SALT LAKE CITY, April 19, 2010 (GLOBE NEWSWIRE) -- Zions Bancorporation (Nasdaq:ZION) ("Zions" or "the Company") today reported a first quarter net loss applicable to common shareholders of $86.5 million or $0.57 per diluted share, compared to a net loss of $176.5 million or $1.26 per diluted share for the fourth quarter of 2009. The net loss per diluted share for the first quarter of 2010 included a loss of $0.23 for taxes and penalties from surrendering certain bank-owned life insurance contracts, partially offset by $0.06 for the gain on the exchange of nonconvertible subordinated debt to common stock.
First Quarter 2010 Highlights
Positives:
-
Gross loan charge-offs fell 30.2% to $248.3 million compared to $355.6 million in the fourth quarter.
-
The provision for loan losses fell for the third consecutive quarter to $265.6 million compared to $390.7 million in the fourth quarter.
-
The tangible common equity ratio strengthened to 6.30% compared to 6.12% in the fourth quarter. Approximately 8.8% of tangible assets are in cash or cash equivalents, up from 4.0% in the fourth quarter.
-
The net interest margin expanded to 4.03% from 3.81% in the fourth quarter.
-
The ratio of the allowance for loan losses to net loans and leases increased to 4.20% compared to 3.95% in the fourth quarter; the ratio of the allowance for credit losses to net loans and leases increased to 4.45% compared to 4.25% in the fourth quarter.
- Credit-related impairment losses on CDO securities dropped to $31.3 million compared to $99.3 million in the fourth quarter.
Challenges:
-
Nonperforming lending-related assets were $2.5 billion compared to $2.4 billion in the fourth quarter (excluding FDIC-supported assets); the ratio to net loans and other real estate owned was 6.42% compared to 6.00% in fourth quarter.
- In spite of originating and renewing approximately $1.4 billion of new credit during the first quarter, loan balances declined 2.9% from the fourth quarter due to continued weakness in loan demand.
"We are encouraged by recent credit trends, particularly the significant decline in gross loan charge-offs during the quarter, and by a reduction in loss severity across the major loan categories," said Harris H. Simmons, chairman and chief executive officer. Mr. Simmons continued, "We're also pleased with the continued strengthening of the composition of our core deposit base and the strong net interest margin. Finally, we are pleased that both our allowance for credit losses and our capital ratios continued to strengthen this quarter."
Asset Quality
Net loan and lease charge-offs for the first quarter of 2010 were $227.1 million or 2.37% annualized of average loans (excluding FDIC-supported loans). This compares with $292.1 million or 2.98% annualized of average loans for the fourth quarter of 2009 (excluding FDIC-supported loans) and $151.7 million or 1.47% annualized of average loans for the first quarter of 2009 (excluding FDIC-supported loans). The 2009 fourth quarter net charge-offs included a $39.3 million recovery. The reduction in net charge-offs during the first quarter of 2010 related mainly to commercial real estate loans.
The provision for loan losses was $265.6 million for the first quarter of 2010 compared to $390.7 million for the fourth quarter of 2009 and $297.6 million for the first quarter of 2009.
Excluding FDIC-supported loans, the allowance for loan losses as a percentage of net loans and leases increased to 4.20% at March 31, 2010 compared to 3.95% at December 31, 2009 and 2.03% at March 31, 2009. The Company released $20.1 million of reserves for unfunded lending commitments due to the reduced level of such commitments. The allowance for credit losses (loan losses and unfunded lending commitments) was $1,677.9 million, or 4.45% of net loans and leases at March 31, 2010, compared to 4.25% at December 31, 2009 and 2.16% at March 31, 2009.
Nonperforming lending-related assets increased slightly to $2,454.0 million at March 31, 2010 ($2,785.4 million including FDIC-supported assets) compared to $2,359.2 million at December 31, 2009 and $1,647.9 million at March 31, 2009. The ratio of nonperforming lending-related assets excluding FDIC-supported assets to net loans, leases and other real estate owned was 6.42% at March 31, 2010 compared to 6.00% at December 31, 2009 and 3.96% at March 31, 2009. Generally, the Company experienced lower loss severity across the major loan categories.
Capital Transactions
During the first quarter, the Company added $205.7 million to common equity as a result of issuances under its common equity distribution program and in exchange for the Company's nonconvertible subordinated debt. A total of 9.9 million shares were issued at an average price of $20.10 per share. These activities resulted in a 0.41% increase to the tangible common equity ratio.
On February 26, 2010, the Company completed the sale of $250 million of common stock that commenced September 17, 2009. For the first quarter of 2010, 1,480,150 shares of this issuance were sold for $27.3 million (average price of $18.42). On March 1, 2010, the Company commenced the sale of another $250 million of common stock under common equity distribution programs. Through March 31, 2010, 6,261,590 shares of this issuance were sold for $125.0 million (average price of $19.96).
On March 30, 2010, the Company completed its offer which commenced March 1, 2010 to exchange any and all of its currently outstanding nonconvertible subordinated debt into shares of its common stock. As previously announced, 2,165,391 shares, or approximately 1.37% of the then outstanding common stock, were issued in exchange for $55.6 million of debt. This exchange represented approximately 29% of the nonconvertible subordinated debt, and left $134.6 million of such debt outstanding as of March 31, 2010. The net gain on subordinated debt exchange of approximately $14.5 million, or $0.06 per diluted share, represented the difference between the carrying value of the debt exchanged and the fair value of the common stock issued, net of commissions and fees.
On March 15, 2010, $21.0 million of convertible subordinated debt was converted into shares of the Company's Series C preferred stock under the Company's debt modification program. Accelerated discount amortization on the converted debt increased interest expense by approximately $11.2 million and reduced the tangible common equity ratio by 0.02%.
The tangible common equity ratio was 6.30% at March 31, 2010 compared to 6.12% at December 31, 2009 and 5.26% at March 31, 2009. The change from December 31, 2009 was primarily due to the previously discussed capital transactions, partially offset by operating results and preferred stock dividends during the quarter. The estimated Tier 1 common to risk-weighted assets ratio was 7.03% at March 31, 2010 compared to 6.73% at December 31, 2009 and 5.73% at March 31, 2009. The improvement in risk-weighted capital ratios is due to a significantly higher mix of cash on the balance sheet compared to the prior quarter, at 8.8% of tangible assets at March 31, 2010, up from 4.0% at December 31, 2009.
Loans
Net loans and leases of $39.0 billion at March 31, 2010 decreased approximately $1.2 billion or 2.9% from $40.2 billion at December 31, 2009, and decreased $2.8 billion or 6.6% from $41.8 billion at March 31, 2009. Excluding FDIC-supported loans, net loans and leases decreased approximately $1.0 billion or 2.7% to $37.7 billion from $38.7 billion at December 31, 2009 and decreased $3.4 billion, or 8.3% from the balance one year ago. The net decrease from December 31, 2009 was primarily in the commercial lending and construction and land development portfolios.
Deposits
Average noninterest-bearing demand deposits for the first quarter of 2010 increased $0.4 billion or 3.2% to $12.5 billion compared to $12.1 billion for the fourth quarter of 2009. Average total deposits for the first quarter of 2010 decreased $1.1 billion or 2.5% to $41.8 billion compared to $42.9 billion for the fourth quarter of 2009, and decreased $0.3 billion or 0.7% compared to $42.1 billion for the first quarter of 2009. The decrease came primarily from higher cost sources of funds such as time deposits and brokered money market accounts, while lower cost sources of funds increased compared to the prior quarter. Gross loans, as a percentage of deposits, equaled 93.0%, down from 96.7% a year ago. The Company has elected to hold the excess deposits in cash or cash equivalents, better positioning the Company for a rising interest rate environment.
Net Interest Income
The net interest margin expanded to 4.03% for the first quarter of 2010 compared to 3.81% for the fourth quarter of 2009 and 3.94% for the first quarter of 2009. The increase for the first quarter of 2010 was primarily due to reduced rates on interest-bearing deposits and to an improved funding mix. The net interest margin was reduced by 0.13% for the discount amortization on the convertible subordinated debt, and by an additional 0.10% for the accelerated discount amortization due to the previously discussed conversion of $21.0 million of convertible subordinated debt.
Investment Securities
During the first quarter of 2010, the Company recognized credit-related net impairment losses on CDOs of $31.3 million or $0.13 per diluted share, compared to $99.3 million or $0.44 per diluted share during the fourth quarter of 2009, and $82.7 million or $0.44 per diluted share during the first quarter of 2009.
CDOs for which the underlying collateral is predominantly bank trust preferred securities comprise $2.2 billion of the $2.7 billion par amount of the bank and insurance CDO portfolio. The following table shows that the composition of CDO securities at March 31, 2010 by original rating changed only slightly from December 31, 2009. Approximately 85% of the $31.3 million of credit-related net impairment losses during the first quarter came from original single A and BBB rated, predominantly bank CDOs.
| (In millions) | |||||||||
| March 31, 2010 | % of carrying | Change | |||||||
| Original | Par | Amortized cost | Carrying value | value to par | 3/31/10 | ||||
| ratings | Amount | % | Amount | % | Amount | % | 3/31/10 | 12/31/09 | vs 12/31/09 |
| AAA | $ 1,136 | 52% | $ 943 | 54% | $ 820 | 71% | 72% | 73% | -1% |
| A | 949 | 44% | 784 | 44% | 329 | 28% | 35% | 34% | 1% |
| BBB | 90 | 4% | 36 | 2% | 15 | 1% | 17% | 17% | 0% |
| $ 2,175 | 100% | $ 1,763 | 100% | $ 1,164 | 100% | 54% | 54% | 0% | |
Noninterest Income
Noninterest income for the first quarter of 2010 was $107.6 million compared to $65.9 million for the fourth quarter of 2009 and a loss of $145.3 million for the first quarter of 2009. The increase from the fourth quarter primarily related to lower security impairment losses, partially offset by lower dividends and other investment income and lower fair value and nonhedge derivative income. The sequential quarter decline in fair value and nonhedge derivative income during the first quarter was mainly due to decreasing hedge balances and a reduced amount of income recognized from unrealized gains in OCI.
Noninterest Expense
Noninterest expense for the first quarter of 2010 was $389.1 million compared to $441.1 million for the fourth quarter of 2009 and $376.2 million for the first quarter of 2009. The primary change in the first quarter of 2010 compared to the fourth quarter of 2009 included the negative provision for unfunded lending commitments as a result of reduced commitments.
Income Taxes
Income taxes for the first quarter of 2010 included approximately $35.1 million of taxes and penalties to surrender certain bank-owned life insurance contracts, which reduced net earnings by approximately $0.23 per diluted share.
Conference Call
Zions will host a conference call to discuss these first quarter results at 5:30 p.m. ET this afternoon (April 19, 2010). Media representatives, analysts and the public are invited to listen to this discussion by calling 1-877-368-2147 (international: 253-237-1247) and entering the passcode 65430529, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation Web site at www.zionsbancorporation.com. A replay of the call will be available from approximately 7:30 p.m. ET on Monday, April 19, 2010, until midnight ET on Monday, April 26, 2010, by dialing 1-800-642-1687 (international: 706-645-9291) and entering the passcode 65430529. The webcast of the conference call will also be archived and available for 30 days.
About Zions Bancorporation
Zions Bancorporation is one of the nation's premier financial services companies, consisting of a collection of great banks in select high growth markets. Zions operates its banking businesses under local management teams and community identities through approximately 500 offices in ten Western and Southwestern states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah and Washington. The Company is a national leader in Small Business Administration lending and public finance advisory services. In addition, Zions is included in the S&P 500 and NASDAQ Financial 100 indices. Investor information and links to subsidiary banks can be accessed at www.zionsbancorporation.com.
Forward-Looking Information
Statements in this press release that are based on other than historical data or that express the Company's expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management's views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this news release. Factors that might cause such differences include, but are not limited to: the Company's ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either internationally, nationally or locally in areas in which the Company conducts its operations, including changes in securities markets and valuations in structured securities and other assets; changes in governmental policies and programs resulting from general economic and financial market conditions; changes in interest and funding rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company's operations or business; and changes in accounting policies, procedures or determinations as may be required by the Financial Accounting Standards Board or other regulatory agencies, including determinations relating to the Company's accounting treatment of its subordinated debt modification.
Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Zions Bancorporation's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and available at the SEC's Internet site (http://www.sec.gov).
Except as required by law, the Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.
| ZIONS BANCORPORATION AND SUBSIDIARIES | |||||||||
| FINANCIAL HIGHLIGHTS | |||||||||
| (Unaudited) | |||||||||
| Three Months Ended | |||||||||
| March 31, 2010 | December 31, 2009 | September 30, 2009 |
June 30, 2009 |
March 31, 2009 | |||||
| PER COMMON SHARE | |||||||||
| Dividends | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.04 | $ 0.04 | ||||
| Book value per common share | 26.89 | 27.85 | 30.38 | 33.89 | 34.39 | ||||
| Tangible common equity per common share | 19.89 | 20.35 | 22.01 | 24.78 | 24.34 | ||||
| SELECTED RATIOS | |||||||||
| Return on average assets | (0.47)% | (1.37)% | (1.15)% | (0.38)% | (6.05)% | ||||
| Return on average common equity | (8.30)% | (16.80)% | (16.74)% | (2.37)% | (70.07)% | ||||
| Efficiency ratio | 68.44 % | 83.47 % | 58.05 % | 37.72 % | 112.16 % | ||||
| Net interest margin | 4.03 % | 3.81 % | 3.91 % | 4.10 % | 3.94 % | ||||
| Capital Ratios | |||||||||
| Tangible common equity ratio | 6.30% | 6.12% | 5.76% | 6.00% | 5.26% | ||||
| Tangible equity ratio | 9.36% | 9.16% | 8.73% | 8.94% | 8.28% | ||||
| Average equity to average assets | 11.16% | 10.76% | 10.94% | 10.41% | 11.81% | ||||
| Risk-Based Capital Ratios1 | |||||||||
| Tier 1 common to risk-weighted assets | 7.03% | 6.73% | 6.59% | 6.41% | 5.73% | ||||
| Tier 1 leverage | 10.90% | 10.38% | 10.40% | 10.22% | 9.56% | ||||
| Tier 1 risk-based capital | 11.01% | 10.53% | 10.34% | 10.00% | 9.43% | ||||
| Total risk-based capital | 13.68% | 13.28% | 13.08% | 12.72% | 13.39% | ||||
| Weighted average common and common-equivalent shares outstanding | 151,073,384 | 139,858,788 | 127,581,404 | 115,908,127 | 114,106,164 | ||||
| Common shares outstanding | 160,300,162 | 150,425,070 | 136,398,089 | 125,095,328 | 115,335,668 | ||||
| 1 Ratios for March 31, 2010 are estimates. | |||||||||
| ZIONS BANCORPORATION AND SUBSIDIARIES | |||||
| CONSOLIDATED BALANCE SHEETS | |||||
| (In thousands, except share amounts) | March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||
| ASSETS | |||||
| Cash and due from banks | $ 1,045,391 | $ 1,370,189 | $ 992,940 | $ 1,229,205 | $ 1,321,972 |
| Money market investments: | |||||
| Interest-bearing deposits and commercial paper | 3,410,211 | 652,964 | 2,234,337 | 1,005,060 | 1,952,555 |
| Federal funds sold | 44,436 | 20,985 | 44,056 | 390,619 | 13,277 |
| Security resell agreements | 73,112 | 57,556 | 52,539 | 57,476 | 305,111 |
| Investment securities: | |||||
| Held-to-maturity, at adjusted cost (approximate fair value $820,689, $833,455, $835,814, $891,186 and $1,361,460) | 867,335 | 869,595 | 877,105 | 937,942 | 1,648,971 |
| Available-for-sale, at fair value | 3,437,098 | 3,655,619 | 3,547,092 | 3,903,895 | 3,086,788 |
| Trading account, at fair value | 50,698 | 23,543 | 76,709 | 78,608 | 65,198 |
| 4,355,131 | 4,548,757 | 4,500,906 | 4,920,445 | 4,800,957 | |
| Loans held for sale | 171,892 | 208,567 | 206,387 | 251,526 | 262,785 |
| Loans: | |||||
| Loans and leases excluding FDIC-supported loans | 37,820,588 | 38,882,083 | 39,782,240 | 40,654,802 | 41,220,610 |
| FDIC-supported loans | 1,320,737 | 1,444,594 | 1,607,493 | 783,238 | 660,892 |
| 39,141,325 | 40,326,677 | 41,389,733 | 41,438,040 | 41,881,502 | |
| Less: | |||||
| Unearned income and fees, net of related costs | 131,723 | 137,697 | 134,629 | 130,042 | 124,749 |
| Allowance for loan losses | 1,581,577 | 1,531,332 | 1,432,715 | 1,248,055 | 832,878 |
| Loans and leases, net of allowance | 37,428,025 | 38,657,648 | 39,822,389 | 40,059,943 | 40,923,875 |
| Other noninterest-bearing investments | 909,601 | 1,099,961 | 1,061,464 | 1,046,131 | 1,051,956 |
| Premises and equipment, net | 707,387 | 710,534 | 698,225 | 703,613 | 701,742 |
| Goodwill | 1,015,161 | 1,015,161 | 1,017,385 | 1,017,385 | 1,034,465 |
| Core deposit and other intangibles | 106,839 | 113,416 | 123,551 | 121,675 | 124,585 |
| Other real estate owned | 414,237 | 389,782 | 413,901 | 304,778 | 243,609 |
| Other assets | 2,031,558 | 2,277,487 | 2,130,070 | 1,660,098 | 1,808,123 |
| $ 51,712,981 | $ 51,123,007 | $ 53,298,150 | $ 52,767,954 | $ 54,545,012 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
| Deposits: | |||||
| Noninterest-bearing demand | $ 12,799,002 | $ 12,324,247 | $ 11,453,247 | $ 11,142,017 | $ 10,517,910 |
| Interest-bearing: | |||||
| Savings and NOW | 5,978,536 | 5,843,573 | 5,392,096 | 4,949,711 | 4,710,899 |
| Money market | 16,667,011 | 16,378,874 | 17,413,735 | 17,276,743 | 18,103,564 |
| Time under $100,000 | 2,306,101 | 2,497,395 | 2,784,593 | 2,845,893 | 3,112,864 |
| Time $100,000 and over | 2,697,261 | 3,117,472 | 3,949,684 | 4,455,225 | 4,647,015 |
| Foreign | 1,647,898 | 1,679,028 | 2,014,626 | 1,974,583 | 2,214,981 |
| 42,095,809 | 41,840,589 | 43,007,981 | 42,644,172 | 43,307,233 | |
| Securities sold, not yet purchased | 47,890 | 43,404 | 39,360 | 51,109 | 39,892 |
| Federal funds purchased | 477,959 | 208,669 | 1,008,181 | 1,169,809 | 1,213,970 |
| Security repurchase agreements | 475,832 | 577,346 | 509,014 | 565,975 | 551,686 |
| Other liabilities | 563,683 | 588,527 | 651,139 | 597,543 | 578,768 |
| Commercial paper | 3,123 | 1,084 | 2,449 | 1,019 | 984 |
| Federal Home Loan Bank advances and other borrowings: | |||||
| One year or less | 175,312 | 120,189 | 42,962 | 47,152 | 429,655 |
| Over one year | 15,640 | 15,722 | 18,803 | 18,882 | 127,680 |
| Long-term debt | 2,000,821 | 2,017,220 | 2,324,020 | 1,917,598 | 2,715,310 |
| Total liabilities | 45,856,069 | 45,412,750 | 47,603,909 | 47,013,259 | 48,965,178 |
| Shareholders' equity: | |||||
| Preferred stock, without par value, authorized 3,000,000 shares | 1,532,323 | 1,502,784 | 1,529,462 | 1,491,730 | 1,587,027 |
| Common stock, without par value; authorized 350,000,000 shares; issued and outstanding 160,300,162, 150,425,070, 136,398,089, 125,095,328 and 115,335,668 shares | 3,517,621 | 3,318,417 | 3,125,344 | 2,935,724 | 2,607,541 |
| Retained earnings | 1,236,497 | 1,324,516 | 1,502,232 | 1,685,522 | 1,713,897 |
| Accumulated other comprehensive income (loss) | (428,177) | (436,899) | (469,112) | (368,164) | (340,727) |
| Deferred compensation | (16,058) | (16,160) | (15,218) | (14,138) | (14,732) |
| Controlling interest shareholders' equity | 5,842,206 | 5,692,658 | 5,672,708 | 5,730,674 | 5,553,006 |
| Noncontrolling interests | 14,706 | 17,599 | 21,533 | 24,021 | 26,828 |
| Total shareholders' equity | 5,856,912 | 5,710,257 | 5,694,241 | 5,754,695 | 5,579,834 |
| $ 51,712,981 | $ 51,123,007 | $ 53,298,150 | $ 52,767,954 | $ 54,545,012 | |
| ZIONS BANCORPORATION AND SUBSIDIARIES | |||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||
| (Unaudited) | |||||
| Three Months Ended | |||||
| (In thousands, except per share amounts) |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
June 30, 2009 |
March 31, 2009 |
| Interest income: | |||||
| Interest and fees on loans | $ 540,446 | $ 569,613 | $ 586,246 | $ 583,590 | $ 579,852 |
| Interest on loans held for sale | 2,363 | 2,735 | 2,434 | 3,082 | 2,756 |
| Lease financing | 5,129 | 5,289 | 5,125 | 4,735 | 4,593 |
| Interest on money market investments | 1,439 | 1,800 | 1,195 | 1,543 | 3,376 |
| Interest on securities: | |||||
| Held-to-maturity – taxable | 2,456 | (2,075) | 4,864 | 9,367 | 18,908 |
| Held-to-maturity – nontaxable | 5,135 | 5,396 | 5,806 | 5,796 | 6,265 |
| Available-for-sale – taxable | 20,971 | 21,063 | 23,460 | 26,982 | 21,703 |
| Available-for-sale – nontaxable | 1,721 | 1,813 | 1,830 | 1,778 | 1,678 |
| Trading account | 475 | 492 | 842 | 823 | 571 |
| Total interest income | 580,135 | 606,126 | 631,802 | 637,696 | 639,702 |
| Interest expense: | |||||
| Interest on savings and money market deposits | 36,389 | 43,921 | 54,554 | 64,949 | 74,553 |
| Interest on time and foreign deposits | 19,687 | 28,671 | 42,780 | 52,577 | 62,679 |
| Interest on short-term borrowings | 3,067 | 2,714 | 2,325 | 3,661 | 6,020 |
| Interest on long-term borrowings | 65,692 | 73,931 | 59,963 | 22,821 | 21,675 |
| Total interest expense | 124,835 | 149,237 | 159,622 | 144,008 | 164,927 |
| Net interest income | 455,300 | 456,889 | 472,180 | 493,688 | 474,775 |
| Provision for loan losses | 265,565 | 390,719 | 565,930 | 762,654 | 297,624 |
| Net interest income after provision for loan losses | 189,735 | 66,170 | (93,750) | (268,966) | 177,151 |
| Noninterest income: | |||||
| Service charges and fees on deposit accounts | 51,608 | 53,475 | 54,466 | 51,833 | 52,788 |
| Other service charges, commissions and fees | 39,042 | 38,794 | 39,227 | 40,291 | 38,227 |
| Trust and wealth management income | 7,609 | 5,825 | 8,209 | 8,750 | 7,165 |
| Capital markets and foreign exchange | 8,539 | 8,692 | 12,106 | 16,311 | 13,204 |
| Dividends and other investment income | 7,700 | 12,942 | 2,597 | 2,684 | 8,408 |
| Loan sales and servicing income | 6,432 | 7,011 | 2,359 | 7,040 | 5,851 |
| Fair value and nonhedge derivative income | 2,188 | 31,367 | 58,092 | 20,316 | 4,004 |
| Equity securities gains (losses), net | (3,165) | (2,164) | (1,805) | (619) | 2,763 |
| Fixed income securities gains (losses), net | 1,256 | (7,385) | 1,900 | 1,444 | 195 |
| Impairment losses on investment securities: | |||||
| Impairment losses on investment securities | (48,570) | (134,357) | (198,378) | (71,515) | (165,616) |
|
Noncredit-related losses on securities not expected to be sold (recognized in other comprehensive income) |
17,307 | 35,051 | 141,863 | 29,546 | 82,943 |
| Net impairment losses on investment securities | (31,263) | (99,306) | (56,515) | (41,969) | (82,673) |
| Valuation losses on securities purchased | -- | -- | -- | (11,701) | (200,391) |
| Gain on subordinated debt modification | -- | 15,220 | -- | 493,725 | -- |
| Gain on subordinated debt exchange | 14,471 | -- | -- | -- | -- |
| Acquisition related gains | -- | 56 | 146,153 | 22,977 | -- |
| Other | 3,193 | 1,360 | 3,951 | 1,654 | 5,197 |
| Total noninterest income | 107,610 | 65,887 | 270,740 | 612,736 | (145,262) |
| Noninterest expense: | |||||
| Salaries and employee benefits | 204,333 | 206,823 | 205,433 | 202,420 | 204,161 |
| Occupancy, net | 28,488 | 28,667 | 28,556 | 26,651 | 28,327 |
| Furniture and equipment | 24,996 | 24,689 | 25,320 | 24,870 | 24,999 |
| Other real estate expense | 32,648 | 38,290 | 30,419 | 23,748 | 18,343 |
| Legal and professional services | 9,976 | 10,081 | 9,076 | 9,497 | 8,543 |
| Postage and supplies | 7,646 | 7,879 | 7,680 | 8,036 | 8,410 |
| Advertising | 6,374 | 5,738 | 4,418 | 5,678 | 7,148 |
| FDIC premiums | 24,210 | 24,197 | 19,820 | 42,329 | 14,171 |
| Amortization of core deposit and other intangibles | 6,577 | 10,135 | 7,575 | 7,078 | 6,886 |
| Provision for unfunded lending commitments | (20,133) | 19,220 | 36,537 | 7,927 | 1,827 |
| Other | 64,011 | 65,410 | 59,873 | 61,235 | 53,390 |
| Total noninterest expense | 389,126 | 441,129 | 434,707 | 419,469 | 376,205 |
| Impairment loss on goodwill | -- | 2,224 | -- | -- | 633,992 |
| Income (loss) before income taxes | (91,781) | (311,296) | (257,717) | (75,699) | (978,308) |
| Income taxes (benefit) | (28,644) | (125,809) | (100,046) | (23,761) | (151,727) |
| Net income (loss) | (63,137) | (185,487) | (157,671) | (51,938) | (826,581) |
| Net income (loss) applicable to noncontrolling interests | (2,927) | (1,423) | (2,394) | (1,209) | (540) |
| Net income (loss) applicable to controlling interest | (60,210) | (184,064) | (155,277) | (50,729) | (826,041) |
| Preferred stock dividends | (26,311) | (24,633) | (26,603) | (25,447) | (26,286) |
| Preferred stock redemption | -- | 32,215 | -- | 52,418 | -- |
| Net earnings (loss) applicable to common shareholders | $ (86,521) | $ (176,482) | $ (181,880) | $ (23,758) | $ (852,327) |
|
Weighted average common shares outstanding during the period: |
|||||
| Basic shares | 151,073 | 139,859 | 127,581 | 115,908 | 114,106 |
| Diluted shares | 151,073 | 139,859 | 127,581 | 115,908 | 114,106 |
| Net earnings (loss) per common share: | |||||
| Basic | $ (0.57) | $ (1.26) | $ (1.43) | $ (0.21) | $ (7.47) |
| Diluted | (0.57) | (1.26) | (1.43) | (0.21) | (7.47) |
| ZIONS BANCORPORATION AND SUBSIDIARIES | |||||
| Loan Balances By Portfolio Type | |||||
| (Unaudited) | |||||
| (In millions) |
March 31, 2010 |
December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 |
| Commercial lending: | |||||
| Commercial and industrial | $ 9,578 | $ 9,922 | $ 10,124 | $ 10,588 | $ 10,958 |
| Leasing | 442 | 466 | 449 | 423 | 401 |
| Owner occupied | 8,457 | 8,752 | 8,745 | 8,782 | 8,769 |
| Total commercial lending | 18,477 | 19,140 | 19,318 | 19,793 | 20,128 |
| Commercial real estate: | |||||
| Construction and land development | 5,060 | 5,552 | 6,087 | 6,848 | 7,265 |
| Term | 7,524 | 7,255 | 7,279 | 6,795 | 6,559 |
| Total commercial real estate | 12,584 | 12,807 | 13,366 | 13,643 | 13,824 |
| Consumer: | |||||
| Home equity credit line | 2,121 | 2,135 | 2,114 | 2,086 | 2,058 |
| 1-4 family residential | 3,584 | 3,642 | 3,698 | 3,781 | 3,817 |
| Construction and other consumer real estate | 403 | 459 | 537 | 599 | 666 |
| Bankcard and other revolving plans | 314 | 341 | 333 | 344 | 327 |
| Other | 279 | 293 | 343 | 342 | 358 |
| Total consumer | 6,701 | 6,870 | 7,025 | 7,152 | 7,226 |
| Foreign loans | 58 | 65 | 74 | 67 | 43 |
| FDIC-supported loans 1 | 1,321 | 1,445 | 1,607 | 783 | 661 |
| Total loans | $ 39,141 | $ 40,327 | $ 41,390 | $ 41,438 | $ 41,882 |
| 1 FDIC-supported loans represent loans acquired from the FDIC subject to loss sharing agreements. | |||||
| ZIONS BANCORPORATION AND SUBSIDIARIES | |||||
| Nonperforming Lending-Related Assets | |||||
| (Unaudited) | |||||
| (In thousands) | March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 |
| Nonaccrual loans | $ 2,087,203 | $ 2,023,503 | $ 1,811,827 | $ 1,628,700 | $ 1,421,279 |
| Other real estate owned | 366,798 | 335,652 | 359,187 | 293,857 | 226,634 |
| Nonperforming lending-related assets, excluding FDIC-supported assets | 2,454,001 | 2,359,155 | 2,171,014 | 1,922,557 | 1,647,913 |
| FDIC-supported nonaccrual loans | 283,999 | 355,911 | 544,558 | 125,854 | 89,935 |
| FDIC-supported other real estate owned | 47,439 | 54,130 | 54,714 | 10,921 | 16,975 |
| FDIC-supported nonperforming assets 1 | 331,438 | 410,041 | 599,272 | 136,775 | 106,910 |
| Total nonperforming lending-related assets | $ 2,785,439 | $ 2,769,196 | $ 2,770,286 | $ 2,059,332 | $ 1,754,823 |
| Ratio of nonperforming lending-related assets, excluding FDIC-supported assets, to net loans and leases2 and other real estate owned | 6.42% | 6.00% | 5.40% | 4.68% | 3.96% |
|
Ratio of nonperforming lending-related assets to net loans and leases2 and other real estate owned |
7.03% | 6.79% | 6.62% | 4.92% | 4.15% |
|
Accruing loans past due 90 days or more, excluding FDIC-supported loans |
$ 60,009 | $ 107,040 | $ 186,519 | $ 178,300 | $ 88,035 |
| FDIC-supported loans past due 90 days or more | 22,275 | 56,260 | 35,553 | 18,231 | 24,365 |
| Ratio of accruing loans past due 90 days or more, excluding FDIC-supported loans, to net loans and leases | 0.16% | 0.27% | 0.47% | 0.44% | 0.21% |
|
Ratio of accruing loans past due 90 days or more to net loans and leases |
0.21% | 0.40% | 0.54% | 0.47% | 0.27% |
| Nonaccrual loans and accruing loans past due 90 days or more, excluding FDIC-supported loans | $ 2,147,212 | $ 2,130,543 | $ 1,998,346 | $ 1,807,000 | $ 1,509,314 |
|
Ratio of nonaccrual loans and accruing loans past due 90 days or more, excluding FDIC-supported loans, to net loans and leases2 |
5.67% | 5.47% | 5.01% | 4.43% | 3.65% |
|
Accruing loans past due 30-89 days, excluding FDIC-supported loans |
$ 462,409 | $ 428,290 | $ 571,399 | $ 495,527 | $ 740,754 |
| FDIC-supported loans past due 30-89 days | 55,919 | 27,485 | 74,142 | 26,144 | 40,066 |
| Restructured loans included in nonaccrual loans | $ 340,165 | $ 298,820 | $ 106,922 | $ 100,590 | $ 5,363 |
| Restructured loans on accrual | 211,486 | 204,233 | 115,635 | 39,280 | 17,362 |
| 1 FDIC-supported assets represent assets acquired from the FDIC subject to loss sharing agreements. | |||||
| 2 Includes loans held for sale. | |||||
| ZIONS BANCORPORATION AND SUBSIDIARIES | |||||
| Allowance for Credit Losses | |||||
| (Unaudited) | |||||
| Three Months Ended | |||||
| (In thousands) | March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 |
| Allowance for Loan Losses | |||||
| Balance at beginning of period | $ 1,531,332 | $ 1,432,715 | $ 1,248,055 | $ 832,878 | $ 686,999 |
| Add: | |||||
| Provision for losses | 265,565 | 390,719 | 565,930 | 762,654 | 297,624 |
| Increase in allowance covered by FDIC indemnification | 11,770 | -- | -- | -- | -- |
| Deduct: | |||||
| Gross loan and lease charge-offs | (248,312) | (355,601) | (389,134) | (353,226) | (157,691) |
| Charge-offs recoverable from FDIC | 1,859 | 2,303 | -- | -- | -- |
| Recoveries | 19,363 | 61,196 | 7,864 | 5,749 | 5,946 |
| Net loan and lease charge-offs | (227,090) | (292,102) | (381,270) | (347,477) | (151,745) |
| Balance at end of period | $ 1,581,577 | $ 1,531,332 | $ 1,432,715 | $ 1,248,055 | $ 832,878 |
|
Ratio of allowance for loan losses to net loans and leases, excluding FDIC-supported loans, outstanding at period end |
4.20% | 3.95% | 3.61% | 3.08% | 2.03% |
| Ratio of allowance for loan losses to nonperforming loans, excluding FDIC-supported loans, at period end | 75.77% | 75.68% | 79.08% | 76.63% | 58.60% |
|
Annualized ratio of net loan and lease charge-offs to average loans, excluding FDIC-supported loans |
2.37% | 2.98% | 3.79% | 3.39% | 1.47% |
| Reserve for Unfunded Lending Commitments | |||||
| Balance at beginning of period | $ 116,445 | $ 97,225 | $ 60,688 | $ 52,761 | $ 50,934 |
| Provision charged (credited) to earnings | (20,133) | 19,220 | 36,537 | 7,927 | 1,827 |
| Balance at end of period | $ 96,312 | $ 116,445 | $ 97,225 | $ 60,688 | $ 52,761 |
| Total Allowance for Credit Losses | |||||
| Allowance for loan losses | $ 1,581,577 | $ 1,531,332 | $ 1,432,715 | $ 1,248,055 | $ 832,878 |
| Reserve for unfunded lending commitments | 96,312 | 116,445 | 97,225 | 60,688 | 52,761 |
| Total allowance for credit losses | $ 1,677,889 | $ 1,647,777 | $ 1,529,940 | $ 1,308,743 | $ 885,639 |
|
Ratio of total allowance for credit losses to net loans and leases outstanding, excluding FDIC-supported loans, at period end |
4.45% | 4.25% | 3.86% | 3.23% | 2.16% |
| ZIONS BANCORPORATION AND SUBSIDIARIES | ||||||
| Nonaccrual Loans By Portfolio Type | ||||||
| (Excluding FDIC-Supported Loans) | ||||||
| (Unaudited) | ||||||
| (In millions) | March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 | |
| Loans held for sale | $ -- | $ -- | $ -- | $ 18 | $ 18 | |
| Commercial lending: | ||||||
| Commercial and industrial | 320 | 319 | 231 | 200 | 204 | |
| Leasing | 8 | 11 | 10 | 10 | 9 | |
| Owner occupied | 460 | 474 | 357 | 282 | 247 | |
| Total commercial lending | 788 | 804 | 598 | 492 | 460 | |
| Commercial real estate: | ||||||
| Construction and land development | 803 | 825 | 839 | 826 | 716 | |
| Term | 324 | 228 | 221 | 126 | 76 | |
| Total commercial real estate | 1,127 | 1,053 | 1,060 | 952 | 792 | |
| Consumer: | ||||||
| Home equity credit line | 14 | 11 | 8 | 6 | 4 | |
| 1-4 family residential | 127 | 113 | 101 | 113 | 91 | |
| Construction and other consumer real estate | 28 | 38 | 42 | 45 | 52 | |
| Bankcard and other revolving plans | -- | 1 | 1 | 1 | 1 | |
| Other | 3 | 3 | 2 | 2 | 3 | |
| Total consumer | 172 | 166 | 154 | 167 | 151 | |
| Total nonaccrual loans | $ 2,087 | $ 2,023 | $ 1,812 | $ 1,629 | $ 1,421 | |
| Net Charge-Offs By Portfolio Type | ||||||
| (In millions) | March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 | |
| Commercial lending: | ||||||
| Commercial and industrial | $ 49 | $ 36 | $ 70 | $ 117 | $ 31 | |
| Leasing | 2 | 2 | 3 | 1 | -- | |
| Owner occupied | 36 | 27 | 19 | 9 | 7 | |
| Total commercial lending | 87 | 65 | 92 | 127 | 38 | |
| Commercial real estate: | ||||||
| Construction and land development | 86 | 139 | 219 | 156 | 80 | |
| Term | 23 | 56 | 29 | 11 | 2 | |
| Total commercial real estate | 109 | 195 | 248 | 167 | 82 | |
| Consumer: | ||||||
| Home equity credit line | 7 | 4 | 6 | 3 | 3 | |
| 1-4 family residential | 15 | 14 | 17 | 24 | 9 | |
| Construction and other consumer real estate | 5 | 10 | 10 | 17 | 13 | |
| Bankcard and other revolving plans | 3 | 2 | 2 | 6 | 2 | |
| Other | 3 | 4 | 6 | 4 | 5 | |
| Total consumer loans | 33 | 34 | 41 | 54 | 32 | |
| Charge-offs recoverable from FDIC | (2) | (2) | -- | -- | -- | |
| Total net charge-offs | $ 227 | $ 292 | $ 381 | $ 348 | $ 152 | |
| ZIONS BANCORPORATION AND SUBSIDIARIES | |||||||||||
| CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| March 31, 2010 | December 31, 2009 | March 31, 2009 | |||||||||
| (In thousands) | Average | Average | Average | Average | Average | Average | |||||
| balance | rate | balance | rate | balance | rate | ||||||
| ASSETS | |||||||||||
| Money market investments | $ 2,227,181 | 0.26% | $ 2,761,132 | 0.26% | $ 2,961,701 | 0.46% | |||||
| Securities: | |||||||||||
| Held-to-maturity | 864,021 | 4.86% | 875,730 | 2.82% | 1,786,617 | 6.48% | |||||
| Available-for-sale | 3,378,930 | 2.83% | 3,507,766 | 2.70% | 2,643,327 | 3.73% | |||||
| Trading account | 51,330 | 3.75% | 67,900 | 2.87% | 56,106 | 4.13% | |||||
| Total securities | 4,294,281 | 3.25% | 4,451,396 | 2.72% | 4,486,050 | 4.83% | |||||
| Loans held for sale | 179,433 | 5.34% | 208,219 | 5.21% | 244,687 | 4.57% | |||||
| Loans: | |||||||||||
| Net loans and leases excluding FDIC-supported loans1 | 38,310,187 | 5.59% | 39,222,262 | 5.59% | 41,383,829 | 5.67% | |||||
| FDIC-supported loans | 1,393,775 | 5.59% | 1,518,368 | 6.24% | 397,412 | 7.19% | |||||
| Total loans and leases | 39,703,962 | 5.59% | 40,740,630 | 5.62% | 41,781,241 | 5.69% | |||||
| Total interest-earning assets | 46,404,857 | 5.12% | 48,161,377 | 5.04% | 49,473,679 | 5.29% | |||||
| Cash and due from banks | 1,280,013 | 1,191,881 | 1,364,473 | ||||||||
| Allowance for loan losses | (1,565,136) | (1,497,873) | (714,642) | ||||||||
| Goodwill | 1,015,161 | 1,017,361 | 1,654,222 | ||||||||
| Core deposit and other intangibles | 110,754 | 120,512 | 126,759 | ||||||||
| Other assets | 4,306,119 | 4,266,457 | 3,495,184 | ||||||||
| Total assets | $ 51,551,768 | $ 53,259,715 | $ 55,399,675 | ||||||||
| LIABILITIES | |||||||||||
| Interest-bearing deposits: | |||||||||||
| Savings and NOW | $ 5,842,531 | 0.36% | $ 5,505,938 | 0.38% | $ 4,529,097 | 0.52% | |||||
| Money market | 16,515,285 | 0.77% | 17,247,187 | 0.89% | 17,480,861 | 1.60% | |||||
| Time under $100,000 | 2,365,645 | 1.44% | 2,637,651 | 1.78% | 3,103,857 | 2.85% | |||||
| Time $100,000 and over | 2,911,319 | 1.23% | 3,575,690 | 1.53% | 4,753,453 | 2.86% | |||||
| Foreign | 1,663,380 | 0.61% | 1,818,423 | 0.65% | 2,356,293 | 1.27% | |||||
| Total interest-bearing deposits | 29,298,160 | 0.78% | 30,784,889 | 0.94% | 32,223,561 | 1.73% | |||||
| Borrowed funds: | |||||||||||
| Securities sold, not yet purchased | 50,243 | 4.29% | 39,045 | 5.11% | 33,469 | 5.32% | |||||
|
Federal funds purchased and security repurchase agreements |
1,137,716 | 0.20% | 1,611,774 | 0.26% | 2,333,675 | 0.32% | |||||
| Commercial paper | 11,185 | 2.14% | 2,125 | 0.93% | 3,383 | 1.68% | |||||
| FHLB advances and other borrowings: | |||||||||||
| One year or less | 141,018 | 5.52% | 89,891 | 5.01% | 935,108 | 1.61% | |||||
| Over one year | 15,693 | 5.07% | 17,963 | 4.84% | 127,942 | 5.72% | |||||
| Long-term debt | 2,028,912 | 13.09% | 2,230,949 | 13.11% | 2,659,678 | 3.03% | |||||
| Total borrowed funds | 3,384,767 | 8.24% | 3,991,747 | 7.62% | 6,093,255 | 1.84% | |||||
| Total interest-bearing liabilities | 32,682,927 | 1.55% | 34,776,636 | 1.70% | 38,316,816 | 1.75% | |||||
| Noninterest-bearing deposits | 12,544,442 | 12,151,870 | 9,905,091 | ||||||||
| Other liabilities | 570,028 | 601,724 | 633,412 | ||||||||
| Total liabilities | 45,797,397 | 47,530,230 | 48,855,319 | ||||||||
| Shareholders' equity: | |||||||||||
| Preferred equity | 1,509,197 | 1,543,363 | 1,583,659 | ||||||||
| Common equity | 4,229,021 | 4,166,944 | 4,932,977 | ||||||||
| Controlling interest shareholders' equity | 5,738,218 | 5,710,307 | 6,516,636 | ||||||||
| Noncontrolling interests | 16,153 | 19,178 | 27,720 | ||||||||
| Total shareholders' equity | 5,754,371 | 5,729,485 | 6,544,356 | ||||||||
| Total liabilities and shareholders' equity | $ 51,551,768 | $ 53,259,715 | $ 55,399,675 | ||||||||
| Spread on average interest-bearing funds | 3.57% | 3.34% | 3.54% | ||||||||
|
Taxable-equivalent net interest income and net yield on interest-earning assets |
4.03% | 3.81% | 3.94% | ||||||||
| 1 Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans. | |||||||||||