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8-K - 8-K - ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/zion-201912318xkcoverp.htm
EX-99.2 - 4Q19 EARNINGS RELEASE SLIDE PRESENTATION - ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/earningspresentation4q2019fi.pdf

ZIONS BANCORPORATION, N.A.
Press Release – Page 1
January 21, 2020

Zions Bancorporation, N.A.
One South Main
Salt Lake City, UT 84133
January 21, 2020
zions20191231aaaa01.jpg
www.zionsbancorporation.com
Fourth Quarter 2019 Financial Results: FOR IMMEDIATE RELEASE
 
Investor and Media Contact: James Abbott (801) 844-7637
Zions Bancorporation, N.A. Reports: 4Q19 Net Earnings¹ of $174 million, diluted EPS of $0.97
compared with 4Q18 Net Earnings¹ of $217 million, diluted EPS of $1.08,
and 3Q19 Net Earnings¹ of $214 million, diluted EPS of $1.17
2019 Annual Net Earnings¹ of $782 million, diluted EPS of $4.16,
compared with 2018 Annual Net Earnings¹ of $850 million, diluted EPS of $4.08

FOURTH QUARTER RESULTS
$0.97
 
$174 million
 
3.46%
 
10.2%
Earnings per diluted common share
 
Net Earnings 1
 
Net interest margin (“NIM”)
 
Common Equity
Tier 1
FOURTH QUARTER HIGHLIGHTS²
 
 
 
Net Interest Income and NIM
Net interest income was $559 million, compared with $576 million
NIM was 3.46%, compared with 3.67%
Total cost of deposits increased 9 basis points, while total cost of deposits from the third quarter of 2019 decreased 6 basis points
Average total deposits increased to $56.7 billion, compared with $54.2 billion
 
 
 
Operating Performance
Pre-provision net revenue ("PPNR") was $246 million, down 19%
Adjusted PPNR³ was $275 million, down 10%
Noninterest expense was $472 million, up 12%
Efficiency ratio³ was 61.3%, compared with 57.8%
 
 
 
Loans and Credit Quality
Net loans and leases were $48.7 billion, up $2.0 billion, or 4%
Nonperforming assets were $251 million, down 2%
Provision for credit losses was $4 million, compared with $6 million
Net charge-offs of 0.18% of average loans, compared with net credit recoveries of 0.07% of average loans
 
 
 
Capital returns
Return on average tangible common equity³ was 11.8%, compared with 14.5%
For 2019, common stock repurchases of $1.1 billion, 23.5 million shares, or 12.5% of shares outstanding as of December 31, 2018
Common dividend increased to $0.34 per share from $0.30 per share
 
 
 
Notable Items
Severance and restructuring charges of $37 million, or $0.16 per share
$10 million expense related to resolution of a self-identified operational issue, or $0.04 per share
Derivative valuation gain of $6 million, or $0.03 per share, on client-related interest rate swaps
 
CEO COMMENTARY
 
Harris H. Simmons, Chairman and CEO, of Zions Bancorporation, commented, “Fourth quarter earnings of $174 million or $0.97 per share were dampened by comparatively flat loan volumes and $37 million in severance and restructuring charges to facilitate a cost reduction initiative that will largely take effect during the first quarter of 2020. We were nevertheless pleased with the strong 10.5% annualized growth in average deposit balances we experienced during the quarter, including 7.5% annualized growth in noninterest-bearing demand deposits; and by the relative stability of our net interest margin in a challenging interest rate and competitive environment.” Mr. Simmons continued, “Economic conditions throughout the markets we serve remain vibrant, and we are optimistic that credit quality will continue to be relatively strong in 2020.”
OPERATING PERFORMANCE3

chart-674d7955097c5c9f92ca01.jpgchart-e65c8ab4494c55c0abda01.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 19-22.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 2
January 21, 2020

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
 
 
 
 
 
 
 
4Q19 - 3Q19
 
4Q19 - 4Q18
(In millions)
4Q19
 
3Q19
 
4Q18
 
$
 
%
 
$
 
%
Interest and fees on loans
$
557

 
$
581

 
$
555

 
$
(24
)
 
(4
)%
 
$
2

 
 %
Interest on money market investments
7

 
8

 
8

 
(1
)
 
(13
)
 
(1
)
 
(13
)
Interest on securities
83

 
88

 
93

 
(5
)
 
(6
)
 
(10
)
 
(11
)
Total interest income
647

 
677

 
656

 
(30
)
 
(4
)
 
(9
)
 
(1
)
Interest on deposits
62

 
69

 
48

 
(7
)
 
(10
)
 
14

 
29

Interest on short and long-term borrowings
26

 
41

 
32

 
(15
)
 
(37
)
 
(6
)
 
(19
)
Total interest expense
88

 
110

 
80

 
(22
)
 
(20
)
 
8

 
10

Net interest income
$
559

 
$
567

 
$
576

 
$
(8
)
 
(1
)
 
$
(17
)
 
(3
)
 
 
 
 
 
 
 
bps
 
 
 
bps
 
 
Yield on interest-earning assets
4.00
%
 
4.15
%
 
4.17
%
 
(15
)
 
 
 
(17
)
 
 
Rate paid on total deposits and interest-bearing liabilities
0.57
%
 
0.71
%
 
0.54
%
 
(14
)
 
 
 
3

 
 
Cost of total deposits
0.44
%
 
0.50
%
 
0.35
%
 
(6
)
 
 
 
9

 
 
Net interest margin
3.46
%
 
3.48
%
 
3.67
%
 
(2
)
 
 
 
(21
)
 
 
Net interest income decreased $17 million to $559 million in the fourth quarter of 2019 from $576 million in the fourth quarter of 2018. Total interest income decreased $9 million due to a $10 million decrease in interest on securities, primarily resulting from an $804 million decline in the average securities balance and a decline in the average yield received on securities, discussed in further detail below. Interest expense increased $8 million primarily due to increases in the rate paid on deposits.
The yield on interest earning assets was 4.00%, a decrease of 15 basis points compared with the third quarter of 2019, and a decrease of 17 basis points compared with the fourth quarter of 2018. Interest income recoveries did not materially impact this quarter or the prior periods presented. The yield on securities decreased 4 basis points relative to the third quarter of 2019 primarily due to a decline in interest rates, and 13 basis points from the year ago rate primarily from increased premium amortization in our Small Business Administration (“SBA”) portfolio resulting from faster repayment speeds. The yield on loans decreased 19 basis points relative to the third quarter of 2019 and 23 basis points from the year ago rate, primarily due to a decline in interest rates across all loan products.
The rate paid on total deposits and interest-bearing liabilities was 0.57% for the fourth quarter of 2019, a decrease from 0.71% for the third quarter of 2019, and an increase from 0.54% for the fourth quarter of 2018. The decline in the rate paid on total deposits and interest-bearing liabilities from the third quarter of 2019 was primarily due to lower rates paid on all interest bearing liabilities, in addition to deposit growth and lower use of short-term borrowings. The increase from the fourth quarter of 2018 was due to an increase in the cost of deposits. The annualized cost of total

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ZIONS BANCORPORATION, N.A.
Press Release – Page 3
January 21, 2020

deposits for the fourth quarter of 2019 was 0.44%, compared with 0.50% for the third quarter of 2019, and 0.35% for the fourth quarter of 2018.
The net interest margin decreased to 3.46% in the fourth quarter of 2019, compared with 3.48% in the third quarter of 2019, and 3.67% in the same prior year period. The decrease from the third quarter of 2019 was primarily due to lower loan yields, partially offset by a lower rate paid on total deposits and interest-bearing liabilities. The decrease from the same prior year period was primarily due to lower loan and securities yields and a higher rate paid on total deposits and interest-bearing liabilities.
Noninterest Income
 
 
 
 
 
 
 
4Q19 - 3Q19
 
4Q19 - 4Q18
(In millions)
4Q19
 
3Q19
 
4Q18
 
$
 
%
 
$
 
%
Commercial account fees
$
31

 
$
31

 
$
29

 
$

 
 %
 
$
2

 
7
 %
Card fees
23

 
24

 
25

 
(1
)
 
(4
)
 
(2
)
 
(8
)
Retail and business banking fees
20

 
20

 
20

 

 

 

 

Loan-related fees and income
19

 
21

 
20

 
(2
)
 
(10
)
 
(1
)
 
(5
)
Capital markets and foreign exchange fees
19

 
23

 
16

 
(4
)
 
(17
)
 
3

 
19

Wealth management and trust fees
16

 
16

 
14

 

 

 
2

 
14

Other customer-related fees
6

 
5

 
7

 
1

 
20

 
(1
)
 
(14
)
Customer-related fees
134

 
140

 
131

 
(6
)
 
(4
)
 
3

 
2

Dividends and other income
16

 
4

 
7

 
12

 
NM

 
9

 
NM

Securities gains, net
2

 
2

 
2

 

 

 

 

Total noninterest income
$
152

 
$
146

 
$
140

 
$
6

 
4

 
$
12

 
9

Total noninterest income for the fourth quarter of 2019 increased by $12 million, or 9%, to $152 million from $140 million for the fourth quarter of 2018. Customer-related fees increased $3 million, or 2%, as a result of higher capital markets and foreign exchange fees, wealth management and trust income and commercial account fees, partially offset by a decrease in card fees. Dividends and other income increased $9 million primarily due to a positive $6 million valuation adjustment on client-related interest rate swaps in the fourth quarter of 2019, compared with a negative $3 million valuation adjustment in the fourth quarter of 2018.
Noninterest Expense
 
 
 
 
 
 
 
4Q19 - 3Q19
 
4Q19 - 4Q18
(In millions)
4Q19
 
3Q19
 
4Q18
 
$
 
%
 
$
 
%
Salaries and employee benefits
$
305

 
$
273

 
$
270

 
$
32

 
12
 %
 
$
35

 
13
 %
Occupancy, net
34

 
34

 
35

 

 

 
(1
)
 
(3
)
Furniture, equipment and software, net
34

 
34

 
31

 

 

 
3

 
10

Other real estate expense, net

 
(2
)
 

 
2

 
NM

 

 
NM

Credit-related expense
5

 
2

 
6

 
3

 
NM

 
(1
)
 
(17
)
Professional and legal services
13

 
10

 
15

 
3

 
30

 
(2
)
 
(13
)
Advertising
3

 
6

 
6

 
(3
)
 
(50
)
 
(3
)
 
(50
)
FDIC premiums
6

 
7

 
6

 
(1
)
 
(14
)
 

 

Other
72

 
51

 
51

 
21

 
41

 
21

 
41

Total noninterest expense
$
472

 
$
415

 
$
420

 
$
57

 
14

 
$
52

 
12

Adjusted noninterest expense 1
$
435

 
$
415

 
$
418

 
$
20

 
5

 
$
17

 
4

1 
For information on non-GAAP financial measures, see pages 19-22.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 4
January 21, 2020

Noninterest expense for the fourth quarter of 2019 was $472 million, an increase of $52 million, or 12%, when compared with $420 million for the fourth quarter of 2018, primarily as a result of a $35 million increase in salaries and employee benefits and a $21 million increase in other noninterest expense. The increase from the fourth quarter of 2018 in salaries and employee benefits was primarily due to a $20 million increase in severance expenses as a result of the previously announced reduction in staffing levels, an $8 million increase in base salaries mainly due to annual salary merit increases, and a $4 million increase in employee benefits.
Other noninterest expense increased primarily as a result of a $13 million impairment on owned or leased properties from actual and planned branch and other office building closures and $10 million of customer reimbursements made by the Bank to remedy a self-identified operational issue. Furniture, equipment, and software expense increased by $3 million as a result of increased amortization expense related to capitalized technology costs from the successful implementation of our commercial loan systems, while advertising expense decreased by $3 million.
Our efficiency ratio was 61.3% in the fourth quarter of 2019, compared with 57.3% in the third quarter of 2019, and 57.8% in the fourth quarter of 2018. Adjusted noninterest expense for the fourth quarter of 2019 increased $17 million, or 4%, to $435 million, compared with $418 million for the same prior year period. Adjusted noninterest expense for the current quarter excludes severance and restructuring costs of $22 million and $15 million, respectively, however it does not exclude the $10 million operational-related expense described previously. For information on non-GAAP financial measures, including differences between noninterest expense and adjusted noninterest expense, see pages 19-22.
BALANCE SHEET ANALYSIS
Asset Quality
 
 
 
 
 
 
 
4Q19 - 3Q19
 
4Q19 - 4Q18
(In millions)
4Q19
 
3Q19
 
4Q18
 
bps
 
 
 
bps
 
 
Ratio of nonperforming assets to loans and leases and other real estate owned
0.51
%
 
0.48
%
 
0.55
 %
 
3

 
 
 
(4
)

 
Annualized ratio of net loan and lease charge-offs (recoveries) to average loans
0.18
%
 
0.01
%
 
(0.07
)%
 
17

 
 
 
25

 
 
Ratio of allowance for credit losses to loans and leases, at period end
1.14
%
 
1.17
%
 
1.18
 %
 
(3
)
 
 
 
(4
)
 
 
 
 
 
 
 
 
 
$
 
%
 
$
 
%
Classified loans
$
803

 
$
799

 
$
698

 
$
4

 
1
 %
 
$
105

 
15
 %
Nonperforming assets
251

 
237

 
256

 
14

 
6

 
(5
)
 
(2
)
Net loan and lease charge-offs (recoveries)
22

 
1

 
(8
)
 
21

 
NM

 
30

 
NM

Provision for credit losses
4

 
10

 
6

 
(6
)
 
(60
)
 
(2
)
 
(33
)%
Classified loans increased 15%, while nonperforming assets declined 2% from the fourth quarter of 2018. The ratio of nonaccrual loans and accruing loans past due 90 days or more to loans and leases was 0.52%, compared with 0.56% in the fourth quarter of 2018.
The Bank recorded a $4 million provision for credit losses during the fourth quarter of 2019, compared with $10 million during the third quarter of 2019, and $6 million for the fourth quarter of 2018. The allowance for credit losses

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ZIONS BANCORPORATION, N.A.
Press Release – Page 5
January 21, 2020

was $554 million at December 31, 2019, compared with $552 million at December 31, 2018. The slight increase in the allowance for credit losses from the prior-year period is primarily due to loan growth, offset by recent default and loss rates that are lower than long-term averages.
On January 1, 2020, we adopted Accounting Standards Update (“ASU”) 2016-13, Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and its subsequent updates, often referred to as the Current Expected Credit Loss ("CECL") model. Upon adoption of the guidance, Zions recorded the full amount of the allowance for credit losses of $526 million, compared with $554 million at December 31, 2019, resulting in an after-tax increase to retained earnings of approximately $20 million.
Loans and Leases
 
 
 
 
 
 
 
4Q19 - 3Q19
 
4Q19 - 4Q18
(In millions)
4Q19
 
3Q19
 
4Q18
 
$
 
%
 
$
 
%
Loans held for sale
$
129

 
$
141

 
$
93

 
$
(12
)
 
(9
)%
 
$
36

 
39
%
Loans and leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
25,388

 
25,287

 
24,162

 
101

 

 
1,226

 
5

Commercial real estate
11,555

 
11,816

 
11,125

 
(261
)
 
(2
)
 
430

 
4

Consumer
11,766

 
11,732

 
11,427

 
34

 

 
339

 
3

Loans and leases, net of unearned income and fees
48,709

 
48,835

 
46,714

 
(126
)
 

 
1,995

 
4

Less allowance for loan losses
495

 
510

 
495

 
(15
)
 
(3
)
 

 

Loans and leases held for investment, net of allowance
$
48,214

 
$
48,325

 
$
46,219

 
$
(111
)
 

 
$
1,995

 
4

Loans and leases, net of unearned income and fees, increased $2.0 billion, or 4%, to $48.7 billion at December 31, 2019 from $46.7 billion at December 31, 2018. Within commercial loans, municipal loans increased $732 million, commercial and industrial loans increased $247 million, and owner-occupied loans increased $240 million. Term commercial real estate loans increased $405 million. The growth in consumer loans was primarily due to a $392 million increase in 1-4 family residential loans. Unfunded lending commitments and letters of credit increased $1.6 billion, or 7.2%, to $23.9 billion at December 31, 2019, from $22.3 billion at December 31, 2018.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 6
January 21, 2020

Deposits and Borrowed Funds
 
 
 
 
 
 
 
4Q19 - 3Q19
 
4Q19 - 4Q18
(In millions)
4Q19
 
3Q19
 
4Q18
 
$
 
%
 
$
 
%
Noninterest-bearing demand
$
23,576

 
$
23,770

 
$
23,645

 
$
(194
)
 
(1
)%
 
$
(69
)
 
 %
Interest-bearing:
 
 
 
 
 
 
 
 
 
 
 
 
 
Savings and money market
28,790

 
27,427

 
26,120

 
1,363

 
5

 
2,670

 
10

Time
4,719

 
4,942

 
4,336

 
(223
)
 
(5
)
 
383

 
9

Total deposits
$
57,085

 
$
56,139

 
$
54,101

 
$
946

 
2

 
$
2,984

 
6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowed funds:
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds purchased and other short-term borrowings
$
2,053

 
$
4,579

 
$
5,653

 
(2,526
)
 
(55
)
 
(3,600
)
 
(64
)
Long-term debt
$
1,723

 
$
1,242

 
$
724

 
481

 
39

 
999

 
NM
Total borrowed funds
$
3,776

 
$
5,821

 
$
6,377

 
$
(2,045
)
 
(35
)
 
$
(2,601
)
 
(41
)
Total deposits increased by $3.0 billion, or 6%, to $57.1 billion as of December 31, 2019, while noninterest bearing deposits decreased slightly over the same period. Average total deposits increased to $56.7 billion for the fourth quarter of 2019, compared with $54.2 billion for the fourth quarter of 2018. Average noninterest bearing deposits declined 2% to $23.8 billion for the fourth quarter of 2019, compared with $24.3 billion for the fourth quarter of 2018, and were 42% and 45% of average total deposits, respectively, for the same periods.
Total borrowed funds decreased $2.6 billion, or 41%, to $3.8 billion as of December 31, 2019. Average borrowed funds decreased to $4.3 billion for the fourth quarter of 2019, compared with $4.5 billion for the fourth quarter of 2018. The decrease in both end of period and average borrowed funds reflects deposit growth exceeding loan growth and securities run-off.
Shareholders’ Equity
 
 
 
 
 
 
 
4Q19 - 3Q19
 
4Q19 - 4Q18
(In millions)
4Q19
 
3Q19
 
4Q18
 
$
 
%
 
$
 
%
Shareholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
$
566

 
$
566

 
$
566

 
$

 
 %
 
$

 
 %
Common stock and additional paid-in capital
2,735

 
3,002

 
3,806

 
(267
)
 
(9
)
 
(1,071
)
 
(28)
Retained earnings
4,009

 
3,892

 
3,456

 
117

 
3

 
553

 
16

Accumulated other comprehensive income (loss)
43

 
49

 
(250
)
 
(6
)
 
(12)
 
293

 
NM
Total shareholders' equity
$
7,353

 
$
7,509

 
$
7,578

 
$
(156
)
 
(2
)
 
$
(225
)
 
(3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital distributions:
 
 
 
 
 
 
 
 
 
 
 
 
 
Common dividends paid
$
57

 
$
60

 
$
57

 
(3
)
 
(5
)
 

 

Bank common stock repurchased
275

 
275

 
250

 

 

 
25

 
10
Total capital distributed to common shareholders
332

 
335

 
307

 
(3
)
 
(1
)
 
25

 
8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital distributed as a percentage of net earnings applicable to common shareholders
191
%
 
157
%
 
141
%
 

 

 

 


During the fourth quarter of 2019, the Bank’s common stock dividend was $0.34 per share, compared with $0.30 per share in the fourth quarter of 2018. Common stock repurchases during the current quarter totaled $275 million, or 5.5 million shares, which is equivalent to 3.2% of common stock outstanding as of September 30, 2019. During the last

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ZIONS BANCORPORATION, N.A.
Press Release – Page 7
January 21, 2020

four quarters, the Bank repurchased $1.1 billion, or 23.5 million shares, of common stock which is equivalent to 12.5% of common stock outstanding as of December 31, 2018. As of December 31, 2019, the Bank had 29.3 million ZIONW warrants outstanding with a strike price of $33.91 per share that expire on May 22, 2020.
Common stock and additional paid-in capital decreased $1.1 billion, or 28%, from the fourth quarter of 2018, due to the previously mentioned share repurchases. Accumulated other comprehensive income improved $293 million, from a negative $250 million as of December 31, 2018, to $43 million as of December 31, 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 $34.98 at December 31, 2019, compared with $31.97 at December 31, 2018, primarily due to a 12.0% decrease in common shares outstanding over the same period. Basel III common equity tier 1 (“CET1”) capital was $5.7 billion at December 31, 2019 and $6.2 billion at December 31, 2018. The estimated Basel III CET1 capital ratio was 10.2% at December 31, 2019 compared with 11.7% at December 31, 2018. For information on non-GAAP financial measures, see pages 19-22.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 8
January 21, 2020

Supplemental Presentation and Conference Call
Zions has posted a supplemental presentation to its website, which will be used to discuss these fourth quarter results at 5:30 p.m. ET this afternoon (January 21, 2020). 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 6674727 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 will 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 annual net revenue of $2.8 billion in 2019 and approximately $70 billion of total assets. 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 consistent national leader in Small Business Administration lending and public finance advisory services. The bank is a consistent national and state-wide leader of customer survey awards in small and middle-market banking, as well as a national leader in Small Business Administration lending and public finance advisory services. 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 9
January 21, 2020

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 10
January 21, 2020

FINANCIAL HIGHLIGHTS
(Unaudited)
 
Three Months Ended
(In millions, except share, per share, and ratio data)
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
BALANCE SHEET 1
 
 
 
 
 
 
 
 
 
Loans held for investment, net of allowance
$
48,214

 
$
48,325

 
$
48,114

 
$
47,109

 
$
46,219

Total assets
69,172

 
70,361

 
70,065

 
69,195

 
68,746

Deposits
57,085

 
56,139

 
54,332

 
54,535

 
54,101

Total shareholders’ equity
7,353

 
7,509

 
7,599

 
7,588

 
7,578

STATEMENT OF INCOME
 
 
 
 
 
 
 
 
 
Net earnings applicable to common shareholders
$
174

 
$
214

 
$
189

 
$
205

 
$
217

Net interest income
559

 
567

 
569

 
576

 
576

Taxable-equivalent net interest income 2
566

 
574

 
576

 
582

 
582

Total noninterest income
152

 
146

 
132

 
132

 
140

Total noninterest expense
472

 
415

 
424

 
430

 
420

Adjusted pre-provision net revenue 2
275

 
309

 
294

 
285

 
305

Provision for credit losses
4

 
10

 
21

 
4

 
6

SHARE AND PER COMMON SHARE AMOUNTS
 
 
 
 
 
 
 
 
 
Net earnings per diluted common share
$
0.97

 
$
1.17

 
$
0.99

 
$
1.04

 
$
1.08

Dividends
0.34

 
0.34

 
0.30

 
0.30

 
0.30

Book value per common share 1
41.12

 
40.75

 
39.75

 
38.47

 
37.39

Tangible book value per common share 1, 2
34.98

 
34.80

 
34.02

 
32.92

 
31.97

Weighted average share price
48.39

 
43.04

 
46.11

 
47.71

 
46.61

Weighted average diluted common shares outstanding (in thousands)
178,718

 
181,870

 
189,098

 
195,241

 
199,048

Common shares outstanding (in thousands) 1
165,057

 
170,373

 
176,935

 
182,513

 
187,554

SELECTED RATIOS AND OTHER DATA
 
 
 
 
 
 
 
 
 
Return on average assets
1.04
%
 
1.25
%
 
1.14
%
 
1.26
%
 
1.34
 %
Return on average common equity
10.1
%
 
12.1
%
 
10.8
%
 
11.9
%
 
12.4
 %
Return on average tangible common equity 2
11.8
%
 
14.2
%
 
12.7
%
 
13.9
%
 
14.5
 %
Net interest margin
3.46
%
 
3.48
%
 
3.54
%
 
3.68
%
 
3.67
 %
Cost of total deposits, annualized
0.44
%
 
0.50
%
 
0.49
%
 
0.43
%
 
0.35
 %
Efficiency ratio 2
61.3
%
 
57.3
%
 
59.0
%
 
60.2
%
 
57.8
 %
Effective tax rate
22.1
%
 
22.9
%
 
22.7
%
 
22.3
%
 
22.1
 %
Ratio of nonperforming assets to loans and leases and other real estate owned
0.51
%
 
0.48
%
 
0.52
%
 
0.50
%
 
0.55
 %
Annualized ratio of net loan and lease charge-offs (recoveries) to average loans
0.18
%
 
0.01
%
 
0.12
%
 
%
 
(0.07
)%
Ratio of total allowance for credit losses to loans and leases outstanding 1
1.14
%
 
1.17
%
 
1.16
%
 
1.17
%
 
1.18
 %
Full-time equivalent employees
10,188

 
10,255

 
10,326

 
10,204

 
10,201

CAPITAL RATIOS AND DATA 1
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
$
5,719

 
$
5,871

 
$
5,987

 
$
6,124

 
$
6,245

Risk-weighted assets
56,048

 
56,298

 
55,499

 
54,404

 
53,591

Tangible common equity ratio
8.5
%
 
8.5
%
 
8.7
%
 
8.8
%
 
8.9
 %
Common equity tier 1 capital ratio
10.2
%
 
10.4
%
 
10.8
%
 
11.3
%
 
11.7
 %
Tier 1 leverage ratio
9.2
%
 
9.3
%
 
9.5
%
 
9.9
%
 
10.3
 %
Tier 1 risk-based capital ratio
11.2
%
 
11.4
%
 
11.8
%
 
12.3
%
 
12.7
 %
Total risk-based capital ratio
13.2
%
 
12.6
%
 
13.0
%
 
13.5
%
 
13.9
 %
1 
At period end.
2 
For information on non-GAAP financial measures, see pages 19-22.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 11
January 21, 2020

CONSOLIDATED BALANCE SHEETS

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

ASSETS
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
705

 
$
796

 
$
538

 
$
536

 
$
614

Money market investments:
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
743

 
1,149

 
634

 
702

 
619

Federal funds sold and security resell agreements
484

 
504

 
620

 
438

 
1,461

Investment securities:
 
 
 
 
 
 
 
 
 
Held-to-maturity1, at amortized cost
592

 
658

 
695

 
764

 
774

Available-for-sale, at fair value
13,725

 
14,033

 
14,672

 
14,904

 
14,737

Trading account, at fair value
182

 
280

 
148

 
316

 
106

Total investment securities
14,499

 
14,971

 
15,515

 
15,984

 
15,617

Loans held for sale
129

 
141

 
105

 
69

 
93

Loans and leases, net of unearned income and fees
48,709

 
48,835

 
48,617

 
47,606

 
46,714

Less allowance for loan losses
495

 
510

 
503

 
497

 
495

Loans held for investment, net of allowance
48,214

 
48,325

 
48,114

 
47,109

 
46,219

Other noninterest-bearing investments
898

 
982

 
1,056

 
993

 
1,046

Premises, equipment and software, net
1,142

 
1,146

 
1,133

 
1,125

 
1,124

Goodwill and intangibles
1,014

 
1,014

 
1,014

 
1,014

 
1,015

Other real estate owned
8

 
4

 
5

 
6

 
4

Other assets
1,336

 
1,329

 
1,331

 
1,219

 
934

Total assets
$
69,172

 
$
70,361

 
$
70,065

 
$
69,195

 
$
68,746

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
23,576

 
$
23,770

 
$
22,947

 
$
23,259

 
$
23,645

Interest-bearing:
 
 
 
 
 
 
 
 
 
Savings and money market
28,790

 
27,427

 
26,470

 
26,348

 
26,120

Time
4,719

 
4,942

 
4,915

 
4,928

 
4,336

Total deposits
57,085

 
56,139

 
54,332

 
54,535

 
54,101

Federal funds purchased and other short-term borrowings
2,053

 
4,579

 
6,023

 
4,944

 
5,653

Long-term debt
1,723

 
1,242

 
1,236

 
1,228

 
724

Reserve for unfunded lending commitments
59

 
62

 
60

 
59

 
57

Other liabilities
899

 
830

 
815

 
841

 
633

Total liabilities
61,819

 
62,852

 
62,466

 
61,607

 
61,168

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
2,735

 
3,002

 
3,271

 
3,541

 
3,806

Retained earnings
4,009

 
3,892

 
3,737

 
3,603

 
3,456

Accumulated other comprehensive income (loss)
43

 
49

 
25

 
(122
)
 
(250
)
Total shareholders’ equity
7,353

 
7,509

 
7,599

 
7,588

 
7,578

Total liabilities and shareholders’ equity
$
69,172

 
$
70,361

 
$
70,065

 
$
69,195

 
$
68,746

1 Held-to-maturity (approximate fair value)
597

 
662

 
698

 
762

 
767

2 Common stock (issued and outstanding)
165,057

 
170,373

 
176,935

 
182,513

 
187,554


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ZIONS BANCORPORATION, N.A.
Press Release – Page 12
January 21, 2020

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
Three Months Ended
(In millions, except share and per share amounts)
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
Interest income:
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
557

 
$
581

 
$
581

 
$
570

 
$
555

Interest on money market investments
7

 
8

 
8

 
9

 
8

Interest on securities
83

 
88

 
95

 
96

 
93

Total interest income
647

 
677

 
684

 
675

 
656

Interest expense:
 
 
 
 
 
 
 
 
 
Interest on deposits
62

 
69

 
66

 
57

 
48

Interest on short- and long-term borrowings
26

 
41

 
49

 
42

 
32

Total interest expense
88

 
110

 
115

 
99

 
80

Net interest income
559

 
567

 
569

 
576

 
576

Provision for credit losses:
 
 
 
 
 
 
 
 
 
Provision for loan losses
7

 
8

 
20

 
2

 
7

Provision for unfunded lending commitments
(3
)
 
2

 
1

 
2

 
(1
)
Total provision for credit losses
4

 
10

 
21

 
4

 
6

Net interest income after provision for credit losses
555

 
557

 
548

 
572

 
570

Noninterest income:
 
 
 
 
 
 
 
 
 
Commercial account fees
31

 
31

 
30

 
30

 
29

Card fees
23

 
24

 
23

 
22

 
25

Retail and business banking fees
20

 
20

 
20

 
18

 
20

Loan-related fees and income
19

 
21

 
17

 
16

 
20

Capital markets and foreign exchange fees
19

 
23

 
20

 
17

 
16

Wealth management and trust fees
16

 
16

 
15

 
14

 
14

Other customer-related fees
6

 
5

 
5

 
5

 
7

Customer-related fees
134

 
140


130

 
122

 
131

Dividends and other income
16

 
4

 
5

 
9

 
7

Securities gains (losses), net
2

 
2

 
(3
)
 
1

 
2

Total noninterest income
152

 
146

 
132

 
132

 
140

Noninterest expense:
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
305

 
273

 
274

 
287

 
270

Occupancy, net
34

 
34

 
32

 
33

 
35

Furniture, equipment and software, net
34

 
34

 
35

 
32

 
31

Other real estate expense, net

 
(2
)
 

 
(1
)
 

Credit-related expense
5

 
2

 
8

 
6

 
6

Professional and legal services
13

 
10

 
13

 
11

 
15

Advertising
3

 
6

 
5

 
5

 
6

FDIC premiums
6

 
7

 
6

 
6

 
6

Other
72

 
51

 
51

 
51

 
51

Total noninterest expense
472

 
415

 
424

 
430

 
420

Income before income taxes
235

 
288

 
256

 
274

 
290

Income taxes
52

 
66

 
58

 
61

 
64

Net income
183

 
222

 
198

 
213

 
226

Preferred stock dividends
(9
)
 
(8
)
 
(9
)
 
(8
)
 
(9
)
Net earnings applicable to common shareholders
$
174

 
$
214

 
$
189

 
$
205

 
$
217

Weighted average common shares outstanding during the period:
 
 
 
 
 
 
 
 
Basic shares (in thousands)
167,078

 
173,160

 
179,156

 
184,767

 
189,169

Diluted shares (in thousands)
178,718

 
181,870

 
189,098

 
195,241

 
199,048

Net earnings per common share:
 
 
 
 
 
 
 
 
 
Basic
$
1.03

 
$
1.23

 
$
1.05

 
$
1.10

 
$
1.14

Diluted
0.97

 
1.17

 
0.99

 
1.04

 
1.08


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ZIONS BANCORPORATION, N.A.
Press Release – Page 13
January 21, 2020

CONSOLIDATED STATEMENTS OF INCOME

 
Year Ended December 31,
(In millions, except share and per share amounts)
2019
 
2018
 
2017
 
(Unaudited)
 
 
 
 
Interest income:
 
 
 
 
 
Interest and fees on loans
$
2,289

 
$
2,102

 
$
1,847

Interest on money market investments
32

 
29

 
19

Interest on securities
362

 
350

 
326

Total interest income
2,683

 
2,481

 
2,192

Interest expense:
 
 
 
 
 
Interest on deposits
254

 
135

 
59

Interest on short- and long-term borrowings
157

 
116

 
68

Total interest expense
411

 
251

 
127

Net interest income
2,272

 
2,230

 
2,065

Provision for credit losses:
 
 
 
 
 
Provision for loan losses
37

 
(39
)
 
24

Provision for unfunded lending commitments
2

 
(1
)
 
(7
)
Total provision for credit losses
39

 
(40
)
 
17

Net interest income after provision for loan losses
2,233

 
2,270

 
2,048

Noninterest income:
 
 
 
 
 
Commercial account fees
121

 
122

 
126

Card fees
92

 
94

 
96

Retail and business banking fees
78

 
78

 
78

Loan-related fees and income
75

 
74

 
72

Capital markets and foreign exchange fees
78

 
58

 
49

Wealth management and trust fees
60

 
55

 
47

Other customer-related fees
21

 
27

 
22

Customer-related fees
525

 
508

 
490

Dividends and other investment income
34

 
43

 
40

Securities gains, net
3

 
1

 
14

Total noninterest income
562

 
552

 
544

Noninterest expense:
 
 
 
 
 
Salaries and employee benefits
1,141

 
1,070

 
1,006

Occupancy, net
133

 
132

 
129

Furniture, equipment and software, net
135

 
126

 
130

Other real estate expense, net
(3
)
 
1

 
(1
)
Credit-related expense
20

 
25

 
29

Professional and legal services
47

 
52

 
57

Advertising
19

 
26

 
22

FDIC premiums
25

 
50

 
53

Other
225

 
197

 
231

Total noninterest expense
1,742

 
1,679

 
1,656

Income before income taxes
1,053