Zions Bancorporation Reports Earnings Of $0.37 Per Diluted Common Share For First Quarter 2015

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Apr 20, 2015, 04:10 ET

SALT LAKE CITY, April 20, 2015 /PRNewswire/ -- Zions Bancorporation (NASDAQ: ZION) ("Zions" or "the Company") today reported first quarter net earnings applicable to common shareholders of $75.3 million, or $0.37 per diluted common share, compared to $66.8 million, or $0.33 per diluted common share, for the fourth quarter of 2014.

The following is an abbreviated version of the 2015 first quarter earnings release. For the full version, including financial tables, please visit zionsbancorporation.com.

First Quarter 2015 Highlights

Credit quality metrics remained in line with expectations. However, as expected, energy-related nonperforming and classified loans increased and are expected to increase further in a continued low energy price environment. The Company experienced $17 million in net recoveries on loans.
Total noninterest expenses improved to $397 million from $423 million in the prior quarter due in part to reduced costs from CCAR preparation.
Net interest income declined somewhat, due primarily to fewer days of income and lower yields on loans as a result of continued pricing pressure on loan production particularly for larger commercial loans.
The estimated Basel III common equity tier 1 capital ratio at March 31, 2015 was 11.81% on a 2015 phase-in basis, essentially unchanged from 11.82% at December 31, 2014.

"The first quarter results were generally in line with our expectations. We continued to strengthen reserves in light of continuing stress in the energy sector. We are nonetheless pleased to see the proactive and rapid steps many in that industry are taking to adjust to the current environment, including raising significant amounts of capital. We are encouraged by other credit trends and notably experienced recoveries net of charge-offs of $17 million during the quarter," said Harris H. Simmons, chairman and chief executive officer.

Mr. Simmons continued, "Loan growth was subdued during the quarter; however, we continue to exercise caution with regard to underwriting standards and remain disciplined with respect to pricing. Finally, we are pleased to have announced an increase in the quarterly dividend on common stock to $0.06 per share from the previous $0.04 quarterly rate."

Net Interest Income
Net interest income decreased to $417 million in the first quarter of 2015 from $430 million in the fourth quarter of 2014, primarily as a result of two fewer days of income. The net interest margin decreased to 3.22% in the first quarter of 2015, compared to 3.25% in the fourth quarter of 2014, primarily due to lower loan yields on new production.

Noninterest Income
Noninterest income for the first quarter of 2015 was $122 million, compared to $129 million for the fourth quarter of 2014. The decrease was mostly attributable to the recognition in the fourth quarter of unrealized gains on Small Business Investment Company investments in both dividends and other investment income and in equity securities gains; excluding the securities gains, noninterest income declined moderately primarily due to lower service charges, which is largely attributable to seasonal effects.

Noninterest Expense
Noninterest expense for the first quarter of 2015 was $397 million, compared to $423 million for the fourth quarter of 2014 and $398 million for the first quarter of 2014. The decrease compared to the fourth quarter related to (1) the recognition of the litigation settlement in the fourth quarter in other noninterest expense and (2) decreased professional and legal services following the Company's CCAR submission in January 2015. The $5 million quarterly increase to $244 million in salary and employee benefits expense was primarily due to the cyclical first quarter increase in payroll taxes.

Conference Call
Zions will host a conference call to discuss these first quarter results at 5:30 p.m. ET this afternoon (April 20, 2015). 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 10432053, 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.

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 in 11 Western and Southwestern states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. The Company is a national leader in Small Business Administration lending and received 24 "Excellence" awards by Greenwich Associates for the 2014 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 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. Statements based on historical data are not intended and should not be understood to indicate the Company's expectations regarding future events. 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 could cause actual results to differ materially from those expressed in the forward-looking statements include the actual amount and duration of declines in the price of oil and gas as well as other factors discussed in the Company'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.

FINANCIAL HIGHLIGHTS (Unaudited)

	Three Months Ended
*(In thousands, except share, per share, and ratio data)*	March 31, 2015		December 31, 2014		September 30, 2014		June 30, 2014		March 31, 2014
BALANCE SHEET
Loans and leases, net of allowance	$	39,560,101	$	39,458,995	$	39,129,295	$	38,954,172	$	38,460,917
Total assets	57,555,931		57,208,874		55,458,870		55,111,275		56,080,844
Deposits	48,123,360		47,848,075		46,266,562		45,672,140		46,533,305
Total shareholders' equity	7,454,298		7,369,530		7,322,159		6,700,090		6,586,216

STATEMENT OF INCOME
Net interest income	$	417,346	$	430,430	$	416,819	$	416,284	$	416,471

Taxable-equivalent net interest income	421,581		434,789		420,850		420,202		420,305
Provision for loan losses	(1,494)		11,587		(54,643)		(54,416)		(610)
Total noninterest income	121,822		129,396		116,071		124,849		138,313
Total noninterest expense	397,461		422,666		438,536		406,027		398,063

Net earnings applicable to common shareholders	75,279		66,761		79,127		104,490		76,190

PER COMMON SHARE
Net earnings per diluted common share	$	0.37	$	0.33	$	0.40	$	0.56	$	0.41
Dividends	0.04		0.04		0.04		0.04		0.04
Book value per common share ¹	31.74		31.35		31.14		30.77		30.19

Tangible book value per common share ¹	26.64		26.23		26.00		25.13		24.53

SELECTED RATIOS
Return on average assets	0.66%		0.57%		0.69%		0.87%		0.74%
Return on average common equity	4.77%		4.06%		5.10%		7.30%		5.52%

Tangible return on average tangible common equity	5.80%		4.95%		6.19%		9.07%		6.96%
Net interest margin	3.22%		3.25%		3.20%		3.29%		3.31%

Ratio of nonperforming lending-related assets to loans and leases and other real estate owned	0.99%		0.81%		0.84%		0.95%		1.12%

Annualized ratio of net loan and lease charge-offs to average loans	(0.17)%		0.17%		0.11%		0.06%		0.08%

Ratio of total allowance for credit losses to loans and leases outstanding ¹	1.75%		1.71%		1.74%		1.95%		2.11%

Capital Ratios ¹
Tangible common equity ratio	9.58%		9.48%		9.70%		8.60%		8.24%
Basel III: ^2,3
Common equity tier 1 capital	11.81%		11.82%
Tier 1 leverage	11.77%		11.59%
Tier 1 risk-based capital	13.99%		14.03%
Total risk-based capital	16.04%		16.08%
Basel I:
Tier 1 common equity			11.92%		11.86%		10.45%		10.56%
Tier 1 leverage			11.82%		11.87%		11.00%		10.71%
Tier 1 risk-based capital			14.47%		14.43%		13.00%		13.19%
Total risk-based capital			16.27%		16.28%		14.90%		15.11%

Weighted average common and common-equivalent shares outstanding	202,944,209		203,277,500		197,271,076		185,286,329		185,122,844
Common shares outstanding ¹	203,192,991		203,014,903		202,898,491		185,112,965		184,895,182