Zions Bancorporation Reports Earnings of $0.30 Per Diluted Common Share for Second Quarter 2012
SALT LAKE CITY, July 23, 2012 /PRNewswire/ -- Zions Bancorporation (NASDAQ: ZION) ("Zions" or "the Company") today reported second quarter net earnings applicable to common shareholders of $55.2 million or $0.30 per diluted common share, compared to $25.5 million or $0.14 per diluted share for the first quarter of 2012. Net earnings applicable to common shareholders were favorably impacted this quarter by a 43% reduction in preferred stock dividends due primarily to the $700 million TARP redemption and related warrant amortization in the first quarter.
Adjusted for the noncash effects in the second quarter of the discount amortization on conversion of subordinated debt and additional accretion (net of expense) on acquired FDIC-supported loans, net earnings applicable to common shareholders were $72.9 million or $0.40 per diluted share for the second quarter of 2012, compared to $40.5 million or $0.22 per diluted share for the first quarter of 2012.
Second Quarter 2012 Highlights
- Credit quality improved in nearly all major geographies and loan types. Net charge-offs decreased 20% to $43 million.
- Loans and leases, excluding FDIC-supported loans, increased $328 million to $36.2 billion at June 30, 2012.
- Net interest income decreased 2.3% to $432 million from $442 million in the first quarter. The core net interest margin decreased 9 basis points to 3.72% from 3.81% in the first quarter.
"We continue to enjoy strong improvement in credit trends and expect classified loans to continue to trend lower," said Harris H. Simmons, chairman and chief executive officer. "Furthermore, we were pleased to experience a moderate degree of loan growth primarily driven by business loan growth; however, our business customers generally remain quite cautious, which is constraining revenue growth," continued Mr. Simmons. "Finally, supported by the continued improvement in credit quality, we believe we are on track to redeem the balance of the TARP preferred stock in the second half of 2012."
Asset Quality
Net loan and lease charge-offs decreased 20% to $43 million for the second quarter of 2012, compared to $55 million for the first quarter of 2012. Net charge-offs declined primarily in commercial and industrial and term commercial real estate loans.
Nonperforming lending-related assets declined 9% to $0.9 billion at June 30, 2012 from $1.0 billion at March 31, 2012. Nonaccrual loans declined 9% to $793 million at June 30, 2012 from $872 million at March 31, 2012. The ratio of nonperforming lending-related assets to loans and leases and other real estate owned decreased to 2.53% at June 30, 2012, compared to 2.79% at March 31, 2012.
Classified loans, excluding FDIC-supported loans, decreased approximately 9% to $1.9 billion at June 30, 2012, compared to $2.1 billion at March 31, 2012. Approximately 73% of classified loans were current as to principal and interest for both the second and first quarters of 2012.
The provision for loan losses was $10.9 million for the second quarter of 2012, compared to $15.7 million for the first quarter of 2012.
The allowance for credit losses of approximately $1.1 billion, or 2.92% of loans and leases at June 30, 2012, was essentially unchanged from the balance at March 31, 2012.
Loans
Loans and leases, excluding FDIC-supported loans, increased $328 million to $36.2 billion at June 30, 2012, compared to $35.9 billion at March 31, 2012. The increases were predominantly in commercial and industrial and 1-4 family residential loans and were widespread geographically. Construction and land development loans were essentially unchanged from March 31, 2012 and therefore did not detract from net loan growth during the quarter. Average loans and leases, excluding FDIC-supported loans, remained essentially the same at $36.1 billion compared to the first quarter of 2012.
Deposits
Average total deposits for the second quarter of 2012 increased $571 million or 1.3% to $42.9 billion compared to $42.4 billion for the first quarter of 2012. The increase resulted primarily from a higher level of average noninterest-bearing demand deposits for the second quarter of 2012, which were $16.2 billion compared to $15.7 billion for the first quarter of 2012. The ratio of loans to deposits was 85.4% at June 30, 2012, compared to 84.9% at March 31, 2012.
Debt and Shareholders' Equity
As previously reported, on May 1, 2012, the Company issued an additional $100 million of the 4.5% senior notes, bringing the total to $400 million of these notes that are due March 27, 2017. The $100 million notes were sold at a price of 100.249%, with a yield to maturity of 4.442%. On June 20, 2012, the Company issued $158.45 million of 4.0% senior notes due June 20, 2016 at a price of 97.5%, with a yield to maturity of 4.693%. Total net proceeds to the Company from the second quarter issuances were approximately $253 million.
The Company redeemed all $254.9 million of senior notes on their maturity date of June 21, 2012 that were guaranteed under the FDIC's Temporary Liquidity Guarantee Program. The Company has no other notes outstanding under this program.
On May 7, 2012, the Company sold at par $143.75 million of Series F 7.9% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, which qualifies as Tier 1 capital. The Company redeemed on the June 15, 2012 call date all $142.5 million of Series E 11.0% preferred stock.
As previously announced, effective May 16, 2012, approximately $50.2 million of convertible subordinated debt was converted into the Company's Series C preferred stock. Accelerated discount amortization on the converted debt increased interest expense by a pretax noncash amount of approximately $16.2 million ($13.2 million after-tax) in the second quarter of 2012, compared to $12.2 million ($9.9 million after-tax) in the first quarter of 2012.
The estimated common equity tier 1 capital ratio was 9.77% at June 30, 2012, compared to 9.71% at March 31, 2012.
Net Interest Income
Net interest income decreased 2.3% to $432 million for the second quarter of 2012, compared to $442 million for the first quarter of 2012. Core net interest income, adjusted for discount amortization on convertible subordinated debt and accretion on acquired loans, was approximately $444 million for the second quarter of 2012, compared to $453 million for the first quarter of 2012.
The net interest margin decreased 11 basis points to 3.62% in the second quarter of 2012, compared to 3.73% in the first quarter of 2012. The core net interest margin decreased 9 basis points to 3.72% in the second quarter, compared to 3.81% in the first quarter. The decrease in the core net interest margin was primarily due to reduced loan yields, and to a higher cost and amount of long-term debt outstanding, much of which was deposited into a low-yielding cash account because it is intended to be used for the redemption of the remaining TARP preferred stock in the second half of 2012.
Investment Securities
During the second quarter of 2012, the Company recognized credit-related other-than-temporary impairment ("OTTI") on collateralized debt obligations ("CDOs") of $7.3 million or $0.02 per diluted share, compared to $10.2 million or $0.03 per diluted share during the first quarter of 2012. OTTI this quarter was due primarily to credit deterioration at a small number of banks. Reperformance of deferring banks continues to be a favorable trend. Partially offsetting the financial impact of OTTI on CDOs were $3.3 million of fixed income securities gains that resulted from cash principal paydowns of CDOs previously written down.
The following table stratifies the CDOs into performing tranches without credit impairment and nonperforming tranches at June 30, 2012:
June 30, 2012 |
||||||||||||||||||||||||
Net unrealized |
% of carrying |
|||||||||||||||||||||||
losses |
Weighted |
value to par |
||||||||||||||||||||||
(Amounts in millions) |
No. of |
Par |
Amortized |
Carrying |
recognized |
average |
June 30, |
March 31, |
||||||||||||||||
tranches |
amount |
cost |
value |
in OCI 1 |
discount rate 2 |
2012 |
2012 |
Change |
||||||||||||||||
Performing CDOs |
||||||||||||||||||||||||
Predominantly bank CDOs |
30 |
$ 904 |
$ 805 |
$ 572 |
$ (233) |
7.02% |
63% |
66% |
-3% |
|||||||||||||||
Insurance-only CDOs |
21 |
450 |
445 |
330 |
(115) |
7.21% |
73% |
74% |
-1% |
|||||||||||||||
Other CDOs |
7 |
82 |
71 |
62 |
(9) |
7.54% |
76% |
78% |
-2% |
|||||||||||||||
Total performing CDOs |
58 |
1,436 |
1,321 |
964 |
(357) |
7.11% |
67% |
69% |
-2% |
|||||||||||||||
Nonperforming CDOs 3 |
||||||||||||||||||||||||
Deferring interest, but no credit impairment |
3 |
72 |
72 |
21 |
(51) |
12.36% |
29% |
25% |
4% |
|||||||||||||||
Credit impairment prior to last 12 months |
33 |
595 |
438 |
136 |
(302) |
12.84% |
23% |
21% |
2% |
|||||||||||||||
Credit impairment during last 12 months |
23 |
444 |
278 |
72 |
(206) |
13.37% |
16% |
14% |
2% |
|||||||||||||||
Total nonperforming CDOs |
59 |
1,111 |
788 |
229 |
(559) |
13.02% |
21% |
19% |
2% |
|||||||||||||||
Total CDOs |
117 |
$ 2,547 |
$ 2,109 |
$ 1,193 |
$ (916) |
9.69% |
47% |
48% |
-1% |
1 Other comprehensive income, amounts presented are pretax. |
||||||||
2 Margin over LIBOR |
||||||||
3 Defined as either deferring current interest ("PIKing") or OTTI. |
Noninterest Income
Noninterest income for the second quarter of 2012 was $123.0 million, compared to $107.0 million for the first quarter of 2012. The increase mainly resulted from higher dividends and other investment income from private equity investments primarily at Amegy.
Noninterest Expense
Noninterest expense for the second quarter of 2012 was $401.7 million compared to $392.4 million for the first quarter of 2012. The increase was due primarily to an $8.6 million increase in the provision for unfunded lending commitments compared to the prior quarter, driven by an increase in the volume of loan commitments.
Conference Call
Zions will host a conference call to discuss these second quarter results at 5:30 p.m. ET this afternoon (July 23, 2012). 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 93192595, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation website at www.zionsbancorporation.com. A replay of the call will be available from approximately 7:30 p.m. ET on Monday, July 23, 2012, until midnight ET on Monday, July 30, 2012, by dialing 855-859-2056 (domestic and international) and entering the passcode. 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 500 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. 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 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 might cause such differences include, but are not limited to: the Company's ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either internationally, nationally or locally in areas in which the Company conducts its operations, including changes in securities markets and valuations in structured securities and other assets; changes in governmental policies and programs resulting from general economic and financial market conditions; changes in interest and funding rates; continuing consolidation in the financial services industry; new private and governmental legal actions or changes in existing private and governmental legal actions; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company's operations or business (including The Dodd-Frank Wall Street Reform and Consumer Protection Act); and changes in accounting policies, procedures or determinations as may be required by the Financial Accounting Standards Board or other regulatory agencies.
Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Zions Bancorporation'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 (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.
ZIONS BANCORPORATION AND SUBSIDIARIES |
||||||||||
FINANCIAL HIGHLIGHTS |
||||||||||
(Unaudited) |
||||||||||
Three Months Ended |
||||||||||
(In thousands, except share, per share, and ratio data) |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|||||
2012 |
2012 |
2011 |
2011 |
2011 |
||||||
PER COMMON SHARE |
||||||||||
Dividends |
$ 0.01 |
$ 0.01 |
$ 0.01 |
$ 0.01 |
$ 0.01 |
|||||
Book value per common share |
25.48 |
25.25 |
25.02 |
24.78 |
24.88 |
|||||
Tangible common equity per common share |
19.65 |
19.39 |
19.14 |
18.87 |
18.95 |
|||||
SELECTED RATIOS |
||||||||||
Return on average assets |
0.70% |
0.69% |
0.67% |
0.84% |
0.57% |
|||||
Return on average common equity |
4.71% |
2.21% |
3.84% |
5.58% |
2.53% |
|||||
Net interest margin |
3.62% |
3.73% |
3.86% |
3.99% |
3.62% |
|||||
Capital Ratios |
||||||||||
Tangible common equity ratio |
6.91% |
6.89% |
6.77% |
6.90% |
6.95% |
|||||
Tangible equity ratio |
10.35% |
10.24% |
11.33% |
11.56% |
11.58% |
|||||
Average equity to average assets |
12.37% |
13.31% |
13.27% |
13.51% |
13.42% |
|||||
Risk-Based Capital Ratios 1 |
||||||||||
Common equity tier 1 capital |
9.77% |
9.71% |
9.57% |
9.53% |
9.36% |
|||||
Tier 1 leverage |
12.30% |
12.17% |
13.40% |
13.48% |
13.44% |
|||||
Tier 1 risk-based capital |
15.01% |
14.83% |
16.13% |
16.10% |
15.87% |
|||||
Total risk-based capital |
16.87% |
16.76% |
18.06% |
18.12% |
18.01% |
|||||
Taxable-equivalent net interest income |
$ 436,610 |
$ 447,161 |
$ 466,699 |
$ 475,580 |
$ 421,226 |
|||||
Weighted average common and common- |
||||||||||
equivalent shares outstanding |
183,136,631 |
182,963,828 |
182,823,190 |
182,857,702 |
182,728,185 |
|||||
Common shares outstanding |
184,117,522 |
184,228,178 |
184,135,388 |
184,294,782 |
184,311,290 |
|||||
1 Ratios for June 30, 2012 are estimates. |
ZIONS BANCORPORATION AND SUBSIDIARIES |
||||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||||
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
||||||
(In thousands, except share amounts) |
2012 |
2012 |
2011 |
2011 |
2011 |
|||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||
ASSETS |
||||||||||
Cash and due from banks |
$ 1,124,673 |
$ 1,082,186 |
$ 1,224,350 |
$ 1,102,768 |
$ 1,035,028 |
|||||
Money market investments: |
||||||||||
Interest-bearing deposits |
7,887,175 |
7,629,399 |
7,020,895 |
5,118,066 |
4,924,992 |
|||||
Federal funds sold and security resell agreements |
83,529 |
52,634 |
102,159 |
165,106 |
123,132 |
|||||
Investment securities: |
||||||||||
Held-to-maturity, at adjusted cost (approximate fair value |
||||||||||
$715,710, $728,479, $729,974, $715,608, and $762,998) |
773,016 |
797,149 |
807,804 |
791,569 |
829,702 |
|||||
Available-for-sale, at fair value |
3,167,590 |
3,223,086 |
3,230,795 |
3,970,602 |
4,084,963 |
|||||
Trading account, at fair value |
20,539 |
19,033 |
40,273 |
49,782 |
51,152 |
|||||
3,961,145 |
4,039,268 |
4,078,872 |
4,811,953 |
4,965,817 |
||||||
Loans held for sale |
139,245 |
184,579 |
201,590 |
159,300 |
158,943 |
|||||
Loans, net of unearned income and fees: |
||||||||||
Loans and leases |
36,231,104 |
35,903,475 |
36,393,782 |
35,924,054 |
35,969,702 |
|||||
FDIC-supported loans |
642,246 |
687,126 |
750,870 |
800,454 |
853,875 |
|||||
36,873,350 |
36,590,601 |
37,144,652 |
36,724,508 |
36,823,577 |
||||||
Less allowance for loan losses |
971,716 |
1,010,059 |
1,049,958 |
1,148,903 |
1,237,733 |
|||||
Loans, net of allowance |
35,901,634 |
35,580,542 |
36,094,694 |
35,575,605 |
35,585,844 |
|||||
Other noninterest-bearing investments |
867,882 |
875,037 |
865,231 |
860,045 |
858,678 |
|||||
Premises and equipment, net |
714,913 |
715,815 |
719,276 |
726,503 |
722,600 |
|||||
Goodwill |
1,015,129 |
1,015,129 |
1,015,129 |
1,015,129 |
1,015,161 |
|||||
Core deposit and other intangibles |
59,277 |
63,538 |
67,830 |
72,571 |
77,346 |
|||||
Other real estate owned |
144,816 |
158,592 |
153,178 |
203,173 |
238,990 |
|||||
Other assets |
1,507,594 |
1,499,588 |
1,605,905 |
1,721,101 |
1,654,883 |
|||||
$ 53,407,012 |
$ 52,896,307 |
$ 53,149,109 |
$ 51,531,320 |
$ 51,361,414 |
||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||||
Deposits: |
||||||||||
Noninterest-bearing demand |
$ 16,498,248 |
$ 16,185,140 |
$ 16,110,857 |
$ 14,911,729 |
$ 14,475,383 |
|||||
Interest-bearing: |
||||||||||
Savings and NOW |
7,505,841 |
7,406,910 |
7,159,101 |
6,711,002 |
6,555,306 |
|||||
Money market |
14,439,389 |
14,813,495 |
14,616,740 |
14,576,527 |
14,948,065 |
|||||
Time |
3,211,942 |
3,326,717 |
3,413,550 |
3,536,755 |
3,775,409 |
|||||
Foreign |
1,504,827 |
1,366,826 |
1,575,361 |
1,627,135 |
1,437,067 |
|||||
43,160,247 |
43,099,088 |
42,875,609 |
41,363,148 |
41,191,230 |
||||||
Securities sold, not yet purchased |
104,882 |
47,404 |
44,486 |
30,070 |
42,709 |
|||||
Federal funds purchased and security repurchase agreements |
759,591 |
486,808 |
608,098 |
630,901 |
630,058 |
|||||
Other short-term borrowings |
7,621 |
19,839 |
70,273 |
125,290 |
147,945 |
|||||
Long-term debt |
2,274,571 |
2,283,121 |
1,954,462 |
1,898,439 |
1,879,669 |
|||||
Reserve for unfunded lending commitments |
103,586 |
98,718 |
102,422 |
98,062 |
100,264 |
|||||
Other liabilities |
507,151 |
474,551 |
510,531 |
466,493 |
456,448 |
|||||
Total liabilities |
46,917,649 |
46,509,529 |
46,165,881 |
44,612,403 |
44,448,323 |
|||||
Shareholders' equity: |
||||||||||
Preferred stock, without par value, authorized 4,400,000 shares |
1,800,473 |
1,737,633 |
2,377,560 |
2,354,523 |
2,329,370 |
|||||
Common stock, without par value; authorized 350,000,000 |
||||||||||
shares; issued and outstanding 184,117,522, 184,228,178, |
||||||||||
184,135,388, 184,294,782 and 184,311,290 shares |
4,157,525 |
4,162,522 |
4,163,242 |
4,160,697 |
4,158,369 |
|||||
Retained earnings |
1,110,120 |
1,060,525 |
1,036,590 |
994,380 |
931,345 |
|||||
Accumulated other comprehensive income (loss) |
(576,147) |
(571,567) |
(592,084) |
(588,834) |
(504,491) |
|||||
Controlling interest shareholders' equity |
6,491,971 |
6,389,113 |
6,985,308 |
6,920,766 |
6,914,593 |
|||||
Noncontrolling interests |
(2,608) |
(2,335) |
(2,080) |
(1,849) |
(1,502) |
|||||
Total shareholders' equity |
6,489,363 |
6,386,778 |
6,983,228 |
6,918,917 |
6,913,091 |
|||||
$ 53,407,012 |
$ 52,896,307 |
$ 53,149,109 |
$ 51,531,320 |
$ 51,361,414 |
ZIONS BANCORPORATION AND SUBSIDIARIES |
||||||||||
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||
(Unaudited) |
||||||||||
Three Months Ended |
||||||||||
(In thousands, except per share amounts) |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|||||
2012 |
2012 |
2011 |
2011 |
2011 |
||||||
Interest income: |
||||||||||
Interest and fees on loans |
$ 478,569 |
$ 486,615 |
$ 504,243 |
$ 520,133 |
$ 523,741 |
|||||
Interest on money market investments |
5,099 |
4,628 |
4,308 |
3,482 |
3,199 |
|||||
Interest on securities: |
||||||||||
Held-to-maturity |
9,325 |
8,959 |
9,106 |
8,937 |
9,009 |
|||||
Available-for-sale |
25,090 |
23,158 |
21,268 |
21,382 |
22,179 |
|||||
Trading account |
148 |
338 |
548 |
462 |
538 |
|||||
Total interest income |
518,231 |
523,698 |
539,473 |
554,396 |
558,666 |
|||||
Interest expense: |
||||||||||
Interest on deposits |
20,823 |
23,413 |
26,645 |
31,093 |
34,257 |
|||||
Interest on short-term borrowings |
256 |
779 |
1,221 |
1,501 |
1,783 |
|||||
Interest on long-term debt |
65,165 |
57,207 |
49,699 |
51,207 |
106,454 |
|||||
Total interest expense |
86,244 |
81,399 |
77,565 |
83,801 |
142,494 |
|||||
Net interest income |
431,987 |
442,299 |
461,908 |
470,595 |
416,172 |
|||||
Provision for loan losses |
10,853 |
15,664 |
(1,476) |
14,553 |
1,330 |
|||||
Net interest income after provision for loan losses |
421,134 |
426,635 |
463,384 |
456,042 |
414,842 |
|||||
Noninterest income: |
||||||||||
Service charges and fees on deposit accounts |
43,426 |
43,532 |
42,873 |
44,154 |
42,878 |
|||||
Other service charges, commissions and fees |
38,554 |
34,226 |
38,539 |
45,308 |
43,958 |
|||||
Trust and wealth management income |
8,057 |
6,374 |
6,481 |
6,269 |
7,179 |
|||||
Capital markets and foreign exchange |
7,342 |
5,734 |
8,106 |
7,729 |
8,358 |
|||||
Dividends and other investment income |
21,542 |
9,480 |
7,805 |
9,356 |
17,239 |
|||||
Loan sales and servicing income |
10,287 |
8,352 |
6,058 |
6,165 |
9,836 |
|||||
Fair value and nonhedge derivative income (loss) |
(6,784) |
(4,400) |
(4,677) |
(5,718) |
4,195 |
|||||
Equity securities gains (losses), net |
107 |
9,145 |
1,961 |
5,289 |
(1,636) |
|||||
Fixed income securities gains (losses), net |
5,519 |
720 |
1,288 |
13,035 |
(2,396) |
|||||
Impairment losses on investment securities: |
||||||||||
Impairment losses on investment securities |
(24,026) |
(18,273) |
(12,351) |
(55,530) |
(6,339) |
|||||
Noncredit-related losses on securities not expected to |
||||||||||
be sold (recognized in other comprehensive income) |
16,718 |
8,064 |
265 |
42,196 |
1,181 |
|||||
Net impairment losses on investment securities |
(7,308) |
(10,209) |
(12,086) |
(13,334) |
(5,158) |
|||||
Other |
2,280 |
4,045 |
1,956 |
2,789 |
3,896 |
|||||
Total noninterest income |
123,022 |
106,999 |
98,304 |
121,042 |
128,349 |
|||||
Noninterest expense: |
||||||||||
Salaries and employee benefits |
220,765 |
224,634 |
220,290 |
216,855 |
222,138 |
|||||
Occupancy, net |
28,169 |
27,951 |
27,899 |
29,040 |
27,588 |
|||||
Furniture and equipment |
27,302 |
26,792 |
27,036 |
26,852 |
26,153 |
|||||
Other real estate expense |
6,440 |
7,810 |
14,936 |
20,564 |
17,903 |
|||||
Credit related expense |
12,415 |
13,485 |
14,213 |
15,379 |
17,124 |
|||||
Provision for unfunded lending commitments |
4,868 |
(3,704) |
4,360 |
(2,202) |
(1,904) |
|||||
Legal and professional services |
12,947 |
11,096 |
14,974 |
8,897 |
8,432 |
|||||
Advertising |
6,618 |
5,807 |
7,780 |
6,511 |
5,962 |
|||||
FDIC premiums |
10,444 |
10,919 |
12,012 |
12,573 |
15,232 |
|||||
Amortization of core deposit and other intangibles |
4,262 |
4,291 |
4,741 |
4,773 |
4,855 |
|||||
Other |
67,426 |
63,291 |
76,799 |
69,776 |
72,773 |
|||||
Total noninterest expense |
401,656 |
392,372 |
425,040 |
409,018 |
416,256 |
|||||
Income before income taxes |
142,500 |
141,262 |
136,648 |
168,066 |
126,935 |
|||||
Income taxes |
51,036 |
51,859 |
47,877 |
59,348 |
54,325 |
|||||
Net income |
91,464 |
89,403 |
88,771 |
108,718 |
72,610 |
|||||
Net loss applicable to noncontrolling interests |
(273) |
(273) |
(248) |
(375) |
(265) |
|||||
Net income applicable to controlling interest |
91,737 |
89,676 |
89,019 |
109,093 |
72,875 |
|||||
Preferred stock dividends |
(36,522) |
(64,187) |
(44,599) |
(43,928) |
(43,837) |
|||||
Net earnings applicable to common shareholders |
$ 55,215 |
$ 25,489 |
$ 44,420 |
$ 65,165 |
$ 29,038 |
|||||
Weighted average common shares outstanding during the period: |
||||||||||
Basic shares |
182,985 |
182,798 |
182,703 |
182,676 |
182,472 |
|||||
Diluted shares |
183,137 |
182,964 |
182,823 |
182,858 |
182,728 |
|||||
Net earnings per common share: |
||||||||||
Basic |
$ 0.30 |
$ 0.14 |
$ 0.24 |
$ 0.35 |
$ 0.16 |
|||||
Diluted |
0.30 |
0.14 |
0.24 |
0.35 |
0.16 |
ZIONS BANCORPORATION AND SUBSIDIARIES |
||||||||||||||||||||
Loan Balances By Portfolio Type |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
(In millions) |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|||||||||||||||
2012 |
2012 |
2011 |
2011 |
2011 |
||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
$ 10,383 |
$ 10,157 |
$ 10,335 |
$ 9,733 |
$ 9,520 |
|||||||||||||||
Leasing |
406 |
394 |
380 |
366 |
365 |
|||||||||||||||
Owner occupied |
7,811 |
7,887 |
8,159 |
8,326 |
8,419 |
|||||||||||||||
Municipal |
477 |
441 |
441 |
440 |
448 |
|||||||||||||||
Total commercial |
19,077 |
18,879 |
19,315 |
18,865 |
18,752 |
|||||||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction and land development |
2,099 |
2,100 |
2,265 |
2,467 |
2,748 |
|||||||||||||||
Term |
8,011 |
8,070 |
7,883 |
7,723 |
7,701 |
|||||||||||||||
Total commercial real estate |
10,110 |
10,170 |
10,148 |
10,190 |
10,449 |
|||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity credit line |
2,181 |
2,167 |
2,187 |
2,161 |
2,143 |
|||||||||||||||
1-4 family residential |
4,019 |
3,875 |
3,921 |
3,891 |
3,807 |
|||||||||||||||
Construction and other consumer real estate |
328 |
316 |
306 |
303 |
308 |
|||||||||||||||
Bankcard and other revolving plans |
284 |
274 |
291 |
278 |
280 |
|||||||||||||||
Other |
232 |
223 |
226 |
236 |
231 |
|||||||||||||||
Total consumer |
7,044 |
6,855 |
6,931 |
6,869 |
6,769 |
|||||||||||||||
FDIC-supported loans 1 |
642 |
687 |
751 |
801 |
854 |
|||||||||||||||
Total loans |
$ 36,873 |
$ 36,591 |
$ 37,145 |
$ 36,725 |
$ 36,824 |
|||||||||||||||
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) |
||||||||||||||||||||
(In thousands) |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|||||||||||||||
2012 |
2012 |
2011 |
2011 |
2011 |
||||||||||||||||
Balance sheet: |
||||||||||||||||||||
Change in assets from reestimation of cash |
||||||||||||||||||||
FDIC-supported loans |
$ 14,761 |
$ 13,171 |
$ 17,003 |
$ 20,642 |
$ 21,467 |
|||||||||||||||
FDIC indemnification asset (included in |
(11,233) |
(10,002) |
(13,126) |
(15,431) |
(14,975) |
|||||||||||||||
Balance at end of period: |
||||||||||||||||||||
FDIC-supported loans |
642,246 |
687,126 |
750,870 |
800,454 |
853,875 |
|||||||||||||||
FDIC indemnification asset (included in other |
100,561 |
106,477 |
120,358 |
135,299 |
150,557 |
|||||||||||||||
Three Months Ended |
||||||||||||||||||||
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
||||||||||||||||
2012 |
2012 |
2011 |
2011 |
2011 |
||||||||||||||||
Statement of income: |
||||||||||||||||||||
Interest income: |
||||||||||||||||||||
Interest and fees on loans |
$ 14,761 |
$ 13,171 |
$ 17,003 |
$ 20,642 |
$ 21,467 |
|||||||||||||||
Noninterest expense: |
||||||||||||||||||||
Other noninterest expense |
11,233 |
10,002 |
13,126 |
15,431 |
14,975 |
|||||||||||||||
Net increase in pretax income |
$ 3,528 |
$ 3,169 |
$ 3,877 |
$ 5,211 |
$ 6,492 |
ZIONS BANCORPORATION AND SUBSIDIARIES |
||||||||||
Nonperforming Lending-Related Assets |
||||||||||
(Unaudited) |
||||||||||
(Amounts in thousands) |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|||||
2012 |
2012 |
2011 |
2011 |
2011 |
||||||
Nonaccrual loans |
$ 771,510 |
$ 849,543 |
$ 885,608 |
$ 1,038,803 |
$ 1,243,304 |
|||||
Other real estate owned |
125,142 |
129,676 |
128,874 |
170,023 |
195,005 |
|||||
Nonperforming lending-related assets, excluding |
||||||||||
FDIC-supported assets |
896,652 |
979,219 |
1,014,482 |
1,208,826 |
1,438,309 |
|||||
FDIC-supported nonaccrual loans |
21,980 |
22,623 |
24,267 |
29,082 |
30,414 |
|||||
FDIC-supported other real estate owned |
19,674 |
28,916 |
24,304 |
33,150 |
43,985 |
|||||
FDIC-supported nonperforming assets |
41,654 |
51,539 |
48,571 |
62,232 |
74,399 |
|||||
Total nonperforming lending-related assets |
$ 938,306 |
$ 1,030,758 |
$ 1,063,053 |
$ 1,271,058 |
$ 1,512,708 |
|||||
Ratio of nonperforming lending-related assets to loans 1 |
||||||||||
and leases and other real estate owned |
2.53% |
2.79% |
2.83% |
3.43% |
4.06% |
|||||
Accruing loans past due 90 days or more, excluding |
||||||||||
FDIC-supported loans |
$ 29,460 |
$ 38,172 |
$ 19,145 |
$ 15,863 |
$ 19,195 |
|||||
Accruing FDIC-supported loans past due 90 days or more |
70,453 |
76,945 |
74,611 |
85,714 |
89,554 |
|||||
Ratio of accruing loans past due 90 days or more to |
||||||||||
loans 1and leases |
0.27% |
0.31% |
0.25% |
0.28% |
0.29% |
|||||
Nonaccrual loans and accruing loans past due 90 days or more |
$ 893,403 |
$ 987,283 |
$ 1,003,631 |
$ 1,169,462 |
$ 1,382,467 |
|||||
Ratio of nonaccrual loans and accruing loans past due |
||||||||||
90 days or more to loans 1and leases |
2.41% |
2.68% |
2.69% |
3.17% |
3.74% |
|||||
Accruing loans past due 30 - 89 days, excluding |
||||||||||
FDIC-supported loans |
$ 142,501 |
$ 171,224 |
$ 183,976 |
$ 174,250 |
$ 170,782 |
|||||
Accruing FDIC-supported loans past due 30 - 89 days |
15,519 |
13,899 |
24,691 |
13,816 |
21,520 |
|||||
Restructured loans included in nonaccrual loans |
227,568 |
276,669 |
295,825 |
308,159 |
324,077 |
|||||
Restructured loans on accrual |
393,360 |
401,554 |
448,109 |
430,253 |
393,602 |
|||||
Classified loans, excluding FDIC-supported loans |
1,880,932 |
2,076,220 |
2,056,472 |
2,361,574 |
2,675,741 |
|||||
1Includes loans held for sale. |
ZIONS BANCORPORATION AND SUBSIDIARIES |
||||||||||
Allowance for Credit Losses |
||||||||||
(Unaudited) |
||||||||||
Three Months Ended |
||||||||||
(Amounts in thousands) |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|||||
2012 |
2012 |
2011 |
2011 |
2011 |
||||||
Allowance for Loan Losses |
||||||||||
Balance at beginning of period |
$ 1,010,059 |
$ 1,049,958 |
$ 1,148,903 |
$ 1,237,733 |
$ 1,349,800 |
|||||
Add: |
||||||||||
Provision for losses |
10,853 |
15,664 |
(1,476) |
14,553 |
1,330 |
|||||
Adjustment for FDIC-supported loans |
(5,856) |
(1,057) |
(2,655) |
(1,520) |
(162) |
|||||
Deduct: |
||||||||||
Gross loan and lease charge-offs |
(73,685) |
(80,014) |
(120,599) |
(129,146) |
(142,444) |
|||||
Recoveries |
30,345 |
25,508 |
25,785 |
27,283 |
29,209 |
|||||
Net loan and lease charge-offs |
(43,340) |
(54,506) |
(94,814) |
(101,863) |
(113,235) |
|||||
Balance at end of period |
$ 971,716 |
$ 1,010,059 |
$ 1,049,958 |
$ 1,148,903 |
$ 1,237,733 |
|||||
Ratio of allowance for loan losses to loans and |
||||||||||
leases, at period end |
2.64% |
2.76% |
2.83% |
3.13% |
3.36% |
|||||
Ratio of allowance for loan losses to nonperforming |
||||||||||
loans, at period end |
122.46% |
115.81% |
115.40% |
107.59% |
97.17% |
|||||
Annualized ratio of net loan and lease charge-offs to |
||||||||||
average loans |
0.47% |
0.59% |
1.03% |
1.11% |
1.23% |
|||||
Reserve for Unfunded Lending Commitments |
||||||||||
Balance at beginning of period |
$ 98,718 |
$ 102,422 |
$ 98,062 |
$ 100,264 |
$ 102,168 |
|||||
Provision charged (credited) to earnings |
4,868 |
(3,704) |
4,360 |
(2,202) |
(1,904) |
|||||
Balance at end of period |
$ 103,586 |
$ 98,718 |
$ 102,422 |
$ 98,062 |
$ 100,264 |
|||||
Total Allowance for Credit Losses |
||||||||||
Allowance for loan losses |
$ 971,716 |
$ 1,010,059 |
$ 1,049,958 |
$ 1,148,903 |
$ 1,237,733 |
|||||
Reserve for unfunded lending commitments |
103,586 |
98,718 |
102,422 |
98,062 |
100,264 |
|||||
Total allowance for credit losses |
$ 1,075,302 |
$ 1,108,777 |
$ 1,152,380 |
$ 1,246,965 |
$ 1,337,997 |
|||||
Ratio of total allowance for credit losses |
||||||||||
to loans and leases outstanding, at period end |
2.92% |
3.03% |
3.10% |
3.40% |
3.63% |
ZIONS BANCORPORATION AND SUBSIDIARIES |
|||||||||||||||||||||||
Nonaccrual Loans By Portfolio Type |
|||||||||||||||||||||||
(Excluding FDIC-Supported Loans) |
|||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||
(In millions) |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
||||||||||||||||||
2012 |
2012 |
2011 |
2011 |
2011 |
|||||||||||||||||||
Loans held for sale |
$ - |
$ - |
$ 18 |
$ 18 |
$ 17 |
||||||||||||||||||
Commercial: |
|||||||||||||||||||||||
Commercial and industrial |
133 |
149 |
127 |
176 |
186 |
||||||||||||||||||
Leasing |
1 |
1 |
2 |
1 |
1 |
||||||||||||||||||
Owner occupied |
240 |
245 |
239 |
268 |
314 |
||||||||||||||||||
Municipal |
- |
- |
- |
- |
6 |
||||||||||||||||||
Total commercial |
374 |
395 |
368 |
445 |
507 |
||||||||||||||||||
Commercial real estate: |
|||||||||||||||||||||||
Construction and land development |
115 |
148 |
220 |
245 |
344 |
||||||||||||||||||
Term |
182 |
191 |
156 |
189 |
233 |
||||||||||||||||||
Total commercial real estate |
297 |
339 |
376 |
434 |
577 |
||||||||||||||||||
Consumer: |
|||||||||||||||||||||||
Home equity credit line |
14 |
17 |
18 |
15 |
13 |
||||||||||||||||||
1-4 family residential |
76 |
87 |
91 |
108 |
110 |
||||||||||||||||||
Construction and other consumer real estate |
8 |
8 |
12 |
16 |
16 |
||||||||||||||||||
Bankcard and other revolving plans |
1 |
1 |
- |
- |
- |
||||||||||||||||||
Other |
2 |
3 |
3 |
3 |
3 |
||||||||||||||||||
Total consumer |
101 |
116 |
124 |
142 |
142 |
||||||||||||||||||
Total nonaccrual loans |
$ 772 |
$ 850 |
$ 886 |
$ 1,039 |
$ 1,243 |
||||||||||||||||||
Net Charge-Offs By Portfolio Type |
|||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||
Three Months Ended |
|||||||||||||||||||||||
(In millions) |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
||||||||||||||||||
2012 |
2012 |
2011 |
2011 |
2011 |
|||||||||||||||||||
Commercial: |
|||||||||||||||||||||||
Commercial and industrial |
$ 9 |
$ 17 |
$ 9 |
$ 27 |
$ 18 |
||||||||||||||||||
Leasing |
- |
- |
- |
- |
- |
||||||||||||||||||
Owner occupied |
10 |
8 |
33 |
27 |
19 |
||||||||||||||||||
Municipal |
- |
- |
- |
- |
- |
||||||||||||||||||
Total commercial |
19 |
25 |
42 |
54 |
37 |
||||||||||||||||||
Commercial real estate: |
|||||||||||||||||||||||
Construction and land development |
(2) |
(2) |
13 |
17 |
37 |
||||||||||||||||||
Term |
13 |
18 |
24 |
15 |
18 |
||||||||||||||||||
Total commercial real estate |
11 |
16 |
37 |
32 |
55 |
||||||||||||||||||
Consumer: |
|||||||||||||||||||||||
Home equity credit line |
6 |
4 |
6 |
4 |
6 |
||||||||||||||||||
1-4 family residential |
5 |
7 |
7 |
5 |
11 |
||||||||||||||||||
Construction and other consumer real estate |
- |
1 |
1 |
4 |
2 |
||||||||||||||||||
Bankcard and other revolving plans |
1 |
2 |
2 |
3 |
2 |
||||||||||||||||||
Other |
1 |
- |
- |
- |
- |
||||||||||||||||||
Total consumer loans |
13 |
14 |
16 |
16 |
21 |
||||||||||||||||||
Total net charge-offs |
$ 43 |
$ 55 |
$ 95 |
$ 102 |
$ 113 |
ZIONS BANCORPORATION AND SUBSIDIARIES |
||||||||||||
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES |
||||||||||||
(Unaudited) |
||||||||||||
Three Months Ended |
Three Months Ended |
Three Months Ended |
||||||||||
June 30, 2012 |
March 31, 2012 |
December 31, 2011 |
||||||||||
(In thousands) |
Average |
Average |
Average |
Average |
Average |
Average |
||||||
balance |
rate |
balance |
rate |
balance |
rate |
|||||||
ASSETS |
||||||||||||
Money market investments |
$ 7,786,191 |
0.26% |
$ 7,282,245 |
0.26% |
$ 6,574,588 |
0.26% |
||||||
Securities: |
||||||||||||
Held-to-maturity |
797,843 |
5.72% |
799,741 |
5.53% |
794,030 |
5.60% |
||||||
Available-for-sale |
3,084,771 |
3.34% |
3,093,827 |
3.08% |
3,496,842 |
2.47% |
||||||
Trading account |
18,877 |
3.15% |
41,189 |
3.30% |
65,901 |
3.30% |
||||||
Total securities |
3,901,491 |
3.82% |
3,934,757 |
3.58% |
4,356,773 |
3.06% |
||||||
Loans held for sale |
157,308 |
3.99% |
174,902 |
3.45% |
161,134 |
3.45% |
||||||
Loans 1: |
||||||||||||
Loans and leases |
36,067,463 |
5.07% |
36,078,917 |
5.17% |
36,122,003 |
5.23% |
||||||
FDIC-supported loans |
661,597 |
14.84% |
712,877 |
13.29% |
775,365 |
14.51% |
||||||
Total loans |
36,729,060 |
5.25% |
36,791,794 |
5.33% |
36,897,368 |
5.43% |
||||||
Total interest-earning assets |
48,574,050 |
4.33% |
48,183,698 |
4.41% |
47,989,863 |
4.50% |
||||||
Cash and due from banks |
1,025,681 |
1,122,979 |
1,071,368 |
|||||||||
Allowance for loan losses |
(1,004,879) |
(1,046,709) |
(1,128,602) |
|||||||||
Goodwill |
1,015,129 |
1,015,129 |
1,015,125 |
|||||||||
Core deposit and other intangibles |
61,511 |
65,837 |
70,345 |
|||||||||
Other assets |
3,218,519 |
3,239,161 |
3,332,441 |
|||||||||
Total assets |
$ 52,890,011 |
$ 52,580,095 |
$ 52,350,540 |
|||||||||
LIABILITIES |
||||||||||||
Interest-bearing deposits: |
||||||||||||
Savings and NOW |
$ 7,435,000 |
0.17% |
$ 7,200,170 |
0.20% |
$ 6,858,799 |
0.23% |
||||||
Money market |
14,522,941 |
0.28% |
14,701,771 |
0.32% |
14,769,654 |
0.36% |
||||||
Time |
3,264,853 |
0.75% |
3,369,323 |
0.79% |
3,468,855 |
0.84% |
||||||
Foreign |
1,490,695 |
0.35% |
1,408,409 |
0.40% |
1,634,203 |
0.43% |
||||||
Total interest-bearing deposits |
26,713,489 |
0.31% |
26,679,673 |
0.35% |
26,731,511 |
0.40% |
||||||
Borrowed funds: |
||||||||||||
Securities sold, not yet purchased |
6,128 |
1.90% |
22,758 |
3.38% |
30,704 |
4.11% |
||||||
Federal funds purchased and security |
||||||||||||
repurchase agreements |
474,026 |
0.14% |
528,662 |
0.12% |
632,030 |
0.11% |
||||||
Other short-term borrowings |
13,290 |
2.00% |
48,394 |
3.61% |
102,930 |
2.82% |
||||||
Long-term debt |
2,329,608 |
11.25% |
1,991,776 |
11.55% |
1,921,251 |
10.26% |
||||||
Total borrowed funds |
2,823,052 |
9.32% |
2,591,590 |
9.00% |
2,686,915 |
7.52% |
||||||
Total interest-bearing liabilities |
29,536,541 |
1.17% |
29,271,263 |
1.12% |
29,418,426 |
1.05% |
||||||
Noninterest-bearing deposits |
16,228,973 |
15,691,499 |
15,469,278 |
|||||||||
Other liabilities |
582,743 |
619,231 |
515,595 |
|||||||||
Total liabilities |
46,348,257 |
45,581,993 |
45,403,299 |
|||||||||
Shareholders' equity: |
||||||||||||
Preferred equity |
1,830,845 |
2,355,549 |
2,365,430 |
|||||||||
Common equity |
4,713,318 |
4,644,722 |
4,583,748 |
|||||||||
Controlling interest shareholders' equity |
6,544,163 |
7,000,271 |
6,949,178 |
|||||||||
Noncontrolling interests |
(2,409) |
(2,169) |
(1,937) |
|||||||||
Total shareholders' equity |
6,541,754 |
6,998,102 |
6,947,241 |
|||||||||
Total liabilities and shareholders' equity |
$ 52,890,011 |
$ 52,580,095 |
$ 52,350,540 |
|||||||||
Spread on average interest-bearing funds |
3.16% |
3.29% |
3.45% |
|||||||||
Net yield on interest-earning assets |
3.62% |
3.73% |
3.86% |
|||||||||
1 Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans. |
ZIONS BANCORPORATION AND SUBSIDIARIES |
||||||||||
GAAP to Non-GAAP Reconciliation |
||||||||||
(Unaudited) |
||||||||||
Three Months Ended |
||||||||||
June 30, 2012 |
March 31, 2012 |
|||||||||
(Amounts in thousands) |
Diluted |
Diluted |
||||||||
Amount |
EPS |
Amount |
EPS |
|||||||
1. |
Net Earnings Excluding the Effects of the Discount Amortization on |
|||||||||
Convertible Subordinated Debt and Additional Accretion on Acquired Loans |
||||||||||
Net earnings applicable to common shareholders (GAAP) |
$ 55,215 |
$ 0.30 |
$ 25,489 |
$ 0.14 |
||||||
Addback for the after-tax impact of: |
||||||||||
Discount amortization on convertible subordinated debt |
6,584 |
0.04 |
6,905 |
0.04 |
||||||
Accelerated discount amortization on convertible subordinated debt |
13,175 |
0.07 |
9,920 |
0.05 |
||||||
Additional accretion of interest income on acquired loans, net of expense |
(2,035) |
(0.01) |
(1,830) |
(0.01) |
||||||
Net earnings excluding the effects of the discount amortization on convertible |
||||||||||
subordinated debt and additional accretion on acquired loans (non-GAAP) |
$ 72,939 |
$ 0.40 |
$ 40,484 |
$ 0.22 |
||||||
Three Months Ended |
||||||||||
June 30, 2012 |
March 31, 2012 |
|||||||||
2. |
Core Net Interest Income (NII)/Net Interest Margin (NIM) |
NII |
NIM |
NII |
NIM |
|||||
Net interest income/net interest margin as reported (GAAP) |
$ 431,987 |
3.62 % |
1 |
$ 442,299 |
3.73 % |
1 |
||||
Addback for the pretax impact of: |
||||||||||
Discount amortization on convertible subordinated debt |
10,663 |
0.09 % |
11,182 |
0.09 % |
||||||
Accelerated discount amortization on convertible subordinated debt |
16,202 |
0.13 % |
12,204 |
0.10 % |
||||||
Additional accretion of interest income on acquired loans |
(14,761) |
(0.12)% |
(13,171) |
(0.11)% |
||||||
Core net interest income/net interest margin (non-GAAP) |
$ 444,091 |
3.72 % |
$ 452,514 |
3.81 % |
1 Calculation of net interest margin is based on taxable-equivalent net interest income. |
This Press Release presents the following non-GAAP financial measures: 1. Net earnings excluding the effects of the discount amortization on convertible subordinated debt and additional accretion on acquired loans, and 2. Core net interest income/net interest margin. These non-GAAP financial measures exclude the effects of the following adjustments: (i) periodic discount amortization on convertible subordinated debt; (ii) accelerated discount amortization on convertible subordinated debt which has been converted; and (iii) additional accretion of interest income on acquired loans based on increased projected cash flows (net of related expense in 1.).
The identified adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures 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 measures 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. These non-GAAP financial measures are 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 these non-GAAP financial measures 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 these 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 analyses of results reported under GAAP.
SOURCE Zions Bancorporation
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