ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/ - FORM 8-K - EX-99.1 - EARNINGS RELEASE 4TH QUARTER 2013

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8-K - 8-K - ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/	a4q20138-kcoverpage.htm

EXHIBIT 99.1

***FOR IMMEDIATE RELEASE***



For: ZIONS BANCORPORATION					Contact: James Abbott
One South Main, 15th Floor					Tel: (801) 524-4787
Salt Lake City, Utah					January 27, 2014
Harris H. Simmons
Chairman/Chief Executive Officer

ZIONS BANCORPORATION REPORTS ANNUAL NET EARNINGS FOR 2013 OF

$294 MILLION, WITH STRONG LOAN GROWTH IN THE FOURTH QUARTER

SALT LAKE CITY, January 27, 2014 – Zions Bancorporation (NASDAQ: ZION) (“Zions” or “the Company”) today reported annual net earnings for 2013 of $294 million, or $1.58 per diluted common share, compared to $179 million, or $0.97 per diluted share, for 2012.

The Company reported a fourth quarter of 2013 net loss applicable to common shareholders of $(59.4) million or $(0.32) per diluted common share. The quarterly loss included impairment charges on collateralized debt obligation (“CDO”) securities as a result of both the Company’s decision to reduce risk within its CDO portfolio, and the impact of the final provisions of the Volcker Rule. The loss also included debt extinguishment costs that resulted from the Company’s successful tender offer for some of its high cost subordinated debt. The total impairment charges and debt extinguishment costs were $222 million pretax or $0.74 per diluted share after-tax.

For comparative purposes, net earnings for the third quarter of 2013 were $209.7 million or $1.12 per diluted share, and $35.6 million or $0.19 per diluted share for the fourth quarter of 2012. The third quarter amount included a $126 million or $0.68 per diluted share increase to net earnings for the redemption of all of the Company’s Series C preferred stock.

Fourth Quarter 2013 Highlights


•	Loans and leases held for investment, excluding FDIC-supported loans, increased $795 million compared to the prior quarter to $38.7 billion at December 31, 2013. Average loans and leases, excluding FDIC-supported loans, increased $442 million.

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ZIONS BANCORPORATION

Press Release – Page 2

January 27, 2014


•	Net interest income, excluding the effect of income from FDIC-supported loans, increased modestly compared to the previous quarter.


•	Credit quality showed continued improvement, with nonperforming lending-related assets and classified loans declining 16% and 13%, respectively, compared to the prior quarter. This continued improvement resulted in a fourth quarter negative provision for loan losses of $31 million.


•	The fair value of the CDO portfolio increased by $137 million during the quarter, even as sales and paydowns reduced the par balance of the portfolio.


•	Tangible book value per share improved by 3% compared to the prior quarter, increasing to $23.88 from $23.16; compared to the year-ago period, tangible book value per share improved by approximately 14%, a significant portion of which is attributable to the improvement in fair values of CDOs.

“We are pleased with the improvement in loan growth, further strengthening of credit quality, and stabilization of the net interest margin during the quarter. Additionally, the steps we are taking to reduce risk in our securities portfolio, combined with continued strengthening of our capital ratios, positions us well to serve our customers and grow as the economy continues to improve,” said Harris H. Simmons, chairman and chief executive officer.

Dividend Announcement

In addition to announcing its fourth quarter financial results, the Company also announced today that its Board of Directors declared a regular quarterly dividend of $0.04 per common share. The dividend is payable February 27, 2014 to shareholders of record on February 20, 2014. The Board of Directors also declared the regular quarterly cash dividends on the Company’s various perpetual preferred shares. The cash dividends on the Series A, F, G, H and J shares are payable on March 15, 2014 to shareholders of record on March 1, 2014. The cash dividends on the Series I shares are payable on June 15, 2014 to shareholders of record on June 1, 2014.

Loans

Loans and leases held for investment, excluding FDIC-supported loans, increased $795 million, or 2%, to $38.7 billion at December 31, 2013 from $37.9 billion at September 30, 2013. The increases were predominantly in commercial and industrial loans primarily in Texas and California, and in 1-4 family residential loans primarily in Texas and Utah. Average loans and leases, excluding FDIC-supported loans, increased $442 million, or 1%, to $38.3 billion during the fourth quarter of 2013, compared to $37.8 billion during the third quarter of 2013. Unfunded lending commitments at December 31, 2013 increased by approximately $578 million during the fourth quarter of 2013 to a total of $17.2 billion at December 31, 2013, compared to a $488 million increase during the third quarter of 2013.

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ZIONS BANCORPORATION

Press Release – Page 3

January 27, 2014

Deposits

Average total deposits for the fourth quarter of 2013 increased $0.7 billion, or 1%, to $46.3 billion, compared to $45.6 billion for the third quarter of 2013. This increase was driven primarily by noninterest-bearing demand deposits, which increased to an average of $18.8 billion in the fourth quarter from $18.2 billion in the third quarter. The ratio of average loans to average deposits was 84% for the fourth quarter, unchanged from the third quarter.

Debt and Shareholders’ Equity

The Company completed the following debt transactions during the quarter, excluding those in its medium-term note program:

On November 5, 2013, the Company issued $162 million of qualifying Tier 2 fixed/floating rate subordinated notes due November 15, 2023. Interest payments at a rate of 5.65% commence May 15, 2014 and continue semiannually to the earliest possible redemption date of November 15, 2018, after which they are payable quarterly at an annual floating rate equal to three-month LIBOR plus 4.19%. Net proceeds were approximately $160 million.

Effective December 6, 2013, the Company completed the purchases of $250 million par amount of its 5.5% and 6.0% convertible and nonconvertible subordinated notes. The purchases were made as a result of separate cash tender offers totaling $250 million that were announced on November 6, 2013. The total debt extinguishment cost recorded by the Company as a result of these purchases was approximately $80 million pretax or $0.27 per diluted share after-tax.

The estimated common equity Tier 1 capital ratio was 10.15% at December 31, 2013, compared to 10.47% at September 30, 2013.

CDO Investment Securities

As explained in the Company’s press release issued January 21, 2014, the Company reached a decision to sell a portion of its CDO portfolio, which resulted in impairment charges of those securities to their fair values. This decision was the result of an analysis of the Company’s CDO securities under the Volcker Rule (as subsequently modified by the Interim Final Rule) and other factors. The total OTTI adjustment reduced net earnings for the fourth quarter by approximately $142 million pretax or $0.47 per diluted share after-tax.

The following table provides selected information on the CDOs, stratified into performing tranches without credit impairment and nonperforming tranches at December 31, 2013:

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ZIONS BANCORPORATION

Press Release – Page 4

January 27, 2014



	December 31, 2013
								Net unrealized losses recognized in AOCI ¹			Weighted average discount rate ²		% of carrying value to par
(Amounts in millions)	No. of tranches	Par amount		Amortized cost		Carrying value		Net unrealized losses recognized in AOCI ¹			Weighted average discount rate ²		December 31, 2013	September 30, 2013	Change
Performing CDOs
Predominantly bank CDOs	23	$	687	$	617	$	499	$	(118	)	5.6	%	73%	71%	2	%
Insurance CDOs	22	433		413		346		(67		)	4.9	%	80%	75%	5	%
Other CDOs	3	43		26		26		—			10.6	%	60%	75%	(15	)%
Total performing CDOs	48	1,163		1,056		871		(185		)	5.5	%	75%	73%	2	%

Nonperforming CDOs ³
CDOs credit impaired prior to last 12 months	32	614		369		285		(84		)	7.0	%	46%	42%	4	%
CDOs credit impaired during last 12 months	23	448		187		150		(37		)	6.5	%	33%	27%	6	%
Total nonperforming CDOs	55	1,062		556		435		(121		)	6.8	%	41%	30%	11	%

Total CDOs	103	$	2,225	$	1,612	$	1,306	$	(306	)	6.1	%	59%	52%	7	%

¹ Amounts presented are pretax.

² Margin over related LIBOR index.

³ Defined as either deferring current interest (“PIKing”) or OTTI; the majority are predominantly bank CDOs.

The following table shows changes in selected information on the CDOs from December 31, 2012 to December 31, 2013:



	Change from December 31, 2012 to December 31, 2013
												Decrease (increase) in net unrealized losses recognized in OCI			Weighted average discount rate
(Amounts in millions)	No. of tranches		Par amount			Amortized cost			Carrying value						Weighted average discount rate		% of carrying value to par
Performing CDOs
Predominantly bank CDOs	(5	)	$	(124	)	$	(110	)	$	(39	)		$	71	(2.2	)%		7	%
Insurance CDOs	—		(21		)	(36		)	19				55		(3.7	)%		8	%
Other CDOs	(3	)	(11		)	(17		)	(12		)		5		1.2	%		(10	)%
Total performing CDOs	(8	)	(156		)	(163		)	(32		)		131		(2.6	)%		7	%

Nonperforming CDOs
Credit impairment prior to last 12 months	14		245			118			176				58		(3.7	)%		16	%
Credit impairment during last 12 months	(16	)	(284		)	(254		)	(31		)		223		(3.1	)%		8	%
Total nonperforming CDOs	(2	)	(39		)	(136		)	145				281		(3.2	)%		15	%

Total CDOs	(10	)	$	(195	)	$	(299	)	$	113			$	412	(2.9	)%		10	%

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ZIONS BANCORPORATION

Press Release – Page 5

January 27, 2014

The primary improvement to the Company’s accumulated other comprehensive income (“AOCI”) during the fourth quarter is attributable to the recognition in earnings of unrealized losses on CDO securities and to an increase in fair value of the CDO securities.

Net Interest Income

Excluding income from FDIC-supported loans, net interest income increased slightly compared to the prior quarter due to stronger loan growth, partially offset by reduced yield in the loan portfolio. Interest income from FDIC-supported loans also improved by approximately $13 million due to payoffs. In total, net interest income increased to $432 million for the fourth quarter of 2013, compared to $416 million for the third quarter of 2013. The net interest margin increased to 3.33% in the fourth quarter of 2013, compared to 3.22% in the third quarter of 2013, primarily as a result of the strong performance of FDIC-supported loans.

Noninterest Income

Noninterest income for the fourth quarter of 2013 was $(31) million, compared to $122 million for the third quarter of 2013. The significant majority of the linked quarter decline was attributable to the OTTI on CDO securities, as previously discussed. Loan sales and servicing income decreased primarily due to a lower volume of mortgage refinancing.

Noninterest Expense

Noninterest expense for the fourth quarter of 2013 was $495 million compared to $371 million for the third quarter of 2013. Increases this quarter compared to the previous quarter were due primarily to (1) the debt extinguishment cost of $80 million, (2) the change in the provision for unfunded lending commitments to $5.6 million this quarter from a negative provision of $19.9 million in the third quarter, due in part to a higher volume of loan commitments, (3) the increase in professional and legal services to $23.9 million in the fourth quarter from $16.5 million in the third quarter, and (4) an increase in the amortization of the FDIC indemnification asset to $19.9 million, compared to the prior quarter amount of $13.0 million, included in other noninterest expense. The increase in professional and legal services was primarily due to consulting expense related to the Company’s Comprehensive Capital Analysis and Review (“CCAR”) submission.

Asset Quality

Nonperforming lending-related assets declined 16% to $453 million at December 31, 2013 from $538 million at September 30, 2013, primarily due to favorable resolutions. Nonaccrual loans declined 14% to $407 million at December 31, 2013 from $472 million at September 30, 2013. The ratio of nonperforming lending-related assets to loans and leases and other real estate owned decreased to 1.15% at December 31, 2013, compared to 1.40% at September 30, 2013.

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ZIONS BANCORPORATION

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January 27, 2014

Classified loans, excluding FDIC-supported loans, decreased approximately 13% to $1.2 billion at December 31, 2013, compared to $1.4 billion at September 30, 2013. Consistent with recent quarters, approximately 84% were current as to principal and interest.

Net loan and lease charge-offs increased to $19 million in the fourth quarter of 2013, compared to $9 million in the third quarter of 2013.

The negative provision for loan losses was $31 million for the fourth quarter of 2013, compared to a negative provision of $6 million for the third quarter of 2013. The negative provision continues to result from the improvement in credit quality. The allowance for credit losses was $836 million, or 2.14% of loans and leases at December 31, 2013, compared to $882 million, or 2.30% of loans and leases at September 30, 2013. The Company’s allowance for credit losses remains among the strongest of its peer regional banks.

Conference Call

Zions will host a conference call to discuss these fourth quarter results at 5:30 p.m. ET this afternoon (January 27, 2014). Media representatives, analysts and the public are invited to listen to this discussion by calling 253-237-1247 (domestic and international) and entering the passcode 29467185, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation website at www.zionsbancorporation.com. The webcast of the conference call will also be archived and available for 30 days.

About Zions Bancorporation

Zions Bancorporation is one of the nation’s premier financial services companies, consisting of a collection of great banks in select Western markets. Zions operates its banking businesses under local management teams and community identities through approximately 475 offices in 10 Western and Southwestern states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah and Washington. The Company is a national leader in Small Business Administration lending and public finance advisory services, and received 13 “Excellence” awards by Greenwich Associates for the 2012 survey. In addition, Zions is included in the S&P 500 and NASDAQ Financial 100 indices. Investor information and links to subsidiary banks can be accessed at www.zionsbancorporation.com.

Forward-Looking Information

Statements in this press release that are based on other than historical data or that express the Company’s expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations or forecasts of

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ZIONS BANCORPORATION

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January 27, 2014

future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management’s views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, and its Current Report on Form 8-K dated January 21, 2014, filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s Internet site (http://www.sec.gov).

Except as required by law, the Company 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

Press Release – Page 8

January 27, 2014

FINANCIAL HIGHLIGHTS

(Unaudited)



	Three Months Ended
(In thousands, except share, per share, and ratio data)	December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012
PER COMMON SHARE
Dividends	$	0.04		$	0.04		$	0.04		$	0.01		$	0.01
Book value per common share ¹	29.57			28.87			27.82			27.43			26.73
Tangible common equity per common share ¹	23.88			23.16			22.09			21.67			20.95

SELECTED RATIOS
Return on average assets	(0.30		)%	0.80		%	0.61		%	0.83		%	0.43		%
Return on average common equity	(4.51		)%	16.03		%	4.35		%	7.18		%	2.91		%
Tangible return on average tangible common equity	(5.45		)%	20.34		%	5.73		%	9.37		%	4.07		%
Net interest margin	3.33		%	3.22		%	3.44		%	3.44		%	3.47		%

Capital Ratios
Tangible common equity ratio ¹	8.02		%	7.90		%	7.57		%	7.53		%	7.09		%
Tangible equity ratio ¹	9.85		%	9.75		%	10.78		%	9.97		%	9.15		%
Average equity to average assets	11.20		%	12.39		%	12.11		%	11.54		%	11.03		%

Risk-Based Capital Ratios ^1,2
Common equity Tier 1 capital	10.15		%	10.47		%	10.03		%	10.07		%	9.80		%
Tier 1 leverage	10.48		%	10.63		%	11.75		%	11.55		%	10.96		%
Tier 1 risk-based capital	12.72		%	13.10		%	14.30		%	14.08		%	13.38		%
Total risk-based capital	14.62		%	14.82		%	15.94		%	15.75		%	15.05		%

Taxable-equivalent net interest income	$	435,714		$	419,236		$	434,579		$	422,252		$	434,252

Weighted average common and common-equivalent shares outstanding	184,208,544			184,742,414			184,061,623			183,655,129			183,456,109
Common shares outstanding ¹	184,677,696			184,600,005			184,436,656			184,246,471			184,199,198

¹At period end.

² Ratios for December 31, 2013 are estimates.

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ZIONS BANCORPORATION

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January 27, 2014

CONSOLIDATED BALANCE SHEETS



(In thousands, except share amounts)	December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
ASSETS
Cash and due from banks	$	1,175,083		$	1,365,082		$	1,183,097		$	928,817		$	1,841,907
Money market investments:
Interest-bearing deposits	8,175,048			8,180,639			8,180,010			5,785,268			5,978,978
Federal funds sold and security resell agreements	282,248			209,070			221,799			2,340,177			2,775,354
Investment securities:
Held-to-maturity, at adjusted cost (approximate fair value $609,547, $727,908, $734,292, $684,668, and $674,741)	588,981			777,849			783,371			736,158			756,909
Available-for-sale, at fair value	3,701,886			3,333,889			3,193,395			3,287,844			3,091,310
Trading account, at fair value	34,559			38,278			26,385			28,301			28,290
	4,325,426			4,150,016			4,003,151			4,052,303			3,876,509

Loans held for sale	171,328			114,810			164,619			161,559			251,651

Loans, net of unearned income and fees:
Loans and leases	38,693,094			37,897,869			37,756,010			37,284,694			37,137,006
FDIC-supported loans	350,271			374,861			431,935			477,725			528,241
	39,043,365			38,272,730			38,187,945			37,762,419			37,665,247
Less allowance for loan losses	746,291			797,523			813,912			841,781			896,087
Loans, net of allowance	38,297,074			37,475,207			37,374,033			36,920,638			36,769,160

Other noninterest-bearing investments	855,642			851,349			852,939			855,388			855,462
Premises and equipment, net	726,372			720,365			717,299			706,746			708,882
Goodwill	1,014,129			1,014,129			1,014,129			1,014,129			1,014,129
Core deposit and other intangibles	36,444			39,667			43,239			47,000			50,818
Other real estate owned	46,105			66,381			80,789			89,904			98,151
Other assets	926,228			1,001,597			1,069,436			1,208,635			1,290,917
	$	56,031,127		$	55,188,312		$	54,904,540		$	54,110,564		$	55,511,918

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	18,758,753		$	18,566,137		$	17,803,950		$	17,311,150		$	18,469,458
Interest-bearing:
Savings and money market	23,029,928			22,806,132			22,887,404			22,760,397			22,896,624
Time	2,593,038			2,689,688			2,810,431			2,889,903			2,962,931
Foreign	1,980,161			1,607,409			1,514,270			1,528,745			1,804,060
	46,361,880			45,669,366			45,016,055			44,490,195			46,133,073

Securities sold, not yet purchased	73,606			21,183			15,799			1,662			26,735
Federal funds purchased and security repurchase agreements	266,742			252,591			240,816			325,107			320,478
Other short-term borrowings	—			—			—			—			5,409
Long-term debt	2,273,575			2,304,301			2,173,176			2,352,569			2,337,113
Reserve for unfunded lending commitments	89,705			84,147			104,082			100,455			106,809
Other liabilities	501,056			523,915			494,280			489,923			533,660
Total liabilities	49,566,564			48,855,503			48,044,208			47,759,911			49,463,277

Shareholders’ equity:
Preferred stock, without par value, authorized 4,400,000 shares	1,003,970			1,003,970			1,728,659			1,301,289			1,128,302
Common stock, without par value; authorized 350,000,000 shares; issued and outstanding 184,677,696, 184,600,005, 184,436,656, 184,246,471, and 184,199,198 shares	4,179,024			4,172,887			4,167,828			4,170,888			4,166,109
Retained earnings	1,473,670			1,540,455			1,338,401			1,290,131			1,203,815
Accumulated other comprehensive income (loss)	(192,101		)	(384,503		)	(374,556		)	(406,903		)	(446,157		)
Controlling interest shareholders’ equity	6,464,563			6,332,809			6,860,332			6,355,405			6,052,069
Noncontrolling interests	—			—			—			(4,752		)	(3,428		)
Total shareholders’ equity	6,464,563			6,332,809			6,860,332			6,350,653			6,048,641
	$	56,031,127		$	55,188,312		$	54,904,540		$	54,110,564		$	55,511,918

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ZIONS BANCORPORATION

Press Release – Page 10

January 27, 2014

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



	Three Months Ended
(In thousands, except per share amounts)	December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012
Interest income:
Interest and fees on loans	$	458,493		$	442,366		$	460,308		$	453,433		$	462,002
Interest on money market investments	5,985			6,175			5,764			5,439			6,004
Interest on securities:
Held-to-maturity	7,721			7,739			7,846			7,974			8,130
Available-for-sale	17,450			16,917			19,028			17,712			21,971
Trading account	368			210			287			190			150
Total interest income	490,017			473,407			493,233			484,748			498,257

Interest expense:
Interest on deposits	13,622			14,506			15,143			15,642			16,861
Interest on short-term borrowings	72			71			78			92			178
Interest on long-term debt	44,288			43,309			47,355			50,899			51,261
Total interest expense	57,982			57,886			62,576			66,633			68,300

Net interest income	432,035			415,521			430,657			418,115			429,957
Provision for loan losses	(30,538		)	(5,573		)	(21,990		)	(29,035		)	(10,401		)
Net interest income after provision for loan losses	462,573			421,094			452,647			447,150			440,358

Noninterest income:
Service charges and fees on deposit accounts	43,729			44,701			44,329			43,580			44,492
Other service charges, commissions and fees	46,877			45,977			45,888			42,731			46,497
Trust and wealth management income	8,067			7,120			7,732			6,994			7,450
Capital markets and foreign exchange	6,516			7,309			6,740			7,486			7,708
Dividends and other investment income	9,898			12,101			11,339			12,724			13,117
Loan sales and servicing income	5,155			8,464			10,723			10,951			10,595
Fair value and nonhedge derivative loss	(5,347		)	(4,403		)	(2,957		)	(5,445		)	(4,778		)
Equity securities gains (losses), net	314			3,165			2,209			2,832			(682		)
Fixed income securities gains (losses), net	(6,624		)	1,580			(1,153		)	3,299			10,259
Impairment losses on investment securities:
Impairment losses on investment securities	(141,733		)	(10,470		)	(4,910		)	(31,493		)	(120,082		)
Noncredit-related losses on securities not expected to be sold (recognized in other comprehensive income)	—			1,403			693			21,376			36,274
Net impairment losses on investment securities	(141,733		)	(9,067		)	(4,217		)	(10,117		)	(83,808		)
Other	1,998			5,243			4,515			6,184			3,309
Total noninterest income (loss)	(31,150		)	122,190			125,148			121,219			54,159

Noninterest expense:
Salaries and employee benefits	226,616			229,185			227,328			229,789			220,039
Occupancy, net	28,733			28,230			27,951			27,389			28,226
Equipment, software and furniture	27,450			26,560			26,545			26,074			27,774
Other real estate expense	(1,024		)	(831		)	1,590			1,977			5,266
Credit related expense	6,509			7,265			9,397			10,482			11,302
Provision for unfunded lending commitments	5,558			(19,935		)	3,627			(6,354		)	959
Professional and legal services	23,886			16,462			17,149			10,471			15,717
Advertising	5,571			6,091			5,807			5,893			5,969
FDIC premiums	8,789			9,395			10,124			9,711			10,760
Amortization of core deposit and other intangibles	3,224			3,570			3,762			3,819			4,216
Debt extinguishment cost	79,910			—			40,282			—			—
Other	79,528			64,671			78,116			78,097			76,786
Total noninterest expense	494,750			370,663			451,678			397,348			407,014

Income (loss) before income taxes	(63,327		)	172,621			126,117			171,021			87,503
Income taxes (benefit)	(21,855		)	61,107			43,091			60,634			29,817
Net income (loss)	(41,472		)	111,514			83,026			110,387			57,686
Net loss applicable to noncontrolling interests	—			—			—			(336		)	(566		)
Net income (loss) applicable to controlling interest	(41,472		)	111,514			83,026			110,723			58,252
Preferred stock dividends	(17,965		)	(27,507		)	(27,641		)	(22,399		)	(22,647		)
Preferred stock redemption	—			125,700			—			—			—
Net earnings (loss) applicable to common shareholders	$	(59,437	)	$	209,707		$	55,385		$	88,324		$	35,605

Weighted average common shares outstanding during the period:
Basic shares	184,209			184,112			183,647			183.396			183,300
Diluted shares	184,209			184,742			184,062			183,655			183,456

Net earnings (loss) per common share:
Basic	$	(0.32	)	$	1.13		$	0.30		$	0.48		$	0.19
Diluted	(0.32		)	1.12			0.30			0.48			0.19

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ZIONS BANCORPORATION

Press Release – Page 11

January 27, 2014

CONSOLIDATED STATEMENTS OF INCOME



	Year Ended
(In thousands, except per share amounts)	December 31, 2013			December 31, 2012
	(Unaudited)
Interest income:
Interest and fees on loans	1,814,600			1,889,884
Interest on money market investments	23,363			21,080
Interest on securities:
Held-to-maturity	31,280			34,751
Available-for-sale	71,107			92,261
Trading account	1,055			746
Total interest income	1,941,405			2,038,722

Interest expense:
Interest on deposits	58,913			80,146
Interest on short-term borrowings	313			1,406
Interest on long-term debt	185,851			225,230
Total interest expense	245,077			306,782

Net interest income	1,696,328			1,731,940
Provision for loan losses	(87,136		)	14,227
Net interest income after provision for loan losses	1,783,464			1,717,713

Noninterest income:
Service charges and fees on deposit accounts	176,339			176,401
Other service charges, commissions and fees	181,473			174,420
Trust and wealth management income	29,913			28,402
Capital markets and foreign exchange	28,051			26,810
Dividends and other investment income	46,062			55,825
Loan sales and servicing income	35,293			39,929
Fair value and nonhedge derivative loss	(18,152		)	(21,782		)
Equity securities gains, net	8,520			11,253
Fixed income securities gains (losses), net	(2,898		)	19,544
Impairment losses on investment securities:
Impairment losses on investment securities	(188,606		)	(166,257		)
Noncredit-related losses on securities not expected to be sold (recognized in other comprehensive income)	23,472			62,196
Net impairment losses on investment securities	(165,134		)	(104,061		)
Other	17,940			13,129
Total noninterest income	337,407			419,870

Noninterest expense:
Salaries and employee benefits	912,918			885,661
Occupancy, net	112,303			112,947
Equipment, software and furniture	106,629			108,990
Other real estate expense	1,712			19,723
Credit related expense	33,653			50,518
Provision for unfunded lending commitments	(17,104		)	4,387
Professional and legal services	67,968			52,509
Advertising	23,362			25,720
FDIC premiums	38,019			43,401
Amortization of core deposit and other intangibles	14,375			17,010
Debt extinguishment cost	120,192			—
Other	300,412			275,151
Total noninterest expense	1,714,439			1,596,017

Income before income taxes	406,432			541,566
Income taxes	142,977			193,416
Net income	263,455			348,150
Net loss applicable to noncontrolling interests	(336		)	(1,366		)
Net income applicable to controlling interest	263,791			349,516
Preferred stock dividends	(95,512		)	(170,885		)
Preferred stock redemption	125,700			—
Net earnings applicable to common shareholders	$	293,979		$	178,631

Weighted average common shares outstanding during the year:
Basic shares	183,844			183,081
Diluted shares	184,297			183,236

Net earnings per common share:
Basic	$	1.58		$	0.97
Diluted	1.58			0.97

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ZIONS BANCORPORATION

Press Release – Page 12

January 27, 2014

Loan Balances by Portfolio Type

(Unaudited)



(In millions)	December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012
Commercial:
Commercial and industrial		$	12,481		$	11,904		$	11,899		$	11,504		$	11,257
Leasing		388			375			388			390			423
Owner occupied		7,437			7,379			7,394			7,501			7,589
Municipal		449			449			454			484			494
Total commercial		20,755			20,107			20,135			19,879			19,763

Commercial real estate:
Construction and land development		2,183			2,240			2,191			2,039			1,939
Term		8,006			7,929			7,971			8,012			8,063
Total commercial real estate		10,189			10,169			10,162			10,051			10,002

Consumer:
Home equity credit line		2,133			2,124			2,124			2,125			2,178
1-4 family residential		4,737			4,637			4,486			4,408			4,350
Construction and other consumer real estate		325			321			322			320			321
Bankcard and other revolving plans		356			332			315			293			307
Other		198			208			212			208			216
Total consumer		7,749			7,622			7,459			7,354			7,372

FDIC-supported loans ¹		350			375			432			478			528
Total loans		$	39,043		$	38,273		$	38,188		$	37,762		$	37,665

¹ FDIC-supported loans represent loans acquired from the FDIC subject to loss sharing agreements.

FDIC-Supported Loans – Effect of Higher Accretion

and Impact on FDIC Indemnification Asset

(Unaudited)



	Three Months Ended
(In thousands)	December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012
Balance sheet:

Change in assets from reestimation of cash flows – increase (decrease):
FDIC-supported loans		$	28,502			$	15,018			$	28,424			$	18,977			$	12,970
FDIC indemnification asset (included in other assets)		(19,934		)		(12,965		)		(21,845		)		(20,288		)		(10,610		)

Balance at end of period:
FDIC-supported loans		350,271				374,861				431,935				477,725				528,241
FDIC indemnification asset (included in other assets)		26,411				41,771				51,297				71,100				90,074

	Three Months Ended
(In thousands)	December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012
Statement of income:

Interest income:
Interest and fees on loans		$	28,502			$	15,018			$	28,424			$	18,977			$	12,970

Noninterest expense:
Other noninterest expense		19,934				12,965				21,845				20,288				10,610
Net increase (decrease) in pretax income		$	8,568			$	2,053			$	6,579			$	(1,311	)		$	2,360

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ZIONS BANCORPORATION

Press Release – Page 13

January 27, 2014

Nonperforming Lending-Related Assets

(Unaudited)



(Amounts in thousands)	December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012

Nonaccrual loans	$	402,219		$	466,795		$	515,708		$	589,221		$	630,810
Other real estate owned	42,817			58,295			70,031			80,701			90,269
Nonperforming lending-related assets, excluding FDIC-supported assets	445,036			525,090			585,739			669,922			721,079

FDIC-supported nonaccrual loans	4,394			4,744			5,256			4,927			17,343
FDIC-supported other real estate owned	3,288			8,086			10,758			9,203			7,882
FDIC-supported nonperforming assets	7,682			12,830			16,014			14,130			25,225
Total nonperforming lending-related assets	$	452,718		$	537,920		$	601,753		$	684,052		$	746,304

Ratio of nonperforming lending-related assets to loans ¹ and leases and other real estate owned	1.15		%	1.40		%	1.57		%	1.80		%	1.96		%

Accruing loans past due 90 days or more, excluding FDIC-supported loans	$	9,957		$	9,398		$	10,685		$	12,708		$	9,730
Accruing FDIC-supported loans past due 90 days or more	30,391			22,450			33,410			47,208			52,033
Ratio of accruing loans past due 90 days or more to loans ¹ and leases	0.10		%	0.08		%	0.11		%	0.16		%	0.16		%

Nonaccrual loans and accruing loans past due 90 days or more	$	446,961		$	503,387		$	565,059		$	654,064		$	709,916
Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans ¹ and leases	1.14		%	1.31		%	1.47		%	1.72		%	1.87		%

Accruing loans past due 30 - 89 days, excluding FDIC-supported loans	$	104,760		$	85,128		$	103,075		$	155,896		$	185,422
Accruing FDIC-supported loans past due 30 - 89 days	11,752			10,983			6,522			11,571			11,924

Restructured loans included in nonaccrual loans	136,135			166,573			162,496			193,975			215,476
Restructured loans on accrual	345,299			384,793			385,428			416,181			407,026

Classified loans, excluding FDIC-supported loans	1,240,148			1,432,806			1,639,206			1,737,178			1,767,460

¹ Includes loans held for sale.

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ZIONS BANCORPORATION

Press Release – Page 14

January 27, 2014

Allowance for Credit Losses

(Unaudited)



	Three Months Ended
(Amounts in thousands)	December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012
Allowance for Loan Losses
Balance at beginning of period	$	797,523		$	813,912		$	841,781		$	896,087		$	927,068
Add:
Provision for losses	(30,538		)	(5,573		)	(21,990		)	(29,035		)	(10,401		)
Adjustment for FDIC-supported loans	(1,481		)	(2,118		)	(209		)	(7,429		)	(1,721		)
Deduct:
Gross loan and lease charge-offs	(37,405		)	(22,826		)	(35,099		)	(35,467		)	(54,709		)
Recoveries	18,192			14,128			29,429			17,625			35,850
Net loan and lease charge-offs	(19,213		)	(8,698		)	(5,670		)	(17,842		)	(18,859		)
Balance at end of period	$	746,291		$	797,523		$	813,912		$	841,781		$	896,087

Ratio of allowance for loan losses to loans and leases, at period end	1.91		%	2.08		%	2.13		%	2.23		%	2.38		%

Ratio of allowance for loan losses to nonperforming loans, at period end	183.54		%	169.13		%	156.23		%	141.68		%	138.25		%

Annualized ratio of net loan and lease charge-offs to average loans	0.20		%	0.09		%	0.06		%	0.19		%	0.20		%

Reserve for Unfunded Lending Commitments
Balance at beginning of period	$	84,147		$	104,082		$	100,455		$	106,809		$	105,850
Provision charged (credited) to earnings	5,558			(19,935		)	3,627			(6,354		)	959
Balance at end of period	$	89,705		$	84,147		$	104,082		$	100,455		$	106,809

Total Allowance for Credit Losses
Allowance for loan losses	$	746,291		$	797,523		$	813,912		$	841,781		$	896,087
Reserve for unfunded lending commitments	89,705			84,147			104,082			100,455			106,809
Total allowance for credit losses	$	835,996		$	881,670		$	917,994		$	942,236		$	1,002,896

Ratio of total allowance for credit losses to loans and leases outstanding, at period end	2.14		%	2.30		%	2.40		%	2.50		%	2.66		%

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ZIONS BANCORPORATION

Press Release – Page 15

January 27, 2014

Nonaccrual Loans by Portfolio Type

(Excluding FDIC-Supported Loans)

(Unaudited)



(In millions)	December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012

Commercial:
Commercial and industrial		$	98		$	100		$	94		$	100		$	91
Leasing		1			1			1			1			1
Owner occupied		136			158			186			195			206
Municipal		10			10			9			9			9
Total commercial		245			269			290			305			307

Commercial real estate:
Construction and land development		29			65			70			93			108
Term		60			61			71			102			125
Total commercial real estate		89			126			141			195			233

Consumer:
Home equity credit line		9			8			11			12			14
1-4 family residential		53			58			66			71			70
Construction and other consumer real estate		4			4			5			4			5
Bankcard and other revolving plans		1			1			2			1			1
Other		1			1			1			1			1
Total consumer		68			72			85			89			91
Total nonaccrual loans		$	402		$	467		$	516		$	589		$	631

Net Charge-Offs by Portfolio Type

(Unaudited)



	Three Months Ended
(In millions)	December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012
Commercial:
Commercial and industrial		$	15			$	2			$	2			$	5			$	(1	)
Leasing		—				—				—				—				2
Owner occupied		1				2				3				5				7
Municipal		—				—				—				—				—
Total commercial		16				4				5				10				8

Commercial real estate:
Construction and land development		(3		)		(1		)		(3		)		(3		)		(7		)
Term		5				3				(2		)		5				7
Total commercial real estate		2				2				(5		)		2				—

Consumer:
Home equity credit line		—				1				2				2				6
1-4 family residential		—				1				3				3				4
Construction and other consumer real estate		—				—				1				(1		)		—
Bankcard and other revolving plans		1				1				—				2				1
Other		—				—				—				—				—
Total consumer loans		1				3				6				6				11
Total net charge-offs		$	19			$	9			$	6			$	18			$	19

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ZIONS BANCORPORATION

Press Release – Page 16

January 27, 2014

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES

(Unaudited)



	Three Months Ended
	December 31, 2013					September 30, 2013					June 30, 2013
(In thousands)	Average balance			Average rate		Average balance			Average rate		Average balance			Average rate
ASSETS
Money market investments	$	9,154,232		0.26	%	$	9,454,131		0.26	%	$	8,652,403		0.27	%
Securities:
Held-to-maturity	770,168			4.75	%	778,268			4.73	%	740,839			5.07	%
Available-for-sale	3,230,152			2.17	%	3,071,039			2.22	%	3,090,910			2.50	%
Trading account	43,063			3.39	%	25,959			3.21	%	36,296			3.17	%
Total securities	4,043,383			2.68	%	3,875,266			2.73	%	3,868,045			3.00	%

Loans held for sale	119,671			3.73	%	131,652			3.70	%	141,313			3.47	%

Loans ¹:
Loans and leases	38,259,795			4.41	%	37,818,273			4.43	%	37,518,549			4.55	%
FDIC-supported loans	363,982			36.88	%	405,316			20.52	%	452,849			31.22	%
Total loans	38,623,777			4.72	%	38,223,589			4.60	%	37,971,398			4.87	%
Total interest-earning assets	51,941,063			3.77	%	51,684,638			3.66	%	50,633,159			3.94	%
Cash and due from banks	1,026,814					976,159					1,000,221
Allowance for loan losses	(790,361		)			(810,290		)			(837,651		)
Goodwill	1,014,129					1,014,129					1,014,129
Core deposit and other intangibles	38,137					41,751					45,262
Other assets	2,470,837					2,608,252					2,808,640
Total assets	$	55,700,619				$	55,514,639				$	54,663,760

LIABILITIES
Interest-bearing deposits:
Savings and money market	$	22,972,978		0.16	%	$	22,982,998		0.17	%	$	22,871,040		0.18	%
Time	2,642,104			0.50	%	2,749,985			0.56	%	2,842,322			0.59	%
Foreign	1,796,912			0.20	%	1,675,256			0.20	%	1,642,381			0.20	%
Total interest-bearing deposits	27,411,994			0.20	%	27,408,239			0.21	%	27,355,743			0.22	%
Borrowed funds:
Federal funds purchased and other short-term borrowings	271,501			0.11	%	260,744			0.11	%	287,766			0.11	%
Long-term debt	2,352,748			7.47	%	2,198,752			7.81	%	2,214,215			8.58	%
Total borrowed funds	2,624,249			6.71	%	2,459,496			7.00	%	2,501,981			7.60	%
Total interest-bearing liabilities	30,036,243			0.77	%	29,867,735			0.77	%	29,857,724			0.84	%
Noninterest-bearing deposits	18,842,097					18,179,584					17,629,219
Other liabilities	584,887					591,735					559,219
Total liabilities	49,463,227					48,639,054					48,046,162
Shareholders’ equity:
Preferred equity	1,003,970					1,685,512					1,518,823
Common equity	5,233,422					5,190,073					5,102,082
Controlling interest shareholders’ equity	6,237,392					6,875,585					6,620,905
Noncontrolling interests	—					—					(3,307		)
Total shareholders’ equity	6,237,392					6,875,585					6,617,598
Total liabilities and shareholders’ equity	$	55,700,619				$	55,514,639				$	54,663,760

Spread on average interest-bearing funds				3.00	%				2.89	%				3.10	%

Net yield on interest-earning assets				3.33	%				3.22	%				3.44	%

¹ Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.

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ZIONS BANCORPORATION

Press Release – Page 17

January 27, 2014

GAAP to Non-GAAP Reconciliation

(Unaudited)



Tangible Return on Average Tangible Common Equity
	Three Months Ended
(Amounts in thousands)	December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012

Net earnings (loss) applicable to common shareholders (GAAP)	$	(59,437	)	$	209,707		$	55,385		$	88,324		$	35,605

Adjustments, net of tax:
Impairment loss on goodwill	—			—			—			—			583
Amortization of core deposit and other intangibles	2,046			2,268			2,391			2,425			2,677
Net earnings (loss) applicable to common shareholders, excluding the effects of the adjustments, net of tax (non-GAAP) (a)	$	(57,391	)	$	211,975		$	57,776		$	90,749		$	38,865

Average common equity (GAAP)	$	5,233,422		$	5,190,073		$	5,102,082		$	4,990,317		$	4,862,972
Average goodwill	(1,014,129		)	(1,014,129		)	(1,014,129		)	(1,014,129		)	(1,014,986		)
Average core deposit and other intangibles	(38,137		)	(41,751		)	(45,262		)	(49,069		)	(53,083		)
Average tangible common equity (non-GAAP) (b)	$	4,181,156		$	4,134,193		$	4,042,691		$	3,927,119		$	3,794,903

Number of days in quarter (c)	92			92			91			90			92
Number of days in year (d)	365			365			365			365			366

Tangible return on average tangible common equity (non-GAAP) (a/b/c*d)	(5.45		)%	20.34		%	5.73		%	9.37		%	4.07		%

This press release presents the non-GAAP financial measure previously shown. The adjustments to reconcile from the applicable GAAP financial measure to the non-GAAP financial measure are included where applicable in financial results presented in accordance with GAAP. The Company considers these adjustments to be relevant to ongoing operating results.

The Company believes that excluding the amounts associated with these adjustments to present the non-GAAP financial measure provides a meaningful base for period-to-period and company-to-company comparisons, which will assist investors and analysts in analyzing the operating results of the Company and in predicting future performance. This non-GAAP financial measure is used by management and the Board of Directors to assess the performance of the Company’s business for evaluating bank reporting segment performance, for presentations of Company performance to investors, and for other reasons as may be requested by investors and analysts. The Company further believes that presenting this non-GAAP financial measure will permit investors and analysts to assess the performance of the Company on the same basis as that applied by management and the Board of Directors.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. 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.

# # #

ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/ - FORM 8-K - EX-99.1 - EARNINGS RELEASE 4TH QUARTER 2013 - January 27, 2014

Attached files

ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/ Reports