Published:
Zions Bancorporation Reports Earnings of $0.65 Per Diluted Common Share for Second Quarter 2008
SALT LAKE CITY, July 17 /PRNewswire-FirstCall/ -- Zions Bancorporation
(Nasdaq: ZION) ("Zions" or "the Company") today reported second quarter net
earnings applicable to common shareholders of $69.7 million, or $0.65 per
diluted common share, compared to $155.6 million or $1.43 per diluted common
share for the second quarter of 2007. The return on average common equity was
5.53% compared to 12.50% for the second quarter of 2007.
Second Quarter 2008 Key Performance Highlights Compared to First Quarter
2008
-- Loan growth of $1.1 billion, excluding $897 million resulting from
purchases ofLockhart securities related to loan securitizations.
-- Average core deposit growth of $0.3 billion.
-- Net interest margin of 4.18%, down 5 basis points, primarily due to
increased nonperforming assets.
-- Credit quality:
Provision for loan losses of $114.2 million or 1.13% annualized of
average loans, up $21.9 million from $92.3 million.
Net loan and lease charge-offs of $67.8 million or 0.67% annualized
of average loans, up $17.0 million from $50.8 million.
Nonperforming assets of $697.4 million or 1.66% of net loans and
leases and other real estate owned, up $263.1 million from
$434.3 million.
-- Impairment losses on securities of $38.8 million pretax, or $0.22 per
diluted share.
"In what continues to be a turbulent and difficult environment in which a
number of financial institutions have posted losses, we are pleased that our
banks continue to be profitable and well-capitalized," said Harris H. Simmons,
chairman and chief executive officer. "Our core business is strong, our
balance sheet remains healthy, and our net credit costs remain very reasonable
compared to the industry even as we continue to strengthen our reserves."
Year-to-date net earnings applicable to common shareholders were $174.0
million, or $1.63 per diluted common share, compared to $305.3 million, or
$2.78 per diluted common share for the same period in 2007. The return on
average common equity for the first six months of 2008 was 6.86% compared to
12.38% for the first six months of 2007.
Loan Growth
On-balance-sheet net loans and leases were $41.9 billion at June 30, 2008.
Excluding the $897 million of loans fromLockhart, this represents an increase
of approximately $1.1 billion or 10.7% annualized from $39.9 billion at March
31, 2008, and an increase of approximately $4.2 billion or 11.4% from $36.8
billion at June 30, 2007. The $897 million of loans resulted from the purchase
of certain securities from Lockhart Funding LLC, an off-balance sheet
commercial paper conduit sponsored by Zions Bank. The purchase of these
securities was required by the Liquidity Agreement betweenLockhart and Zions
Bank when MBIA Inc. was downgraded below AA-. These securities were backed by
loans originated or underwritten by Zions Bank and at June 30, 2008 are
reflected on the Company's balance sheet primarily as owner occupied
commercial loans. Organic loan growth during the quarter was concentrated
primarily in commercial lending and secondarily in commercial term real estate
loans, principally at Zions Bank and Amegy Bank ofTexas. Construction and
land development loans declined over $300 million inCalifornia,Arizona and
Nevada during the quarter, partially offset by growth inTexas.
Deposits
Average core deposits for the second quarter of 2008 increased $0.3
billion or 3.7% annualized to $32.4 billion compared to $32.1 billion for the
first quarter of 2008 and increased $1.6 billion or 5.0% compared to $30.9
billion for the second quarter of 2007. Average core deposit growth for the
quarter was concentrated in money market, savings, and noninterest-bearing
demand deposit accounts. Average total deposits for the second quarter of 2008
increased $0.2 billion to $36.8 billion or 2.0% annualized compared to $36.6
billion for the first quarter of 2008, and increased $0.8 billion or 2.3%
compared to $36.0 billion for the second quarter of 2007. Average noninterest-
bearing demand deposits for the second quarter of 2008 were $9.1 billion
compared to $9.0 billion for the first quarter of 2008 and $9.6 billion for
the second quarter of 2007.
Net Interest Income
The net interest margin was 4.18% for the second quarter of 2008 compared
to 4.23% for the first quarter of 2008 and 4.53% for the second quarter of
2007. The decreased net interest margin for the second quarter of 2008 was
driven by the increase in nonperforming assets during the quarter. The effect
of commercial paper purchased fromLockhart on the net interest margin was a
reduction of approximately 9 basis points for the second quarter of 2008 and
11 basis points for the first quarter of 2008.
Net interest income for the second quarter of 2008 decreased $1.7 million
or 1.4% annualized to $484.7 million compared to $486.5 million for the first
quarter of 2008, and increased $15.4 million or 3.3% compared to $469.3
million for the second quarter of 2007. Taxable-equivalent net interest income
for the second quarter of 2008 decreased $2.0 million or 1.6% annualized to
$490.6 million compared to $492.5 million for the first quarter of 2008, and
increased $14.5 million or 3.1% from $476.1 million for the second quarter of
2007.
Asset Quality
Nonperforming assets were $697.4 million at June 30, 2008 compared to
$434.3 million at March 31, 2008 and $95.4 million at June 30, 2007. This
increase is being driven primarily by deterioration in residential real estate
acquisition, development and construction exposures in the Southwest, and by
some weakening inUtah residential construction and commercial and industrial
portfolios. The Company has not seen meaningful deterioration in credit
quality in other major loan types or geographies. The ratio of nonperforming
assets to net loans and leases and other real estate owned was 1.66% at June
30, 2008 compared to 1.09% at March 31, 2008 and 0.26% at June 30, 2007.
Net loan and lease charge-offs for the second quarter of 2008 were $67.8
million or 0.67% annualized of average loans. This compares with $50.8 million
or 0.52% annualized of average loans for the first quarter of 2008 and $8.7
million or 0.10% annualized of average loans for the second quarter of 2007.
The increase in charge-offs largely was driven by declining collateral values
on residential acquisition, development, and construction loans in the
Southwest and inUtah.
The provision for loan losses was $114.2 million for the second quarter of
2008 compared to $92.3 million for the first quarter of 2008 and $17.8 million
for the second quarter of 2007. The provision for the second quarter of 2008
was 1.13% annualized of average loans and was $46.4 million in excess of net
loan and lease charge-offs. The combined provisions for loan losses and
unfunded lending commitments were $115.9 million for the second quarter of
2008, $95.9 million for the first quarter of 2008, and $19.0 million for the
second quarter of 2007.
The allowance for loan losses as a percentage of net loans and leases was
1.31% at June 30, 2008, 1.26% at March 31, 2008, and 1.03% at June 30, 2007.
The total allowance and reserve for credit losses (allowance for loan losses
plus the reserve for unfunded lending commitments) was $575.8 million at June
30, 2008 compared to $526.4 million at March 31, 2008 and $401.5 million at
June 30, 2007.
Investment Securities
The Company recognized other-than-temporary impairment ("OTTI") during the
second quarter of 2008 of approximately $38.8 million pretax, or $0.22 per
diluted share, compared to $46.0 million of impairment and valuation losses
during the first quarter of 2008. Approximately $28.7 million of the amount
resulted from write-downs of two ABS CDOs and one bank and insurance income
note initially deemed to have OTTI this quarter. The remaining $10.1 million
resulted from write-downs of six REIT trust preferred CDOs and one bank and
insurance income note for which OTTI had previously been recognized. OTTI for
the two bank and insurance income notes amounted to $3.4 million this quarter.
As of June 30, 2008, approximately $3.8 million of fair value remained on bank
and insurance income notes. The impairment for the quarter was based on an
ongoing valuation review of the investment securities portfolio.
During the second quarter of 2008, the Company reassessed the
classification of certain asset-backed and trust preferred CDOs. On April 28,
2008, the Company reclassified approximately $1.2 billion at fair value of
these available-for-sale securities to held-to-maturity. The related
unrealized pretax loss of approximately $273 million included in accumulated
other comprehensive income ("OCI") remained in OCI and is being amortized as a
yield adjustment through earnings over the remaining terms of the securities.
No gain or loss was recognized at the time of reclassification. The Company
considers the held-to-maturity classification to be more appropriate because
it has the ability and the intent to hold these securities to maturity.
Lockhart Funding
On June 23, 2008, Zions Bank purchased $787 million of securities from
Lockhart. The purchase was pursuant to the Liquidity Agreement that Zions Bank
provides forLockhart and resulted from an investment downgrade by Moody's
Investor Service on MBIA Inc., which insured the securities. The purchases
comprised the entire remaining small business loan securitizations created by
Zions Bank and held byLockhart. No gain or loss was recognized on these
purchases. Upon dissolution of the securitization trusts (including $87
million of related securities owned by the Parent), the Company recorded $897
million of loans on its balance sheet including $23 million of premium. After
this purchase,Lockhart held approximately $862 million of securities at June
30, 2008.
The Company has also purchased asset-backed commercial paper ("CP") from
Lockhart and held approximately $493 million of this CP on its balance sheet
at June 30, 2008, which was down from $1,227 million at March 31, 2008 and
$710 million at December 31, 2007. The amount ofLockhart commercial paper
included in money market investments on the Company's average balance sheet
was approximately $1,091 million for the second quarter of 2008, $1,202
million for the first quarter of 2008, and $763 million for the fourth quarter
of 2007. These purchases were made to provide liquidity toLockhart due to
ongoing contraction and disruptions in the markets for asset-backed CP.
Noninterest Income
Noninterest income for the second quarter of 2008 was $72.4 million
compared to $111.0 million for the first quarter of 2008 and $141.3 million
for the second quarter of 2007. The amount for the second quarter of 2008
includes impairment losses on securities of $38.8 million compared to $46.0
million of impairment and valuation losses in the first quarter of 2008. Fair
value and nonhedge derivative income decreased $23.6 million during the
quarter, primarily because of decreases in the fair value of nonhedge
derivatives due to decreasing spreads between LIBOR and prime rates. Net
equity securities gains decreased $18.2 million compared to the first quarter
mainly because of $8.2 million of net losses on venture capital investments
during the quarter and the $12.4 million Visa gain included in the first
quarter. Net of related minority interest of $5.7 million, income taxes and
other expenses, the venture capital losses decreased net income for the
quarter by approximately $1.8 million, or $0.02 per diluted common share.
Noninterest Expense
Noninterest expense for the second quarter of 2008 was $354.4 million
compared to $350.1 million for the first quarter of 2008 and $347.6 million
for the second quarter of 2007. While salaries and employee benefits decreased
from the first quarter primarily because of reduced payroll taxes and
employee-related accrual adjustments, other noninterest expense increased
compared to the first quarter mainly because of the $5.6 million reversal of
the Visa indemnification accrual during the first quarter.
The efficiency ratio was 63.0% for the second quarter of 2008 compared to
58.0% for the first quarter of 2008 and 56.3% for the second quarter of 2007.
Income Taxes
Income tax expense for the second quarter of 2008 included a benefit of
$5.9 million due to a state settlement that allowed the Company to reduce its
liability and related interest for uncertain tax positions under the
provisions of FIN 48.
Capital Management
Tangible equity declined by $46 million at June 30, 2008 compared to March
31, 2008. The Company's tangible equity ratio was 5.97% at June 30, 2008
compared to 6.20% at March 31, 2008 and 6.52% at June 30, 2007. The decrease
from the previous quarter is mainly due to loan growth, reduced earnings, and
the decrease in OCI. At June 30, 2008, regulatory Tier 1 and total risk-based
capital increased to $3,685 million and $5,732 million from $3,646 million and
$5,644 million at March 31, 2008, respectively. On a pro forma basis including
the effect of the preferred stock issued in early July, regulatory capital
ratios are estimated to be approximately flat compared to March 31, 2008.
Weighted average common and common-equivalent shares outstanding for the
second quarter of 2008 were 106,711,948 compared to 106,722,000 for the first
quarter of 2008 and 109,123,735 for the second quarter of 2007. Common shares
outstanding at June 30, 2008 were 107,518,975 compared to 107,139,188 at March
31, 2008 and 108,034,079 at June 30, 2007.
Subsequent Event
On July 2, 2008, the Company completed a $46.7 million offering of 9.50%
Series C Fixed-Rate Non-Cumulative Perpetual Preferred Stock. The amount of
the offering sold by the Company's broker-dealer subsidiary was in line with
expectations. The stock may be redeemed by the Company after five years. The
tangible equity ratio at June 30, 2008 would have been 6.06% if the proceeds
of the preferred stock offering were included.
Conference Call
Zions will host a conference call to discuss these second quarter results
at 5:30 p.m. ET this afternoon (July 17, 2008). Media representatives,
analysts and the public are invited to listen to this discussion by calling
1-800-884-5695 (international: 617-786-2960) and entering the passcode
38253318, or via on-demand webcast. A link to the webcast will be available on
the Zions Bancorporation Web site at http://www.zionsbancorporation.com. A
replay of the call will be available from 7:30 p.m. ET on Thursday, July 17,
through midnight ET on Thursday, July 24, by dialing 1-888-286-8010
(international: 617-801-6888) and entering the passcode 71581191. 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 over 500 offices and approximately 600 ATMs
in ten Western and Southwestern states:Arizona,California,Colorado,Idaho,
Nevada,New Mexico,Oregon,Texas,Utah andWashington. 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 http://www.zionsbancorporation.com.
Forward-Looking Information
Statements in this news release that are based on other than historical
data 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. These forward-looking statements
are not guarantees of future performance, 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 nationally or locally in areas in which the Company
conducts its operations, including changes in asset-backed commercial paper
markets and valuations in structured securities and other assets; changes in
interest 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 or
procedures as may be required by the Financial Accounting Standards Board or
other regulatory agencies.
Additional factors that could cause actual results to differ materially
from those expressed in the forward-looking statements are discussed in the
2007 Annual Report on Form 10-K of Zions Bancorporation filed with the
Securities and Exchange Commission ("SEC") and available at the SEC's Internet
site (http://www.sec.gov).
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)
(In thousands, except per share and ratio data)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 % Change 2008 2007 % Change
EARNINGS
Taxable-equivalent
net interest
income $490,587 $476,060 3.05% $983,124 $939,781 4.61%
Taxable-equivalent
revenue 562,959 617,401 (8.82)% 1,166,496 1,226,536 (4.90)%
Net interest
income 484,743 469,347 3.28% 971,201 926,430 4.83%
Noninterest
income 72,372 141,341 (48.80)% 183,372 286,755 (36.05)%
Provision for
loan losses 114,192 17,763 542.86% 206,474 26,874 668.30%
Noninterest
expense 354,417 347,612 1.96% 704,520 699,591 0.70%
Income before
income taxes
and minority
interest 88,506 245,313 (63.92)% 243,579 486,720 (49.96)%
Income taxes 22,037 86,065 (74.39)% 71,933 174,919 (58.88)%
Minority
interest (5,729) 34 nm (7,301) (671) 988.08%
Net income 72,198 159,214 (54.65)% 178,947 312,472 (42.73)%
Net earnings
applicable
to common
shareholders 69,744 155,607 (55.18)% 174,040 305,262 (42.99)%
PER COMMON SHARE
Net earnings
(diluted) 0.65 1.43 (54.55)% 1.63 2.78 (41.37)%
Dividends 0.43 0.43 - 0.86 0.82 4.88%
Book value per
common share 46.82 46.14 1.47%
SELECTED RATIOS
Return on average
assets 0.54% 1.33% 0.68% 1.32%
Return on
average common
equity 5.53% 12.50% 6.86% 12.38%
Efficiency
ratio 62.96% 56.30% 60.40% 57.04%
Net interest
margin 4.18% 4.53% 4.20% 4.52%
ZIONS BANCORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)
(In thousands, except share and ratio data)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 % Change 2008 2007 % Change
AVERAGE
BALANCES
Total
assets $53,293,375 $47,921,787 11.21% $53,103,599 $47,754,384 11.20%
Total
interest-
earning
assets 47,202,577 42,151,667 11.98% 47,028,006 41,924,964 12.17%
Securities 4,866,421 5,426,896 (10.33)% 5,103,854 5,611,351 (9.04)%
Net loans
and
leases 40,512,249 36,142,957 12.09% 39,982,279 35,776,561 11.76%
Goodwill 2,009,517 2,012,270 (0.14)% 2,009,497 1,998,096 0.57%
Core deposit
and other
intangibles 137,675 188,843 (27.10)% 142,019 191,469 (25.83)%
Total
deposits 36,774,214 35,964,203 2.25% 36,684,444 35,575,016 3.12%
Core
deposits
(1) 32,429,773 30,873,001 5.04% 32,281,560 30,617,110 5.44%
Minority
interest 27,244 35,009 (22.18)% 28,960 37,859 (23.51)%
Shareholders'
equity:
Preferred
equity 240,000 240,000 - 240,000 240,000 -
Common
equity 5,070,047 4,993,383 1.54% 5,098,334 4,973,999 2.50%
Weighted
average
common and
common-
equivalent
shares
outst-
anding 106,711,948 109,123,735 (2.21)% 106,719,923 109,638,577 (2.66)%
AT PERIOD END
Total assets $54,630,883 $48,691,445 12.20%
Total
interest-earning
assets 47,920,419 42,721,118 12.17%
Securities 4,784,185 5,289,180 (9.55)%
Net loans and
leases 41,872,977 36,788,205 13.82%
Sold loans being
serviced (2) 513,623 2,201,897 (76.67)%
Allowance for
loan losses 548,958 380,295 44.35%
Reserve for
unfunded
lending
commitments 26,838 21,222 26.46%
Goodwill 2,009,511 2,013,314 (0.19)%
Core deposit
and other
intangibles 132,481 180,867 (26.75)%
Total deposits 37,607,995 36,185,572 3.93%
Core deposits (1) 33,505,626 31,303,578 7.03%
Minority interest 25,528 32,094 (20.46)%
Shareholders' equity:
Preferred equity 240,000 240,000 -
Common equity 5,033,530 4,984,702 0.98%
Common shares outstanding 107,518,975 108,034,079 (0.48)%
Average equity
to average
assets 9.96% 10.92% 10.05% 10.92%
Common
dividend
payout 66.23% 29.88% 52.98% 29.24%
Tangible
equity
ratio 5.97% 6.52%
Nonperforming
assets $697,432 $95,398 631.08%
Accruing loans
past due
90 days
or more 108,934 47,782 127.98%
Nonperforming
assets to net
loans and leases
and other
real estate
owned at
period end 1.66% 0.26%
(1) Amount consists of total deposits excluding time deposits $100,000 and
over.
(2) Amount represents the outstanding balance of loans sold and being
serviced by the Company, excluding conforming first mortgage
residential real estate loans.
ZIONS BANCORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)
(In thousands, except per share and ratio data)
Three Months Ended
June 30, March 31, December 31, September 30, June 30,
2008 2008 2007 2007 2007
EARNINGS
Taxable-equivalent
net interest
income $490,587 $492,537 $485,157 $483,115 $476,060
Taxable-equivalent
revenue 562,959 603,537 464,923 628,938 617,401
Net interest
income 484,743 486,458 478,885 476,637 469,347
Noninterest
income 72,372 111,000 (20,234) 145,823 141,341
Provision for
loan losses 114,192 92,282 69,982 55,354 17,763
Noninterest
expense 354,417 350,103 352,966 352,031 347,612
Income before
income taxes
and minority
interest 88,506 155,073 35,703 215,075 245,313
Income taxes
(benefit) 22,037 49,896 (11,035) 71,853 86,065
Minority
interest (5,729) (1,572) 1,197 7,490 34
Net income 72,198 106,749 45,541 135,732 159,214
Net earnings
applicable
to common
shareholders 69,744 104,296 42,198 131,962 155,607
PER COMMON SHARE
Net earnings
(diluted) 0.65 0.98 0.39 1.22 1.43
Dividends 0.43 0.43 0.43 0.43 0.43
Book value per
common share 46.82 47.49 47.17 46.92 46.14
SELECTED RATIOS
Return on
average assets 0.54% 0.81% 0.35% 1.10% 1.33%
Return on
average
common
equity 5.53% 8.18% 3.29% 10.50% 12.50%
Efficiency
ratio 62.96% 58.01% 75.92% 55.97% 56.30%
Net interest
margin 4.18% 4.23% 4.27% 4.44% 4.53%
ZIONS BANCORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)
(In thousands, except share and ratio data)
Three Months Ended
June 30, March 31, December 31,
2008 2008 2007
AVERAGE BALANCES
Total assets $53,293,375 $52,913,823 $50,941,152
Total interest-earning assets 47,202,577 46,853,435 45,106,413
Securities 4,866,421 5,341,287 5,188,980
Net loans and leases 40,512,249 39,452,309 38,450,974
Goodwill 2,009,517 2,009,477 2,009,022
Core deposit and other intangibles 137,675 146,363 162,679
Total deposits 36,774,214 36,594,674 36,381,125
Core deposits (1) 32,429,773 32,133,347 31,863,057
Minority interest 27,244 30,676 32,343
Shareholders' equity:
Preferred equity 240,000 240,000 240,000
Common equity 5,070,047 5,126,621 5,094,138
Weighted average common and
common-equivalent shares
outstanding 106,711,948 106,722,000 106,902,983
AT PERIOD END
Total assets $54,630,883 $53,408,293 $52,947,414
Total interest-earning assets 47,920,419 46,962,949 46,448,887
Securities 4,784,185 5,002,207 5,860,900
Net loans and leases 41,872,977 39,905,755 39,087,779
Sold loans being serviced (2) 513,623 1,489,490 1,885,132
Allowance for loan losses 548,958 501,283 459,376
Reserve for unfunded lending
commitments 26,838 25,148 21,530
Goodwill 2,009,511 2,009,517 2,009,513
Core deposit and other intangibles 132,481 140,672 149,493
Total deposits 37,607,995 37,516,337 36,922,753
Core deposits (1) 33,505,626 32,968,328 32,531,165
Minority interest 25,528 30,413 30,939
Shareholders' equity:
Preferred equity 240,000 240,000 240,000
Common equity 5,033,530 5,087,801 5,052,800
Common shares outstanding 107,518,975 107,139,188 107,116,505
Average equity to average assets 9.96% 10.14% 10.47%
Common dividend payout 66.23% 44.11% 108.88%
Tangible equity ratio 5.97% 6.20% 6.17%
Nonperforming assets $697,432 $434,293 $283,854
Accruing loans past due 90 days or
more 108,934 84,637 77,419
Nonperforming assets to net loans
and leases and other real estate
owned at period end 1.66% 1.09% 0.73%
(1) Amount consists of total deposits excluding time deposits $100,000 and
over.
(2) Amount represents the outstanding balance of loans sold and being
serviced by the Company, excluding conforming first mortgage
residential real estate loans.
ZIONS BANCORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)
(In thousands, except share and ratio data)
Three Months Ended
September 30, June 30,
2007 2007
AVERAGE BALANCES
Total assets $48,903,319 $47,921,787
Total interest-earning assets 43,200,858 42,151,667
Securities 5,221,722 5,426,896
Net loans and leases 37,194,850 36,142,957
Goodwill 2,015,532 2,012,270
Core deposit and other intangibles 177,864 188,843
Total deposits 35,756,600 35,964,203
Core deposits (1) 31,067,905 30,873,001
Minority interest 37,527 35,009
Shareholders' equity:
Preferred equity 240,000 240,000
Common equity 4,987,275 4,993,383
Weighted average common and
common-equivalent shares outstanding 107,879,963 109,123,735
AT PERIOD END
Total assets $50,044,686 $48,691,445
Total interest-earning assets 44,104,956 42,721,118
Securities 5,261,057 5,289,180
Net loans and leases 37,822,259 36,788,205
Sold loans being serviced (2) 2,022,142 2,201,897
Allowance for loan losses 418,165 380,295
Reserve for unfunded lending commitments 21,394 21,222
Goodwill 2,021,519 2,013,314
Core deposit and other intangibles 172,140 180,867
Total deposits 35,774,713 36,185,572
Core deposits (1) 31,239,069 31,303,578
Minority interest 37,411 32,094
Shareholders' equity:
Preferred equity 240,000 240,000
Common equity 5,016,980 4,984,702
Common shares outstanding 106,934,360 108,034,079
Average equity to average assets 10.69% 10.92%
Common dividend payout 34.96% 29.88%
Tangible equity ratio 6.40% 6.52%
Nonperforming assets $196,575 $95,398
Accruing loans past due 90 days or more 64,516 47,782
Nonperforming assets to net loans and leases
and other real estate owned at period end 0.52% 0.26%
(1) Amount consists of total deposits excluding time deposits $100,000 and
over.
(2) Amount represents the outstanding balance of loans sold and being
serviced by the Company, excluding conforming first mortgage
residential real estate loans.
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
June 30, March 31, December 31,
2008 2008 2007
(Unaudited) (Unaudited)
ASSETS
Cash and due from banks $1,751,724 $1,660,539 $1,855,155
Money market investments:
Interest-bearing deposits and
commercial paper 504,314 1,243,860 726,446
Federal funds sold 274,456 121,892 102,225
Security resell agreements 484,487 689,235 671,537
Investment securities:
Held-to-maturity, at adjusted cost
(approximate fair value $1,730,104,
$704,156, $702,148, $686,026 and
$685,521) 1,914,833 701,658 704,441
Available-for-sale, at fair value 2,817,682 4,259,742 5,134,610
Trading account, at fair value
(includes $463, $0, $741, $22 and
$1,745 transferred as collateral
under repurchase agreements) 51,670 40,807 21,849
4,784,185 5,002,207 5,860,900
Loans:
Loans held for sale 158,509 208,529 207,943
Loans and leases 41,874,224 39,855,365 39,044,163
42,032,733 40,063,894 39,252,106
Less:
Unearned income and fees, net of
related costs 159,756 158,139 164,327
Allowance for loan losses 548,958 501,283 459,376
Loans and leases, net of
allowance 41,324,019 39,404,472 38,628,403
Other noninterest-bearing
investments 1,153,933 1,114,902 1,034,412
Premises and equipment, net 656,013 657,183 655,712
Goodwill 2,009,511 2,009,517 2,009,513
Core deposit and other intangibles 132,481 140,672 149,493
Other real estate owned 125,186 36,476 15,201
Other assets 1,430,574 1,327,338 1,238,417
$54,630,883 $53,408,293 $52,947,414
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $9,735,265 $9,464,122 $9,618,300
Interest-bearing:
Savings and NOW 4,590,767 4,661,963 4,507,837
Money market 11,175,844 10,716,328 10,304,225
Internet money market 2,211,557 2,270,059 2,163,014
Time under $100,000 2,466,082 2,564,434 2,562,363
Time $100,000 and over 4,102,369 4,548,009 4,391,588
Foreign 3,326,111 3,291,422 3,375,426
37,607,995 37,516,337 36,922,753
Securities sold, not yet purchased 46,376 184,522 224,269
Federal funds purchased 2,379,055 1,817,587 2,463,460
Security repurchase agreements 1,010,325 1,144,178 1,298,112
Other liabilities 555,812 620,528 644,375
Commercial paper 137,200 164,657 297,850
Federal Home Loan Bank advances and
other borrowings:
One year or less 4,799,143 3,890,087 3,181,990
Over one year 129,474 127,006 127,612
Long-term debt 2,666,445 2,585,177 2,463,254
Total liabilities 49,331,825 48,050,079 47,623,675
Minority interest 25,528 30,413 30,939
Shareholders' equity:
Capital stock:
Preferred stock, without par value,
authorized 3,000,000 shares:
Series A (liquidation preference
$1,000 per share); issued
and outstanding 240,000 shares 240,000 240,000 240,000
Common stock, without par value;
authorized 350,000,000 shares;
issued and outstanding 107,518,975,
107,139,188, 107,116,505,
106,934,360 and
108,034,079 shares 2,224,455 2,219,905 2,212,237
Retained earnings 2,981,062 2,957,511 2,910,692
Accumulated other comprehensive
income (loss) (158,325) (76,429) (58,835)
Deferred compensation (13,662) (13,186) (11,294)
Total shareholders' equity 5,273,530 5,327,801 5,292,800
$54,630,883 $53,408,293 $52,947,414
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
September 30, June 30,
2007 2007
(Unaudited) (Unaudited)
ASSETS
Cash and due from banks $1,481,238 $1,640,946
Money market investments:
Interest-bearing deposits and
commercial paper 513,395 39,881
Federal funds sold 23,567 120,959
Security resell agreements 484,678 482,893
Investment securities:
Held-to-maturity, at adjusted cost
(approximate fair value $1,730,104,
$704,156, $702,148, $686,026 and
$685,521) 695,842 702,189
Available-for-sale, at fair value 4,549,721 4,564,183
Trading account, at fair value
(includes $463, $0, $741, $22 and
$1,745 transferred as collateral
under repurchase agreements) 15,494 22,808
5,261,057 5,289,180
Loans:
Loans held for sale 200,653 226,041
Loans and leases 37,778,228 36,715,752
37,978,881 36,941,793
Less:
Unearned income and fees, net of
related costs 156,622 153,588
Allowance for loan losses 418,165 380,295
Loans and leases, net of allowance 37,404,094 36,407,910
Other noninterest-bearing investments 1,043,475 972,830
Premises and equipment, net 658,294 648,731
Goodwill 2,021,519 2,013,314
Core deposit and other intangibles 172,140 180,867
Other real estate owned 11,973 10,646
Other assets 969,256 883,288
$50,044,686 $48,691,445
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $9,322,668 $9,857,638
Interest-bearing:
Savings and NOW 4,365,600 4,368,184
Money market 10,446,015 10,344,110
Internet money market 1,707,544 1,544,031
Time under $100,000 2,599,595 2,535,881
Time $100,000 and over 4,535,644 4,881,994
Foreign 2,797,647 2,653,734
35,774,713 36,185,572
Securities sold, not yet purchased 21,036 28,456
Federal funds purchased 2,391,805 2,221,887
Security repurchase agreements 1,070,702 1,061,598
Other liabilities 560,853 602,173
Commercial paper 411,007 228,607
Federal Home Loan Bank advances and
other borrowings:
One year or less 2,037,644 664,509
Over one year 128,218 128,832
Long-term debt 2,354,317 2,313,015
Total liabilities 44,750,295 43,434,649
Minority interest 37,411 32,094
Shareholders' equity:
Capital stock:
Preferred stock, without par value,
authorized 3,000,000 shares:
Series A (liquidation preference
$1,000 per share); issued
and outstanding 240,000 shares 240,000 240,000
Common stock, without par value;
authorized 350,000,000 shares;
issued and outstanding
107,518,975, 107,139,188,
107,116,505, 106,934,360 and
108,034,079 shares 2,200,228 2,279,722
Retained earnings 2,914,439 2,828,613
Accumulated other comprehensive
income (loss) (86,914) (112,840)
Deferred compensation (10,773) (10,793)
Total shareholders' equity 5,256,980 5,224,702
$50,044,686 $48,691,445
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
June 30, March 31, December 31, September 30, June 30,
2008 2008 2007 2007 2007
Interest income:
Interest and
fees on loans $643,111 $688,439 $727,185 $724,598 $697,022
Interest on
loans held
for sale 2,699 3,017 2,975 3,695 4,322
Lease financing 5,767 5,818 5,782 5,461 5,234
Interest on money
market
investments 12,313 19,028 18,760 10,841 7,756
Interest on
securities:
Held-to-maturity -
taxable 15,730 2,455 2,387 2,343 2,064
Held-to-maturity -
nontaxable 6,224 6,429 6,430 6,402 6,227
Available-for-sale -
taxable 35,059 62,356 61,459 61,248 63,825
Available-for-sale -
nontaxable 1,870 1,892 2,070 2,274 2,398
Trading account 159 681 471 880 766
Total interest
income 722,932 790,115 827,519 817,742 789,614
Interest expense:
Interest on
savings and
money market
deposits 80,144 103,987 125,382 123,586 117,295
Interest on time
and foreign
deposits 83,460 106,222 119,242 119,781 120,445
Interest on
short-term
borrowings 43,255 63,134 67,601 59,034 43,369
Interest on
long-term
borrowings 31,330 30,314 36,409 38,704 39,158
Total interest
expense 238,189 303,657 348,634 341,105 320,267
Net interest
income 484,743 486,458 478,885 476,637 469,347
Provision for
loan losses 114,192 92,282 69,982 55,354 17,763
Net interest
income after
provision for
loan losses 370,551 394,176 408,903 421,283 451,584
Noninterest income:
Service charges
and fees on
deposit
accounts 51,067 49,585 48,130 46,919 45,116
Other service
charges,
commissions
and fees 42,362 41,981 44,405 44,471 42,311
Trust and wealth
management
income 10,284 9,693 10,151 9,040 9,125
Capital markets
and foreign
exchange 12,196 10,397 10,632 11,325 11,900
Dividends and
other
investment
income 10,409 12,910 13,830 14,720 11,271
Loan sales and
servicing
income 8,516 7,810 8,640 11,607 8,998
Income from
securities
conduit 1,043 2,581 2,472 3,221 5,968
Fair value and
nonhedge
derivative
income
(loss) (19,789) 3,787 (7,034) (9,391) 924
Equity securities
gains (losses),
net (8,121) 10,068 1,349 11,072 100
Fixed income
securities
gains (losses),
net 78 1,775 (753) 58 13
Impairment losses
on investment
securities
and valuation
losses on
securities
purchased from
Lockhart
Funding (38,761) (45,989) (158,208) - -
Other 3,088 6,402 6,152 2,781 5,615
Total
noninterest
income 72,372 111,000 (20,234) 145,823 141,341
Noninterest expense:
Salaries and
employee
benefits 201,291 209,354 191,141 204,488 198,668
Occupancy, net 27,364 26,799 27,312 27,203 26,334
Furniture and
equipment 25,610 23,738 24,917 23,996 24,272
Legal and
professional
services 11,566 7,880 12,132 10,918 11,242
Postage and
supplies 8,536 9,789 9,416 10,024 9,025
Advertising 7,520 6,351 6,322 6,624 7,517
Merger related
expense 281 307 687 682 1,491
Amortization of
core deposit
and other
intangibles 8,191 8,820 10,459 11,495 11,812
Provision for
unfunded lending
commitments 1,690 3,618 136 172 1,222
Other 62,368 53,447 70,444 56,429 56,029
Total
noninterest
expense 354,417 350,103 352,966 352,031 347,612
Income before
income taxes
and minority
interest 88,506 155,073 35,703 215,075 245,313
Income taxes
(benefit) 22,037 49,896 (11,035) 71,853 86,065
Minority
interest (5,729) (1,572) 1,197 7,490 34
Net income 72,198 106,749 45,541 135,732 159,214
Preferred stock
dividend 2,454 2,453 3,343 3,770 3,607
Net earnings
applicable to
common
shareholders $69,744 $104,296 $42,198 $131,962 $155,607
Weighted average
common shares
outstanding
during the period:
Basic shares 106,595 106,514 106,454 106,814 107,803
Diluted shares 106,712 106,722 106,903 107,880 109,124
Net earnings per
common share:
Basic $0.65 $0.98 $0.40 $1.24 $1.44
Diluted 0.65 0.98 0.39 1.22 1.43
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Unaudited)
(In thousands, except per share amounts)
Six Months Ended
June 30,
2008 2007
Interest income:
Interest and fees on loans $1,331,550 $1,371,599
Interest on loans held for sale 5,716 8,197
Lease financing 11,585 10,440
Interest on money market investments 31,341 14,098
Interest on securities:
Held-to-maturity - taxable 18,185 4,267
Held-to-maturity - nontaxable 12,653 12,318
Available-for-sale - taxable 97,415 132,332
Available-for-sale - nontaxable 3,762 4,856
Trading account 840 1,958
Total interest income 1,513,047 1,560,065
Interest expense:
Interest on savings and money market
deposits 184,131 230,398
Interest on time and foreign deposits 189,682 233,330
Interest on short-term borrowings 106,389 92,061
Interest on long-term borrowings 61,644 77,846
Total interest expense 541,846 633,635
Net interest income 971,201 926,430
Provision for loan losses 206,474 26,874
Net interest income after provision
for loan losses 764,727 899,556
Noninterest income:
Service charges and fees on deposit accounts 100,652 88,501
Other service charges, commissions and fees 84,343 81,688
Trust and wealth management income 19,977 17,341
Capital markets and foreign exchange 22,593 21,631
Dividends and other investment income 23,319 22,364
Loan sales and servicing income 16,326 18,256
Income from securities conduit 3,624 12,483
Fair value and nonhedge derivative income
(loss) (16,002) 2,169
Equity securities gains, net 1,947 5,298
Fixed income securities gains, net 1,853 3,714
Impairment losses on investment securities
and valuation losses on securities purchased
from Lockhart Funding (84,750) -
Other 9,490 13,310
Total noninterest income 183,372 286,755
Noninterest expense:
Salaries and employee benefits 410,645 404,255
Occupancy, net 54,163 52,923
Furniture and equipment 49,348 47,539
Legal and professional services 19,446 20,779
Postage and supplies 18,325 17,072
Advertising 13,871 13,974
Merger related expense 588 3,897
Amortization of core deposit and other
intangibles 17,011 22,941
Provision for unfunded lending commitments 5,308 1,528
Other 115,815 114,683
Total noninterest expense 704,520 699,591
Income before income taxes and minority
interest 243,579 486,720
Income taxes 71,933 174,919
Minority interest (7,301) (671)
Net income 178,947 312,472
Preferred stock dividend 4,907 7,210
Net earnings applicable to common
shareholders $174,040 $305,262
Weighted average common shares outstanding
during the period:
Basic shares 106,554 108,107
Diluted shares 106,720 109,639
Net earnings per common share:
Basic $1.63 $2.82
Diluted 1.63 2.78
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except per share amounts)
Preferred Common Retained
stock stock earnings
Balance, December 31, 2007 $240,000 $2,212,237 $2,910,692
Cumulative effect of change in
accounting principle, adoption of
SFAS 159 (11,471)
Comprehensive income:
Net income for the period 106,749
Other comprehensive gain (loss), net
of tax:
Net realized and unrealized holding
losses on investments and retained
interests
Foreign currency translation
Reclassification for net realized
losses on investments recorded in
operations
Net unrealized gains on derivative
instruments
Other comprehensive loss
Total comprehensive income
Net stock issued under employee plans
and related tax benefits 7,668
Dividends declared on preferred stock (2,453)
Dividends on common stock, $.43 per
share (46,006)
Change in deferred compensation
Balance, March 31, 2008 240,000 2,219,905 2,957,511
Comprehensive loss:
Net income for the period 72,198
Other comprehensive gain (loss), net
of tax:
Net realized and unrealized holding
losses on investments and retained
interests
Foreign currency translation
Reclassification for net realized
losses on investments recorded in
operations
Net unrealized losses on derivative
instruments
Pension and postretirement
Other comprehensive loss
Total comprehensive loss
Stock issued under dividend
reinvestment plan 632
Net stock issued under employee plans
and related tax benefits 3,918
Dividends declared on preferred stock (2,454)
Dividends on common stock, $.43 per
share (46,193)
Change in deferred compensation
Balance, June 30, 2008 $240,000 $2,224,455 $2,981,062
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except per share amounts)
Accumulated
other
comprehensive Total
income Deferred shareholders'
(loss) compensation equity
Balance, December 31, 2007 $(58,835) $(11,294) $5,292,800
Cumulative effect of change in
accounting principle, adoption of
SFAS 159 11,471 -
Comprehensive income:
Net income for the period 106,749
Other comprehensive gain (loss), net of
tax:
Net realized and unrealized holding
losses on investments and retained
interests (130,066)
Foreign currency translation (1)
Reclassification for net realized
losses on investments recorded in
operations 27,301
Net unrealized gains on derivative
instruments 73,701
Other comprehensive loss (29,065) (29,065)
Total comprehensive income 77,684
Net stock issued under employee plans
and related tax benefits 7,668
Dividends declared on preferred stock (2,453)
Dividends on common stock, $.43 per
share (46,006)
Change in deferred compensation (1,892) (1,892)
Balance, March 31, 2008 (76,429) (13,186) 5,327,801
Comprehensive loss:
Net income for the period 72,198
Other comprehensive gain (loss), net of
tax:
Net realized and unrealized holding
losses on investments and retained
interests (40,336)
Foreign currency translation 2
Reclassification for net realized
losses on investments recorded in
operations 23,816
Net unrealized losses on derivative
instruments (66,112)
Pension and postretirement 734
Other comprehensive loss (81,896) (81,896)
Total comprehensive loss (9,698)
Stock issued under dividend
reinvestment plan 632
Net stock issued under employee plans
and related tax benefits 3,918
Dividends declared on preferred stock (2,454)
Dividends on common stock, $.43 per
share (46,193)
Change in deferred compensation (476) (476)
Balance, June 30, 2008 $(158,325) $(13,662) $5,273,530
ZIONS BANCORPORATION AND SUBSIDIARIES
INVESTMENT SECURITIES PORTFOLIO
As of June 30, 2008
(Unaudited) Net
unrealized
gains (losses)
Amortized recognized Carrying
(In thousands) cost in OCI (1) value
HELD-TO-MATURITY:
Municipal securities $692,956 $- $692,956
Asset-backed securities:
Trust preferred securities - banks and
insurance
A rated 1,201,208 (196,582) 1,004,626
BBB rated 174,600 (44,893) 129,707
1,375,808 (241,475) 1,134,333
Trust preferred securities - real
estate investment trusts
AA rated 17,681 (4,916) 12,765
A rated 18,212 (3,900) 14,312
35,893 (8,816) 27,077
Other
AAA rated 42,203 (156) 42,047
A rated 22,622 (11,996) 10,626
BBB rated 8,577 (1,283) 7,294
73,402 (13,435) 59,967
Other debt securities 500 - 500
2,178,559 (263,726) 1,914,833
AVAILABLE-FOR-SALE:
U.S. Treasury securities 40,403 677 41,080
U.S. Government agencies and
corporations:
Agency securities 424,614 (386) 424,228
Agency guaranteed mortgage-backed
securities 428,458 3,493 431,951
Small Business Administration
loan-backed securities 723,224 (17,158) 706,066
Municipal securities 200,587 627 201,214
Asset-backed securities:
Trust preferred securities - banks and
insurance
AAA rated 664,238 (57,215) 607,023
A rated 53,504 (10,746) 42,758
BBB rated 7,000 (1,843) 5,157
Not rated 28,819 3,163 31,982
753,561 (66,641) 686,920
Trust preferred securities - real
estate investment trusts
Noninvestment grade 44,326 (3,637) 40,689
Small business loan-backed 12,622 51 12,673
Other
AAA rated 42,808 (2,701) 40,107
AA rated 47,877 (5,237) 42,640
BBB rated 3,791 (159) 3,632
Noninvestment grade 17,967 (493) 17,474
112,443 (8,590) 103,853
2,740,238 (91,564) 2,648,674
Other securities:
Mutual funds and stock 169,008 - 169,008
2,909,246 (91,564) 2,817,682
Total $5,087,805 $(355,290) $4,732,515
(1) Other comprehensive income. All amounts reported are pretax.
Ratings categories include entire range. For example, "A rated"
includes A+, A and A-.
ZIONS BANCORPORATION AND SUBSIDIARIES
INVESTMENT SECURITIES PORTFOLIO
As of June 30, 2008
(Unaudited) Net
unrealized
gains (losses) Estimated
not recognized fair
(In thousands) in OCI (1) value
HELD-TO-MATURITY:
Municipal securities $(5,178) $687,778
Asset-backed securities:
Trust preferred securities - banks and
insurance
A rated (138,814) 865,812
BBB rated (20,397) 109,310
(159,211) 975,122
Trust preferred securities - real estate
investment trusts
AA rated (4,764) 8,001
A rated (4,313) 9,999
(9,077) 18,000
Other
AAA rated (12,739) 29,308
A rated 1,318 11,944
BBB rated 158 7,452
(11,263) 48,704
Other debt securities - 500
(184,729) 1,730,104
AVAILABLE-FOR-SALE:
U.S. Treasury securities 41,080
U.S. Government agencies and corporations:
Agency securities 424,228
Agency guaranteed mortgage-backed securities 431,951
Small Business Administration loan-backed
securities 706,066
Municipal securities 201,214
Asset-backed securities:
Trust preferred securities - banks and
insurance
AAA rated 607,023
A rated 42,758
BBB rated 5,157
Not rated 31,982
686,920
Trust preferred securities - real estate
investment trusts
Noninvestment grade 40,689
Small business loan-backed 12,673
Other
AAA rated 40,107
AA rated 42,640
BBB rated 3,632
Noninvestment grade 17,474
103,853
2,648,674
Other securities:
Mutual funds and stock 169,008
2,817,682
Total $(184,729) $4,547,786
(1) Other comprehensive income. All amounts reported are pretax.
Ratings categories include entire range. For example, "A rated"
includes A+, A and A-.
ZIONS BANCORPORATION AND SUBSIDIARIES
Nonperforming Assets
(Unaudited)
(In thousands) June 30, March 31, December 31, September 30, June 30,
2008 2008 2007 2007 2007
Nonaccrual
loans $570,101 $387,717 $258,513 $174,315 $82,314
Restructured
loans 2,145 10,100 10,140 10,287 2,438
Other real
estate owned 125,186 36,476 15,201 11,973 10,646
Total $697,432 $434,293 $283,854 $196,575 $95,398
% of net loans
and leases*
and other real
estate owned 1.66% 1.09% 0.73% 0.52% 0.26%
Accruing loans
past due 90 days
or more $108,934 $84,637 $77,419 $64,516 $47,782
% of net loans
and leases* 0.26% 0.21% 0.20% 0.17% 0.13%
*Includes loans
held for sale.
Allowance and
Reserve for
Credit Losses
(Unaudited)
Three Months Ended
(In thousands) June 30, March 31, December 31, September 30, June 30,
2008 2008 2007 2007 2007
Allowance for
Loan Losses
Balance at
beginning of
period $501,283 $459,376 $418,165 $380,295 $371,213
Allowance of
company
acquired - - - 578 -
Allowance of
branches
sold - - (2,034) - -
Allowance
associated
with repurchased
securitized
loans 1,301 425 - - -
Add:
Provision for
losses 114,192 92,282 69,982 55,354 17,763
Deduct:
Loan and lease
charge-offs (75,378) (53,751) (30,023) (20,815) (13,767)
Recoveries 7,560 2,951 3,286 2,753 5,086
Net loan and
lease
charge-offs (67,818) (50,800) (26,737) (18,062) (8,681)
Balance at end
of period $548,958 $501,283 $459,376 $418,165 $380,295
Ratio of allowance
for loan losses
to net loans
and leases
outstanding at
period end 1.31% 1.26% 1.18% 1.11% 1.03%
Ratio of allowance
for loan losses to
nonperforming
loans at period
end 95.93% 126.01% 170.99% 226.52% 448.72%
Reserve for
Unfunded Lending
Commitments
Balance at
beginning
of period $25,148 $21,530 $21,394 $21,222 $20,000
Provision
charged against
earnings 1,690 3,618 136 172 1,222
Balance at end
of period $26,838 $25,148 $21,530 $21,394 $21,222
Total Allowance
and Reserve for
Credit Losses
Allowance for
loan losses $548,958 $501,283 $459,376 $418,165 $380,295
Reserve for
unfunded
lending
commitments 26,838 25,148 21,530 21,394 21,222
Total allowance
and reserve
for credit
losses $575,796 $526,431 $480,906 $439,559 $401,517
ZIONS BANCORPORATION AND SUBSIDIARIES
Sold Loans Being Serviced
(Unaudited)
Three Months Ended
(In thousands) June 30, March 31, December 31, September 30, June 30,
2008 2008 2007 2007 2007
Balance at
beginning
of period $1,489,490 $1,885,132 $2,022,142 $2,201,897 $2,401,355
New loans
sold 28,853 14,773 25,234 8,162 19,173
Loans
repurchased (874,100) (283,204) - - -
Payments and
other
reductions (130,620) (127,211) (162,244) (187,917) (218,631)
Balance at
end of
period $513,623 $1,489,490 $1,885,132 $2,022,142 $2,201,897
Loan Balances By Portfolio Type
(Unaudited)
(In millions) June 30, March 31, December 31, September 30, June 30,
2008 2008 2007 2007 2007
Loans held
for sale $159 $209 $208 $201 $226
Commercial
lending:
Commercial and
industrial 10,590 10,031 9,811 9,260 8,922
Leasing 492 494 503 474 450
Owner occupied 8,912 7,910 7,545 7,347 7,123
Total
commercial
lending 19,994 18,435 17,859 17,081 16,495
Commercial
real estate:
Construction
and land
development 8,264 8,368 8,315 8,322 7,963
Term 5,939 5,569 5,335 5,054 5,084
Total
commercial
real estate 14,203 13,937 13,650 13,376 13,047
Consumer:
Home equity
credit line
and other
consumer real
estate 2,387 2,247 2,203 2,107 2,042
1-4 family
residential 4,172 4,158 4,206 4,178 4,134
Bankcard and
other revolving
plans 332 316 347 299 306
Other 431 434 452 467 456
Total
consumer 7,322 7,155 7,208 7,051 6,938
Foreign loans 25 26 26 27 12
Other receivables 330 302 301 243 224
Total loans $42,033 $40,064 $39,252 $37,979 $36,942
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
Three Months Ended
June 30, 2008
(In thousands) Average Amount of Average
balance interest (1) rate
ASSETS
Money market investments $1,823,907 $12,313 2.72%
Securities:
Held-to-maturity 1,532,818 25,305 6.64%
Available-for-sale 3,295,056 37,936 4.63%
Trading account 38,547 159 1.66%
Total securities 4,866,421 63,400 5.24%
Loans:
Loans held for sale 186,592 2,699 5.82%
Net loans and leases (2) 40,325,657 650,364 6.49%
Total loans and leases 40,512,249 653,063 6.48%
Total interest-earning assets 47,202,577 728,776 6.21%
Cash and due from banks 1,320,584
Allowance for loan losses (516,908)
Goodwill 2,009,517
Core deposit and other intangibles 137,675
Other assets 3,139,930
Total assets $53,293,375
LIABILITIES
Interest-bearing deposits:
Savings and NOW $4,651,117 8,776 0.76%
Money market 10,752,743 54,707 2.05%
Internet money market 2,200,695 16,661 3.04%
Time under $100,000 2,513,620 23,276 3.72%
Time $100,000 and over 4,344,441 40,462 3.75%
Foreign 3,254,872 19,722 2.44%
Total interest-bearing deposits 27,717,488 163,604 2.37%
Borrowed funds:
Securities sold, not yet purchased 33,299 414 5.00%
Federal funds purchased and security
repurchase agreements 2,999,084 14,569 1.95%
Commercial paper 148,946 1,222 3.30%
FHLB advances and other borrowings:
One year or less 4,701,020 27,050 2.31%
Over one year 129,079 1,840 5.73%
Long-term debt 2,632,660 29,490 4.51%
Total borrowed funds 10,644,088 74,585 2.82%
Total interest-bearing liabilities 38,361,576 238,189 2.50%
Noninterest-bearing deposits 9,056,726
Other liabilities 537,782
Total liabilities 47,956,084
Minority interest 27,244
Shareholders' equity:
Preferred equity 240,000
Common equity 5,070,047
Total shareholders' equity 5,310,047
Total liabilities and shareholders'
equity $53,293,375
Spread on average interest-bearing funds 3.71%
Taxable-equivalent net interest income
and net yield on interest-earning
assets $490,587 4.18%
(1) Taxable-equivalent rates used where applicable.
(2) Net of unearned income and fees, net of related costs. Loans include
nonaccrual and restructured loans.
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
Three Months Ended
March 31, 2008
(In thousands) Average Amount of Average
balance interest (1) rate
ASSETS
Money market investments $2,059,839 $19,028 3.72%
Securities:
Held-to-maturity 700,302 12,346 7.09%
Available-for-sale 4,599,258 65,267 5.71%
Trading account 41,727 681 6.56%
Total securities 5,341,287 78,294 5.90%
Loans:
Loans held for sale 214,498 3,017 5.66%
Net loans and leases (2) 39,237,811 695,855 7.13%
Total loans and leases 39,452,309 698,872 7.12%
Total interest-earning assets 46,853,435 796,194 6.83%
Cash and due from banks 1,417,356
Allowance for loan losses (476,614)
Goodwill 2,009,477
Core deposit and other intangibles 146,363
Other assets 2,963,806
Total assets $52,913,823
LIABILITIES
Interest-bearing deposits:
Savings and NOW $4,519,149 10,469 0.93%
Money market 10,552,299 72,320 2.76%
Internet money market 2,218,181 21,198 3.84%
Time under $100,000 2,578,166 27,165 4.24%
Time $100,000 and over 4,461,327 49,074 4.42%
Foreign 3,290,090 29,983 3.67%
Total interest-bearing deposits 27,619,212 210,209 3.06%
Borrowed funds:
Securities sold, not yet purchased 33,577 333 3.99%
Federal funds purchased and security
repurchase agreements 3,314,956 24,206 2.94%
Commercial paper 205,520 2,332 4.56%
FHLB advances and other borrowings:
One year or less 4,082,208 36,263 3.57%
Over one year 127,291 1,825 5.77%
Long-term debt 2,504,618 28,489 4.57%
Total borrowed funds 10,268,170 93,448 3.66%
Total interest-bearing liabilities 37,887,382 303,657 3.22%
Noninterest-bearing deposits 8,975,462
Other liabilities 653,682
Total liabilities 47,516,526
Minority interest 30,676
Shareholders' equity:
Preferred equity 240,000
Common equity 5,126,621
Total shareholders' equity 5,366,621
Total liabilities and shareholders'
equity $52,913,823
Spread on average interest-bearing funds 3.61%
Taxable-equivalent net interest
income and net yield on
interest-earning assets $492,537 4.23%
(1) Taxable-equivalent rates used where applicable.
(2) Net of unearned income and fees, net of related costs. Loans include
nonaccrual and restructured loans.
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
Six Months Ended
June 30, 2008
(In thousands) Average Amount of Average
balance interest (1) rate
ASSETS
Money market investments $1,941,873 $31,341 3.25%
Securities:
Held-to-maturity 1,116,560 37,651 6.78%
Available-for-sale 3,947,157 103,203 5.26%
Trading account 40,137 840 4.21%
Total securities 5,103,854 141,694 5.58%
Loans:
Loans held for sale 200,545 5,716 5.73%
Net loans and leases (2) 39,781,734 1,346,219 6.81%
Total loans and leases 39,982,279 1,351,935 6.80%
Total interest-earning assets 47,028,006 1,524,970 6.52%
Cash and due from banks 1,368,970
Allowance for loan losses (496,761)
Goodwill 2,009,497
Core deposit and other intangibles 142,019
Other assets 3,051,868
Total assets $53,103,599
LIABILITIES
Interest-bearing deposits:
Savings and NOW $4,585,133 19,245 0.84%
Money market 10,652,521 127,027 2.40%
Internet money market 2,209,438 37,859 3.45%
Time under $100,000 2,545,893 50,441 3.98%
Time $100,000 and over 4,402,884 89,536 4.09%
Foreign 3,272,481 49,705 3.05%
Total interest-bearing deposits 27,668,350 373,813 2.72%
Borrowed funds:
Securities sold, not yet purchased 33,438 747 4.49%
Federal funds purchased and security
repurchase agreements 3,157,020 38,775 2.47%
Commercial paper 177,233 3,554 4.03%
FHLB advances and other borrowings:
One year or less 4,391,614 63,313 2.90%
Over one year 128,185 3,665 5.75%
Long-term debt 2,568,639 57,979 4.54%
Total borrowed funds 10,456,129 168,033 3.23%
Total interest-bearing liabilities 38,124,479 541,846 2.86%
Noninterest-bearing deposits 9,016,094
Other liabilities 595,732
Total liabilities 47,736,305
Minority interest 28,960
Shareholders' equity:
Preferred equity 240,000
Common equity 5,098,334
Total shareholders' equity 5,338,334
Total liabilities and shareholders'
equity $53,103,599
Spread on average interest-bearing funds 3.66%
Taxable-equivalent net interest income
and net yield on interest-earning assets $983,124 4.20%
(1) Taxable-equivalent rates used where applicable.
(2) Net of unearned income and fees, net of related costs. Loans include
nonaccrual and restructured loans.
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
Six Months Ended
June 30, 2007
(In thousands) Average Amount of Average
balance interest (1) rate
ASSETS
Money market investments $537,052 $14,098 5.29%
Securities:
Held-to-maturity 667,690 23,218 7.01%
Available-for-sale 4,870,033 139,803 5.79%
Trading account 73,628 1,958 5.36%
Total securities 5,611,351 164,979 5.93%
Loans:
Loans held for sale 251,959 8,197 6.56%
Net loans and leases (2) 35,524,602 1,386,142 7.87%
Total loans and leases 35,776,561 1,394,339 7.86%
Total interest-earning assets 41,924,964 1,573,416 7.57%
Cash and due from banks 1,539,549
Allowance for loan losses (375,060)
Goodwill 1,998,096
Core deposit and other intangibles 191,469
Other assets 2,475,366
Total assets $47,754,384
LIABILITIES
Interest-bearing deposits:
Savings and NOW $4,510,711 20,239 0.90%
Money market 10,246,270 174,829 3.44%
Internet money market 1,403,946 35,330 5.07%
Time under $100,000 2,476,444 53,108 4.32%
Time $100,000 and over 4,957,906 119,282 4.85%
Foreign 2,503,163 60,940 4.91%
Total interest-bearing deposits 26,098,440 463,728 3.58%
Borrowed funds:
Securities sold, not yet purchased 36,086 808 4.52%
Federal funds purchased and security
repurchase agreements 2,978,728 70,855 4.80%
Commercial paper 186,481 5,012 5.42%
FHLB advances and other borrowings:
One year or less 578,845 15,386 5.36%
Over one year 132,846 3,824 5.80%
Long-term debt 2,370,213 74,022 6.30%
Total borrowed funds 6,283,199 169,907 5.45%
Total interest-bearing liabilities 32,381,639 633,635 3.95%
Noninterest-bearing deposits 9,476,576
Other liabilities 644,311
Total liabilities 42,502,526
Minority interest 37,859
Shareholders' equity:
Preferred equity 240,000
Common equity 4,973,999
Total shareholders' equity 5,213,999
Total liabilities and shareholders'
equity $47,754,384
Spread on average interest-bearing funds 3.62%
Taxable-equivalent net interest income
and net yield on interest-earning assets $939,781 4.52%
(1) Taxable-equivalent rates used where applicable.
(2) Net of unearned income and fees, net of related costs. Loans include
nonaccrual and restructured loans.
ZIONS BANCORPORATION AND SUBSIDIARIES
Net Income by Business Segment
(Unaudited)
Six Months
Three Months Ended Ended
June 30, March 31, June 30,
(In thousands) 2008 2008 2008
Zions First National Bank $25,875 $57,295 $83,170
California Bank & Trust 25,027 22,349 47,376
Amegy Corporation 28,666 24,639 53,305
National Bank of Arizona 5,084 7,982 13,066
Nevada State Bank 4,094 13,509 17,603
Vectra Bank Colorado 3,422 5,624 9,046
The Commerce Bank of Washington 3,542 3,295 6,837
Other (23,512) (27,944) (51,456)
$72,198 $106,749 $178,947
Actual and Pro Forma Capital Ratios - Consolidated
(Unaudited)
Zions Bancorporation
Pro Forma Regulatory
March 31, June 30, June 30, Well-
2008 2008 2008 Capitalized
Tangible equity 6.20% 5.97% 6.06% na
Tier 1 capital (to average assets) 7.18% 7.20%(1) 7.29%(2) 5.00%
Tier 1 capital (to risk-weighted
assets) 7.64% 7.50%(1) 7.59%(2) 6.00%
Total capital (to risk-weighted
assets) 11.83% 11.70%(1) 11.79%(2) 10.00%
(1) Preliminary estimate.
(2) Estimated including the $46.7 million of preferred stock issued July
2008.
SOURCE Zions Bancorporation
Copyright © 2008, PRNewswire
Copyright © 2008, NewsBlaze,
Daily NewsTags: Banking and Finance, utah
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