Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported) July 20, 2020

ZIONS BANCORPORATION, NATIONAL ASSOCIATION
(Exact name of registrant as specified in its charter)
United States of America
001-12307
87-0189025
 
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(IRS Employer Identification No.)
 
 
 
One South Main,
Salt Lake City,
Utah
84133-1109
 
(Address of Principal Executive Offices)
(Zip Code)
 

Registrant's telephone number, including area code (801) 844-7637
 
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbols
Name of Each Exchange on Which Registered
Common Stock, par value $0.001
ZION
The NASDAQ Stock Market, LLC
Depositary Shares each representing a 1/40th ownership interest in a share of:


   Series A Floating-Rate Non-Cumulative Perpetual Preferred Stock
ZIONP
The NASDAQ Stock Market, LLC
   Series G Fixed/Floating-Rate Non-Cumulative Perpetual Preferred Stock
ZIONO
The NASDAQ Stock Market, LLC
   Series H 5.75% Non-Cumulative Perpetual Preferred Stock
ZIONN
The NASDAQ Stock Market, LLC
6.95% Fixed-to-Floating Rate Subordinated Notes due September 15, 2028
ZIONL
The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐






Item 2.02    Results of Operations and Financial Condition.

On July 20, 2020, Zions Bancorporation, National Association (“the Bank”) announced its financial results for the quarter ended June 30, 2020 and its intent to host a conference call to discuss such results at 5:30 p.m. Eastern Time on July 20, 2020. The press release announcing the financial results for the quarter ended June 30, 2020 is furnished as Exhibit 99.1 and incorporated herein by reference. A presentation to be used in conjunction with the conference call regarding the Company’s first quarter financial results is furnished as Exhibit 99.2 and incorporated herein by reference.

The information in this Current Report on Form 8-K, including the exhibits, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, the information in this Current Report on Form 8-K, including the exhibits, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended.

Item 9.01    Financial Statements and Exhibits.

Exhibits.

The following exhibits are furnished as part of this Current Report on Form 8-K:
Exhibit Number
Description
Press Release dated July 20, 2020 (furnished herewith).
Earnings Release Presentation dated July 20, 2020 (furnished herewith).
101
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
104
The cover page from this Current Report on form 8-K, formatted as Inline XBRL.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
  
 
ZIONS BANCORPORATION, NATIONAL ASSOCIATION
 
 
 
 
By:
/s/ Paul E. Burdiss
 
 
Name:   Paul E. Burdiss
 
 
Title:      Executive Vice President and Chief Financial Officer
Date: July 20, 2020
 
 
  




ZIONS BANCORPORATION, N.A.
Press Release – Page 1
July 20, 2020

Zions Bancorporation, N.A.
One South Main
Salt Lake City, UT 84133
July 20, 2020
zions2020630-er.jpg
www.zionsbancorporation.com
Second Quarter 2020 Financial Results: FOR IMMEDIATE RELEASE
 
Investor and Media Contact: James Abbott (801) 844-7637
Zions Bancorporation, N.A. Reports: 2Q20 Net Earnings¹ of $57 million, diluted EPS of $0.34
compared with 2Q19 Net Earnings¹ of $189 million, diluted EPS of $0.99,
and 1Q20 Net Earnings¹ of $6 million, diluted EPS of $0.04

SECOND QUARTER RESULTS
$0.34
 
$57 million
 
3.23%
 
10.2%
Net earnings1 per diluted common share
 
Net Earnings 1
 
Net interest margin (“NIM”)
 
Common Equity
Tier 1
SECOND QUARTER HIGHLIGHTS²
 
 
 
Net Interest Income and NIM
•
Net interest income was $563 million, compared with $569 million
•
NIM was 3.23%, compared with 3.54%
 
 
 
Operating Performance
•
Pre-provision net revenue ("PPNR") was $256 million, down 10%
•
Adjusted PPNR³ was $300 million, up 2%
•
Noninterest expense was $430 million, up 1%
•
Adjusted noninterest expense³ was $402 million, down 5%
•
Efficiency ratio³ was 57.3%, compared with 59.0%
 
 
 
Loans and Credit Quality
•
Net loans and leases were $55.1 billion, up $6.5 billion, or 13%, and includes SBA PPP loans of $6.7 billion.
•
Nonperforming assets were $344 million, up 36%
•
The provision for credit losses was $168 million, compared with $21 million
•
Net charge-offs of 0.23% of average loans, compared with 0.12%
 
 
 
Capital
•
The CET1 Capital ratio was 10.2%, compared with 10.8%
 
 
 
Notable items
•
Termination of the Bank’s pension plan resulted in a one-time expense of $28 million, or $0.13 per share4
•
Derivative valuation loss of $12 million, or $0.06 per share,4 on client-related interest rate swaps
•
During the quarter, the Bank repurchased and retired $429 million principal amount of its senior notes and recognized a net gain of less than $1 million
•
Weighted average diluted shares decreased 8.6 million from the first quarter of 2020, primarily due to a lower average Bank common share price and the expiration of 29.2 million ZIONW warrants on May 22, 2020
 
CEO COMMENTARY
 
Harris H. Simmons, Chairman and CEO of Zions Bancorporation, commented, “By most any measure, the past three months have been one of the most extraordinary periods in the Bank’s history. Despite having sent thousands of our employees to work from home through the pandemic, we swiftly responded to the urgent needs of over 46,000 small businesses - many of them new to the Bank - by providing them with Paycheck Protection Program loans totaling nearly $7 billion, making Zions one of the ten largest providers of PPP loans in the nation. At the same time, we’ve been conducting exhaustive credit reviews of our exposures in industries particularly hard hit by the economic impact of the pandemic and find ourselves generally quite encouraged by the resilience of our borrowers, the great majority of whom entered this time of stress with strong balance sheets and liquidity. We believe our tendency to engage in collateralized lending will further strengthen our ability to work with borrowers through this challenging time while moderating our credit losses. During the quarter we also maintained a strong focus on controlling operating expenses, which, when adjusted for the effects of the previously announced termination of our pension plan, decreased 5% from the second quarter a year ago.”
OPERATING PERFORMANCE3
chart-0f01cee7b19b5ac7ae3.jpgchart-14f62b3b34e75f28ab9.jpg
1 Net Earnings is net earnings applicable to common shareholders.
2 Comparisons noted in the bullet points are calculated for the current quarter versus the same prior-year period, unless otherwise specified.
3 For information on non-GAAP financial measures and the reasons for which the Bank presents these numbers, see pages 18-21.
4 EPS calculations assume a 24.7% statutory tax rate.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 2
July 20, 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
 
 
 
 
 
 
 
2Q20 - 1Q20
 
2Q20 - 2Q19
(In millions)
2Q20
 
1Q20
 
2Q19
 
$
 
%
 
$
 
%
Interest and fees on loans
$
514

 
$
532

 
$
581

 
$
(18
)
 
(3
)%
 
$
(67
)
 
(12
)%
Interest on money market investments
1

 
8

 
8

 
(7
)
 
(88
)
 
(7
)
 
(88
)
Interest on securities
80

 
82

 
95

 
(2
)
 
(2
)
 
(15
)
 
(16
)
Total interest income
595

 
622

 
684

 
(27
)
 
(4
)
 
(89
)
 
(13
)
Interest on deposits
23

 
51

 
66

 
(28
)
 
(55
)
 
(43
)
 
(65
)
Interest on short and long-term borrowings
9

 
23

 
49

 
(14
)
 
(61
)
 
(40
)
 
(82
)
Total interest expense
32

 
74

 
115

 
(42
)
 
(57
)
 
(83
)
 
(72
)
Net interest income
$
563

 
$
548

 
$
569

 
$
15

 
3

 
$
(6
)
 
(1
)
 
 
 
 
 
 
 
bps
 
 
 
bps
 
 
Yield on interest-earning assets1
3.41
%
 
3.87
%
 
4.24
%
 
(46
)
 
 
 
(83
)
 
 
Rate paid on total deposits and interest-bearing liabilities1
0.19
%
 
0.48
%
 
0.75
%
 
(29
)
 
 
 
(56
)
 
 
Cost of total deposits1
0.15
%
 
0.36
%
 
0.49
%
 
(21
)
 
 
 
(34
)
 
 
Net interest margin1
3.23
%
 
3.41
%
 
3.54
%
 
(18
)
 
 
 
(31
)
 
 
1 Rates are calculated using amounts in thousands and taxable-equivalent rates are used where applicable.
Net interest income decreased $6 million, or 1%, to $563 million in the second quarter of 2020 from $569 million in the second quarter of 2019. Total interest income decreased $89 million, or 13%, due to a $67 million decrease in interest and fees on loans and a $15 million decrease in interest on securities, primarily resulting from lower yields on loans and securities, and a $700 million decline in the average securities balance. Interest expense decreased $83 million, or 72%, due to a $43 million decline in interest paid on deposits and a $40 million decline in interest paid on short and long-term borrowings attributable to both lower rates paid on both categories as well as reduced borrowings.
The yield on interest earning assets was 3.41%, a decrease of 46 basis points compared with the first quarter of 2020, and a decrease of 83 basis points compared with the second quarter of 2019. The yield on average interest earning assets includes $5.0 billion of Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans with a yield of 3.14%. As the SBA PPP program continues to evolve, changes to the loan terms and exercise of loan forgiveness may impact the effective yield. The yield on loans decreased 59 basis points relative to the first quarter of 2020 and 102 basis points from the year ago period, due to a sharp and significant decline in benchmark interest rates, which impacted all three of Zions’ major loan categories. The yield on securities decreased 14 basis points relative to the first quarter of 2020 and 31 basis points from the year ago period, primarily from lower yields on mortgage-backed securities, which were also attributable to lower benchmark interest rates.
The annualized cost of total deposits for the second quarter of 2020 was 0.15%, compared with 0.36% for the first quarter of 2020, and 0.49% for the second quarter of 2019. The rate paid on total deposits and interest-bearing

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ZIONS BANCORPORATION, N.A.
Press Release – Page 3
July 20, 2020

liabilities was 0.19% for the second quarter of 2020, a decrease from 0.48% for the first quarter of 2020, and from 0.75% for the second quarter of 2019. The decline in the rate paid on total deposits and interest-bearing liabilities was due to lower benchmark interest rates, reduced use of exception pricing on deposits, strong deposit growth and less reliance on short-term borrowings when compared with the second quarter of 2019. The majority of SBA PPP loans were funded in deposit accounts, which contributed substantially to the deposit growth.
The net interest margin declined to 3.23% in the second quarter of 2020, compared with 3.41% in the first quarter of 2020, and 3.54% in the same prior year period. The factors contributing to the margin decline were primarily described in the preceding paragraphs.
Noninterest Income
 
 
 
 
 
 
 
2Q20 - 1Q20
 
2Q20 - 2Q19
(In millions)
2Q20
 
1Q20
 
2Q19
 
$
 
%
 
$
 
%
Commercial account fees
$
30

 
$
31

 
$
30

 
$
(1
)
 
(3
)%
 
$
—

 
—
 %
Card fees
19

 
21

 
23

 
(2
)
 
(10
)
 
(4
)
 
(17
)
Retail and business banking fees
15

 
19

 
20

 
(4
)
 
(21
)
 
(5
)
 
(25
)
Loan-related fees and income
27

 
26

 
17

 
1

 
4

 
10

 
59

Capital markets and foreign exchange fees
18

 
24

 
20

 
(6
)
 
(25
)
 
(2
)
 
(10
)
Wealth management and trust fees
15

 
16

 
15

 
(1
)
 
(6
)
 
—

 
—

Other customer-related fees
6

 
6

 
5

 
—

 
—

 
1

 
20

Customer-related fees
130

 
143

 
130

 
(13
)
 
(9
)
 
—

 
—

Fair value and nonhedge derivative income (loss)
(12
)
 
(11
)
 
(6
)
 
(1
)
 
(9
)
 
(6
)
 
NM

Dividends and other income
3

 
8

 
11

 
(5
)
 
(63
)
 
(8
)
 
(73
)
Securities gains (losses), net
(4
)
 
(6
)
 
(3
)
 
2

 
33

 
(1
)
 
(33
)
Total noninterest income
$
117

 
$
134

 
$
132

 
$
(17
)
 
(13
)
 
$
(15
)
 
(11
)
Total noninterest income for the second quarter of 2020 decreased by $15 million, or 11%, to $117 million from $132 million for the second quarter of 2019. Total customer-related fees were unchanged at $130 million. Loan-related fees and income increased $10 million due to strength in residential mortgage banking activity, including loan sales, which benefited from the reduction in benchmark interest rates. Due to the waiving of fees for customers during the early stages of the COVID-19 pandemic, there was a $5 million decrease in retail and business banking fees, mostly attributable to lower insufficient fund fees, as well as a $4 million decrease in card fees from reduced economic activity and transaction volume in the second quarter of 2020. A $2 million decrease in capital markets and foreign exchange fees, due largely to reduced loan syndication fees, also adversely impacted customer-related fees.
In the second quarter of 2020, the Bank recognized a $12 million negative credit valuation adjustment (“CVA”) on client-related interest rate swaps, compared with a $6 million negative CVA in the prior year period. This change reflects the Bank’s growing credit exposure to interest rate swap counterparties. Dividends and other income decreased from $11 million in the second quarter of 2019, to $3 million in the second quarter of 2020, due to adverse market valuations on certain Small Business Investment Company (“SBIC”) investments and lower dividends received from the Federal Home Loan Bank (“FHLB”), reflecting less FHLB activity stock held by the Bank.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 4
July 20, 2020

Noninterest Expense
 
 
 
 
 
 
 
2Q20 - 1Q20
 
2Q20 - 2Q19
(In millions)
2Q20
 
1Q20
 
2Q19
 
$
 
%
 
$
 
%
Salaries and employee benefits
$
267

 
$
274

 
$
274

 
$
(7
)
 
(3
)%
 
$
(7
)
 
(3
)%
Occupancy, net
32

 
33

 
32

 
(1
)
 
(3
)
 
—

 
—

Furniture, equipment and software, net
32

 
32

 
35

 
—

 
—

 
(3
)
 
(9
)
Other real estate expense, net
—

 
—

 
—

 
—

 
NM

 
—

 
NM

Credit-related expense
6

 
4

 
8

 
2

 
50

 
(2
)
 
(25
)
Professional and legal services
10

 
12

 
13

 
(2
)
 
(17
)
 
(3
)
 
(23
)
Advertising
3

 
3

 
5

 
—

 
—

 
(2
)
 
(40
)
FDIC premiums
7

 
5

 
6

 
2

 
40

 
1

 
17

Other
73

 
45

 
51

 
28

 
62

 
22

 
43

Total noninterest expense
$
430

 
$
408

 
$
424

 
$
22

 
5

 
$
6

 
1

Adjusted noninterest expense 1
$
402

 
$
407

 
$
423

 
$
(5
)
 
(1
)
 
$
(21
)
 
(5
)
1 
For information on non-GAAP financial measures, see pages 18-21.
Noninterest expense for the second quarter of 2020 was $430 million, an increase of $6 million, or 1%, when compared with $424 million for the second quarter of 2019, primarily as a result of a $28 million pension plan termination-related expense recognized in other noninterest expense. The pension plan termination expense included a loss of $17 million that was reclassified out of accumulated other comprehensive income, resulting in a pre-tax decrease in shareholders’ equity of $11 million. Salaries and employee benefits decreased by $7 million, primarily from lower overall incentive compensation, although there were increases for certain compensation pools, such as those related to SBA PPP loans.
Adjusted noninterest expense for the second quarter of 2020 decreased $21 million, or 5%, to $402 million, compared with $423 million for the same prior year period. The efficiency ratio was 57.3% in the second quarter of 2020, compared with 57.7% in the first quarter of 2020, and 59.0% in the second quarter of 2019. For information on non-GAAP financial measures, including differences between noninterest expense and adjusted noninterest expense, see pages 18-21.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 5
July 20, 2020

BALANCE SHEET ANALYSIS
Asset Quality
 
 
 
 
 
 
 
2Q20 - 1Q20
 
2Q20 - 2Q19
(In millions)
2Q20
 
1Q20
 
2Q19
 
bps
 
 
 
bps
 
 
Ratio of nonperforming assets to loans and leases and other real estate owned
0.62
%
 
0.56
%
 
0.52
%
 
6

 
 
 
10


 
Annualized ratio of net loan and lease charge-offs to average loans
0.23
%
 
0.06
%
 
0.12
%
 
17

 
 
 
11

 
 
Ratio of total allowance for credit losses to loans1 and leases outstanding, at period end
1.66
%
 
1.56
%
 
1.16
%
 
10

 
 
 
50

 
 
Ratio of total allowance for credit losses to loans1 and leases outstanding (excluding SBA PPP loans), at period end
1.88
%
 
1.56
%
 
1.16
%
 
32

 
 
 
72

 
 
 
 
 
 
 
 
 
$
 
%
 
$
 
%
Classified loans
$
1,477

 
$
881

 
$
770

 
$
596

 
68
 %
 
$
707

 
92
%
Nonperforming assets
344

 
280

 
253

 
64

 
23

 
91

 
36

Net loan and lease charge-offs
31

 
7

 
14

 
24

 
NM

 
17

 
NM

Provision for credit losses
168

 
258

 
21

 
(90
)
 
(35
)
 
147

 
NM

1 Does not include loans held for sale.
Classified loans and nonperforming assets increased 92% and 36%, respectively, from the second quarter of 2019. The ratio of nonaccrual loans and accruing loans past due 90 days or more to loans and leases was 0.64%, compared with 0.54% in the second quarter of 2019.
The Bank recorded a $168 million provision for credit losses during the second quarter of 2020, compared with $258 million during the first quarter of 2020, and $21 million for the second quarter of 2019. The allowance for credit losses was $914 million at June 30, 2020, compared with $563 million at June 30, 2019 and equaled 1.66% of total loans, which included $6.7 billion of SBA PPP loans. Excluding the SBA PPP loans, the allowance for credit loss to adjusted total loans ratio was 1.88%, compared with 1.56% at March 31, 2020, and 1.16% at June 30, 2019. The increase in the allowance for credit losses is primarily due to experienced and expected economic deterioration caused by the COVID-19 pandemic.




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ZIONS BANCORPORATION, N.A.
Press Release – Page 6
July 20, 2020

Loans and Leases
 
 
 
 
 
 
 
2Q20 - 1Q20
 
2Q20 - 2Q19
(In millions)
2Q20
 
1Q20
 
2Q19
 
$
 
%
 
$
 
%
Loans held for sale
$
105

 
$
140

 
$
105

 
$
(35
)
 
(25
)%
 
$
—

 
—
 %
Loans and leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial - excluding SBA PPP loans
25,018

 
26,392

 
25,107

 
(1,374
)
 
(5
)
 
(89
)
 
—

Commercial - SBA PPP loans
6,690

 
—

 
—

 
6,690

 
NM
 
6,690

 
NM
Commercial real estate
11,954

 
11,741

 
11,827

 
213

 
2

 
127

 
1

Consumer
11,467

 
11,794

 
11,683

 
(327
)
 
(3
)
 
(216
)
 
(2
)
Loans and leases, net of unearned income and fees
55,129

 
49,927

 
48,617

 
5,202

 
10

 
6,512

 
13

Less allowance for loan losses
860

 
730

 
503

 
130

 
18

 
357

 
71

Loans and leases held for investment, net of allowance
$
54,269

 
$
49,197

 
$
48,114

 
$
5,072

 
10

 
$
6,155

 
13

Loans and leases, net of unearned income and fees, increased $6.5 billion, or 13%, to $55.1 billion at June 30, 2020, from $48.6 billion at June 30, 2019, primarily due to the origination of SBA PPP loans. Excluding SBA PPP loans, a decrease of $807 million in commercial and industrial loans was partially offset by increases of $476 million in municipal loans and $255 million in owner-occupied loans. Term commercial real estate loans increased $369 million. Consumer loans decreased $216 million, which was spread across all consumer loan subcategories. Unfunded lending commitments and letters of credit increased $0.7 billion, or 3.0%, to $24.0 billion at June 30, 2020, from $23.3 billion at June 30, 2019.
Oil and Gas-Related Exposure1
 
 
 
 
 
 
 
 
 
(In millions)
2Q20
 
1Q20
 
2Q19
 
 
4Q14
Loans and leases
 
 
 
 
 
 
 
 
Upstream
$
1,034

 
$
1,025

 
$
919

 
 
$
1,107

Midstream
909

 
889

 
840

 
 
579

Oil and gas services
460

 
470

 
484

 
 
1,277

Downstream
226

 
195

 
188

 
 
110

Total loan and lease balances
2,629

 
2,579

 
2,431

 
 
3,073

Unfunded lending commitments
1,916

 
2,039

 
2,246

 
 
2,700

Total oil and gas credit exposure
$
4,545

 
$
4,618

 
$
4,677

 
 
$
5,773

 
 
 
 
 
 
 
 
 
Credit quality measures
 
 
 
 
 
 
 
 
Nonaccrual loan ratio
2.7
%
 
0.7
%
 
0.7
%
 
 
0.6
%
Ratio of nonaccrual loans that are current
69.4
%
 
70.6
%
 
58.8
%
 
 
58.8
%
Net charge-off ratio, annualized2
—
%
 
0.2
%
 
—
%
 
 
—
%
1Because many borrowers operate in multiple businesses, judgment has been applied in characterizing a borrower as oil and
gas-related, including a particular segment of oil and gas-related activity, e.g., upstream or midstream; typically, 50% of
revenues coming from the oil and gas sector is used as a guide.
2Calculated as the ratio of annualized net charge-offs for each respective period to loan balances at each period end.
At June 30, 2020, oil and gas-related loans represented 5% of the total loan portfolio, compared with 8% at December 31, 2014, or the beginning of the last energy cycle. Due to active risk management of the portfolio, the mix of oil and gas-related loans at June 30, 2020 consists of 39% upstream, 35% midstream, 17% oil and gas-related services, and

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ZIONS BANCORPORATION, N.A.
Press Release – Page 7
July 20, 2020

9% downstream, compared with 36%, 19%, 42%, and 3%, respectively, at December 31, 2014. We use disciplined underwriting practices to mitigate the risk associated with upstream lending activities. Upstream loans are made to reserve-based borrowers, where approximately 84% of those loans are collateralized by the value of the borrower’s oil and gas reserves. For the second quarter of 2020, the oil and gas-related classified loan ratio was 8.3%, there were no oil and gas-related loan net charge-offs, and the allowance for credit losses related to oil and gas-related loans was 5.7%.
Deposits and Borrowed Funds
 
 
 
 
 
 
 
2Q20 - 1Q20
 
2Q20 - 2Q19
(In millions)
2Q20
 
1Q20
 
2Q19
 
$
 
%
 
$
 
%
Noninterest-bearing demand
$
30,714

 
$
24,380

 
$
22,947

 
$
6,334

 
26
 %
 
$
7,767

 
34
 %
Interest-bearing:
 
 
 
 
 
 
 
 
 
 
 
 
 
Savings and money market
31,307

 
28,901

 
26,470

 
2,406

 
8

 
4,837

 
18

Time
3,663

 
4,237

 
4,915

 
(574
)
 
(14
)
 
(1,252
)
 
(25
)
Total deposits
$
65,684

 
$
57,518

 
$
54,332

 
$
8,166

 
14

 
$
11,352

 
21

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowed funds:
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds purchased and other short-term borrowings
$
860

 
$
3,765

 
$
6,023

 
$
(2,905
)
 
(77
)
 
$
(5,163
)
 
(86
)
Long-term debt
1,353

 
1,795

 
1,236

 
(442
)
 
(25
)
 
117

 
9

Total borrowed funds
$
2,213

 
$
5,560

 
$
7,259

 
$
(3,347
)
 
(60
)
 
$
(5,046
)
 
(70
)
Total deposits increased by $11.4 billion, or 21%, to $65.7 billion as of June 30, 2020, primarily due to a $7.8 billion increase in noninterest-bearing deposits. The funding of SBA PPP loan proceeds into customer deposit accounts contributed meaningfully to overall deposit growth, in addition to deposit growth from non-SBA PPP loan program customers.
Average total deposits increased to $63.0 billion for the second quarter of 2020, compared with $54.3 billion for the second quarter of 2019. Average noninterest-bearing deposits increased 26% to $29.1 billion for the second quarter of 2020, compared with $23.1 billion for the second quarter of 2019, and were 46% and 42% of average total deposits, respectively, for the same periods.
Total borrowed funds decreased $5.0 billion, or 70%, to $2.2 billion as of June 30, 2020. Average borrowed funds decreased to $4.0 billion for the second quarter of 2020, compared with $7.0 billion for the second quarter of 2019. The decrease in both end-of-period and average borrowed funds reflects less reliance on wholesale borrowings due to the strength of deposit growth, which significantly exceeded earning asset growth over this period.

- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 8
July 20, 2020

Long-Term Debt and Shareholders’ Equity
 
 
 
 
 
 
 
2Q20 - 1Q20
 
2Q20 - 2Q19
(In millions)
2Q20
 
1Q20
 
2Q19
 
$
 
%
 
$
 
%
Shareholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
$
566

 
$
566

 
$
566

 
$
—

 
—
 %
 
$
—

 
—
 %
Common stock and additional paid-in capital
2,675

 
2,668

 
3,271

 
7

 
—

 
(596
)
 
(18
)
Retained earnings
3,979

 
3,979

 
3,737

 
—

 
—

 
242

 
6

Accumulated other comprehensive income
355

 
259

 
25

 
96

 
37

 
330

 
NM

Total shareholders' equity
$
7,575

 
$
7,472

 
$
7,599

 
$
103

 
1

 
$
(24
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital distributions:
 
 
 
 
 
 
 
 
 
 
 
 
 
Common dividends paid
$
56

 
$
56

 
$
54

 
$
—

 
—

 
$
2

 
4

Bank common stock repurchased
—

 
75

 
275

 
(75
)
 
NM

 
(275
)
 
NM

Total capital distributed to common shareholders
$
56

 
$
131

 
$
329

 
$
(75
)
 
(57
)
 
$
(273
)
 
(83
)
Long-term debt
During the second quarter of 2020, the Bank repurchased and retired $429 million principal amount of its senior notes and recognized a net gain of less than $1 million. This action was taken in order to manage changes in the balance sheet resulting from strong deposit growth.
Shareholder’s Equity
During the second quarter of 2020, the Bank’s common stock dividend was $0.34 per share, compared with $0.30 per share in the second quarter of 2019. Accumulated other comprehensive income improved $330 million, from $25 million as of June 30, 2019, to $355 million as of June 30, 2020. The improvement was primarily a result of increases in the fair value of available-for-sale securities due to changes in interest rates. Weighted average diluted shares outstanding decreased 8.6 million from the first quarter of 2020, primarily due to a lower average Bank common share price and the expiration of 29.2 million ZIONW warrants on May 22, 2020.
Tangible book value per common share increased to $36.56 at June 30, 2020, compared with $34.02 at June 30, 2019. Basel III common equity tier 1 (“CET1”) capital was $5.7 billion at June 30, 2020 and $6.0 billion at June 30, 2019. The estimated Basel III CET1 capital ratio was 10.2% at June 30, 2020, compared with 10.8% at June 30, 2019. For information on non-GAAP financial measures, see pages 18-21.
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") accounting standard. The OCC, Federal Reserve and FDIC issued a joint statement on March 27, 2020, revised on April 7, 2020, with proposed guidance for banking institutions that have adopted CECL in 2020. We have adopted the provisions of this interim final rule, which allows banks to add back, for regulatory capital purposes only, a transition adjustment related to CECL beginning with the first quarter 2020 financial statements. The adoption of these provisions improved our CET1 capital ratio at June 30, 2020 by 14 basis points.

- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 9
July 20, 2020

Supplemental Presentation and Conference Call
Zions has posted a supplemental presentation to its website, which will be used to discuss these second quarter results at 5:30 p.m. ET this afternoon (July 20, 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 5441419, 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, 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 more than $75 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 recipient of national and state-wide 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 and assumptions 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 “forecasts,” “targets,” “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “would,” “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 effects of the spread of the virus commonly referred to as the coronavirus or COVID-19 (and other potentially similar pandemic situations) and associated impacts on general economic conditions on, among other things, our customers’ ability to make timely payments on obligations, fee income revenue due to reduced loan origination activity and card swipe income, operating expense due to alternative approaches to doing business, and so forth; 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 as systems breaches and failures; and legislative, regulatory and economic developments. These risks, as well as other

- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 10
July 20, 2020

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.
We caution you against undue reliance on forward-looking statements, which reflect our views only as of the date they are made. Except as may be 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.



- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 11
July 20, 2020

FINANCIAL HIGHLIGHTS
(Unaudited)
 
Three Months Ended
(In millions, except share, per share, and ratio data)
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
BALANCE SHEET 1
 
 
 
 
 
 
 
 
 
Loans held for investment, net of allowance
$
54,269

 
$
49,197

 
$
48,214

 
$
48,325

 
$
48,114

Total assets
76,447

 
71,467

 
69,172

 
70,361

 
70,065

Deposits
65,684

 
57,518

 
57,085

 
56,139

 
54,332

Total shareholders’ equity
7,575

 
7,472

 
7,353

 
7,509

 
7,599

STATEMENT OF INCOME
 
 
 
 
 
 
 
 
 
Net earnings applicable to common shareholders
$
57

 
$
6

 
$
174

 
$
214

 
$
189

Net interest income
563

 
548

 
559

 
567

 
569

Taxable-equivalent net interest income 2
569

 
555

 
566

 
574

 
576

Total noninterest income
117

 
134

 
152

 
146

 
132

Total noninterest expense
430

 
408

 
472

 
415

 
424

Adjusted pre-provision net revenue 2
300

 
299

 
275

 
309

 
294

Provision for credit losses
168

 
258

 
4

 
10

 
21

SHARE AND PER COMMON SHARE AMOUNTS
 
 
 
 
 
 
 
 
 
Net earnings per diluted common share
$
0.34

 
$
0.04

 
$
0.97

 
$
1.17

 
$
0.99

Dividends
0.34

 
0.34

 
0.34

 
0.34

 
0.30

Book value per common share 1
42.74

 
42.15

 
41.12

 
40.75

 
39.75

Tangible book value per common share 1, 2
36.56

 
35.96

 
34.98

 
34.80

 
34.02

Weighted average share price
31.53

 
41.02

 
48.39

 
43.04

 
46.11

Weighted average diluted common shares outstanding (in thousands)
164,425

 
172,998

 
178,718

 
181,870

 
189,098

Common shares outstanding (in thousands) 1
163,978

 
163,852

 
165,057

 
170,373

 
176,935

SELECTED RATIOS AND OTHER DATA
 
 
 
 
 
 
 
 
 
Return on average assets
0.35
%
 
0.08
%
 
1.04
%
 
1.25
%
 
1.14
%
Return on average common equity
3.3
%
 
0.3
%
 
10.1
%
 
12.1
%
 
10.8
%
Return on average tangible common equity 2
3.8
%
 
0.4
%
 
11.8
%
 
14.2
%
 
12.7
%
Net interest margin
3.23
%
 
3.41
%
 
3.46
%
 
3.48
%
 
3.54
%
Cost of total deposits, annualized
0.15
%
 
0.36
%
 
0.44
%
 
0.50
%
 
0.49
%
Efficiency ratio 2
57.3
%
 
57.7
%
 
61.3
%
 
57.3
%
 
59.0
%
Effective tax rate
19.5
%
 
12.5
%
 
22.1
%
 
22.9
%
 
22.7
%
Ratio of nonperforming assets to loans and leases and other real estate owned
0.62
%
 
0.56
%
 
0.51
%
 
0.48
%
 
0.52
%
Annualized ratio of net loan and lease charge-offs (recoveries) to average loans
0.23
%
 
0.06
%
 
0.18
%
 
0.01
%
 
0.12
%
Ratio of total allowance for credit losses to loans and leases outstanding 1
1.66
%
 
1.56
%
 
1.14
%
 
1.17
%
 
1.16
%
Full-time equivalent employees
9,859

 
9,879

 
10,188

 
10,255

 
10,326

CAPITAL RATIOS AND DATA 1
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
$
5,696

 
$
5,667

 
$
5,719

 
$
5,871

 
$
5,987

Risk-weighted assets 3
55,878

 
56,861

 
56,039

 
56,298

 
55,499

Tangible common equity ratio
7.9
%
 
8.4
%
 
8.5
%
 
8.5
%
 
8.7
%
Common equity tier 1 capital ratio 3
10.2
%
 
10.0
%
 
10.2
%
 
10.4
%
 
10.8
%
Tier 1 leverage ratio 3
8.4
%
 
9.0
%
 
9.2
%
 
9.3
%
 
9.5
%
Tier 1 risk-based capital ratio 3
11.2
%
 
11.0
%
 
11.2
%
 
11.4
%
 
11.8
%
Total risk-based capital ratio 3
13.5
%
 
13.2
%
 
13.2
%
 
12.6
%
 
13.0
%
1 
At period end.
2 
For information on non-GAAP financial measures, see pages 18-21.
3 Current period ratios and amounts represent estimates.

- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 12
July 20, 2020

CONSOLIDATED BALANCE SHEETS

(In millions, shares in thousands)
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
(Unaudited)
 
(Unaudited)
 

 
(Unaudited)
 
(Unaudited)
ASSETS
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
570

 
$
730

 
$
705

 
$
796

 
$
538

Money market investments:
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
1,579

 
1,225

 
743

 
1,149

 
634

Federal funds sold and security resell agreements
266

 
550

 
484

 
504

 
620

Investment securities:
 
 
 
 
 
 
 
 
 
Held-to-maturity1, at amortized cost
688

 
585

 
592

 
658

 
695

Available-for-sale, at fair value
14,201

 
14,231

 
13,725

 
14,033

 
14,672

Trading account, at fair value
160

 
160

 
182

 
280

 
148

Total securities, net of allowance
15,049

 
14,976

 
14,499

 
14,971

 
15,515

Loans held for sale
105

 
140

 
129

 
141

 
105

Loans and leases, net of unearned income and fees
55,129

 
49,927

 
48,709

 
48,835

 
48,617

Less allowance for loan losses
860

 
730

 
495

 
510

 
503

Loans held for investment, net of allowance
54,269

 
49,197

 
48,214

 
48,325

 
48,114

Other noninterest-bearing investments
813

 
916

 
898

 
982

 
1,056

Premises, equipment and software, net
1,173

 
1,144

 
1,142

 
1,146

 
1,133

Goodwill and intangibles
1,014

 
1,014

 
1,014

 
1,014

 
1,014

Other real estate owned
5

 
6

 
8

 
4

 
5

Other assets
1,604

 
1,569

 
1,336

 
1,329

 
1,331

Total assets
$
76,447

 
$
71,467

 
$
69,172

 
$
70,361

 
$
70,065

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
30,714

 
$
24,380

 
$
23,576

 
$
23,770

 
$
22,947

Interest-bearing:
 
 
 
 
 
 
 
 
 
Savings and money market
31,307

 
28,901

 
28,790

 
27,427

 
26,470

Time
3,663

 
4,237

 
4,719

 
4,942

 
4,915

Total deposits
65,684

 
57,518

 
57,085

 
56,139

 
54,332

Federal funds purchased and other short-term borrowings
860

 
3,765

 
2,053

 
4,579

 
6,023

Long-term debt
1,353

 
1,795

 
1,723

 
1,242

 
1,236

Reserve for unfunded lending commitments
54

 
47

 
59

 
62

 
60

Other liabilities
921

 
870

 
899

 
830

 
815

Total liabilities
68,872

 
63,995

 
61,819

 
62,852

 
62,466

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
2,675

 
2,668

 
2,735

 
3,002

 
3,271

Retained earnings
3,979

 
3,979

 
4,009

 
3,892

 
3,737

Accumulated other comprehensive income
355

 
259

 
43

 
49

 
25

Total shareholders’ equity
7,575

 
7,472

 
7,353

 
7,509

 
7,599

Total liabilities and shareholders’ equity
$
76,447

 
$
71,467

 
$
69,172

 
$
70,361

 
$
70,065

1 Held-to-maturity (approximate fair value)
$
691

 
$
587

 
$
597

 
$
662

 
$
698

2 Common shares (issued and outstanding)
163,978

 
163,852

 
165,057

 
170,373

 
176,935


- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 13
July 20, 2020

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
Three Months Ended
(In millions, except share and per share amounts)
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
Interest income:
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
514

 
$
532

 
$
557

 
$
581

 
$
581

Interest on money market investments
1

 
8

 
7

 
8

 
8

Interest on securities
80

 
82

 
83

 
88

 
95

Total interest income
595

 
622

 
647

 
677

 
684

Interest expense:
 
 
 
 
 
 
 
 
 
Interest on deposits
23

 
51

 
62

 
69

 
66

Interest on short- and long-term borrowings
9

 
23

 
26

 
41

 
49

Total interest expense
32

 
74

 
88

 
110

 
115

Net interest income
563

 
548

 
559

 
567

 
569

Provision for credit losses:
 
 
 
 
 
 
 
 
 
Provision for loan losses
161

 
240

 
7

 
8

 
20

Provision for unfunded lending commitments
7

 
18

 
(3
)
 
2

 
1

Total provision for credit losses
168

 
258

 
4

 
10

 
21

Net interest income after provision for credit losses
395

 
290

 
555

 
557

 
548

Noninterest income:
 
 
 
 
 
 
 
 
 
Commercial account fees
30

 
31

 
31

 
31

 
30

Card fees
19

 
21

 
23

 
24

 
23

Retail and business banking fees
15

 
19

 
20

 
20

 
20

Loan-related fees and income
27

 
26

 
19

 
21

 
17

Capital markets and foreign exchange fees
18

 
24

 
19

 
23

 
20

Wealth management and trust fees
15

 
16

 
16

 
16

 
15

Other customer-related fees
6

 
6

 
6

 
5

 
5

Customer-related fees
130

 
143


134

 
140

 
130

Fair value and nonhedge derivative income (loss)
(12
)
 
(11
)
 
6

 
(6
)
 
(6
)
Dividends and other income
3

 
8

 
10

 
10

 
11

Securities gains (losses), net
(4
)
 
(6
)
 
2

 
2

 
(3
)
Total noninterest income
117

 
134

 
152

 
146

 
132

Noninterest expense:
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
267

 
274

 
305

 
273

 
274

Occupancy, net
32

 
33

 
34

 
34

 
32

Furniture, equipment and software, net
32

 
32

 
34

 
34

 
35

Other real estate expense, net
—

 
—

 
—

 
(2
)
 
—

Credit-related expense
6

 
4

 
5

 
2

 
8

Professional and legal services
10

 
12

 
13

 
10

 
13

Advertising
3

 
3

 
3

 
6

 
5

FDIC premiums
7

 
5

 
6

 
7

 
6

Other
73

 
45

 
72

 
51

 
51

Total noninterest expense
430

 
408

 
472

 
415

 
424

Income before income taxes
82

 
16

 
235

 
288

 
256

Income taxes
16

 
2

 
52

 
66

 
58

Net income
66

 
14

 
183

 
222

 
198

Preferred stock dividends
(9
)
 
(8
)
 
(9
)
 
(8
)
 
(9
)
Net earnings applicable to common shareholders
$
57

 
$
6

 
$
174

 
$
214

 
$
189

Weighted average common shares outstanding during the period:
 
 
 
 
 
 
 
 
Basic shares (in thousands)
163,542

 
164,143

 
167,078

 
173,160

 
179,156

Diluted shares (in thousands)
164,425

 
172,998

 
178,718

 
181,870

 
189,098

Net earnings per common share:
 
 
 
 
 
 
 
 
 
Basic
$
0.34

 
$
0.04

 
$
1.03

 
$
1.23

 
$
1.05

Diluted
0.34

 
0.04

 
0.97

 
1.17

 
0.99


- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 14
July 20, 2020

Loan Balances Held for Investment by Portfolio Type
(Unaudited)
(In millions)
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
14,076

 
$
15,533

 
$
14,760

 
$
14,846

 
$
14,883

SBA PPP
6,690

 
—

 
—

 
—

 
—

Leasing
324

 
331

 
334

 
332

 
337

Owner occupied
8,083

 
8,045

 
7,901

 
7,924

 
7,828

Municipal
2,535

 
2,483

 
2,393

 
2,185

 
2,059

Total commercial
31,708

 
26,392

 
25,388

 
25,287

 
25,107

Commercial real estate:
 
 
 
 
 
 
 
 
 
Construction and land development
2,367

 
2,257

 
2,211

 
2,347

 
2,609

Term
9,587

 
9,484

 
9,344

 
9,469

 
9,218

Total commercial real estate
11,954

 
11,741

 
11,555

 
11,816

 
11,827

Consumer:
 
 
 
 
 
 
 
 
 
Home equity credit line
2,856

 
2,958

 
2,917

 
2,930

 
2,929

1-4 family residential
7,393

 
7,567

 
7,568

 
7,506

 
7,440

Construction and other consumer real estate
640

 
629

 
624

 
637

 
644

Bankcard and other revolving plans
437

 
488

 
502

 
494

 
502

Other
141

 
152

 
155

 
165

 
168

Total consumer
11,467

 
11,794

 
11,766

 
11,732

 
11,683

Loans and leases, net of unearned income and fees
$
55,129

 
$
49,927

 
$
48,709

 
$
48,835

 
$
48,617


Nonperforming Assets
(Unaudited)
(In millions)
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans1
$
339

 
$
274

 
$
243

 
$
233

 
$
248

Other real estate owned
5

 
6

 
8

 
4

 
5

Total nonperforming assets
$
344

 
$
280

 
$
251

 
$
237

 
$
253

Ratio of nonperforming assets to loans1 and leases and other real estate owned
0.62
%
 
0.56
%
 
0.51
%
 
0.48
%
 
0.52
%
Accruing loans past due 90 days or more
$
16

 
$
8

 
$
10

 
$
6

 
$
17

Ratio of accruing loans past due 90 days or more to loans1 and leases
0.03
%
 
0.02
%
 
0.02
%
 
0.01
%
 
0.03
%
Nonaccrual loans and accruing loans past due 90 days or more
$
355

 
$
282

 
$
253

 
$
239

 
$
265

Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans1 and leases
0.64
%
 
0.56
%
 
0.52
%
 
0.49
%
 
0.54
%
Accruing loans past due 30-89 days
$
168

 
$
135

 
$
75

 
$
84

 
$
99

Restructured loans included in nonaccrual loans
88

 
88

 
75

 
92

 
79

Restructured loans on accrual
197

 
79

 
78

 
90

 
97

Classified loans
1,477

 
881

 
803

 
799

 
770

1 Includes loans held for sale.

- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 15
July 20, 2020

Allowance for Credit Losses
(Unaudited)
 
Three Months Ended
(In millions)
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
Allowance for Loan Losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period1
$
730

 
$
497

 
$
510

 
$
503

 
$
497

Provision for loan losses
161

 
240

 
7

 
8

 
20

Loan and lease charge-offs
36

 
13

 
32

 
11

 
23

Less: Recoveries
5

 
6

 
10

 
10

 
9

Net loan and lease charge-offs
31

 
7

 
22

 
1

 
14

Balance at end of period
$
860

 
$
730

 
$
495

 
$
510

 
$
503

Ratio of allowance for loan losses to loans2 and leases, at period end
1.56
%
 
1.46
%
 
1.02
%
 
1.04
%
 
1.03
%
Ratio of allowance for loan losses to nonaccrual loans2 at period end
254
%
 
266
%
 
204
%
 
219
%
 
203
%
Annualized ratio of net loan and lease charge-offs to average loans
0.23
%
 
0.06
%
 
0.18
%
 
0.01
%
 
0.12
%
 
 
 
 
 
 
 
 
 
 
Reserve for Unfunded Lending Commitments
 
 
 
 
 
 
 
 
 
Balance at beginning of period1
$
47

 
$
29

 
$
62

 
$
60

 
$
59

Provision for unfunded lending commitments
7

 
18

 
(3
)
 
2

 
1

Balance at end of period
$
54

 
$
47

 
$
59

 
$
62

 
$
60

 
 
 
 
 
 
 
 
 
 
Allowance for Credit Losses
 
 
 
 
 
 
 
 
 
Allowance for loan losses
$
860

 
$
730

 
$
495

 
$
510

 
$
503

Reserve for unfunded lending commitments
54

 
47

 
59

 
62

 
60

Total allowance for credit losses
$
914

 
$
777

 
$
554

 
$
572

 
$
563

Ratio of total allowance for credit losses to loans2 and leases outstanding, at period end
1.66
%
 
1.56
%
 
1.14
%
 
1.17
%
 
1.16
%
Ratio of total allowance for credit losses to loans2 and leases outstanding (excluding SBA PPP loans), at period end
1.88
%
 
1.56
%
 
1.14
%
 
1.17
%
 
1.16
%
1 Beginning balances at March 31, 2020 for the allowance for loan losses and reserve for unfunded lending commitments do not agree to their respective ending balances at December 31, 2019 because of the adoption of the CECL accounting standard; the allowance for loan losses was adjusted to $497 million, the reserve for unfunded lending commitments was adjusted to $29 million on January 1, 2020.
2 Does not include loans held for sale.

- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 16
July 20, 2020

Nonaccrual Loans by Portfolio Type
(Unaudited)
(In millions)
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
 
 
 
 
 
 
 
 
 
Loans held for sale
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
172

 
$
135

 
$
110

 
$
97

 
$
85

Leasing
1

 
1

 
—

 
1

 
1

Owner occupied
68

 
65

 
65

 
49

 
69

Municipal
—

 
—

 
—

 
—

 
1

Total commercial
241

 
201

 
175

 
147

 
156

Commercial real estate:
 
 
 
 
 
 
 
 
 
Construction and land development
—

 
—

 
—

 
—

 
1

Term
23

 
15

 
16

 
29

 
31

Total commercial real estate
23

 
15

 
16

 
29

 
32

Consumer:
 
 
 
 
 
 
 
 
 
Home equity credit line
15

 
14

 
12

 
12

 
12

1-4 family residential
59

 
43

 
40

 
44

 
44

Construction and other consumer real estate
—

 
—

 
—

 
1

 
4

Bankcard and other revolving plans
1

 
1

 
—

 
—

 
—

Other
—

 
—

 
—

 
—

 
—

Total consumer
75

 
58

 
52

 
57

 
60

Total nonaccrual loans
$
339

 
$
274

 
$
243

 
$
233

 
$
248


Net Charge-Offs by Portfolio Type
(Unaudited)
(In millions)
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
26

 
$
7

 
$
19

 
$
—

 
$
13

Leasing
—

 
—

 
—

 
—

 
—

Owner occupied
2

 
(1
)
 
(1
)
 
(1
)
 
—

Municipal
—

 
—

 
—

 
—

 
—

Total commercial
28

 
6

 
18

 
(1
)
 
13

Commercial real estate:
 
 
 
 
 
 
 
 
 
Construction and land development
—

 
—

 
(1
)
 
—

 
—

Term
—

 
—

 
2

 
(1
)
 
—

Total commercial real estate
—

 
—

 
1

 
(1
)
 
—

Consumer:
 
 
 
 
 
 
 
 
 
Home equity credit line
—

 
—

 
1

 
—

 
—

1-4 family residential
—

 
(1
)
 
(1
)
 
(1
)
 
(1
)
Construction and other consumer real estate
—

 
—

 
—

 
—

 
—

Bankcard and other revolving plans
2

 
1

 
2

 
3

 
1

Other
1

 
1

 
1

 
1

 
1

Total consumer loans
3

 
1

 
3

 
3

 
1

Total net charge-offs (recoveries)
$
31

 
$
7

 
$
22

 
$
1

 
$
14


- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 17
July 20, 2020

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
Three Months Ended
 
June 30, 2020
 
March 31, 2020
 
June 30, 2019
(In millions)
Average balance
 
Average
yield/rate 1
 
Average balance
 
Average
yield/rate 1
 
Average balance
 
Average
yield/rate 1
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Money market investments
$
1,610

 
0.35
%
 
$
2,013

 
1.52
%
 
$
1,261

 
2.64
%
Securities:
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity
632

 
3.58
%
 
593

 
3.72
%
 
687

 
3.69
%
Available-for-sale
14,128

 
2.12
%
 
13,687

 
2.26
%
 
14,750

 
2.43
%
Trading account
149

 
4.29
%
 
164

 
4.27
%
 
172

 
4.48
%
Total securities
14,909

 
2.20
%
 
14,444

 
2.34
%
 
15,609

 
2.51
%
Loans held for sale
125

 
5.02
%
 
109

 
3.14
%
 
71

 
2.18
%
Loans held for investment:2
 
 
 
 
 
 
 
 
 
 
 
Commercial - excluding SBA PPP loans
25,773

 
4.05
%
 
25,514

 
4.53
%
 
24,977

 
4.94
%
Commerical - SBA PPP loans
5,016

 
3.14
%
 
—

 
—
%
 
—

 
—
%
Commercial real estate
11,866

 
3.81
%
 
11,546

 
4.62
%
 
11,777

 
5.22
%
Consumer
11,613

 
3.66
%
 
11,737

 
3.99
%
 
11,570

 
4.28
%
Total loans held for investment
54,268

 
3.83
%
 
48,797

 
4.42
%
 
48,324

 
4.85
%
Total interest-earning assets
70,912

 
3.41
%
 
65,363

 
3.87
%
 
65,265

 
4.24
%
Cash and due from banks
617

 
 
 
676

 
 
 
592

 
 
Allowance for credit losses on loans and debt securities
(724
)
 
 
 
(499
)
 
 
 
(496
)
 
 
Goodwill and intangibles
1,014

 
 
 
1,014

 
 
 
1,014

 
 
Other assets
4,095

 
 
 
3,651

 
 
 
3,480

 
 
Total assets
$
75,914

 
 
 
$
70,205

 
 
 
$
69,855

 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Savings and money market
$
30,094

 
0.13
%
 
$
28,856

 
0.47
%
 
$
26,262

 
0.63
%
Time
3,853

 
1.35
%
 
4,454

 
1.61
%
 
5,025

 
2.02
%
Total interest-bearing deposits
33,947

 
0.27
%
 
33,310

 
0.62
%
 
31,287

 
0.85
%
Borrowed funds:
 
 
 
 
 
 
 
 
 
 
 
Federal funds purchased and other short-term borrowings
2,230

 
0.11
%
 
2,922

 
1.19
%
 
5,795

 
2.53
%
Long-term debt
1,736

 
1.93
%
 
1,747

 
3.21
%
 
1,230

 
3.84
%
Total borrowed funds
3,966

 
0.91
%
 
4,669

 
1.95
%
 
7,025

 
2.76
%
Total interest-bearing funds
37,913

 
0.34
%
 
37,979

 
0.78
%
 
38,312

 
1.20
%
Noninterest-bearing deposits
29,053

 
 
 
23,599

 
 
 
23,060

 
 
Other liabilities
1,352

 
 
 
1,137

 
 
 
929

 
 
Total liabilities
68,318

 
 
 
62,715

 
 
 
62,301

 
 
Shareholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
Preferred equity
566

 
 
 
566

 
 
 
566

 
 
Common equity
7,030

 
 
 
6,924

 
 
 
6,988

 
 
Total shareholders’ equity
7,596

 
 
 
7,490

 
 
 
7,554

 
 
Total liabilities and shareholders’ equity
$
75,914

 
 
 
$
70,205

 
 
 
$
69,855

 
 
Spread on average interest-bearing funds
 
 
3.07
%
 
 
 
3.09
%
 
 
 
3.04
%
Impact of net noninterest-bearing sources of funds
 
 
0.16
%
 
 
 
0.32
%
 
 
 
0.50
%
Net interest margin
 
 
3.23
%
 
 
 
3.41
%
 
 
 
3.54
%
Memo: total loans and leases, excluding SBA PPP loans
49,252

 
3.90
%
 
48,797

 
4.42
%
 
48,324

 
4.85
%
Memo: total cost of deposits
 
 
0.15
%
 
 
 
0.36
%
 
 
 
0.49
%
Memo: total deposits and interest-bearing liabilities
66,966

 
0.19
%
 
61,578

 
0.48
%
 
61,372

 
0.75
%
1 Rates are calculated using amounts in thousands and the statutory taxable-equivalent rates where applicable.
2 Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.

- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 18
July 20, 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)
 
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
Tangible Book Value per Common Share
 
 
 
 
 
 
 
 
 
 
Total shareholders’ equity (GAAP)
 
$
7,575

 
$
7,472

 
$
7,353

 
$
7,509

 
$
7,599

Preferred stock
 
(566
)
 
(566
)
 
(566
)
 
(566
)
 
(566
)
Goodwill and intangibles
 
(1,014
)
 
(1,014
)
 
(1,014
)
 
(1,014
)
 
(1,014
)
Tangible common equity (non-GAAP)
(a)
$
5,995

 
$
5,892

 
$
5,773

 
$
5,929

 
$
6,019

Common shares outstanding (in thousands)
(b)
163,978

 
163,852

 
165,057

 
170,373

 
176,935

Tangible book value per common share (non-GAAP)
(a/b)
$
36.56

 
$
35.96

 
$
34.98

 
$
34.80

 
$
34.02


- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 19
July 20, 2020

GAAP to Non-GAAP Reconciliations
(Unaudited)
Return on Average Tangible Common Equity (“ROTCE”) – this schedule also includes “net earnings applicable to common shareholders, excluding the effects of the adjustments, net of tax” and “average tangible common equity.” ROTCE 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 about performance because they present measures of those assets that can generate income.
 
 
Three Months Ended
(Dollar amounts in millions)
 
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
Return on Average Tangible Common Equity
 
 
 
 
 
 
 
 
 
Net earnings applicable to common shareholders (GAAP)
 
$
57

 
$
6

 
$
174

 
$
214

 
$
189

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)
$
57

 
$
6

 
$
174

 
$
214

 
$
189

Average common equity (GAAP)
 
$
7,030

 
$
6,924

 
$
6,866

 
$
7,002

 
$
6,988

Average goodwill and intangibles
 
(1,014
)
 
(1,014
)
 
(1,014
)
 
(1,014
)
 
(1,014
)
Average tangible common equity (non-GAAP)
(b)
$
6,016

 
$
5,910

 
$
5,852

 
$
5,988

 
$
5,974

Number of days in quarter
(c)
91

 
91

 
92

 
92

 
91

Number of days in year
(d)
366

 
366

 
365

 
365

 
365

Return on average tangible common equity (non-GAAP)
(a/b/c)*d
3.8
%
 
0.4
%
 
11.8
%
 
14.2
%
 
12.7
%



- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 20
July 20, 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 schedule 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)
 
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
Efficiency Ratio
 
 
 
 
 
 
 
 
 
 
Noninterest expense (GAAP)
(a)
$
430

 
$
408

 
$
472

 
$
415

 
$
424

Adjustments:
 
 
 
 
 
 
 
 
 
 
Severance costs
 
—

 
—

 
22

 
2

 
1

Other real estate expense, net
 
—

 
—

 
—

 
(2
)
 
—

Restructuring costs
 
—

 
1

 
15

 
—

 
—

Pension termination-related expense
 
28

 
—

 
—

 
—

 
—

Total adjustments
(b)
28

 
1

 
37

 
—

 
1

Adjusted noninterest expense (non-GAAP)
(a-b)=(c)
$
402

 
$
407

 
$
435

 
$
415

 
$
423

Net interest income (GAAP)
(d)
$
563

 
$
548

 
$
559

 
$
567

 
$
569

Fully taxable-equivalent adjustments
(e)
6

 
7

 
7

 
7

 
7

Taxable-equivalent net interest income (non-GAAP)
(d+e)=(f)
569

 
555

 
566

 
574

 
576

Noninterest income (GAAP)
(g)
117

 
134

 
152

 
146

 
132

Combined income (non-GAAP)
(f+g)=(h)
686

 
689

 
718

 
720

 
708

Adjustments:
 
 
 
 
 
 
 
 
 
 
Fair value and nonhedge derivative loss
 
(12
)
 
(11
)
 
6

 
(6
)
 
(6
)
Securities gains (losses), net
 
(4
)
 
(6
)
 
2

 
2

 
(3
)
Total adjustments
(i)
(16
)
 
(17
)
 
8

 
(4
)
 
(9
)
Adjusted taxable-equivalent revenue
(non-GAAP)
(h-i)=(j)
$
702

 
$
706

 
$
710

 
$
724

 
$
717

Pre-provision net revenue (PPNR) (non-GAAP)
(h)-(a)
$
256

 
$
281

 
$
246

 
$
305

 
$
284

Adjusted PPNR (non-GAAP)
(j)-(c)
300

 
299

 
275

 
309

 
294

Efficiency ratio (non-GAAP)
(c/j)
57.3
%
 
57.7
%
 
61.3
%
 
57.3
%
 
59.0
%


- more -

ZIONS BANCORPORATION, N.A.
Press Release – Page 21
July 20, 2020

 
 
Six Months Ended
(In millions)
 
June 30,
2020
 
June 30,
2019
Efficiency Ratio
 
 
 
 
Noninterest expense (GAAP)
(a)
$
837

 
$
854

Adjustments:
 
 
 
 
Severance costs
 
—

 
1

Other real estate expense
 
—

 
(1
)
Debt extinguishment cost
 
—

 
—

Amortization of core deposit and other intangibles
 
—

 
1

Restructuring costs
 
1

 
—

Pension termination-related expense
 
28

 
—

Total adjustments
(b)
29

 
1

Adjusted noninterest expense (non-GAAP)
(a-b)=(c)
$
808

 
$
853

Net interest income (GAAP)
(d)
$
1,111

 
$
1,145

Fully taxable-equivalent adjustments
(e)
13

 
13

Taxable-equivalent net interest income (non-GAAP)
(d+e)=(f)
1,124

 
1,158

Noninterest income (GAAP)
(g)
250

 
264

Combined income (non-GAAP)
(f+g)=(h)
1,374

 
1,422

Adjustments:
 
 
 
 
Fair value and nonhedge derivative income (loss)
 
(23
)
 
(8
)
Securities gains (losses), net
 
(9
)
 
(2
)
Total adjustments
(i)
(32
)
 
(10
)
Adjusted taxable-equivalent revenue (non-GAAP)
(h-i)=(j)
$
1,406

 
$
1,432

Pre-provision net revenue (PPNR)
(h)-(a)
$
537

 
$
568

Adjusted PPNR (non-GAAP)
(j)-(c)
598

 
579

Efficiency ratio (non-GAAP)
(c/j)
57.5
%
 
59.6
%

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