
 
%
Shareholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
$
566

 
$
566

 
$
566

 
$

 
 %
 
$

 
 %
Common stock and additional paid-in capital
3,002

 
3,271

 
4,052

 
(269
)
 
(8
)
 
(1,050
)
 
(26)
Retained earnings
3,892

 
3,737

 
3,296

 
155

 
4

 
596

 
18

Accumulated other comprehensive income (loss)
49

 
25

 
(361
)
 
24

 
96
 
410

 
NM
Total shareholders' equity
$
7,509

 
$
7,599

 
$
7,553

 
$
(90
)
 
(1
)
 
$
(44
)
 
(1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital distributions:
 
 
 
 
 
 
 
 
 
 
 
 
 
Common dividends paid
$
60

 
$
54

 
$
58

 
6

 
11

 
2

 
3

Bank common stock repurchased
275

 
275

 
185

 

 

 
90

 
49
Total capital distributed to common shareholders
335

 
329

 
243

 
6

 
2

 
92

 
38

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital distributed as a percentage of net earnings applicable to common shareholders
157
%
 
174
%
 
113
%
 

 

 

 


During the third quarter of 2019, the Bank’s common stock dividend was $0.34 per share, compared with $0.30 per share in the third quarter of 2018. Common stock repurchases during the current quarter totaled $275 million, or 6.6 million shares, which is equivalent to 3.8% of common stock outstanding as of June 30, 2019. During the last four quarters, the Bank repurchased $1.1 billion, or 23.1 million shares, of common stock which is equivalent to 12.0% of common stock outstanding as of September 30, 2018. As of September 30, 2019, the Bank had 29.3 million ZIONW warrants outstanding with a strike price of $34.14 per share that expire on May 22, 2020.
Common stock and additional paid-in capital decreased $1.1 billion, or 26%, from the third quarter of 2018, primarily due to the previously mentioned share repurchases. Accumulated other comprehensive income improved $410 million from a negative $361 million as of September 30, 2018, to $49 million as of September 30, 2019. The improvement was primarily a result of increases in the fair value of available-for-sale securities due to changes in interest rates.
Tangible book value per common share increased to $34.80 at September 30, 2019, compared with $31.08 at September 30, 2018, primarily due to a 11.3% decrease in common shares outstanding over the same period. Basel III common equity tier 1 (“CET1”) capital was $5.9 billion at September 30, 2019 and $6.3 billion at September 30, 2018. The estimated Basel III CET1 capital ratio was 10.4% at September 30, 2019 compared with 12.1% at September 30, 2018. For information on non-GAAP financial measures, see pages 16-19.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 7
October 21, 2019

Supplemental Presentation and Conference Call
Zions has posted a supplemental presentation to its website, which will be used to discuss these third quarter results at 5:30 p.m. ET this afternoon (October 21, 2019). Media representatives, analysts, investors and the public are invited to join this discussion by calling (253) 237-1247 (domestic and international) and entering the passcode 1358841 or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation website at zionsbancorporation.com. The webcast of the conference call will also be archived and available for 30 days.
Additionally, Zions expects to host its biennial investor day on Thursday, February 6, 2020. Institutional investors and professional equity and fixed income analysts are encouraged to attend in person; retail investors and investment advisers are encouraged to join by webcast. The link to the webcast will be posted to zionsbancorporation.com in advance of the event.
About Zions Bancorporation, N.A.
Zions Bancorporation, N.A. is one of the nation's premier financial services companies with total assets of $70 billion. Zions operates under local management teams and distinct brands in 11 western states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington and Wyoming. The Bank is a national leader in Small Business Administration lending and public finance advisory services. The Bank has been the recipient of many local and national awards, primarily reflecting its strong customer service and products. The Bank has a strong commitment to the communities in which it operates. In addition, Zions is included in the S&P 500 and NASDAQ Financial 100 indices. Investor information and links to local banking brands can be accessed at zionsbancorporation.com.
Forward-Looking Information
This earnings release includes “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations regarding future events or determinations, all of which are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, market trends, industry results or regulatory outcomes to differ materially from those expressed or implied by such forward-looking statements.
Without limiting the foregoing, the words “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “would,” “targets,” “will” and the negative thereof and similar words and expressions are intended to identify forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about future financial and operating results. Actual results and outcomes may differ materially from those presented, either expressed or implied, in the release. Important risk factors that may cause such material differences include, but are not limited to, the Bank’s ability to meet operating leverage goals; the rate of change of interest-sensitive assets and liabilities relative to changes in benchmark interest rates; the ability of the Bank to upgrade its core deposit system and implement new digital products in order to remain competitive; risks associated with information security, such

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ZIONS BANCORPORATION, N.A.
Press Release – Page 8
October 21, 2019

as systems breaches and failures; and legislative, regulatory and economic developments. These risks, as well as other factors, are discussed in the Bank’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (SEC) and available at the SEC’s Internet site (https://www.sec.gov/). In addition, you may obtain documents filed with the SEC by the Bank free of charge by contacting: Investor Relations, Zions Bancorporation, N.A., One South Main Street, 11th Floor, Salt Lake City, Utah 84133, (801) 844-7637.
Except as required by law, Zions Bancorporation, N.A. specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.



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ZIONS BANCORPORATION, N.A.
Press Release – Page 9
October 21, 2019

FINANCIAL HIGHLIGHTS
(Unaudited)
 
Three Months Ended
(In millions, except share, per share, and ratio data)
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
BALANCE SHEET 1
 
 
 
 
 
 
 
 
 
Loans held for investment, net of allowance
$
48,325

 
$
48,114

 
$
47,109

 
$
46,219

 
$
45,330

Total assets
70,361

 
70,065

 
69,195

 
68,746

 
66,731

Deposits
56,139

 
54,332

 
54,535

 
54,101

 
53,785

Total shareholders’ equity
7,509

 
7,599

 
7,588

 
7,578

 
7,553

STATEMENT OF INCOME
 
 
 
 
 
 
 
 
 
Net earnings applicable to common shareholders
$
214

 
$
189

 
$
205

 
$
217

 
$
215

Net interest income
567

 
569

 
576

 
576

 
565

Taxable-equivalent net interest income 2
574

 
576

 
582

 
582

 
570

Total noninterest income
146

 
132

 
132

 
140

 
136

Total noninterest expense
415

 
424

 
430

 
420

 
420

Adjusted pre-provision net revenue 2
309

 
294

 
285

 
305

 
291

Provision for credit losses
10

 
21

 
4

 
6

 
(11
)
SHARE AND PER COMMON SHARE AMOUNTS
 
 
 
 
 
 
 
 
 
Net earnings per diluted common share
$
1.17

 
$
0.99

 
$
1.04

 
$
1.08

 
$
1.04

Dividends
0.34

 
0.30

 
0.30

 
0.30

 
0.30

Book value per common share 1
40.75

 
39.75

 
38.47

 
37.39

 
36.36

Tangible book value per common share 1, 2
34.80

 
34.02

 
32.92

 
31.97

 
31.08

Weighted average share price
43.04

 
46.11

 
47.71

 
46.61

 
52.80

Weighted average diluted common shares outstanding (in thousands)
181,870

 
189,098

 
195,241

 
199,048

 
205,765

Common shares outstanding (in thousands) 1
170,373

 
176,935

 
182,513

 
187,554

 
192,169

SELECTED RATIOS AND OTHER DATA
 
 
 
 
 
 
 
 
 
Return on average assets
1.25
%
 
1.14
%
 
1.26
%
 
1.34
 %
 
1.33
 %
Return on average common equity
12.1
%
 
10.8
%
 
11.9
%
 
12.4
 %
 
12.1
 %
Return on average tangible common equity 2
14.2
%
 
12.7
%
 
13.9
%
 
14.5
 %
 
14.2
 %
Net interest margin
3.48
%
 
3.54
%
 
3.68
%
 
3.67
 %
 
3.63
 %
Cost of total deposits, annualized
0.50
%
 
0.49
%
 
0.43
%
 
0.35
 %
 
0.28
 %
Efficiency ratio 2
57.3
%
 
59.0
%
 
60.2
%
 
57.8
 %
 
58.8
 %
Effective tax rate
22.9
%
 
22.7
%
 
22.3
%
 
22.1
 %
 
23.6
 %
Ratio of nonperforming assets to loans and leases and other real estate owned
0.48
%
 
0.52
%
 
0.50
%
 
0.55
 %
 
0.64
 %
Annualized ratio of net loan and lease charge-offs (recoveries) to average loans
0.01
%
 
0.12
%
 
%
 
(0.07
)%
 
(0.01
)%
Ratio of total allowance for credit losses to loans and leases outstanding 1
1.17
%
 
1.16
%
 
1.17
%
 
1.18
 %
 
1.17
 %
Full-time equivalent employees
10,255

 
10,326

 
10,204

 
10,201

 
10,143

CAPITAL RATIOS AND DATA 1
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
$
5,871

 
$
5,987

 
$
6,124

 
$
6,245

 
$
6,331

Risk-weighted assets
56,307

 
55,499

 
54,404

 
53,591

 
52,493

Tangible common equity ratio
8.5
%
 
8.7
%
 
8.8
%
 
8.9
 %
 
9.1
 %
Common equity tier 1 capital ratio
10.4
%
 
10.8
%
 
11.3
%
 
11.7
 %
 
12.1
 %
Tier 1 leverage ratio
9.3
%
 
9.5
%
 
9.9
%
 
10.3
 %
 
10.5
 %
Tier 1 risk-based capital ratio
11.4
%
 
11.8
%
 
12.3
%
 
12.7
 %
 
13.1
 %
Total risk-based capital ratio
12.6
%
 
13.0
%
 
13.5
%
 
13.9
 %
 
14.6
 %
1 
At period end.
2 
For information on non-GAAP financial measures, see pages 16-19.

- more -


ZIONS BANCORPORATION, N.A.
Press Release – Page 10
October 21, 2019

CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, shares in thousands)
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 

 
(Unaudited)
ASSETS
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
796

 
$
538

 
$
536

 
$
614

 
$
517

Money market investments:
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
1,149

 
634

 
702

 
619

 
590

Federal funds sold and security resell agreements
504

 
620

 
438

 
1,461

 
560

Investment securities:
 
 
 
 
 
 
 
 
 
Held-to-maturity1, at amortized cost
658

 
695

 
764

 
774

 
751

Available-for-sale, at fair value
14,033

 
14,672

 
14,904

 
14,737

 
14,625

Trading account, at fair value
280

 
148

 
316

 
106

 
176

Total investment securities
14,971

 
15,515

 
15,984

 
15,617

 
15,552

Loans held for sale
141

 
105

 
69

 
93

 
61

Loans and leases, net of unearned income and fees
48,835

 
48,617

 
47,606

 
46,714

 
45,810

Less allowance for loan losses
510

 
503

 
497

 
495

 
480

Loans held for investment, net of allowance
48,325

 
48,114

 
47,109

 
46,219

 
45,330

Other noninterest-bearing investments
982

 
1,056

 
993

 
1,046

 
1,027

Premises, equipment and software, net
1,146

 
1,133

 
1,125

 
1,124

 
1,111

Goodwill and intangibles
1,014

 
1,014

 
1,014

 
1,015

 
1,015

Other real estate owned
4

 
5

 
6

 
4

 
4

Other assets
1,329

 
1,331

 
1,219

 
934

 
964

Total assets
$
70,361

 
$
70,065

 
$
69,195

 
$
68,746

 
$
66,731

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
23,770

 
$
22,947

 
$
23,259

 
$
23,645

 
$
24,067

Interest-bearing:
 
 
 
 
 
 
 
 
 
Savings and money market
27,427

 
26,470

 
26,348

 
26,120

 
25,462

Time
4,942

 
4,915

 
4,928

 
4,336

 
4,256

Total deposits
56,139

 
54,332

 
54,535

 
54,101

 
53,785

Federal funds purchased and other short-term borrowings
4,579

 
6,023

 
4,944

 
5,653

 
3,780

Long-term debt
1,242

 
1,236

 
1,228

 
724

 
879

Reserve for unfunded lending commitments
62

 
60

 
59

 
57

 
58

Other liabilities
830

 
815

 
841

 
633

 
676

Total liabilities
62,852

 
62,466

 
61,607

 
61,168

 
59,178

Shareholders’ equity:
 
 
 
 
 
 
 
 
 
Preferred stock, without par value; authorized 4,400 shares
566

 
566

 
566

 
566

 
566

Common stock2 ($0.001 par value; authorized 350,000 shares) and additional paid-in capital
3,002

 
3,271

 
3,541

 
3,806

 
4,052

Retained earnings
3,892

 
3,737

 
3,603

 
3,456

 
3,296

Accumulated other comprehensive income (loss)
49

 
25

 
(122
)
 
(250
)
 
(361
)
Total shareholders’ equity
7,509

 
7,599

 
7,588

 
7,578

 
7,553

Total liabilities and shareholders’ equity
$
70,361

 
$
70,065

 
$
69,195

 
$
68,746

 
$
66,731

1 Held-to-maturity (approximate fair value)
662

 
698

 
762

 
767

 
734

2 Common stock (issued and outstanding)
170,373

 
176,935

 
182,513

 
187,554

 
192,169


- more -


ZIONS BANCORPORATION, N.A.
Press Release – Page 11
October 21, 2019

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
Three Months Ended
(In millions, except share and per share amounts)
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
Interest income:
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
581

 
$
581

 
$
570

 
$
555

 
$
537

Interest on money market investments
8

 
8

 
9

 
8

 
8

Interest on securities
88

 
95

 
96

 
93

 
86

Total interest income
677

 
684

 
675

 
656

 
631

Interest expense:
 
 
 
 
 
 
 
 
 
Interest on deposits
69

 
66

 
57

 
48

 
38

Interest on short- and long-term borrowings
41

 
49

 
42

 
32

 
28

Total interest expense
110

 
115

 
99

 
80

 
66

Net interest income
567

 
569

 
576

 
576

 
565

Provision for credit losses:
 
 
 
 
 
 
 
 
 
Provision for loan losses
8

 
20

 
2

 
7

 
(11
)
Provision for unfunded lending commitments
2

 
1

 
2

 
(1
)
 

Total provision for credit losses
10

 
21

 
4

 
6

 
(11
)
Net interest income after provision for credit losses
557

 
548

 
572

 
570

 
576

Noninterest income:
 
 
 
 
 
 
 
 
 
Commercial account fees
31

 
30

 
30

 
29

 
31

Card fees
24

 
23

 
22

 
25

 
24

Retail and business banking fees
20

 
20

 
18

 
20

 
19

Loan-related fees and income
21

 
17

 
16

 
20

 
17

Capital markets and foreign exchange fees
23

 
20

 
17

 
16

 
14

Wealth management and trust fees
16

 
15

 
14

 
14

 
14

Other customer-related fees
5

 
5

 
5

 
7

 
7

Customer-related fees
140

 
130


122

 
131

 
126

Dividends and other income
4

 
5

 
9

 
7

 
11

Securities gains (losses), net
2

 
(3
)
 
1

 
2

 
(1
)
Total noninterest income
146

 
132

 
132

 
140

 
136

Noninterest expense:
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
273

 
274

 
287

 
270

 
264

Occupancy, net
34

 
32

 
33

 
35

 
33

Furniture, equipment and software, net
34

 
35

 
32

 
31

 
30

Other real estate expense, net
(2
)
 

 
(1
)
 

 
1

Credit-related expense
2

 
8

 
6

 
6

 
5

Professional and legal services
10

 
13

 
11

 
15

 
12

Advertising
6

 
5

 
5

 
6

 
8

FDIC premiums
7

 
6

 
6

 
6

 
18

Other
51

 
51

 
51

 
51

 
49

Total noninterest expense
415

 
424

 
430

 
420

 
420

Income before income taxes
288

 
256

 
274

 
290

 
292

Income taxes
66

 
58

 
61

 
64

 
69

Net income
222

 
198

 
213

 
226

 
223

Preferred stock dividends
(8
)
 
(9
)
 
(8
)
 
(9
)
 
(8
)
Net earnings applicable to common shareholders
$
214

 
$
189

 
$
205

 
$
217

 
$
215

Weighted average common shares outstanding during the period:
 
 
 
 
 
 
 
 
Basic shares (in thousands)
173,160

 
179,156

 
184,767

 
189,169

 
192,973

Diluted shares (in thousands)
181,870

 
189,098

 
195,241

 
199,048

 
205,765

Net earnings per common share:
 
 
 
 
 
 
 
 
 
Basic
$
1.23

 
$
1.05

 
$
1.10

 
$
1.14

 
$
1.11

Diluted
1.17

 
0.99

 
1.04

 
1.08

 
1.04


- more -


ZIONS BANCORPORATION, N.A.
Press Release – Page 12
October 21, 2019

Loan Balances Held for Investment by Portfolio Type
(Unaudited)
(In millions)
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
14,846

 
$
14,883

 
$
14,758

 
$
14,513

 
$
14,096

Leasing
332

 
337

 
312

 
327

 
332

Owner occupied
7,924

 
7,828

 
7,754

 
7,661

 
7,548

Municipal
2,185

 
2,059

 
1,774

 
1,661

 
1,563

Total commercial
25,287

 
25,107

 
24,598

 
24,162

 
23,539

Commercial real estate:
 
 
 
 
 
 
 
 
 
Construction and land development
2,347

 
2,609

 
2,343

 
2,186

 
2,295

Term
9,469

 
9,218

 
9,187

 
8,939

 
8,752

Total commercial real estate
11,816

 
11,827

 
11,530

 
11,125

 
11,047

Consumer:
 
 
 
 
 
 
 
 
 
Home equity credit line
2,930

 
2,929

 
2,884

 
2,937

 
2,884

1-4 family residential
7,506

 
7,440

 
7,294

 
7,176

 
7,039

Construction and other consumer real estate
637

 
644

 
636

 
643

 
644

Bankcard and other revolving plans
494

 
502

 
489

 
491

 
483

Other
165

 
168

 
175

 
180

 
174

Total consumer
11,732

 
11,683

 
11,478

 
11,427

 
11,224

Loans and leases, net of unearned income and fees
$
48,835

 
$
48,617

 
$
47,606

 
$
46,714

 
$
45,810


Nonperforming Assets
(Unaudited)
(In millions)
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans1
$
233

 
$
248

 
$
234

 
$
252

 
$
288

Other real estate owned
4

 
5

 
6

 
4

 
4

Total nonperforming assets
$
237

 
$
253

 
$
240

 
$
256

 
$
292

Ratio of nonperforming assets to loans1 and leases and other real estate owned
0.48
%
 
0.52
%
 
0.50
%
 
0.55
%
 
0.64
%
Accruing loans past due 90 days or more
$
6

 
$
17

 
$
8

 
$
10

 
$
12

Ratio of accruing loans past due 90 days or more to loans1 and leases
0.01
%
 
0.03
%
 
0.02
%
 
0.02
%
 
0.03
%
Nonaccrual loans and accruing loans past due 90 days or more
$
239

 
$
265

 
$
242

 
$
262

 
$
300

Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans1 and leases
0.49
%
 
0.54
%
 
0.51
%
 
0.56
%
 
0.65
%
Accruing loans past due 30-89 days
$
84

 
$
99

 
$
142

 
$
65

 
$
87

Restructured loans included in nonaccrual loans
92

 
79

 
76

 
90

 
90

Restructured loans on accrual
90

 
97

 
98

 
112

 
114

Classified loans
799

 
770

 
729

 
698

 
784

1 Includes loans held for sale.

- more -


ZIONS BANCORPORATION, N.A.
Press Release – Page 13
October 21, 2019

Allowance for Credit Losses
(Unaudited)
 
Three Months Ended
(In millions)
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
Allowance for Loan Losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
503

 
$
497

 
$
495

 
$
480

 
$
490

Provision for loan losses
8

 
20

 
2

 
7

 
(11
)
Loan and lease charge-offs
11

 
23

 
12

 
13

 
17

Less: Recoveries
10

 
9

 
12

 
21

 
18

Net loan and lease charge-offs (recoveries)
1

 
14

 

 
(8
)
 
(1
)
Balance at end of period
$
510

 
$
503

 
$
497

 
$
495

 
$
480

Ratio of allowance for loan losses to loans1 and leases, at period end
1.04
%
 
1.03
%
 
1.04
%
 
1.06
 %
 
1.05
 %
Ratio of allowance for loan losses to nonaccrual loans1 at period end
219
%
 
203
%
 
212
%
 
201
 %
 
167
 %
Annualized ratio of net loan and lease charge-offs (recoveries) to average loans
0.01
%
 
0.12
%
 
%
 
(0.07
)%
 
(0.01
)%
 
 
 
 
 
 
 
 
 
 
Reserve for Unfunded Lending Commitments
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
60

 
$
59

 
$
57

 
$
58

 
$
58

Provision for unfunded lending commitments
2

 
1

 
2

 
(1
)
 

Balance at end of period
$
62

 
$
60

 
$
59

 
$
57

 
$
58

 
 
 
 
 
 
 
 
 
 
Allowance for Credit Losses
 
 
 
 
 
 
 
 
 
Allowance for loan losses
$
510

 
$
503

 
$
497

 
$
495

 
$
480

Reserve for unfunded lending commitments
62

 
60

 
59

 
57

 
58

Total allowance for credit losses
$
572

 
$
563

 
$
556

 
$
552

 
$
538

Ratio of total allowance for credit losses to loans1 and leases outstanding, at period end
1.17
%
 
1.16
%
 
1.17
%
 
1.18
 %
 
1.17
 %
1 Does not include loans held for sale.

- more -


ZIONS BANCORPORATION, N.A.
Press Release – Page 14
October 21, 2019

Nonaccrual Loans by Portfolio Type
(Unaudited)
(In millions)
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
 
 
 
 
 
 
 
 
 
Loans held for sale
$

 
$

 
$

 
$
6

 
$

Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
97

 
$
85

 
$
72

 
$
82

 
$
112

Leasing
1

 
1

 
1

 
2

 
2

Owner occupied
49

 
69

 
69

 
67

 
66

Municipal

 
1

 
1

 
1

 
1

Total commercial
147

 
156

 
143

 
152

 
181

Commercial real estate:
 
 
 
 
 
 
 
 
 
Construction and land development

 
1

 
1

 

 

Term
29

 
31

 
32

 
38

 
46

Total commercial real estate
29

 
32

 
33

 
38

 
46

Consumer:
 
 
 
 
 
 
 
 
 
Home equity credit line
12

 
12

 
11

 
13

 
13

1-4 family residential
44

 
44

 
45

 
42

 
47

Construction and other consumer real estate
1

 
4

 
2

 

 

Bankcard and other revolving plans

 

 

 
1

 
1

Other

 

 

 

 

Total consumer
57

 
60

 
58

 
56

 
61

Total nonaccrual loans
$
233

 
$
248

 
$
234

 
$
252

 
$
288


Net Charge-Offs by Portfolio Type
(Unaudited)
(In millions)
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$

 
$
13

 
$
1

 
$
(10
)
 
$
(3
)
Leasing

 

 

 

 

Owner occupied
(1
)
 

 
1

 

 
(1
)
Municipal

 

 

 

 

Total commercial
(1
)
 
13

 
2

 
(10
)
 
(4
)
Commercial real estate:
 
 
 
 
 
 
 
 
 
Construction and land development

 

 

 
(1
)
 
(2
)
Term
(1
)
 

 
(2
)
 

 
4

Total commercial real estate
(1
)
 

 
(2
)
 
(1
)
 
2

Consumer:
 
 
 
 
 
 
 
 
 
Home equity credit line

 

 
(1
)
 

 
(1
)
1-4 family residential
(1
)
 
(1
)
 
(1
)
 

 

Construction and other consumer real estate

 

 

 

 

Bankcard and other revolving plans
3

 
1

 
1

 
2

 
2

Other
1

 
1

 
1

 
1

 

Total consumer loans
3

 
1

 

 
3

 
1

Total net charge-offs (recoveries)
$
1

 
$
14

 
$

 
$
(8
)
 
$
(1
)

- more -


ZIONS BANCORPORATION, N.A.
Press Release – Page 15
October 21, 2019

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
 
Three Months Ended
 
September 30, 2019
 
June 30, 2019
 
September 30, 2018
(In millions)
Average balance
 
Average
yield/rate 1
 
Average balance
 
Average
yield/rate
1
 
Average balance
 
Average
yield/rate
1
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Money market investments
$
1,413

 
2.41
%
 
$
1,261

 
2.64
%
 
$
1,327

 
2.25
%
Securities:
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity
693

 
3.66
%
 
687

 
3.69
%
 
848

 
3.52
%
Available-for-sale
14,323

 
2.29
%
 
14,750

 
2.43
%
 
14,592

 
2.20
%
Trading account
135

 
4.50
%
 
172

 
4.48
%
 
65

 
3.43
%
Total securities
15,151

 
2.37
%
 
15,609

 
2.51
%
 
15,505

 
2.28
%
Loans held for sale
89

 
3.67
%
 
71

 
2.18
%
 
53

 
4.82
%
Loans held for investment:2
 
 
 
 
 
 
 
 
 
 
 
Commercial
25,284

 
4.83
%
 
24,977

 
4.94
%
 
23,263

 
4.88
%
Commercial real estate
11,849

 
5.10
%
 
11,777

 
5.22
%
 
11,009

 
5.01
%
Consumer
11,695

 
4.22
%
 
11,570

 
4.28
%
 
11,096

 
4.07
%
Total loans held for investment
48,828

 
4.75
%
 
48,324

 
4.85
%
 
45,368

 
4.71
%
Total interest-earning assets
65,481

 
4.15
%
 
65,265

 
4.24
%
 
62,253

 
4.06
%
Cash and due from banks
616

 
 
 
592

 
 
 
516

 
 
Allowance for loan losses
(502
)
 
 
 
(496
)
 
 
 
(489
)
 
 
Goodwill and intangibles
1,014

 
 
 
1,014

 
 
 
1,015

 
 
Other assets
3,643

 
 
 
3,480

 
 
 
3,079

 
 
Total assets
$
70,252

 
 
 
$
69,855

 
 
 
$
66,374

 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Savings and money market
$
26,962

 
0.65
%
 
$
26,262

 
0.63
%
 
$
25,483

 
0.36
%
Time
4,963

 
1.99
%
 
5,025

 
2.02
%
 
4,118

 
1.49
%
Total interest-bearing deposits
31,925

 
0.86
%
 
31,287

 
0.85
%
 
29,601

 
0.52
%
Borrowed funds:
 
 
 
 
 
 
 
 
 
 
 
Federal funds purchased and other short-term borrowings
5,099

 
2.29
%
 
5,795

 
2.53
%
 
3,917

 
2.09
%
Long-term debt
1,239

 
3.65
%
 
1,230

 
3.84
%
 
572

 
4.91
%
Total borrowed funds
6,338

 
2.56
%
 
7,025

 
2.76
%
 
4,489

 
2.45
%
Total interest-bearing funds
38,263

 
1.14
%
 
38,312

 
1.20
%
 
34,090

 
0.77
%
Noninterest-bearing deposits
23,359

 
 
 
23,060

 
 
 
23,974

 
 
Other liabilities
1,062

 
 
 
929

 
 
 
720

 
 
Total liabilities
62,684

 
 
 
62,301

 
 
 
58,784

 
 
Shareholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
Preferred equity
566

 
 
 
566

 
 
 
566

 
 
Common equity
7,002

 
 
 
6,988

 
 
 
7,024

 
 
Total shareholders’ equity
7,568

 
 
 
7,554

 
 
 
7,590

 
 
Total liabilities and shareholders’ equity
$
70,252

 
 
 
$
69,855

 
 
 
$
66,374

 
 
Spread on average interest-bearing funds
 
 
3.01
%
 
 
 
3.04
%
 
 
 
3.29
%
Impact of net noninterest-bearing sources of funds
 
 
0.47
%
 
 
 
0.50
%
 
 
 
0.34
%
Net interest margin
 
 
3.48
%
 
 
 
3.54
%
 
 
 
3.63
%
Memo: total cost of deposits
 
 
0.50
%
 
 
 
0.49
%
 
 
 
0.28
%
Memo: total deposits and interest-bearing liabilities
61,622

 
0.71
%
 
61,372

 
0.75
%
 
58,064

 
0.45
%
1 Rates are calculated using amounts in thousands and taxable-equivalent rates used where applicable.
2 Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.

- more -


ZIONS BANCORPORATION, N.A.
Press Release – Page 16
October 21, 2019

GAAP to Non-GAAP Reconciliations
(Unaudited)
This press release presents non-GAAP financial measures, in addition to GAAP financial measures, to provide investors with additional information. The adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are presented in the following schedules. The Bank considers these adjustments to be relevant to ongoing operating results and provide a meaningful base for period-to-period and company-to-company comparisons. These non-GAAP financial measures are used by management to assess the performance and financial position of the Bank and for presentations of Bank performance to investors. The Bank further believes that presenting these non-GAAP financial measures will permit investors to assess the performance of the Bank on the same basis as that applied by management.
Non-GAAP financial measures have inherent limitations, and are not required to be uniformly applied by individual entities. Although non-GAAP financial measures are frequently used by stakeholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.
The following are non-GAAP financial measures presented in this press release and a discussion of the reasons for which management uses these non-GAAP measures:
Tangible Book Value per Common Share – this schedule also includes “tangible common equity.” Tangible book value per common share is a non-GAAP financial measure that management believes provides additional useful information about the level of tangible equity in relation to outstanding shares of common stock. Management believes the use of ratios that utilize tangible equity provides additional useful information to management and others about capital adequacy because they present measures of those assets that can generate income.
(In millions, except shares and per share amounts)
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
Tangible Book Value per Common Share
 
 
 
 
 
 
 
 
 
 
Total shareholders’ equity (GAAP)
 
$
7,509

 
$
7,599

 
$
7,588

 
$
7,578

 
$
7,553

Preferred stock
 
(566
)
 
(566
)
 
(566
)
 
(566
)
 
(566
)
Goodwill and intangibles
 
(1,014
)
 
(1,014
)
 
(1,014
)
 
(1,015
)
 
(1,015
)
Tangible common equity (non-GAAP)
(a)
$
5,929

 
$
6,019

 
$
6,008

 
$
5,997

 
$
5,972

Common shares outstanding (in thousands)
(b)
170,373

 
176,935

 
182,513

 
187,554

 
192,169

Tangible book value per common share (non-GAAP)
(a/b)
$
34.80

 
$
34.02

 
$
32.92

 
$
31.97

 
$
31.08


- more -


ZIONS BANCORPORATION, N.A.
Press Release – Page 17
October 21, 2019

GAAP to Non-GAAP Reconciliations
(Unaudited)
Return on Average Tangible Common Equity – this schedule also includes “net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax” and “average tangible common equity.” Return on average tangible common equity is a non-GAAP financial measure that management believes provides useful information to management and others about the Bank’s use of shareholders’ equity. Management believes the use of ratios that utilize tangible equity provides additional useful information because they present measures of those assets that can generate income.
 
 
Three Months Ended
(Dollar amounts in millions)
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
Return on Average Tangible Common Equity
 
 
 
 
 
 
 
 
 
Net earnings applicable to common shareholders (GAAP)
 
$
214

 
$
189

 
$
205

 
$
217

 
$
215

Adjustments, net of tax:
 
 
 
 
 
 
 
 
 
 
Amortization of core deposit and other intangibles
 

 

 

 

 

Net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax (non-GAAP)
(a)
$
214

 
$
189

 
$
205

 
$
217

 
$
215

Average common equity (GAAP)
 
$
7,002

 
$
6,988

 
$
7,005

 
$
6,938

 
$
7,024

Average goodwill and intangibles
 
(1,014
)
 
(1,014
)
 
(1,014
)
 
(1,015
)
 
(1,015
)
Average tangible common equity (non-GAAP)
(b)
$
5,988

 
$
5,974

 
$
5,991

 
$
5,923

 
$
6,009

Number of days in quarter
(c)
92

 
91

 
90

 
92

 
92

Number of days in year
(d)
365

 
365

 
365

 
365

 
365

Return on average tangible common equity (non-GAAP)
(a/b/c)*d
14.2
%
 
12.7
%
 
13.9
%
 
14.5
%
 
14.2
%



- more -


ZIONS BANCORPORATION, N.A.
Press Release – Page 18
October 21, 2019

GAAP to Non-GAAP Reconciliations
(Unaudited)
Efficiency Ratio – this schedule also includes “adjusted noninterest expense,” “taxable-equivalent net interest income,” “adjusted taxable-equivalent revenue,” “pre-provision net revenue (PPNR)” and “adjusted PPNR.” The methodology of determining the efficiency ratio may differ among companies. Management makes adjustments to exclude certain items as identified in the subsequent schedules which it believes allows for more consistent comparability among periods. Management believes the efficiency ratio provides useful information regarding the cost of generating revenue. Adjusted noninterest expense provides a measure as to how well the Bank is managing its expenses, and adjusted PPNR enables management and others to assess the Bank’s ability to generate capital to cover credit losses through a credit cycle. Taxable-equivalent net interest income allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources.
Adjusted Pre-Provision Net Revenue per Common Share – this schedule uses “adjusted PPNR” as calculated in the efficiency ratio, which is divided by the weighted average diluted common shares for the period. As mentioned previously, Management believes that adjusted PPNR enables management and others to assess the Bank’s ability to generate capital to cover credit losses through a credit cycle. Dividing this amount by the weighted average diluted common shares outstanding provides a shareholder’s perspective of PPNR growth.
 
 
Three Months Ended
(In millions)
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
Efficiency Ratio
 
 
 
 
 
 
 
 
 
 
Noninterest expense (GAAP)
(a)
$
415

 
$
424

 
$
430

 
$
420

 
$
420

Adjustments:
 
 
 
 
 
 
 
 
 
 
Severance costs
 
2

 
1

 

 
2

 
2

Other real estate expense, net
 
(2
)
 

 
(1
)
 

 
1

Restructuring costs
 

 

 

 

 
1

Pension termination-related expense
 

 

 

 

 

Total adjustments
(b)

 
1

 
(1
)
 
2

 
4

Adjusted noninterest expense (non-GAAP)
(a-b)=(c)
$
415

 
$
423

 
$
431

 
$
418

 
$
416

Net interest income (GAAP)
(d)
$
567

 
$
569

 
$
576

 
$
576

 
$
565

Fully taxable-equivalent adjustments
(e)
7

 
7

 
6

 
6

 
5

Taxable-equivalent net interest income (non-GAAP)
(d+e)=(f)
574

 
576

 
582

 
582

 
570

Noninterest income (GAAP)
(g)
146

 
132

 
132

 
140

 
136

Combined income (non-GAAP)
(f+g)=(h)
720

 
708

 
714

 
722

 
706

Adjustments:
 
 
 
 
 
 
 
 
 
 
Fair value and nonhedge derivative loss
 
(6
)
 
(6
)
 
(3
)
 
(3
)
 

Securities gains (losses), net
 
2

 
(3
)
 
1

 
2

 
(1
)
Total adjustments
(i)
(4
)
 
(9
)
 
(2
)
 
(1
)
 
(1
)
Adjusted taxable-equivalent revenue
(non-GAAP)
(h-i)=(j)
$
724

 
$
717

 
$
716

 
$
723

 
$
707

Pre-provision net revenue (PPNR) (non-GAAP)
(h)-(a)
$
305

 
$
284

 
$
284

 
$
302

 
$
286

Adjusted PPNR (non-GAAP)
(j-c)=(k)
309

 
294

 
285

 
305

 
291

Efficiency ratio (non-GAAP)
(c/j)
57.3
%
 
59.0
%
 
60.2
%
 
57.8
%
 
58.8
%
 
 
 
 
 
 
 
 
 
 
 
Adjusted PPNR per common share
 
 
 
 
 
 
 
 
 
 
Adjusted PPNR (non-GAAP)
(k)
309

 
294

 
285

 
305

 
291

Weighted average diluted shares outstanding (in thousands)
(l)
181,870

 
189,098

 
195,241

 
199,048

 
205,765

Adjusted PPNR per common share (non-GAAP)
(k)/(l)
1.70

 
1.55

 
1.46

 
1.53

 
1.41


- more -


ZIONS BANCORPORATION, N.A.
Press Release – Page 19
October 21, 2019


 
 
Nine Months Ended
(In millions)
 
September 30,
2019
 
September 30,
2018
Efficiency Ratio
 
 
 
 
Noninterest expense (GAAP)
(a)
$
1,270

 
$
1,259

Adjustments:
 
 
 
 
Severance costs
 
4

 
1

Other real estate expense
 
(3
)
 
1

Amortization of core deposit and other intangibles
 

 
1

Restructuring costs
 

 
1

Pension termination-related expense
 

 

Total adjustments
(b)
1

 
4

Adjusted noninterest expense (non-GAAP)
(a-b)=(c)
$
1,269

 
$
1,255

Net interest income (GAAP)
(d)
$
1,712

 
$
1,654

Fully taxable-equivalent adjustments
(e)
20

 
16

Taxable-equivalent net interest income (non-GAAP)
(d+e)=(f)
1,732

 
1,670

Noninterest income (GAAP)
(g)
410

 
412

Combined income (non-GAAP)
(f+g)=(h)
2,142

 
2,082

Adjustments:
 
 
 
 
Fair value and nonhedge derivative income (loss)
 
(15
)
 
2

Securities gains (losses), net
 

 
(1
)
Total adjustments
(i)
(15
)
 
1

Adjusted taxable-equivalent revenue (non-GAAP)
(h-i)=(j)
$
2,157

 
$
2,081

Pre-provision net revenue (PPNR)
(h)-(a)
$
872

 
$
823

Adjusted PPNR (non-GAAP)
(j-c)=(k)
888

 
826

Efficiency ratio (non-GAAP)
(c/j)
58.8
%
 
60.3
%
 
 
 
 
 
Adjusted PPNR per common share
 
 
 
 
Adjusted PPNR (non-GAAP)
(k)
888

 
826

Weighted average diluted shares outstanding (in thousands)
(l)
188,895

 
208,657

Adjusted PPNR per common share (non-GAAP)
(k)/(l)
4.70

 
3.96



# # #