Operating Segment Information

6 Months Ended

Jun. 30, 2020

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 is continually refined. In the third quarter of 2019, we made changes to the FTP process to more accurately reflect the cost of funds for loans. Prior period amounts have been revised to reflect the impact of these changes had they been instituted for the periods presented. Total average loans and deposits presented for the banking segments include insignificant intercompany amounts between banking segments and may also include deposits with the Other segment.

As of June 30, 2020, our banking business is conducted through 7 locally managed and branded segments in distinct geographical areas. Zions Bank operates 95 branches in Utah, 25 branches in Idaho, and one branch in Wyoming. Amegy operates 75 branches in Texas. CB&T operates 85 branches in California. NBAZ operates 56 branches in Arizona. NSB operates 46 branches in Nevada. Vectra operates 34 branches in Colorado and one branch in New Mexico. TCBW operates two branches in Washington and one branch in Oregon.

The operating segment identified as “Other” includes certain non-bank 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.

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 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 Bank. Transactions between operating segments are primarily conducted at fair value, resulting in profits that are eliminated for reporting consolidated results of operations.

The following schedule presents selected operating segment information for the three months ended June 30, 2020 and 2019:


	Zions Bank						Amegy						CB&T
(In millions)	2020		2019		2020		2019		2020		2019
SELECTED INCOME STATEMENT DATA
Net interest income	$	156	$	175	$	120	$	127	$	123	$	134
Provision for credit losses	40		16		25		(8)		46		9
Net interest income after provision for credit losses	116		159		95		135		77		125
Noninterest income	38		38		31		34		19		22
Noninterest expense	111		120		79		86		74		82
Income (loss) before income taxes	$	43	$	77	$	47	$	83	$	22	$	65
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	$	14,222	$	13,067	$	13,570	$	12,254	$	12,524	$	10,838
Total average deposits	17,977		15,205		13,023		11,361		13,522		11,412


	NBAZ						NSB						Vectra
(In millions)	2020		2019		2020		2019		2020		2019
SELECTED INCOME STATEMENT DATA
Net interest income	$	53	$	59	$	35	$	38	$	33	$	35
Provision for credit losses	16		2		40		—		(1)		1
Net interest income after provision for credit losses	37		57		(5)		38		34		34
Noninterest income	10		11		10		11		8		6
Noninterest expense	35		38		34		37		27		27
Income (loss) before income taxes	$	12	$	30	$	(29)	$	12	$	15	$	13
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	$	5,247	$	4,847	$	3,169	$	2,570	$	3,490	$	3,105
Total average deposits	5,722		5,048		5,402		4,406		3,662		2,811

	TCBW						Other						Consolidated Bank
(In millions)	2020		2019		2020		2019		2020		2019
SELECTED INCOME STATEMENT DATA
Net interest income	$	13	$	14	$	30	$	(13)	$	563	$	569
Provision for credit losses	5		2		(3)		(1)		168		21
Net interest income after provision for credit losses	8		12		33		(12)		395		548
Noninterest income	1		1		—		9		117		132
Noninterest expense	5		5		65		29		430		424
Income (loss) before income taxes	$	4	$	8	$	(32)	$	(32)	$	82	$	256
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	$	1,485	$	1,203	$	561	$	440	$	54,268	$	48,324
Total average deposits	1,282		1,053		2,410		3,051		63,000		54,347

The following schedule presents selected operating segment information for the six months ended June 30, 2020 and 2019:


	Zions Bank						Amegy						CB&T
(In millions)	2020		2019		2020		2019		2020		2019
SELECTED INCOME STATEMENT DATA
Net interest income	$	314	$	351	$	237	$	252	$	245	$	267
Provision for credit losses	94		26		127		(23)		84		12
Net interest income after provision for credit losses	220		325		110		275		161		255
Noninterest income	76		71		67		68		44		41
Noninterest expense	221		237		161		174		151		164
Income (loss) before income taxes	$	75	$	159	$	16	$	169	$	54	$	132
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	$	13,611	$	13,004	$	12,984	$	12,058	$	11,773	$	10,707
Total average deposits	16,953		15,238		12,344		11,401		12,825		11,328

	NBAZ						NSB						Vectra
(In millions)	2020		2019		2020		2019		2020		2019
SELECTED INCOME STATEMENT DATA
Net interest income	$	105	$	117	$	70	$	76	$	65	$	69
Provision for credit losses	35		4		52		(1)		23		5
Net interest income after provision for credit losses	70		113		18		77		42		64
Noninterest income	21		21		21		21		16		12
Noninterest expense	72		78		70		73		53		54
Income (loss) before income taxes	$	19	$	56	$	(31)	$	25	$	5	$	22
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	$	4,991	$	4,798	$	2,942	$	2,535	$	3,296	$	3,080
Total average deposits	5,413		4,972		5,115		4,368		3,325		2,816



	TCBW						Other						Consolidated Bank
(In millions)	2020		2019		2020		2019		2020		2019
SELECTED INCOME STATEMENT DATA
Net interest income	$	25	$	27	$	50	$	(14)	$	1,111	$	1,145
Provision for credit losses	10		2		1		—		426		25
Net interest income after provision for credit losses	15		25		49		(14)		685		1,120
Noninterest income	2		2		3		28		250		264
Noninterest expense	11		11		98		63		837		854
Income (loss) before income taxes	$	6	$	16	$	(46)	$	(49)	$	98	$	530
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans	$	1,372	$	1,156	$	563	$	412	$	51,532	$	47,750
Total average deposits	1,165		1,064		2,814		2,946		59,954		54,133