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 |  |
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 |
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.
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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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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.
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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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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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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 | 1,143 | 936 | ||||||||
Income taxes | 237 | 259 | 344 | ||||||||
Net income | 816 | 884 | 592 | ||||||||
Preferred stock dividends | (34 | ) | (34 | ) | (40 | ) | |||||
Preferred stock redemption | — | — | (2 | ) | |||||||
Net earnings applicable to common shareholders | $ | 782 | $ | 850 | $ | 550 | |||||
Weighted average common shares outstanding during the year: | |||||||||||
Basic shares (in thousands) | 175,984 | 193,589 | 200,776 | ||||||||
Diluted shares (in thousands) | 186,504 | 206,501 | 209,653 | ||||||||
Net earnings per common share: | |||||||||||
Basic | $ | 4.41 | $ | 4.36 | $ | 2.71 | |||||
Diluted | 4.16 | 4.08 | 2.60 | ||||||||
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ZIONS BANCORPORATION, N.A.
Press Release – Page 14
January 21, 2020
Loan Balances Held for Investment by Portfolio Type
(Unaudited)
(In millions) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||
Commercial: | |||||||||||||||||||
Commercial and industrial | $ | 14,760 | $ | 14,846 | $ | 14,883 | $ | 14,758 | $ | 14,513 | |||||||||
Leasing | 334 | 332 | 337 | 312 | 327 | ||||||||||||||
Owner occupied | 7,901 | 7,924 | 7,828 | 7,754 | 7,661 | ||||||||||||||
Municipal | 2,393 | 2,185 | 2,059 | 1,774 | 1,661 | ||||||||||||||
Total commercial | 25,388 | 25,287 | 25,107 | 24,598 | 24,162 | ||||||||||||||
Commercial real estate: | |||||||||||||||||||
Construction and land development | 2,211 | 2,347 | 2,609 | 2,343 | 2,186 | ||||||||||||||
Term | 9,344 | 9,469 | 9,218 | 9,187 | 8,939 | ||||||||||||||
Total commercial real estate | 11,555 | 11,816 | 11,827 | 11,530 | 11,125 | ||||||||||||||
Consumer: | |||||||||||||||||||
Home equity credit line | 2,917 | 2,930 | 2,929 | 2,884 | 2,937 | ||||||||||||||
1-4 family residential | 7,568 | 7,506 | 7,440 | 7,294 | 7,176 | ||||||||||||||
Construction and other consumer real estate | 624 | 637 | 644 | 636 | 643 | ||||||||||||||
Bankcard and other revolving plans | 502 | 494 | 502 | 489 | 491 | ||||||||||||||
Other | 155 | 165 | 168 | 175 | 180 | ||||||||||||||
Total consumer | 11,766 | 11,732 | 11,683 | 11,478 | 11,427 | ||||||||||||||
Loans and leases, net of unearned income and fees | $ | 48,709 | $ | 48,835 | $ | 48,617 | $ | 47,606 | $ | 46,714 | |||||||||
Nonperforming Assets
(Unaudited)
(In millions) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||
Nonaccrual loans1 | $ | 243 | $ | 233 | $ | 248 | $ | 234 | $ | 252 | |||||||||
Other real estate owned | 8 | 4 | 5 | 6 | 4 | ||||||||||||||
Total nonperforming assets | $ | 251 | $ | 237 | $ | 253 | $ | 240 | $ | 256 | |||||||||
Ratio of nonperforming assets to loans1 and leases and other real estate owned | 0.51 | % | 0.48 | % | 0.52 | % | 0.50 | % | 0.55 | % | |||||||||
Accruing loans past due 90 days or more | $ | 10 | $ | 6 | $ | 17 | $ | 8 | $ | 10 | |||||||||
Ratio of accruing loans past due 90 days or more to loans1 and leases | 0.02 | % | 0.01 | % | 0.03 | % | 0.02 | % | 0.02 | % | |||||||||
Nonaccrual loans and accruing loans past due 90 days or more | $ | 253 | $ | 239 | $ | 265 | $ | 242 | $ | 262 | |||||||||
Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans1 and leases | 0.52 | % | 0.49 | % | 0.54 | % | 0.51 | % | 0.56 | % | |||||||||
Accruing loans past due 30-89 days | $ | 75 | $ | 84 | $ | 99 | $ | 142 | $ | 65 | |||||||||
Restructured loans included in nonaccrual loans | 75 | 92 | 79 | 76 | 90 | ||||||||||||||
Restructured loans on accrual | 78 | 90 | 97 | 98 | 112 | ||||||||||||||
Classified loans | 803 | 799 | 770 | 729 | 698 | ||||||||||||||
1 Includes loans held for sale.
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ZIONS BANCORPORATION, N.A.
Press Release – Page 15
January 21, 2020
Allowance for Credit Losses
(Unaudited)
Three Months Ended | |||||||||||||||||||
(In millions) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||
Allowance for Loan Losses | |||||||||||||||||||
Balance at beginning of period | $ | 510 | $ | 503 | $ | 497 | $ | 495 | $ | 480 | |||||||||
Provision for loan losses | 7 | 8 | 20 | 2 | 7 | ||||||||||||||
Loan and lease charge-offs | 32 | 11 | 23 | 12 | 13 | ||||||||||||||
Less: Recoveries | 10 | 10 | 9 | 12 | 21 | ||||||||||||||
Net loan and lease charge-offs (recoveries) | 22 | 1 | 14 | — | (8 | ) | |||||||||||||
Balance at end of period | $ | 495 | $ | 510 | $ | 503 | $ | 497 | $ | 495 | |||||||||
Ratio of allowance for loan losses to loans1 and leases, at period end | 1.02 | % | 1.04 | % | 1.03 | % | 1.04 | % | 1.06 | % | |||||||||
Ratio of allowance for loan losses to nonaccrual loans1 at period end | 204 | % | 219 | % | 203 | % | 212 | % | 201 | % | |||||||||
Annualized ratio of net loan and lease charge-offs (recoveries) to average loans | 0.18 | % | 0.01 | % | 0.12 | % | — | % | (0.07 | )% | |||||||||
Reserve for Unfunded Lending Commitments | |||||||||||||||||||
Balance at beginning of period | $ | 62 | $ | 60 | $ | 59 | $ | 57 | $ | 58 | |||||||||
Provision for unfunded lending commitments | (3 | ) | 2 | 1 | 2 | (1 | ) | ||||||||||||
Balance at end of period | $ | 59 | $ | 62 | $ | 60 | $ | 59 | $ | 57 | |||||||||
Allowance for Credit Losses | |||||||||||||||||||
Allowance for loan losses | $ | 495 | $ | 510 | $ | 503 | $ | 497 | $ | 495 | |||||||||
Reserve for unfunded lending commitments | 59 | 62 | 60 | 59 | 57 | ||||||||||||||
Total allowance for credit losses | $ | 554 | $ | 572 | $ | 563 | $ | 556 | $ | 552 | |||||||||
Ratio of total allowance for credit losses to loans1 and leases outstanding, at period end | 1.14 | % | 1.17 | % | 1.16 | % | 1.17 | % | 1.18 | % | |||||||||
1 Does not include loans held for sale.
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ZIONS BANCORPORATION, N.A.
Press Release – Page 16
January 21, 2020
Nonaccrual Loans by Portfolio Type
(Unaudited)
(In millions) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||
Loans held for sale | $ | — | $ | — | $ | — | $ | — | $ | 6 | |||||||||
Commercial: | |||||||||||||||||||
Commercial and industrial | $ | 110 | $ | 97 | $ | 85 | $ | 72 | $ | 82 | |||||||||
Leasing | — | 1 | 1 | 1 | 2 | ||||||||||||||
Owner occupied | 65 | 49 | 69 | 69 | 67 | ||||||||||||||
Municipal | — | — | 1 | 1 | 1 | ||||||||||||||
Total commercial | 175 | 147 | 156 | 143 | 152 | ||||||||||||||
Commercial real estate: | |||||||||||||||||||
Construction and land development | — | — | 1 | 1 | — | ||||||||||||||
Term | 16 | 29 | 31 | 32 | 38 | ||||||||||||||
Total commercial real estate | 16 | 29 | 32 | 33 | 38 | ||||||||||||||
Consumer: | |||||||||||||||||||
Home equity credit line | 12 | 12 | 12 | 11 | 13 | ||||||||||||||
1-4 family residential | 40 | 44 | 44 | 45 | 42 | ||||||||||||||
Construction and other consumer real estate | — | 1 | 4 | 2 | — | ||||||||||||||
Bankcard and other revolving plans | — | — | — | — | 1 | ||||||||||||||
Other | — | — | — | — | — | ||||||||||||||
Total consumer | 52 | 57 | 60 | 58 | 56 | ||||||||||||||
Total nonaccrual loans | $ | 243 | $ | 233 | $ | 248 | $ | 234 | $ | 252 | |||||||||
Net Charge-Offs by Portfolio Type
(Unaudited)
(In millions) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||
Commercial: | |||||||||||||||||||
Commercial and industrial | $ | 19 | $ | — | $ | 13 | $ | 1 | $ | (10 | ) | ||||||||
Leasing | — | — | — | — | — | ||||||||||||||
Owner occupied | (1 | ) | (1 | ) | — | 1 | — | ||||||||||||
Municipal | — | — | — | — | — | ||||||||||||||
Total commercial | 18 | (1 | ) | 13 | 2 | (10 | ) | ||||||||||||
Commercial real estate: | |||||||||||||||||||
Construction and land development | (1 | ) | — | — | — | (1 | ) | ||||||||||||
Term | 2 | (1 | ) | — | (2 | ) | — | ||||||||||||
Total commercial real estate | 1 | (1 | ) | — | (2 | ) | (1 | ) | |||||||||||
Consumer: | |||||||||||||||||||
Home equity credit line | 1 | — | — | (1 | ) | — | |||||||||||||
1-4 family residential | (1 | ) | (1 | ) | (1 | ) | (1 | ) | — | ||||||||||
Construction and other consumer real estate | — | — | — | — | — | ||||||||||||||
Bankcard and other revolving plans | 2 | 3 | 1 | 1 | 2 | ||||||||||||||
Other | 1 | 1 | 1 | 1 | 1 | ||||||||||||||
Total consumer loans | 3 | 3 | 1 | — | 3 | ||||||||||||||
Total net charge-offs (recoveries) | $ | 22 | $ | 1 | $ | 14 | $ | — | $ | (8 | ) | ||||||||
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ZIONS BANCORPORATION, N.A.
Press Release – Page 17
January 21, 2020
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
Three Months Ended | ||||||||||||||||||||
December 31, 2019 | September 30, 2019 | December 31, 2018 | ||||||||||||||||||
(In millions) | Average balance | Average yield/rate 1 | Average balance | Average yield/rate 1 | Average balance | Average yield/rate 1 | ||||||||||||||
ASSETS | ||||||||||||||||||||
Money market investments | $ | 1,440 | 1.92 | % | $ | 1,413 | 2.41 | % | $ | 1,302 | 2.53 | % | ||||||||
Securities: | ||||||||||||||||||||
Held-to-maturity | 617 | 3.68 | % | 693 | 3.66 | % | 709 | 3.59 | % | |||||||||||
Available-for-sale | 13,771 | 2.25 | % | 14,323 | 2.29 | % | 14,567 | 2.40 | % | |||||||||||
Trading account | 173 | 4.36 | % | 135 | 4.50 | % | 89 | 4.15 | % | |||||||||||
Total securities | 14,561 | 2.33 | % | 15,151 | 2.37 | % | 15,365 | 2.46 | % | |||||||||||
Loans held for sale | 134 | 3.32 | % | 89 | 3.67 | % | 37 | 6.16 | % | |||||||||||
Loans held for investment:2 | ||||||||||||||||||||
Commercial | 25,258 | 4.65 | % | 25,284 | 4.83 | % | 23,745 | 4.90 | % | |||||||||||
Commercial real estate | 11,735 | 4.84 | % | 11,849 | 5.10 | % | 11,168 | 5.17 | % | |||||||||||
Consumer | 11,720 | 4.10 | % | 11,695 | 4.22 | % | 11,299 | 4.17 | % | |||||||||||
Total loans held for investment | 48,713 | 4.56 | % | 48,828 | 4.75 | % | 46,212 | 4.79 | % | |||||||||||
Total interest-earning assets | 64,848 | 4.00 | % | 65,481 | 4.15 | % | 62,916 | 4.17 | % | |||||||||||
Cash and due from banks | 675 | 616 | 542 | |||||||||||||||||
Allowance for loan losses | (507 | ) | (502 | ) | (488 | ) | ||||||||||||||
Goodwill and intangibles | 1,014 | 1,014 | 1,015 | |||||||||||||||||
Other assets | 3,545 | 3,643 | 3,040 | |||||||||||||||||
Total assets | $ | 69,575 | $ | 70,252 | $ | 67,025 | ||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||
Savings and money market | $ | 28,138 | 0.56 | % | $ | 26,962 | 0.65 | % | $ | 25,658 | 0.46 | % | ||||||||
Time | 4,808 | 1.84 | % | 4,963 | 1.99 | % | 4,286 | 1.67 | % | |||||||||||
Total interest-bearing deposits | 32,946 | 0.75 | % | 31,925 | 0.86 | % | 29,944 | 0.63 | % | |||||||||||
Borrowed funds: | ||||||||||||||||||||
Federal funds purchased and other short-term borrowings | 2,719 | 1.75 | % | 5,099 | 2.29 | % | 3,728 | 2.36 | % | |||||||||||
Long-term debt | 1,587 | 3.41 | % | 1,239 | 3.65 | % | 795 | 4.86 | % | |||||||||||
Total borrowed funds | 4,306 | 2.36 | % | 6,338 | 2.56 | % | 4,523 | 2.80 | % | |||||||||||
Total interest-bearing funds | 37,252 | 0.94 | % | 38,263 | 1.14 | % | 34,467 | 0.92 | % | |||||||||||
Noninterest-bearing deposits | 23,795 | 23,359 | 24,295 | |||||||||||||||||
Other liabilities | 1,096 | 1,062 | 759 | |||||||||||||||||
Total liabilities | 62,143 | 62,684 | 59,521 | |||||||||||||||||
Shareholders’ equity: | ||||||||||||||||||||
Preferred equity | 566 | 566 | 566 | |||||||||||||||||
Common equity | 6,866 | 7,002 | 6,938 | |||||||||||||||||
Total shareholders’ equity | 7,432 | 7,568 | 7,504 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 69,575 | $ | 70,252 | $ | 67,025 | ||||||||||||||
Spread on average interest-bearing funds | 3.06 | % | 3.01 | % | 3.25 | % | ||||||||||||||
Impact of net noninterest-bearing sources of funds | 0.40 | % | 0.47 | % | 0.42 | % | ||||||||||||||
Net interest margin | 3.46 | % | 3.48 | % | 3.67 | % | ||||||||||||||
Memo: total cost of deposits | 0.44 | % | 0.50 | % | 0.35 | % | ||||||||||||||
Memo: total deposits and interest-bearing liabilities | 61,047 | 0.57 | % | 61,622 | 0.71 | % | 58,762 | 0.54 | % | |||||||||||
1 Rates are calculated using amounts in thousands and taxable-equivalent rates used where applicable.
2 Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.
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ZIONS BANCORPORATION, N.A.
Press Release – Page 18
January 21, 2020
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
Twelve Months Ended | ||||||||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2017 | ||||||||||||||||||
(In millions) | Average balance | Average yield/rate 1 | Average balance | Average yield/rate 1 | Average balance | Average yield/rate 1 | ||||||||||||||
ASSETS | ||||||||||||||||||||
Money market investments | $ | 1,346 | 2.41 | % | $ | 1,360 | 2.12 | % | $ | 1,539 | 1.23 | % | ||||||||
Securities: | ||||||||||||||||||||
Held-to-maturity | 706 | 3.69 | % | 781 | 3.56 | % | 776 | 3.95 | % | |||||||||||
Available-for-sale | 14,389 | 2.36 | % | 14,712 | 2.23 | % | 14,907 | 2.10 | % | |||||||||||
Trading account | 147 | 4.45 | % | 109 | 3.97 | % | 64 | 3.75 | % | |||||||||||
Total securities | 15,242 | 2.45 | % | 15,602 | 2.31 | % | 15,747 | 2.20 | % | |||||||||||
Loans held for sale | 89 | 2.90 | % | 53 | 4.63 | % | 87 | 3.56 | % | |||||||||||
Loans held for investment:2 | ||||||||||||||||||||
Commercial | 24,990 | 4.86 | % | 23,333 | 4.79 | % | 22,116 | 4.36 | % | |||||||||||
Commercial real estate | 11,675 | 5.11 | % | 11,079 | 4.95 | % | 11,184 | 4.50 | % | |||||||||||
Consumer | 11,600 | 4.22 | % | 11,013 | 4.04 | % | 10,201 | 3.84 | % | |||||||||||
Total loans held for investment | 48,265 | 4.77 | % | 45,425 | 4.65 | % | 43,501 | 4.27 | % | |||||||||||
Total interest-earning assets | 64,942 | 4.17 | % | 62,440 | 4.01 | % | 60,874 | 3.66 | % | |||||||||||
Cash and due from banks | 610 | 549 | 786 | |||||||||||||||||
Allowance for loan losses | (501 | ) | (495 | ) | (548 | ) | ||||||||||||||
Goodwill and intangibles | 1,014 | 1,015 | 1,019 | |||||||||||||||||
Other assets | 3,506 | 3,060 | 2,985 | |||||||||||||||||
Total assets | $ | 69,571 | $ | 66,569 | $ | 65,116 | ||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||
Savings and money market | $ | 26,852 | 0.60 | % | $ | 25,480 | 0.32 | % | $ | 25,453 | 0.15 | % | ||||||||
Time | 4,868 | 1.94 | % | 3,876 | 1.38 | % | 2,966 | 0.69 | % | |||||||||||
Total interest-bearing deposits | 31,720 | 0.80 | % | 29,356 | 0.46 | % | 28,419 | 0.21 | % | |||||||||||
Borrowed funds: | ||||||||||||||||||||
Federal funds purchased and other short-term borrowings | 4,719 | 2.36 | % | 4,562 | 1.93 | % | 4,096 | 1.05 | % | |||||||||||
Long-term debt | 1,236 | 3.69 | % | 535 | 5.21 | % | 417 | 5.79 | % | |||||||||||
Total borrowed funds | 5,955 | 2.64 | % | 5,097 | 2.27 | % | 4,513 | 1.49 | % | |||||||||||
Total interest-bearing funds | 37,675 | 1.09 | % | 34,453 | 0.73 | % | 32,932 | 0.38 | % | |||||||||||
Noninterest-bearing deposits | 23,361 | 23,827 | 23,781 | |||||||||||||||||
Other liabilities | 1,004 | 699 | 624 | |||||||||||||||||
Total liabilities | 62,040 | 58,979 | 57,337 | |||||||||||||||||
Shareholders’ equity: | ||||||||||||||||||||
Preferred equity | 566 | 566 | 631 | |||||||||||||||||
Common equity | 6,965 | 7,024 | 7,148 | |||||||||||||||||
Total shareholders’ equity | 7,531 | 7,590 | 7,779 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 69,571 | $ | 66,569 | $ | 65,116 | ||||||||||||||
Spread on average interest-bearing funds | 3.08 | % | 3.28 | % | 3.27 | % | ||||||||||||||
Impact of net noninterest-bearing sources of funds | 0.46 | % | 0.33 | % | 0.18 | % | ||||||||||||||
Net interest margin | 3.54 | % | 3.61 | % | 3.45 | % | ||||||||||||||
Memo: total cost of deposits | 0.46 | % | 0.25 | % | 0.11 | % | ||||||||||||||
Memo: total deposits and interest-bearing liabilities | 61,036 | 0.67 | % | 58,280 | 0.43 | % | 56,713 | 0.22 | % | |||||||||||
1 Rates are calculated using amounts in thousands and taxable-equivalent rates used where applicable. The taxable-equivalent rates used are the rates that were applicable at the time of each respective reporting period.
2 Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.
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ZIONS BANCORPORATION, N.A.
Press Release – Page 19
January 21, 2020
GAAP to Non-GAAP Reconciliations
(Unaudited)
This press release presents non-GAAP financial measures, in addition to GAAP financial measures, to provide investors with additional information. The adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are presented in the following schedules. The Bank considers these adjustments to be relevant to ongoing operating results and provide a meaningful base for period-to-period and company-to-company comparisons. These non-GAAP financial measures are used by management to assess the performance and financial position of the Bank and for presentations of Bank performance to investors. The Bank further believes that presenting these non-GAAP financial measures will permit investors to assess the performance of the Bank on the same basis as that applied by management.
Non-GAAP financial measures have inherent limitations, and are not required to be uniformly applied by individual entities. 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.
The following are non-GAAP financial measures presented in this press release and a discussion of the reasons for which management uses these non-GAAP measures:
Tangible Book Value per Common Share – this schedule also includes “tangible common equity.” Tangible book value per common share is a non-GAAP financial measure that management believes provides additional useful information about the level of tangible equity in relation to outstanding shares of common stock. Management believes the use of ratios that utilize tangible equity provides additional useful information to management and others about capital adequacy because they present measures of those assets that can generate income.
(In millions, except shares and per share amounts) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||
Tangible Book Value per Common Share | ||||||||||||||||||||
Total shareholders’ equity (GAAP) | $ | 7,353 | $ | 7,509 | $ | 7,599 | $ | 7,588 | $ | 7,578 | ||||||||||
Preferred stock | (566 | ) | (566 | ) | (566 | ) | (566 | ) | (566 | ) | ||||||||||
Goodwill and intangibles | (1,014 | ) | (1,014 | ) | (1,014 | ) | (1,014 | ) | (1,015 | ) | ||||||||||
Tangible common equity (non-GAAP) | (a) | $ | 5,773 | $ | 5,929 | $ | 6,019 | $ | 6,008 | $ | 5,997 | |||||||||
Common shares outstanding (in thousands) | (b) | 165,057 | 170,373 | 176,935 | 182,513 | 187,554 | ||||||||||||||
Tangible book value per common share (non-GAAP) | (a/b) | $ | 34.98 | $ | 34.80 | $ | 34.02 | $ | 32.92 | $ | 31.97 | |||||||||
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ZIONS BANCORPORATION, N.A.
Press Release – Page 20
January 21, 2020
GAAP to Non-GAAP Reconciliations
(Unaudited)
Return on Average Tangible Common Equity – this schedule also includes “net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax” and “average tangible common equity.” Return on average tangible common equity is a non-GAAP financial measure that management believes provides useful information to management and others about the Bank’s use of shareholders’ equity. Management believes the use of ratios that utilize tangible equity provides additional useful information because they present measures of those assets that can generate income.
Three Months Ended | ||||||||||||||||||||
(Dollar amounts in millions) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||
Return on Average Tangible Common Equity | ||||||||||||||||||||
Net earnings applicable to common shareholders (GAAP) | $ | 174 | $ | 214 | $ | 189 | $ | 205 | $ | 217 | ||||||||||
Adjustments, net of tax: | ||||||||||||||||||||
Amortization of core deposit and other intangibles | — | — | — | — | — | |||||||||||||||
Net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax (non-GAAP) | (a) | $ | 174 | $ | 214 | $ | 189 | $ | 205 | $ | 217 | |||||||||
Average common equity (GAAP) | $ | 6,866 | $ | 7,002 | $ | 6,988 | $ | 7,005 | $ | 6,938 | ||||||||||
Average goodwill and intangibles | (1,014 | ) | (1,014 | ) | (1,014 | ) | (1,014 | ) | (1,015 | ) | ||||||||||
Average tangible common equity (non-GAAP) | (b) | $ | 5,852 | $ | 5,988 | $ | 5,974 | $ | 5,991 | $ | 5,923 | |||||||||
Number of days in quarter | (c) | 92 | 92 | 91 | 90 | 92 | ||||||||||||||
Number of days in year | (d) | 365 | 365 | 365 | 365 | 365 | ||||||||||||||
Return on average tangible common equity (non-GAAP) | (a/b/c)*d | 11.8 | % | 14.2 | % | 12.7 | % | 13.9 | % | 14.5 | % | |||||||||
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ZIONS BANCORPORATION, N.A.
Press Release – Page 21
January 21, 2020
GAAP to Non-GAAP Reconciliations
(Unaudited)
Efficiency Ratio – this schedule also includes “adjusted noninterest expense,” “taxable-equivalent net interest income,” “adjusted taxable-equivalent revenue,” “pre-provision net revenue (PPNR)” and “adjusted PPNR.” The methodology of determining the efficiency ratio may differ among companies. Management makes adjustments to exclude certain items as identified in the subsequent schedules which it believes allows for more consistent comparability among periods. Management believes the efficiency ratio provides useful information regarding the cost of generating revenue. Adjusted noninterest expense provides a measure as to how well the Bank is managing its expenses, and adjusted PPNR enables management and others to assess the Bank’s ability to generate capital to cover credit losses through a credit cycle. Taxable-equivalent net interest income allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources.
Three Months Ended | ||||||||||||||||||||
(In millions) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||
Efficiency Ratio | ||||||||||||||||||||
Noninterest expense (GAAP) | (a) | $ | 472 | $ | 415 | $ | 424 | $ | 430 | $ | 420 | |||||||||
Adjustments: | ||||||||||||||||||||
Severance costs | 22 | 2 | 1 | — | 2 | |||||||||||||||
Other real estate expense, net | — | (2 | ) | — | (1 | ) | — | |||||||||||||
Restructuring costs | 15 | — | — | — | — | |||||||||||||||
Pension termination-related expense | — | — | — | — | — | |||||||||||||||
Total adjustments | (b) | 37 | — | 1 | (1 | ) | 2 | |||||||||||||
Adjusted noninterest expense (non-GAAP) | (a-b)=(c) | $ | 435 | $ | 415 | $ | 423 | $ | 431 | $ | 418 | |||||||||
Net interest income (GAAP) | (d) | $ | 559 | $ | 567 | $ | 569 | $ | 576 | $ | 576 | |||||||||
Fully taxable-equivalent adjustments | (e) | 7 | 7 | 7 | 6 | 6 | ||||||||||||||
Taxable-equivalent net interest income (non-GAAP) | (d+e)=(f) | 566 | 574 | 576 | 582 | 582 | ||||||||||||||
Noninterest income (GAAP) | (g) | 152 | 146 | 132 | 132 | 140 | ||||||||||||||
Combined income (non-GAAP) | (f+g)=(h) | 718 | 720 | 708 | 714 | 722 | ||||||||||||||
Adjustments: | ||||||||||||||||||||
Fair value and nonhedge derivative loss | 6 | (6 | ) | (6 | ) | (3 | ) | (3 | ) | |||||||||||
Securities gains (losses), net | 2 | 2 | (3 | ) | 1 | 2 | ||||||||||||||
Total adjustments | (i) | 8 | (4 | ) | (9 | ) | (2 | ) | (1 | ) | ||||||||||
Adjusted taxable-equivalent revenue (non-GAAP) | (h-i)=(j) | $ | 710 | $ | 724 | $ | 717 | $ | 716 | $ | 723 | |||||||||
Pre-provision net revenue (PPNR) (non-GAAP) | (h)-(a) | $ | 246 | $ | 305 | $ | 284 | $ | 284 | $ | 302 | |||||||||
Adjusted PPNR (non-GAAP) | (j-c)=(k) | 275 | 309 | 294 | 285 | 305 | ||||||||||||||
Efficiency ratio (non-GAAP) | (c/j) | 61.3 | % | 57.3 | % | 59.0 | % | 60.2 | % | 57.8 | % | |||||||||
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ZIONS BANCORPORATION, N.A.
Press Release – Page 22
January 21, 2020
Twelve Months Ended | ||||||||||||
(In millions) | December 31, 2019 | December 31, 2018 | December 31, 2017 | |||||||||
Efficiency Ratio | ||||||||||||
Noninterest expense (GAAP) | (a) | $ | 1,742 | $ | 1,679 | $ | 1,656 | |||||
Adjustments: | ||||||||||||
Severance costs | 25 | 3 | 7 | |||||||||
Other real estate expense | (3 | ) | 1 | (1 | ) | |||||||
Amortization of core deposit and other intangibles | 1 | 1 | 6 | |||||||||
Restructuring costs | 15 | 2 | 4 | |||||||||
Pension termination-related expense | — | — | — | |||||||||
Total adjustments | (b) | 38 | 7 | 16 | ||||||||
Adjusted noninterest expense (non-GAAP) | (a-b)=(c) | $ | 1,704 | $ | 1,672 | $ | 1,640 | |||||
Net interest income (GAAP) | (d) | $ | 2,272 | $ | 2,230 | $ | 2,065 | |||||
Fully taxable-equivalent adjustments | (e) | 26 | 22 | 35 | ||||||||
Taxable-equivalent net interest income (non-GAAP) | (d+e)=(f) | 2,298 | 2,252 | 2,100 | ||||||||
Noninterest income (GAAP) | (g) | 562 | 552 | 544 | ||||||||
Combined income (non-GAAP) | (f+g)=(h) | 2,860 | 2,804 | 2,644 | ||||||||
Adjustments: | ||||||||||||
Fair value and nonhedge derivative income (loss) | (9 | ) | (1 | ) | (2 | ) | ||||||
Securities gains (losses), net | 3 | 1 | 14 | |||||||||
Total adjustments | (i) | (6 | ) | — | 12 | |||||||
Adjusted taxable-equivalent revenue (non-GAAP) | (h-i)=(j) | $ | 2,866 | $ | 2,804 | $ | 2,632 | |||||
Pre-provision net revenue (PPNR) | (h)-(a) | $ | 1,118 | $ | 1,125 | $ | 988 | |||||
Adjusted PPNR (non-GAAP) | (j-c)=(k) | 1,162 | 1,132 | 992 | ||||||||
Efficiency ratio (non-GAAP) | (c/j) | 59.5 | % | 59.6 | % | 62.3 | % | |||||
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