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Section 1: 8-K (1Q19 EARNINGS RELEASE)

Document




 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 22, 2019
ZIONS BANCORPORATION, NATIONAL ASSOCIATION
(Exact name of registrant as specified in its charter)
United States of America
001-12307
87-0189025
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
One South Main, Salt Lake City, Utah
84133
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code
(801) 844-7637
 
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))








Item 2.02    Results of Operations and Financial Condition.

On April 22, 2019, Zions Bancorporation, National Association (“the Bank”) announced its financial results for the quarter ended March 31, 2019 and its intent to host a conference call to discuss such results at 5:30 p.m. Eastern Time on April 22, 2019. The press release announcing the financial results for the quarter ended March 31, 2019 is furnished as Exhibit 99.1 and incorporated herein by reference. A presentation to be used in conjunction with the conference call regarding the Company’s first quarter financial results is furnished as Exhibit 99.2 and incorporated herein by reference.

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

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits.

The following exhibits are furnished as part of this Current Report on Form 8-K:

Exhibit 99.1Press Release dated April 22, 2019 (furnished herewith).

Exhibit 99.2Earnings Release Presentation dated April 22, 2019 (furnished herewith).



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


ZIONS BANCORPORATION, NATIONAL ASSOCIATION
 
 
 
 
 
 
 
 
 
 
By:
/s/ Paul E. Burdiss
 
 
Name:
Paul E. Burdiss
 
 
Title:
Executive Vice President and Chief Financial Officer
                    

Date: April 22, 2019




(Back To Top)

Section 2: EX-99.1 (PRESS RELEASE DATED APRIL 22, 2019)

Exhibit

ZIONS BANCORPORATION, N.A.
Press Release – Page 1
April 22, 2019


Zions Bancorporation, N.A.
One South Main
Salt Lake City, UT 84133
April 22, 2019
397601717_zionsbancorporation2019331aa.jpg
www.zionsbancorporation.com
First Quarter 2019 Financial Results: FOR IMMEDIATE RELEASE
 
Investor and Media Contact: James Abbott (801) 844-7637
Zions Bancorporation, N.A. Reports: 1Q19 Net Earnings¹ of $205 million, diluted EPS of $1.04
compared with 1Q18 Net Earnings¹ of $231 million, diluted EPS of $1.09,
and 4Q18 Net Earnings¹ of $217 million, diluted EPS of $1.08

FIRST QUARTER RESULTS
$1.04
 
$205 million
 
3.68%
 
11.3%
Earnings per diluted common share
 
Net Earnings 1
 
Net interest margin (“NIM”)
 
Common Equity
Tier 1

FIRST QUARTER HIGHLIGHTS²
 
 
 
Net Interest Income and NIM
Net interest income was $576 million, up 6%
NIM was 3.68%, compared with 3.56%
Average noninterest-bearing deposits were generally stable at $23.2 billion, compared with $23.4 billion
 
 
 
Operating Performance
Pre-provision net revenue ("PPNR") was $284 million, up 7%
Adjusted PPNR³ was $285 million, up 8%
Noninterest expense was $430 million, up 3%
Adjusted noninterest expense³ was $431 million, up 3%
Efficiency ratio³ was 60.2%, compared with 61.3%
 
 
 
Loans and Credit Quality
Net loans and leases were $47.6 billion, up $2.5 billion, or 6%
Classified loans were $729 million, down 29%; and nonperforming assets were $240 million, down 39%
Provision for credit losses was $4 million, compared with $(47) million
Zero net charge-offs in the current quarter, compared with 0.05% of average loans
 
 
 
Capital Returns
Return on average tangible common equity³ was 13.9%, compared with 15.5%
Common stock repurchases of $275 million, 5.5 million shares, or 2.9% of shares outstanding as of December 31, 2018
Common dividend increased to $0.30 per share from $0.20 per share
 
 
 
Notable Items
Successful implementation of core system upgrade for commercial loans in February
 
CEO COMMENTARY
 
Harris H. Simmons, Chairman and CEO, commented, “First quarter results were fundamentally strong, with earnings per share of $1.04 as compared to $1.09 a year ago. However, the prior year’s first quarter included interest recoveries on several large loans equal to $0.04 per share and a negative provision for credit losses equal to $0.17 per share. Adjusted pre-provision net revenue per share increased 16%; at the same time, credit quality remained strong, with net charged-off loans, as a percentage of average loans and leases, of zero, compared to 0.05% a year ago. Average deposits increased 4% - with noninterest-bearing deposits declining less than 1% - and average loans and leases increased 5% over the prior year period. Economic conditions remain strong throughout the Bank’s market area and we are encouraged by the opportunities we’re seeing for continued healthy growth.”

Mr. Simmons continued, “During the quarter we celebrated the successful completion of the second stage of our three-stage multi-year project to replace the Bank’s core loan and deposit systems. With this milestone reached, Zions now has all its retail, commercial and commercial real estate loans on a new modern core platform.”
OPERATING PERFORMANCE3
397601717_chart-ab52b71d61ce5d6dafe.jpg397601717_chart-a3f572825c7c5bebb01.jpg
¹ Net Earnings is net earnings applicable to common shareholders.
² Comparisons noted in the bullet points are calculated for the current quarter versus the same prior-year period, unless otherwise specified.
³ For information on non-GAAP financial measures and the reasons for which the Bank presents these numbers, see pages 16-18.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 2
April 22, 2019

Comparisons noted in the sections below are calculated for the current quarter versus the same prior-year period, unless otherwise specified. Growth rates of 100% or more are rendered as not meaningful as they are generally reflective of a low initial starting point.
RESULTS OF OPERATIONS
Net Interest Income and Margin
 
 
 
 
 
 
 
1Q19 - 4Q18
 
1Q19 - 1Q18
(In millions)
1Q19
 
4Q18
 
1Q18
 
$
 
%
 
$
 
%
Interest and fees on loans
$
570

 
$
555

 
$
497

 
$
15

 
3
%
 
$
73

 
15
%
Interest on money market investments
9

 
8

 
6

 
1

 
13

 
3

 
50

Interest on securities
96

 
93

 
86

 
3

 
3

 
10

 
12

Total interest income
675

 
656

 
589

 
19

 
3

 
86

 
15

Interest on deposits
57

 
48

 
20

 
9

 
19

 
37

 
NM

Interest on short and long-term borrowings
42

 
32

 
27

 
10

 
31

 
15

 
56

Total interest expense
99

 
80

 
47

 
19

 
24

 
52

 
NM

Net interest income
$
576

 
$
576

 
$
542

 
$

 

 
$
34

 
6

 
 
 
 
 
 
 
bps
 
 
 
bps
 
 
Yield on interest-earning assets
4.31
%
 
4.17
%
 
3.87
%
 
14

 
 
 
44

 
 
Rate paid on total deposits and interest-bearing liabilities
0.67
%
 
0.54
%
 
0.33
%
 
13

 
 
 
34

 
 
Cost of total deposits, annualized
0.43
%
 
0.35
%
 
0.15
%
 
8

 
 
 
28

 
 
Net interest margin
3.68
%
 
3.67
%
 
3.56
%
 
1

 
 
 
12

 
 
Net interest income increased $34 million, or 6%, to $576 million in the first quarter of 2019 from $542 million in the first quarter of 2018. Total interest income increased $86 million primarily due to a $73 million increase in interest and fees on loans, resulting from increases in consumer and commercial loans and short-term interest rates. Interest expense increased $52 million primarily due to the increase in short-term interest rates, as the Bank’s cost of interest-bearing funding increased from 0.33% to 0.67%.
The yield on interest earning assets was 4.31%, an increase of 14 basis points, compared with the fourth quarter of 2018, and 44 basis points, compared with the first quarter of 2018. When adjusted for interest recoveries of $11 million in the first quarter of 2018, using $1 million per loan as the reporting threshold, the yield on interest earning assets increased 51 basis points from that period. During the first quarter of 2019 and the fourth quarter of 2018, the Bank did not experience any interest income recoveries of at least $1 million per loan.
The rate paid on total deposits and interest-bearing liabilities increased to 0.67% for the first quarter of 2019, from 0.54% for the fourth quarter of 2018, and 0.33% for the first quarter of 2018, primarily as a result of increases in short-term interest rates. The total annualized cost of total deposits for the first quarter of 2019 was 0.43%, compared with 0.35% for the fourth quarter of 2018, and 0.15% for the first quarter of 2018.
The net interest margin increased to 3.68% in the first quarter of 2019, compared with 3.67% in the fourth quarter of 2018, and 3.56% in the same prior year period due to the aforementioned items. Excluding the previously mentioned interest income recoveries in the first quarter of 2018, the net interest margin increased 19 basis points.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 3
April 22, 2019

Noninterest Income
 
 
 
 
 
 
 
1Q19 - 4Q18
 
1Q19 - 1Q18
(In millions)
1Q19
 
4Q18
 
1Q18
 
$
 
%
 
$
 
%
Service charges and fees on deposit accounts
$
40

 
$
41

 
$
42

 
$
(1
)
 
(2
)%
 
$
(2
)
 
(5
)%
Other service charges, commissions and fees
54

 
59

 
55

 
(5
)
 
(8
)
 
(1
)
 
(2
)
Wealth management and trust income
13

 
13

 
12

 

 

 
1

 
8

Loan sales and servicing income
5

 
6

 
6

 
(1
)
 
(17
)
 
(1
)
 
(17
)
Capital markets and foreign exchange
8

 
9

 
8

 
(1
)
 
(11
)
 

 

Customer-related fees
120

 
128

 
123

 
(8
)
 
(6
)
 
(3
)
 
(2
)
Dividends and other investment income
9

 
10

 
11

 
(1
)
 
(10
)
 
(2
)
 
(18
)
Securities gains (losses), net
1

 
2

 

 
(1
)
 
(50
)
 
1

 
NM

Other
2

 

 
4

 
2

 
NM

 
(2
)
 
(50
)
Total noninterest income
$
132

 
$
140

 
$
138

 
$
(8
)
 
(6
)
 
$
(6
)
 
(4
)
Total noninterest income for the first quarter of 2019 decreased by $6 million, or 4%, to $132 million from $138 million for the first quarter of 2018. Customer-related fees decreased $3 million, which was largely attributable to an unfavorable impact from the earnings credit rate associated with noninterest bearing demand deposits and softness in retail and small business service charges.
Dividends and other investment income decreased $2 million primarily as a result of increases in the market values of the Company’s Small Business Investment Company (“SBIC”) investments in the first quarter of 2018 that did not reoccur in the first quarter of 2019. Other noninterest income decreased $2 million primarily due to a decrease in credit valuation adjustments on client-related derivatives, partially offset by a gain on the sale of a minor business line.
Noninterest Expense
 
 
 
 
 
 
 
1Q19 - 4Q18
 
1Q19 - 1Q18
(In millions)
1Q19
 
4Q18
 
1Q18
 
$
 
%
 
$
 
%
Salaries and employee benefits
$
287

 
$
270

 
$
269

 
$
17

 
6
 %
 
$
18

 
7
 %
Occupancy, net
33

 
35

 
31

 
(2
)
 
(6
)
 
2

 
6

Furniture, equipment and software, net
32

 
31

 
33

 
1

 
3

 
(1
)
 
(3
)
Other real estate expense, net
(1
)
 

 

 
(1
)
 
NM

 
(1
)
 
NM

Credit-related expense
6

 
6

 
7

 

 

 
(1
)
 
(14
)
Professional and legal services
11

 
15

 
12

 
(4
)
 
(27
)
 
(1
)
 
(8
)
Advertising
5

 
6

 
5

 
(1
)
 
(17
)
 

 

FDIC premiums
6

 
6

 
13

 

 

 
(7
)
 
(54
)
Other
51

 
51

 
49

 

 

 
2

 
4

Total noninterest expense
$
430

 
$
420

 
$
419

 
$
10

 
2

 
$
11

 
3

Adjusted noninterest expense 1
$
431

 
$
418

 
$
419

 
$
13

 
3

 
$
12

 
3

1 
For information on non-GAAP financial measures, see pages 16-18.
Noninterest expense for the first quarter of 2019 was $430 million, an increase of 3%, when compared with $419 million for the first quarter of 2018. Salaries and employee benefits increased $18 million, primarily due to a $6 million increase in base salaries resulting from annual salary merit increases and employee headcount, a $3 million increase in the Bank’s contribution to the employee 401(k) plan as a result of an increased matching contribution and

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ZIONS BANCORPORATION, N.A.
Press Release – Page 4
April 22, 2019

higher profit sharing as a result of improved profitability, and a $2 million increase in incentive compensation. The remaining $7 million increase was primarily a result of an increase in share-based compensation and employee medical expenses, and a decline in deferred salaries.
The increase in the aforementioned salaries and employee benefits were partially offset by a $7 million decrease in FDIC premiums. The decrease in FDIC premiums is primarily due to the elimination of the FDIC surcharge for large banks because the required Deposit Insurance Fund reserve ratio has been met.
Our efficiency ratio was 60.2% in the first quarter of 2019, compared with 57.8% in the fourth quarter of 2018, and 61.3% in the first quarter of 2018. Adjusted noninterest expense for the first quarter of 2019 increased $12 million to $431 million, compared with $419 million for the same prior year period. For information on non-GAAP financial measures, including differences between noninterest expense and adjusted noninterest expense, see pages 16-18.
Income Taxes
Our effective income tax rate was 22.3% for the first quarter of 2019, compared with 22.1% for the fourth quarter of 2018 and 22.7% for the first quarter of 2018.
BALANCE SHEET ANALYSIS
Asset Quality
 
 
 
 
 
 
 
1Q19 - 4Q18
 
1Q19 - 1Q18
(In millions)
1Q19
 
4Q18
 
1Q18
 
bps
 
 
 
bps
 
 
Ratio of nonperforming assets to loans and leases and other real estate owned
0.50
%
 
0.55
 %
 
0.87
%
 
(5
)
 
 
 
(37
)

 
Annualized ratio of net loan and lease charge-offs (recoveries) to average loans
%
 
(0.07
)%
 
0.05
%
 
7

 
 
 
(5
)
 
 
Ratio of allowance for loan losses to loans and leases, at period end
1.04
%
 
1.06
 %
 
1.05
%
 
(2
)
 
 
 
(1
)
 
 
 
 
 
 
 
 
 
$
 
%
 
$
 
%
Classified loans
$
729

 
$
698

 
$
1,023

 
$
31

 
4
 %
 
$
(294
)
 
(29
)%
Nonperforming assets
240

 
256

 
392

 
(16
)
 
(6
)
 
(152
)
 
(39
)
Net loan and lease charge-offs (recoveries)

 
(8
)
 
5

 
8

 
NM

 
(5
)
 
NM

Provision for credit losses
4

 
6

 
(47
)
 
(2
)
 
(33
)
 
51

 
NM

Asset quality improved when compared with the same prior year period. Nonperforming assets declined 6% compared with the fourth quarter of 2018, and 39% from the first quarter of 2018 largely due to improvements in the oil and gas-related portfolio. The ratio of nonaccrual loans and accruing loans past due 90 days or more to loans and leases was 0.51%, a reflection of a relatively benign credit environment and disciplined underwriting.
The Bank recorded a $4 million provision for credit losses during the first quarter of 2019, compared with $6 million during the fourth quarter of 2018, and $(47) million for the first quarter of 2018. The provision for credit losses reflects improved loan growth and generally stable asset quality. The allowance for loan losses was $497 million at

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ZIONS BANCORPORATION, N.A.
Press Release – Page 5
April 22, 2019

March 31, 2019, compared with $473 million at March 31, 2018, or 1.04% and 1.05% of loans and leases, respectively.
Loans and Leases
 
 
 
 
 
 
 
1Q19 - 4Q18
 
1Q19 - 1Q18
(In millions)
1Q19
 
4Q18
 
1Q18
 
$
 
%
 
$
 
%
Loans held for sale
$
69

 
$
93

 
$
90

 
$
(24
)
 
(26
)%
 
$
(21
)
 
(23
)%
Loans and leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
24,598

 
24,162

 
23,140

 
436

 
2

 
1,458

 
6

Commercial real estate
11,530

 
11,125

 
11,122

 
405

 
4

 
408

 
4

Consumer
11,478

 
11,427

 
10,821

 
51

 

 
657

 
6

Loans and leases, net of unearned income and fees
47,606

 
46,714

 
45,083

 
892

 
2

 
2,523

 
6

Less allowance for loan losses
497

 
495

 
473

 
2

 

 
24

 
5

Loans held for investment, net of allowance
$
47,109

 
$
46,219

 
$
44,610

 
$
890

 
2

 
$
2,499

 
6

Loans and leases, net of unearned income and fees, increased $2.5 billion, or 6%, to $47.6 billion at March 31, 2019 from $45.1 billion at March 31, 2018. Within commercial loans, municipal and owner-occupied loans increased $475 million and $409 million, respectively. Approximately $244 million of the increase in commercial real estate loans was primarily related to draws on existing construction loan commitments. The growth in consumer loans was primarily due to a $526 million increase in 1-4 family residential loans. Unfunded lending commitments and letters of credit increased to $22.4 billion at March 31, 2019, compared with $21.0 billion at March 31, 2018.
Deposits
 
 
 
 
 
 
 
1Q19 - 4Q18
 
1Q19 - 1Q18
(In millions)
1Q19
 
4Q18
 
1Q18
 
$
 
%
 
$
 
%
Noninterest-bearing demand
$
23,259

 
$
23,645

 
$
23,909

 
$
(386
)
 
(2
)%
 
$
(650
)
 
(3
)%
Interest-bearing:
 
 
 
 
 
 
 
 
 
 
 
 
 
Savings and money market
26,348

 
26,120

 
25,473

 
228

 
1

 
875

 
3

Time
4,928

 
4,336

 
3,581

 
592

 
14

 
1,347

 
38

Total deposits
$
54,535

 
$
54,101

 
$
52,963

 
$
434

 
1

 
$
1,572

 
3

Total deposits increased by $1.6 billion, or 3%, to $54.5 billion from $53.0 billion. Average total deposits increased to $53.9 billion for the first quarter of 2019, compared with $52.0 billion for the first quarter of 2018. Average noninterest bearing deposits were generally stable at $23.2 billion for the first quarter of 2019, compared with $23.4 billion for the first quarter of 2018, and were 43% and 45% of average total deposits, respectively, for the same periods.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 6
April 22, 2019

Shareholders’ Equity
 
 
 
 
 
 
 
1Q19 - 4Q18
 
1Q19 - 1Q18
(In millions)
1Q19
 
4Q18
 
1Q18
 
$
 
%
 
$
 
%
Shareholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
$
566

 
$
566

 
$
566

 
$

 
 %
 
$

 
 %
Common stock

 

 
4,346

 

 
NM

 
(4,346
)
 
NM

Additional paid-in capital
3,541

 
3,806

 

 
(265
)
 
(7
)
 
3,541

 
NM

Retained earnings
3,603

 
3,456

 
2,999

 
147

 
4

 
604

 
20

Accumulated other comprehensive income (loss)
(122
)
 
(250
)
 
(267
)
 
128

 
51

 
145

 
54

Total shareholders' equity
$
7,588

 
$
7,578

 
$
7,644

 
$
10

 

 
$
(56
)
 
(1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital distributions:
 
 
 
 
 
 
 
 
 
 
 
 
 
Common dividends paid
56

 
57

 
40

 
(1
)
 
(2
)
 
16

 
40

Bank common stock repurchased
275

 
250

 
115

 
25

 
10

 
160

 
NM

Total capital distributed to common shareholders
331

 
307

 
155

 
24

 
8

 
176

 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital distributed as a percentage of net earnings applicable to common shareholders
161
%
 
141
%
 
67
%
 

 

 

 


During the first quarter of 2019, the Bank’s common stock dividend was $0.30 per share, compared with $0.20 per share in the first quarter of 2018. Common stock repurchases during the current quarter totaled $275 million, or 5.5 million shares, which is equivalent to 2.9% of common stock outstanding as of December 31, 2018. During the last four quarters, the Bank repurchased $830 million, or 16.3 million shares, of common stock which is equivalent to 8.3% of common stock outstanding as of March 31, 2018. As of March 31, 2019, the Bank had 29.3 million ZIONW warrants outstanding that expire on May 22, 2020.
Tangible book value per common share increased to $32.92 at March 31, 2019, compared with $30.76 at March 31, 2018. Basel III common equity tier 1 (“CET1”) capital was $6.1 billion at March 31, 2019 and $6.3 billion at March 31, 2018. The estimated Basel III CET1 capital ratio was 11.3% at March 31, 2019 compared with 12.2% at March 31, 2018. For information on non-GAAP financial measures, see pages 16-18.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 7
April 22, 2019

Supplemental Presentation and Conference Call
Zions has posted a supplemental presentation to its website, which will be used to discuss these first quarter results at 5:30 p.m. ET this afternoon (April 22, 2019). Media representatives, analysts, investors and the public are invited to join this discussion by calling (253) 237-1247 (domestic and international) and entering the passcode 7691657 or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation website at zionsbancorporation.com. The webcast of the conference call will also be archived and available for 30 days.
About Zions Bancorporation, N.A.
Zions Bancorporation, N.A. is one of the nation's premier financial services companies with total assets of approximately $70 billion. Zions operates under local management teams and distinct brands in 11 western states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington and Wyoming. The Bank is a national leader in Small Business Administration lending and public finance advisory services. The Bank has been the recipient of many local and national awards, primarily reflecting its strong customer service and products. The Bank has a strong commitment to the communities in which it operates. In addition, Zions is included in the S&P 500 and NASDAQ Financial 100 indices. Investor information and links to local banking brands can be accessed at zionsbancorporation.com.
Forward-Looking Information
This earnings release includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Statements in the earnings release that are based on other than historical information, or that express the Bank’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 reflect, among other things, our current expectations, all of which are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, market trends, industry results or regulatory outcomes to differ materially from those expressed or implied by such forward-looking statements.
Without limiting the foregoing, the words “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “would,” “targets,” “will” and the negative thereof and similar words and expressions are intended to identify forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about future financial and operating results. Actual results and outcomes may differ materially from those presented, either expressed or implied, in the release. Important risk factors that may cause such material differences include, but are not limited to, Zions’ ability to meet operating leverage goals; the rate of change of interest-sensitive assets and liabilities relative to changes in benchmark interest rates; the ability of the Bank to achieve anticipated benefits from its recently completed merger; the ability of the Bank to upgrade its core deposit system and implement new digital products in order to remain competitive with large national banks; and legislative, regulatory and economic

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ZIONS BANCORPORATION, N.A.
Press Release – Page 8
April 22, 2019

developments. These risks, as well as other factors, are discussed in the Bank’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (SEC) and available at the SEC’s Internet site (https://www.sec.gov/). In addition, you may obtain documents filed with the SEC by the Bank free of charge by contacting: Investor Relations, Zions Bancorporation, N.A., One South Main Street, 11th Floor, Salt Lake City, Utah 84133, (801) 844-7637.
Except as required by law, Zions Bancorporation, N.A. specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.



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ZIONS BANCORPORATION, N.A.
Press Release – Page 9
April 22, 2019

FINANCIAL HIGHLIGHTS
(Unaudited)
 
Three Months Ended
(In millions, except share, per share, and ratio data)
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
BALANCE SHEET 1
 
 
 
 
 
 
 
 
 
Loans held for investment, net of allowance
$
47,109

 
$
46,219

 
$
45,330

 
$
44,740

 
$
44,610

Total assets
69,195

 
68,746

 
66,731

 
66,457

 
66,481

Deposits
54,535

 
54,101

 
53,785

 
53,580

 
52,963

Total shareholders’ equity
7,588

 
7,578

 
7,553

 
7,621

 
7,644

STATEMENT OF INCOME
 
 
 
 
 
 
 
 
 
Net earnings applicable to common shareholders
$
205

 
$
217

 
$
215

 
$
187

 
$
231

Net interest income
576

 
576

 
565

 
548

 
542

Taxable-equivalent net interest income 2
582

 
582

 
570

 
553

 
547

Total noninterest income
132

 
140

 
136

 
138

 
138

Total noninterest expense
430

 
420

 
420

 
421

 
419

Adjusted pre-provision net revenue 2
285

 
305

 
291

 
270

 
265

Provision for credit losses
4

 
6

 
(11
)
 
12

 
(47
)
SHARE AND PER COMMON SHARE AMOUNTS
 
 
 
 
 
 
 
 
 
Net earnings per diluted common share
$
1.04

 
$
1.08

 
$
1.04

 
$
0.89

 
$
1.09

Dividends
0.30

 
0.30

 
0.30

 
0.24

 
0.20

Book value per common share 1
38.47

 
37.39

 
36.36

 
36.11

 
35.92

Tangible book value per common share 1, 2
32.92

 
31.97

 
31.08

 
30.91

 
30.76

Weighted average share price
47.71

 
46.61

 
52.80

 
55.19

 
53.82

Weighted average common and common-equivalent shares outstanding (in thousands)
195,241

 
199,048

 
205,765

 
209,247

 
210,243

Common shares outstanding (in thousands) 1
182,513

 
187,554

 
192,169

 
195,392

 
197,050

SELECTED RATIOS AND OTHER DATA
 
 
 
 
 
 
 
 
 
Return on average assets
1.26
%
 
1.34
 %
 
1.33
 %
 
1.19
 %
 
1.45
%
Return on average common equity
11.9
%
 
12.4
 %
 
12.1
 %
 
10.6
 %
 
13.3
%
Return on average tangible common equity 2
13.9
%
 
14.5
 %
 
14.2
 %
 
12.4
 %
 
15.5
%
Net interest margin
3.68
%
 
3.67
 %
 
3.63
 %
 
3.56
 %
 
3.56
%
Cost of total deposits, annualized
0.43
%
 
0.35
 %
 
0.28
 %
 
0.22
 %
 
0.15
%
Efficiency ratio 2
60.2
%
 
57.8
 %
 
58.8
 %
 
60.9
 %
 
61.3
%
Effective tax rate
22.3
%
 
22.1
 %
 
23.6
 %
 
22.1
 %
 
22.7
%
Ratio of nonperforming assets to loans and leases and other real estate owned
0.50
%
 
0.55
 %
 
0.64
 %
 
0.77
 %
 
0.87
%
Annualized ratio of net loan and lease charge-offs (recoveries) to average loans
%
 
(0.07
)%
 
(0.01
)%
 
(0.11
)%
 
0.05
%
Ratio of total allowance for credit losses to loans and leases outstanding 1
1.17
%
 
1.18
 %
 
1.17
 %
 
1.21
 %
 
1.16
%
Full-time equivalent employees
10,204

 
10,201

 
10,143

 
10,217

 
10,122

CAPITAL RATIOS AND DATA 1
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
$
6,124

 
$
6,245

 
$
6,331

 
$
6,360

 
$
6,333

Risk-weighted assets
54,404

 
53,591

 
52,493

 
52,012

 
51,779

Tangible common equity ratio
8.8
%
 
8.9
 %
 
9.1
 %
 
9.2
 %
 
9.3
%
Common equity tier 1 capital ratio
11.3
%
 
11.7
 %
 
12.1
 %
 
12.2
 %
 
12.2
%
Tier 1 leverage ratio
9.9
%
 
10.3
 %
 
10.5
 %
 
10.5
 %
 
10.5
%
Tier 1 risk-based capital ratio
12.3
%
 
12.7
 %
 
13.1
 %
 
13.3
 %
 
13.3
%
Total risk-based capital ratio
13.5
%
 
13.9
 %
 
14.6
 %
 
14.8
 %
 
14.8
%
1 
At period end.
2 
For information on non-GAAP financial measures, see pages 16-18.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 10
April 22, 2019

CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, shares in thousands)
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
(Unaudited)
 
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
ASSETS
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
536

 
$
614

 
$
517

 
$
468

 
$
470

Money market investments:
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
702

 
619

 
590

 
698

 
717

Federal funds sold and security resell agreements
438

 
1,461

 
560

 
558

 
696

Investment securities:
 
 
 
 
 
 
 
 
 
Held-to-maturity, at amortized cost (approximate fair value $762, $767, $734, $866 and $752)
764

 
774

 
751

 
878

 
768

Available-for-sale, at fair value
14,904

 
14,737

 
14,625

 
14,627

 
14,896

Trading account, at fair value
316

 
106

 
176

 
207

 
143

Total investment securities
15,984

 
15,617

 
15,552

 
15,712

 
15,807

Loans held for sale
69

 
93

 
61

 
84

 
90

Loans and leases, net of unearned income and fees
47,606

 
46,714

 
45,810

 
45,230

 
45,083

Less allowance for loan losses
497

 
495

 
480

 
490

 
473

Loans held for investment, net of allowance
47,109

 
46,219

 
45,330

 
44,740

 
44,610

Other noninterest-bearing investments
993

 
1,046

 
1,027

 
1,054

 
1,073

Premises, equipment and software, net
1,125

 
1,124

 
1,111

 
1,099

 
1,098

Goodwill and intangibles
1,014

 
1,015

 
1,015

 
1,015

 
1,016

Other real estate owned
6

 
4

 
4

 
5

 
5

Other assets
1,219

 
934

 
964

 
1,024

 
899

Total assets
$
69,195

 
$
68,746

 
$
66,731

 
$
66,457

 
$
66,481

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
23,259

 
$
23,645

 
$
24,067

 
$
24,007

 
$
23,909

Interest-bearing:
 
 
 
 
 
 
 
 
 
Savings and money market
26,348

 
26,120

 
25,462

 
25,562

 
25,473

Time
4,928

 
4,336

 
4,256

 
4,011

 
3,581

Total deposits
54,535

 
54,101

 
53,785

 
53,580

 
52,963

Federal funds purchased and other short-term borrowings
4,944

 
5,653

 
3,780

 
4,158

 
4,867

Long-term debt
1,228

 
724

 
879

 
383

 
383

Reserve for unfunded lending commitments
59

 
57

 
58

 
58

 
51

Other liabilities
841

 
633

 
676

 
657

 
573

Total liabilities
61,607

 
61,168

 
59,178

 
58,836

 
58,837

Shareholders’ equity:
 
 
 
 
 
 
 
 
 
Preferred stock, without par value; authorized 4,400 shares
566

 
566

 
566

 
566

 
566

Common stock ($0.001 par value; authorized 350,000 shares; issued and outstanding 182,513, 187,554, 192,169, 195,392, and 197,050 shares)

 

 

 
4,231

 
4,346

Additional paid-in-capital
3,541

 
3,806

 
4,052

 

 

Retained earnings
3,603

 
3,456

 
3,296

 
3,139

 
2,999

Accumulated other comprehensive income (loss)
(122
)
 
(250
)
 
(361
)
 
(315
)
 
(267
)
Total shareholders’ equity
7,588

 
7,578

 
7,553

 
7,621

 
7,644

Total liabilities and shareholders’ equity
$
69,195

 
$
68,746

 
$
66,731

 
$
66,457

 
$
66,481


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ZIONS BANCORPORATION, N.A.
Press Release – Page 11
April 22, 2019

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
Three Months Ended
(In millions, except share and per share amounts)
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Interest income:
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
570

 
$
555

 
$
537

 
$
514

 
$
497

Interest on money market investments
9

 
8

 
8

 
7

 
6

Interest on securities
96

 
93

 
86

 
85

 
86

Total interest income
675

 
656

 
631

 
606

 
589

Interest expense:
 
 
 
 
 
 
 
 
 
Interest on deposits
57

 
48

 
38

 
29

 
20

Interest on short- and long-term borrowings
42

 
32

 
28

 
29

 
27

Total interest expense
99

 
80

 
66

 
58

 
47

Net interest income
576

 
576

 
565

 
548

 
542

Provision for credit losses:
 
 
 
 
 
 
 
 
 
Provision for loan losses
2

 
7

 
(11
)
 
5

 
(40
)
Provision for unfunded lending commitments
2

 
(1
)
 

 
7

 
(7
)
Total provision for credit losses
4

 
6

 
(11
)
 
12

 
(47
)
Net interest income after provision for loan losses
572

 
570

 
576

 
536

 
589

Noninterest income:
 
 
 
 
 
 
 
 
 
Service charges and fees on deposit accounts
40

 
41

 
42

 
42

 
42

Other service charges, commissions and fees
54

 
59

 
59

 
55

 
55

Wealth management and trust income
13

 
13

 
12

 
14

 
12

Loan sales and servicing income
5

 
6

 
5

 
7

 
6

Capital markets and foreign exchange
8

 
9

 
7

 
7

 
8

Customer-related fees
120

 
128


125

 
125

 
123

Dividends and other investment income
9

 
10

 
11

 
11

 
11

Securities gains (losses), net
1

 
2

 
(1
)
 
1

 

Other
2

 

 
1

 
1

 
4

Total noninterest income
132

 
140

 
136

 
138

 
138

Noninterest expense:
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
287

 
270

 
264

 
266

 
269

Occupancy, net
33

 
35

 
33

 
32

 
31

Furniture, equipment and software, net
32

 
31

 
30

 
32

 
33

Other real estate expense, net
(1
)
 

 
1

 

 

Credit-related expense
6

 
6

 
5

 
7

 
7

Professional and legal services
11

 
15

 
12

 
14

 
12

Advertising
5

 
6

 
8

 
7

 
5

FDIC premiums
6

 
6

 
18

 
14

 
13

Other
51

 
51

 
49

 
49

 
49

Total noninterest expense
430

 
420

 
420

 
421

 
419

Income before income taxes
274

 
290

 
292

 
253

 
308

Income taxes
61

 
64

 
69

 
56

 
70

Net income
213

 
226

 
223

 
197

 
238

Preferred stock dividends
(8
)
 
(9
)
 
(8
)
 
(10
)
 
(7
)
Net earnings applicable to common shareholders
$
205

 
$
217

 
$
215

 
$
187

 
$
231

Weighted average common shares outstanding during the period:
 
 
 
 
 
 
 
 
Basic shares (in thousands)
184,767

 
189,169

 
192,973

 
195,583

 
196,722

Diluted shares (in thousands)
195,241

 
199,048

 
205,765

 
209,247

 
210,243

Net earnings per common share:
 
 
 
 
 
 
 
 
 
Basic
$
1.10

 
$
1.14

 
$
1.11

 
$
0.95

 
$
1.16

Diluted
1.04

 
1.08

 
1.04

 
0.89

 
1.09


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ZIONS BANCORPORATION, N.A.
Press Release – Page 12
April 22, 2019

Loan Balances Held for Investment by Portfolio Type
(Unaudited)
(In millions)
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
14,758

 
$
14,513

 
$
14,096

 
$
14,134

 
$
14,125

Leasing
312

 
327

 
332

 
358

 
371

Owner occupied
7,754

 
7,661

 
7,548

 
7,365

 
7,345

Municipal
1,774

 
1,661

 
1,563

 
1,388

 
1,299

Total commercial
24,598

 
24,162

 
23,539

 
23,245

 
23,140

Commercial real estate:
 
 
 
 
 
 
 
 
 
Construction and land development
2,343

 
2,186

 
2,295

 
2,202

 
2,099

Term
9,187

 
8,939

 
8,752

 
8,771

 
9,023

Total commercial real estate
11,530

 
11,125

 
11,047

 
10,973

 
11,122

Consumer:
 
 
 
 
 
 
 
 
 
Home equity credit line
2,884

 
2,937

 
2,884

 
2,825

 
2,792

1-4 family residential
7,294

 
7,176

 
7,039

 
6,861

 
6,768

Construction and other consumer real estate
636

 
643

 
644

 
661

 
599

Bankcard and other revolving plans
489

 
491

 
483

 
490

 
488

Other
175

 
180

 
174

 
175

 
174

Total consumer
11,478

 
11,427

 
11,224

 
11,012

 
10,821

Loans and leases, net of unearned income and fees
$
47,606

 
$
46,714

 
$
45,810

 
$
45,230

 
$
45,083


Nonperforming Assets
(Unaudited)
(In millions)
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans1
$
234

 
$
252

 
$
288

 
$
342

 
$
387

Other real estate owned
6

 
4

 
4

 
5

 
5

Total nonperforming assets
$
240

 
$
256

 
$
292

 
$
347

 
$
392

Ratio of nonperforming assets to loans1 and leases and other real estate owned
0.50
%
 
0.55
%
 
0.64
%
 
0.77
%
 
0.87
%
Accruing loans past due 90 days or more
$
8

 
$
10

 
$
12

 
$
5

 
$
16

Ratio of accruing loans past due 90 days or more to loans1 and leases
0.02
%
 
0.02
%
 
0.03
%
 
0.01
%
 
0.04
%
Nonaccrual loans and accruing loans past due 90 days or more
$
242

 
$
262

 
$
300

 
$
347

 
$
403

Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans1 and leases
0.51
%
 
0.56
%
 
0.65
%
 
0.77
%
 
0.89
%
Accruing loans past due 30-89 days
$
142

 
$
65

 
$
87

 
$
119

 
$
98

Restructured loans included in nonaccrual loans
76

 
90

 
90

 
77

 
86

Restructured loans on accrual
98

 
112

 
114

 
104

 
143

Classified loans
729

 
698

 
784

 
947

 
1,023

1 Includes loans held for sale.

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ZIONS BANCORPORATION, N.A.
Press Release – Page 13
April 22, 2019