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Company Release - 01/25/2005 16:10 | |
Strong Loan Growth and Net Interest Margin Improvement Drive Performance SALT LAKE CITY, Jan. 25 /PRNewswire-FirstCall/ -- Zions Bancorporation ("Zions" or "the Company") (Nasdaq: ZION) today reported record fourth-quarter net income of $105.0 million, or $1.15 per diluted share. Net income and earnings per diluted share increased 9.8% and 9.5% over the $95.6 million, or $1.05 per diluted share for the fourth quarter of 2003. The return on average common equity was 15.13% in the fourth quarter of 2004, up from 15.05% for the same period in 2003. Net income for 2004 increased 20.2% to a record $406.0 million, or $4.47 per diluted share, from the $337.8 million, or $3.72 per diluted share for 2003. The return on average common equity for 2004 was 15.27%, compared to 13.69% for 2003. "We are very pleased with the record earnings for both the quarter and all of 2004," stated Harris H. Simmons, chairman and chief executive officer. "Continued strong loan growth, coupled with modest core deposit growth, good credit quality and an improving net interest margin combined to produce strong revenue and earnings growth. We also experienced favorable changes in the mix of both earning assets and funding sources, which more than offset the challenges of a flattening yield curve." Loan and Deposit Growth Average loans and leases for the fourth quarter of 2004 were $21.9 billion, up $646.3 million or 12.2%, annualized from the third quarter 2004 average balance of $21.2 billion, and up 11.9% from the $19.5 billion average balance for the fourth quarter of 2003. Strong loan demand was experienced in virtually all major loan categories and was diversified geographically. Average deposits for the fourth quarter of 2004 increased to $23.1 billion, an increase of 7.3%, annualized over the average balance for the third quarter of 2004, and up 11.4% over the average balance for the fourth quarter of 2003. Average core deposits increased 7.6%, annualized for the quarter, and 12.0% year over year. Average noninterest-bearing demand deposits increased $334 million or 20.7%, annualized compared to the third quarter of 2004, and $1.1 billion or 20.1% year over year. Loan growth exceeded deposit growth during both the quarter and the full year 2004. Loan securitizations and short-term borrowings were used to fund the excess loan growth. Net Interest Income Taxable-equivalent net interest income increased 12.2% for the quarter to $318.5 million compared to $283.9 million for the fourth quarter of 2003. The increase reflects the previously discussed loan and deposit growth coupled with an improved net interest margin. For the fourth quarter of 2004, the net interest margin was 4.49%, compared to 4.25% for the third quarter of 2004 and 4.39% for the fourth quarter of 2003. The higher margin is attributable to increases in interest rates on variable rate loans, significant increases in average noninterest-bearing deposit accounts and substantial decreases in short-term investments. Noninterest Income For the fourth quarter of 2004, noninterest income decreased 13.2% to $95.0 million compared with $109.5 million for the third quarter of 2004, and 7.5% compared with $102.8 million for the fourth quarter of 2003. Deposit service charges declined primarily as a result of higher earnings credit rates on commercial transaction accounts as market interest rates rose. Loan sales and servicing income for the quarter decreased $3.0 million compared to the fourth quarter of 2003 due largely to fewer loan sales in 2004 and reduced cash flows from loan securitizations. Market making, trading and nonhedge derivative income declined $1.5 million compared with the same period in 2003. The decrease included a $2.9 million decline in trading income resulting from a lower margin per trade. Net equity securities losses were $4.7 million for the fourth quarter of 2004, which consisted primarily of a $4.0 million equity investment write down, compared with net equity securities gains of $4.3 million in the third quarter. For the full year 2004, net equity securities losses were $9.8 million. This compares to net gains of $63.8 million in 2003, which included two large gains on the sales of publicly traded securities. Noninterest Expense Noninterest expense for the fourth quarter of 2004 was $238.2 million, an increase of 2.3% from the $232.8 million in the third quarter of 2004, and 9.3% from the $218.0 million for the fourth quarter of 2003. The efficiency ratio for the fourth quarter of 2004 was 57.6% compared to 56.8% for the third quarter of 2004 and 56.4% for the fourth quarter of 2003. Salaries and employee benefits increased from the third quarter of 2004, due principally to increases in incentive plan costs and higher staff levels resulting from business expansion. Legal and professional services increased over the third quarter primarily as a result of additional consulting services for various ongoing projects relating to systems conversions and upgrades. Restructuring costs of $0.6 million represent severance-related costs associated with the previously announced reorganization of Zions Bank International Ltd. Provision for Income Taxes During the third quarter of 2004, the Company signed an agreement that confirmed and implemented its award of a $100 million allocation of tax credit authority under the Community Development Financial Institutions Fund established by the U.S. Government. Under the program, Zions will invest $100 million in a wholly-owned subsidiary that will make qualifying loans and investments, for which Zions will receive Federal income tax credits that will be recognized over the next seven years. The effect of these tax credits on the fourth quarter of 2004 was to reduce income tax expense by approximately $2.9 million, which was substantially all of the $3.0 million credit that the Company was entitled to claim in 2004. We currently estimate that on an ongoing basis, this program will reduce quarterly tax expense by approximately $0.8 to $1.0 million in the first quarter of 2005 and by approximately $5 million for the full year 2005. Asset Quality The ratio of nonperforming assets to net loans and leases and other real estate owned improved to 0.37% at December 31, 2004, compared to 0.42% at September 30, 2004 and 0.49% at December 31, 2003. The ratio is now at its lowest point in the past 27 quarters. Net loan and lease charge-offs were $11.5 million or 0.21% of average loans on an annualized basis for the fourth quarter of 2004, and included a loss of $3.8 million on a letter of credit in which customer fraud was involved. This compares with $10.0 million or 0.19%, annualized for the third quarter of 2004 and $16.6 million or 0.34%, annualized for the fourth quarter of 2003. At December 31, 2004, the allowance for loan losses as a percentage of net loans and leases was 1.20%, a decrease from 1.35% at December 31, 2003 and 1.25% at September 30, 2004. In addition, at December 31, 2004 the allowance was 374.4% of nonperforming loans. The combined allowances for credit losses (allowance for loan losses plus the allowance for unfunded lending commitments) of $283.8 million were 1.25% of net loans and leases at year-end 2004. The provision for loan losses for the fourth quarter of 2004 was $13.2 million compared to $9.4 million provided during the third quarter of 2004 and $16.0 million for the fourth quarter of 2003. The declining trend in the provision since last year corresponds with the improvements in credit quality that have been experienced in the loan portfolio. Including the provision for unfunded lending commitments that is part of noninterest expense, the aggregate provisions for credit losses were $13.8 million for the fourth quarter of 2004 compared to $10.3 million for the third quarter. Capital Management During the fourth quarter of 2004, Zions repurchased 386,614 shares of its common stock at an average price of $64.66 per share. For the twelve months ended December 31, 2004, the Company repurchased 1,734,055 shares at an average per share price of $60.48. As of December 31, 2004, the existing repurchase program had been fully utilized. Weighted average common and common-equivalent shares outstanding for the fourth quarter of 2004 were 91,342,328 compared to 90,956,674 for the third quarter of 2004 and 91,407,363 for the fourth quarter of 2003. The increase in shares from the third quarter of 2004 reflects the effects of a higher average stock price for the quarter, which increased common-equivalent shares. The Company's tangible common equity ratio was 6.80% at December 31, 2004, compared to 6.74% at September 30, 2004 and 6.53% at December 31, 2003. Conference Call Zions will host a conference call to discuss these fourth quarter results at 5:30 p.m. Eastern Time this afternoon (January 25, 2005). Media representatives, analysts and the public are invited to listen to this discussion by calling 1-800-299-9630, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation Web site at www.zionsbancorporation.com. A replay of the call will be available from approximately 7:30 p.m. Eastern Time on Tuesday, January 25 through midnight Eastern Time on Tuesday, February 1, by dialing 1-888-286-8010 and entering the passcode (79437795). The webcast of the conference call will also be archived and available for thirty 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. Under local management teams and community identities, Zions operates approximately 400 full-service banking offices in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Utah and Washington. In addition, Zions is a national leader in SBA lending, public finance advisory services, agricultural finance and electronic bond trading. The Company is also included in the S&P 500 Index. Investor information and links to subsidiary banks can be accessed at 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: changes in general economic and financial market conditions, either nationally or locally in areas in which the Company conducts its operations; changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive 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. 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 Three Months Ended Years Ended
ratio data) December 31, December 31,
2004 2003 % Change 2004 2003 % Change
EARNINGS
Taxable-
equivalent
net interest
income $318,464 $283,866 12.19% $1,195,755 $1,118,416 6.92%
Taxable-
equivalent
revenue 413,505 386,619 6.95% 1,613,618 1,608,511 0.32%
Net interest
income 313,290 278,254 12.59% 1,174,496 1,095,494 7.21%
Noninterest
income 95,041 102,753 (7.51)% 417,863 490,095 (14.74)%
Provision for
loan losses 13,159 15,980 (17.65)% 44,067 69,940 (36.99)%
Noninterest
expense 238,172 217,967 9.27% 923,299 893,862 3.29%
Impairment
loss on
goodwill -- -- -- 602 75,628 (99.20)%
Income before
income taxes
and minority
interest 157,000 147,060 6.76% 624,391 546,159 14.32%
Income taxes 52,641 51,890 1.45% 220,126 213,751 2.98%
Minority
interest (622) (440) 41.36% (1,722) (7,185) (76.03)%
Income from
continuing
operations 104,981 95,610 9.80% 405,987 339,593 19.55%
Loss on
discontinued
operations -- -- -- -- (1,770) 100.00%
Net income 104,981 95,610 9.80% 405,987 337,823 20.18%
PER COMMON SHARE
Net income
(diluted) 1.15 1.05 9.52% 4.47 3.72 20.16%
Income from
continuing
operations
(diluted) 1.15 1.05 9.52% 4.47 3.74 19.52%
Loss on
discontinued
operations
(diluted) -- -- -- -- (0.02) 100.00%
Dividends 0.32 0.30 6.67% 1.26 1.02 23.53%
Book value 31.06 28.27 9.87%
SELECTED RATIOS
Return on
average assets 1.33% 1.32% 1.31% 1.20%
Return on
average
common equity 15.13% 15.05% 15.27% 13.69%
Efficiency
ratio 57.60% 56.38% 57.22% 55.65%
Net interest
margin 4.49% 4.39% 4.32% 4.45%
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)
(In thousands,
except share Three Months Ended
and ratio data) December 31,
2004 2003 % Change
AVERAGE BALANCES
Total assets $31,501,478 $28,761,614 9.53%
Securities 5,255,624 4,858,930 8.16%
Net loans and leases 21,866,761 19,539,294 11.91%
Goodwill 642,646 654,151 (1.76)%
Core deposit and other intangibles 58,956 72,499 (18.68)%
Total deposits 23,144,944 20,782,912 11.37%
Core deposits (1) 21,871,018 19,521,067 12.04%
Minority interest 23,176 20,297 14.18%
Shareholders' equity 2,760,077 2,520,280 9.51%
Weighted average common and
common-equivalent shares
outstanding 91,342,328 91,407,363 (0.07)%
AT PERIOD END
Total assets
Securities
Net loans and leases
Sold loans being serviced (2)
Allowance for loan losses
Allowance for unfunded
lending commitments
Goodwill
Core deposit and
other intangibles
Total deposits
Core deposits (1)
Minority interest
Shareholders' equity
Common shares outstanding
Average equity to
average assets 8.76% 8.76%
Common dividend payout 27.48% 28.24%
Tangible common equity ratio
Nonperforming assets
Accruing loans past due 90
days or more
Nonperforming assets to net
loans and leases and other
real estate owned at period end
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)
(In thousands,
except share Years Ended
and ratio data) December 31,
2004 2003 % Change
AVERAGE BALANCES
Total assets $30,936,148 $28,203,544 9.69%
Securities 5,200,306 4,447,008 16.94%
Net loans and leases 21,046,372 19,324,633 8.91%
Goodwill 647,965 710,709 (8.83)%
Core deposit and
other intangibles 64,695 77,472 (16.49)%
Total deposits 22,104,368 20,253,236 9.14%
Core deposits (1) 20,860,478 18,963,302 10.00%
Minority interest 22,637 21,790 3.89%
Shareholders' equity 2,658,983 2,468,176 7.73%
Weighted average common and
common-equivalent shares
outstanding 90,881,570 90,734,500 0.16%
AT PERIOD END
Total assets $31,469,834 $28,558,238 10.20%
Securities 5,121,215 4,818,017 6.29%
Net loans and leases 22,627,121 19,920,361 13.59%
Sold loans being serviced (2) 3,065,909 2,782,175 10.20%
Allowance for loan losses 271,117 268,506 0.97%
Allowance for unfunded
lending commitments 12,682 12,215 3.82%
Goodwill 642,645 654,152 (1.76)%
Core deposit and
other intangibles 55,440 68,747 (19.36)%
Total deposits 23,292,261 20,896,695 11.46%
Core deposits (1) 21,998,152 19,669,582 11.84%
Minority interest 23,359 19,776 18.12%
Shareholders' equity 2,789,979 2,540,023 9.84%
Common shares outstanding 89,829,947 89,840,638 (0.01)%
Average equity to average assets 8.60% 8.75%
Common dividend payout 28.23% 27.20%
Tangible common equity ratio 6.80% 6.53%
Nonperforming assets 84,286 97,964 (13.96)%
Accruing loans past due 90
days or more 16,375 24,231 (32.42)%
Nonperforming assets to
net loans and leases and
other real estate owned
at period end 0.37% 0.49%
(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
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2004 2003
EARNINGS
Taxable-
equivalent
net interest
income $318,464 $300,047 $289,630 $287,614 $283,866
Taxable-
equivalent
revenue 413,505 409,540 396,909 393,664 386,619
Net interest
income 313,290 294,778 284,245 282,183 278,254
Noninterest
income 95,041 109,493 107,279 106,050 102,753
Provision for
loan losses 13,159 9,363 10,301 11,244 15,980
Noninterest
expense 238,172 232,813 229,976 222,338 217,967
Impairment loss
on goodwill -- 602 -- -- --
Income before
income taxes
and minority
interest 157,000 161,493 151,247 154,651 147,060
Income taxes 52,641 58,140 54,631 54,714 51,890
Minority
interest (622) 858 (2,226) 268 (440)
Net income 104,981 102,495 98,842 99,669 95,610
PER COMMON SHARE
Net income
(diluted) 1.15 1.13 1.09 1.10 1.05
Dividends 0.32 0.32 0.32 0.30 0.30
Book value 31.06 30.39 29.37 29.23 28.27
SELECTED RATIOS
Return on
average
assets 1.33% 1.30% 1.28% 1.34% 1.32%
Return on
average common
equity 15.13% 15.23% 15.18% 15.54% 15.05%
Efficiency
ratio 57.60% 56.85% 57.94% 56.48% 56.38%
Net interest
margin 4.49% 4.25% 4.20% 4.32% 4.39%
ZIONS BANCORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)
(In thousands,
except share
and ratio data) Three Months Ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2004 2003
AVERAGE BALANCES
Total
assets $31,501,478 $31,368,578 $31,040,639 $29,822,933 $28,761,614
Securities 5,255,624 5,232,188 5,224,576 5,087,878 4,858,930
Net loans
and leases 21,866,761 21,220,481 20,969,643 20,117,675 19,539,294
Goodwill 642,646 645,462 650,160 653,678 654,151
Core deposit
and other
intangibles 58,956 62,923 67,031 69,953 72,499
Total
deposits 23,144,944 22,729,540 21,640,762 20,883,922 20,782,912
Core
deposits
(1) 21,871,018 21,463,026 20,409,823 19,680,319 19,521,067
Minority
interest 23,176 23,791 21,750 21,812 20,297
Shareholders'
equity 2,760,077 2,677,404 2,618,259 2,578,879 2,520,280
Weighted
average
common and
common-
equivalent
shares
out-
standing 91,342,328 90,956,674 90,658,259 90,905,218 91,407,363
AT PERIOD END
Total
assets $31,469,834 $30,731,040 $30,894,325 $29,789,703 $28,558,238
Securities 5,121,215 5,058,691 5,028,173 4,857,025 4,818,017
Net loans
and
leases 22,627,121 21,507,043 21,497,058 20,620,718 19,920,361
Sold loans
being
serviced
(2) 3,065,909 3,152,924 2,643,927 2,707,128 2,782,175
Allowance
for loan
losses 271,117 269,413 271,554 271,226 268,506
Allowance for
unfunded
lending
commitments 12,682 12,030 11,098 10,476 12,215
Goodwill 642,645 642,645 650,557 649,354 654,152
Core deposit
and other
intangibles 55,440 57,665 62,221 65,245 68,747
Total
deposits 23,292,261 23,165,131 22,470,488 21,485,880 20,896,695
Core
deposits
(1) 21,998,152 21,883,851 21,198,263 20,283,721 19,669,582
Minority
interest 23,359 24,481 21,721 23,847 19,776
Shareholders'
equity 2,789,979 2,724,261 2,636,451 2,621,965 2,540,023
Common
shares
out-
standing 89,829,947 89,638,753 89,752,384 89,693,704 89,840,638
Average
equity to
average
assets 8.76% 8.54% 8.43% 8.65% 8.76%
Common
dividend
payout 27.48% 28.10% 29.12% 28.26% 28.24%
Tangible
common
equity ratio 6.80% 6.74% 6.37% 6.56% 6.53%
Nonperforming
assets 84,286 91,105 106,750 109,487 97,964
Accruing loans
past due
90 days
or more 16,375 18,182 18,109 26,307 24,231
Nonperforming
assets to
net loans
and leases
and other
real estate
owned at
period end 0.37% 0.42% 0.50% 0.53% 0.49%
(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 December 31, September 30, December 31,
share amounts) 2004 2004 2003
(Unaudited) (Unaudited)
ASSETS
Cash and due from banks $850,998 $1,066,516 $1,119,351
Money market investments:
Interest-bearing deposits 1,251 2,893 884
Federal funds sold 130,086 106,957 54,850
Security resell agreements 461,750 698,569 512,960
Investment securities:
Held to maturity, at cost
(approximate market value
$641,783, $640,462 and $0) 641,659 639,372 --
Available for sale,
at market 4,189,486 3,986,046 4,437,793
Trading account, at market
(includes $163,248,
$120,825 and $211,943
transferred as collateral
under repurchase
agreements) 290,070 433,273 380,224
5,121,215 5,058,691 4,818,017
Loans:
Loans held for sale 196,736 151,199 176,886
Loans, leases and other
receivables 22,535,344 21,459,920 19,839,755
22,732,080 21,611,119 20,016,641
Less:
Unearned income
and fees, net of
related costs 104,959 104,076 96,280
Allowance for loan losses 271,117 269,413 268,506
Net loans 22,356,004 21,237,630 19,651,855
Other noninterest
bearing investments 665,198 666,214 584,377
Premises and equipment, net 409,210 404,226 407,825
Goodwill 642,645 642,645 654,152
Core deposit and
other intangibles 55,440 57,665 68,747
Other real estate owned 11,877 14,222 18,596
Other assets 764,160 774,812 666,624
$31,469,834 $30,731,040 $28,558,238
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing
demand $6,821,528 $6,656,856 $5,882,929
Interest-bearing:
Savings and
money market 13,349,347 13,446,840 12,044,499
Time under $100,000 1,387,784 1,388,649 1,507,628
Time $100,000 and over 1,294,109 1,281,280 1,227,113
Foreign 439,493 391,506 234,526
23,292,261 23,165,131 20,896,695
Securities sold,
not yet purchased 309,893 376,150 263,379
Federal funds purchased 1,841,092 1,069,430 1,370,619
Security repurchase
agreements 683,984 723,000 841,170
Other liabilities 429,129 539,694 442,020
Commercial paper 165,447 168,344 126,144
Federal Home Loan Bank
advances and
other borrowings:
One year or less 15,949 18,106 215,354
Over one year 228,152 228,733 231,440
Long-term debt 1,690,589 1,693,710 1,611,618
Total liabilities 28,656,496 27,982,298 25,998,439
Minority interest 23,359 24,481 19,776
Shareholders' equity:
Capital stock:
Preferred stock,
without par value;
authorized 3,000,000
shares; issued and
outstanding, none -- -- --
Common stock, without
par value; authorized
350,000,000 shares;
issued and outstanding
89,829,947, 89,638,753
and 89,840,638 shares 972,065 965,166 985,904
Retained earnings 1,830,064 1,753,934 1,538,677
Accumulated other
comprehensive income
(loss) (7,932) 9,240 19,041
Shares held in trust for
deferred compensation,
at cost (4,218) (4,079) (3,599)
Total shareholders'
equity 2,789,979 2,724,261 2,540,023
$31,469,834 $30,731,040 $28,558,238
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands,
except per
share Three Months Ended Years Ended
amounts) Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2004 2004 2003 2004 2003
Interest
income:
Interest
and fees
on loans $336,994 $315,590 $289,555 $1,243,399 $1,178,767
Interest on
loans held
for sale 1,443 932 1,545 5,038 8,280
Lease
financing 4,187 4,213 4,368 16,839 18,893
Interest on
money market
investments 4,826 4,994 2,701 16,355 13,011
Interest on
securities:
Held to
maturity --
taxable 1,743 1,765 -- 5,467 --
Held to
maturity --
nontaxable 5,972 6,000 -- 18,742 --
Available
for sale --
taxable 45,799 39,784 35,000 160,621 126,592
Available
for sale --
nontaxable 865 897 7,286 9,062 29,205
Trading
account 6,388 8,884 6,605 29,615 24,640
Total
interest
income 408,217 383,059 347,060 1,505,138 1,399,388
Interest expense:
Interest on
savings and
money market
deposits 35,201 33,048 25,530 121,189 111,616
Interest on
time and
foreign
deposits 17,352 15,692 15,245 61,177 71,875
Interest on
borrowed
funds 42,374 39,541 28,031 148,276 120,403
Total
interest
expense 94,927 88,281 68,806 330,642 303,894
Net
interest
income 313,290 294,778 278,254 1,174,496 1,095,494
Provision for
loan losses 13,159 9,363 15,980 44,067 69,940
Net
interest
income
after
provision
for loan
losses 300,131 285,415 262,274 1,130,429 1,025,554
Noninterest income:
Service charges
and fees on
deposit
accounts 32,023 33,486 32,580 131,683 129,846
Loan sales and
servicing
income 18,577 21,633 21,597 79,081 89,334
Other service
charges,
commissions
and fees 22,025 23,474 20,930 90,928 84,666
Trust and
investment
management
income 4,387 3,718 5,516 16,977 21,057
Income from
securities
conduit 8,503 9,104 8,145 35,185 29,421
Dividends and
other investment
income 8,015 7,157 7,672 31,812 28,508
Market making,
trading and
nonhedge
derivative
income 2,915 2,454 4,386 17,565 29,358
Equity
securities
gains (losses),
net (4,709) 4,277 (1,254) (9,765) 63,807
Fixed income
securities
gains (losses),
net 66 307 529 2,510 (17)
Other 3,239 3,883 2,652 21,887 14,115
Total
noninterest
income 95,041 109,493 102,753 417,863 490,095
Noninterest
expense:
Salaries and
employee
benefits 138,062 133,609 122,725 531,303 491,563
Occupancy,
net 18,511 18,734 17,987 73,716 70,986
Furniture and
equipment 16,453 16,612 17,166 65,781 65,462
Legal and
professional
services 8,715 6,568 8,062 32,390 26,039
Postage and
supplies 6,432 6,290 6,143 25,679 25,805
Advertising 4,930 4,789 5,103 19,747 18,212
Debt
extinguishment
cost -- -- -- -- 24,210
Impairment
losses on
long-lived
assets -- -- 118 712 2,652
Restructuring
charges 632 370 -- 1,068 1,872
Amortization
of core deposit
and other
intangibles 3,443 3,682 3,519 14,129 14,190
Provision for
unfunded
lending
commitments 652 932 -- 467 --
Other 40,342 41,227 37,144 158,307 152,871
Total
noninterest
expense 238,172 232,813 217,967 923,299 893,862
Impairment loss
on goodwill -- 602 -- 602 75,628
Income from
continuing
operations
before income
taxes and
minority
interest 157,000 161,493 147,060 624,391 546,159
Income taxes 52,641 58,140 51,890 220,126 213,751
Minority
interest (622) 858 (440) (1,722) (7,185)
Income from
continuing
operations 104,981 102,495 95,610 405,987 339,593
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Unaudited)
(In thousands,
except per share Three Months Ended Years Ended
amounts) Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2004 2004 2003 2004 2003
Discontinued operations:
Loss from operations
of discontinued
subsidiaries $-- $-- $-- $-- $(466)
Loss on sale -- -- -- -- (2,407)
Income tax benefit -- -- -- -- (1,103)
Loss on
discontinued
operations -- -- -- -- (1,770)
Net income $104,981 $102,495 $95,610 $405,987 $337,823
Weighted average
shares outstanding
during the period:
Basic shares 89,721 89,617 89,913 89,663 90,048
Diluted shares 91,342 90,957 91,407 90,882 90,734
Net income per
common share:
Basic:
Income from
continuing
operations $1.17 $1.14 $1.06 $4.53 $3.77
Loss on
discontinued
operations -- -- -- -- (0.02)
Net income $1.17 $1.14 $1.06 $4.53 $3.75
Diluted:
Income from
continuing
operations $1.15 $1.13 $1.05 $4.47 $3.74
Loss on
discontinued
operations -- -- -- -- (0.02)
Net income $1.15 $1.13 $1.05 $4.47 $3.72
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
(Unaudited)
Year Ended December 31, 2004
Accumulated Other Comprehensive Income (Loss)
Net
Unrealized
Gains (Losses) Net
on Investments, Unrealized
Retained Gains (Losses)
Common Retained Interests on Derivative
(In thousands) Stock Earnings and Other Instruments
Balance,
December 31, 2003 $985,904 $1,538,677 $24,015 $10,716
Comprehensive income:
Net income 405,987
Other comprehensive
income, net of tax:
Net realized and
unrealized holding
losses during the
year, net of
income tax benefit
of $1,817 (2,933)
Foreign currency
translation 803
Reclassification
for net realized
gains recorded
in operations,
net of income tax
expense of $1,307 (2,111)
Net unrealized
losses on derivative
instruments, net of
reclassification
to operations of
$44,290 and income
tax benefit of
$12,574 (20,209)
Minimum pension
liability, net of
income tax
benefit of $1,579
Other comprehensive
loss (4,241) (20,209)
Total comprehensive
income
Stock redeemed
and retired (104,881)
Stock options
exercised, net
of shares
tendered and retired 91,042
Cash dividends
-- common, $1.26 per
share (114,600)
Cost of shares held
in trust for
deferred compensation
Balance,
December 31, 2004 $972,065 $1,830,064 $19,774 $(9,493)
Shares
Held in
Minimum Trust for Total
Pension Deferred Shareholders'
(In thousands) Liability Subtotal Compensation Equity
Balance,
December 31, 2003 $(15,690) $19,041 $(3,599) $2,540,023
Comprehensive income:
Net income 405,987
Other comprehensive
income, net of tax:
Net realized and
unrealized holding
losses during the
year, net of income
tax benefit of
$1,817 (2,933)
Foreign currency
translation 803
Reclassification
for net
realized gains
recorded in
operations, net of
income tax expense
of $1,307 (2,111)
Net unrealized
losses on derivative
instruments, net of
reclassification
to operations of
$44,290 and income
tax benefit
of $12,574 (20,209)
Minimum pension
liability, net of
income tax benefit
of $1,579 (2,523) (2,523)
Other comprehensive
loss (2,523) (26,973) (26,973)
Total comprehensive
income 379,014
Stock redeemed
and retired (104,881)
Stock options
exercised,
net of shares
tendered and retired 91,042
Cash dividends --
common, $1.26
per share (114,600)
Cost of shares held
in trust for deferred
compensation (619) (619)
Balance,
December 31, 2004 $(18,213) $(7,932) $(4,218) $2,789,979
Year Ended December 31, 2003
Accumulated Other Comprehensive Income (Loss)
Net
Unrealized
Gains (Losses) Net
on Investments, Unrealized
Retained Gains (Losses)
Common Retained Interests on Derivative
(In thousands) Stock Earnings and Other Instruments
Balance,
December 31, 2002 $1,034,888 $1,292,741 $44,151 $25,420
Comprehensive income:
Net income 337,823
Other comprehensive
income, net of tax:
Net realized and
unrealized holding
losses during the
year, net of
income tax benefit
of $3,225 (5,207)
Reclassification
for net realized
gains recorded in
operations, net of
income tax expense
of $9,248 (14,929)
Net unrealized losses
on derivative
instruments, net of
reclassification
to operations of
$42,990 and
income tax benefit
of $9,312 (14,704)
Minimum pension
liability, net of
income tax expense
of $4,965
Other comprehensive
income (loss) (20,136) (14,704)
Total comprehensive
income
Stock redeemed and
retired (106,844)
Stock options
exercised,
net of shares
tendered and retired 57,860
Cash dividends --
common, $1.02
per share (91,887)
Cost of shares
held in trust for
deferred compensation
Balance,
December 31, 2003 $985,904 $1,538,677 $24,015 $10,716
Shares
Held in
Minimum Trust for Total
Pension Deferred Shareholders'
(In thousands) Liability Subtotal Compensation Equity
Balance,
December 31, 2002 $(23,357) $46,214 $-- $2,373,843
Comprehensive income:
Net income 337,823
Other comprehensive
income, net of tax:
Net realized
and unrealized
holding losses
during the year,
net of income
tax benefit
of $3,225 (5,207)
Reclassification
for net realized
gains recorded
in operations,
net of income
tax expense
of $9,248 (14,929)
Net unrealized
losses on derivative
instruments, net of
reclassification
to operations
of $42,990 and
income tax benefit
of $9,312 (14,704)
Minimum pension
liability, net of
income tax expense
of $4,965 7,667 7,667
Other comprehensive
income (loss) 7,667 (27,173) (27,173)
Total comprehensive
income 310,650
Stock redeemed
and retired (106,844)
Stock options
exercised,
net of shares
tendered
and retired 57,860
Cash dividends --
common, $1.02
per share (91,887)
Cost of shares
held in trust for
deferred
compensation (3,599) (3,599)
Balance,
December 31, 2003 $(15,690) $19,041 $(3,599) $2,540,023
Total comprehensive income for the three months ended December 31,
2004 and 2003 was $87,809 and $87,623, respectively.
Nonperforming Assets
(Unaudited)
(In thousands) Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2004 2004 2004 2004 2003
Nonaccrual loans $71,763 $76,361 $92,597 $91,698 $78,170
Restructured loans 646 522 563 572 1,198
Other real estate
owned 11,877 14,222 13,590 17,217 18,596
Total $84,286 $91,105 $106,750 $109,487 $97,964
% of net loans
and leases*
and other real
estate owned 0.37% 0.42% 0.50% 0.53% 0.49%
Accruing loans
past due 90 days
or more $16,375 $18,182 $18,109 $26,307 $24,231
% of net loans
and leases* 0.07% 0.08% 0.08% 0.13% 0.12%
*Includes loans held for sale.
Allowances for Credit Losses
(Unaudited)
Three Months Ended
(In thousands) Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2004 2004 2004 2004 2003
Allowance for
Loan Losses
Balance at beginning
of period $269,413 $271,554 $271,226 $268,506 $281,311
Allowance of
branches sold -- (1,549) -- (518) --
Add:
Provision for losses 13,159 9,363 10,301 11,244 15,980
Deduct:
Loan and lease
charge-offs (20,024) (13,617) (14,530) (11,483) (22,436)
Recoveries 8,569 3,662 4,557 3,477 5,866
Net loan and
lease charge-offs (11,455) (9,955) (9,973) (8,006) (16,570)
Reclassification of
allowance for unfunded
lending commitments -- -- -- -- (12,215)
Balance at end
of period $271,117 $269,413 $271,554 $271,226 $268,506
Ratio of allowance
for loan losses
to net loans
and leases outstanding
at period end 1.20% 1.25% 1.26% 1.32% 1.35%
Ratio of allowance
for loan losses
to nonperforming
loans at period end 374.42% 350.42% 291.49% 293.95% 338.31%
Allowance for Unfunded
Lending Commitments
Balance at beginning
of period $12,030 $11,098 $10,476 $12,215 $--
Reclassification of
allowance for
loan losses -- -- -- -- 12,215
Provision charged
(credited) against
earnings 652 932 622 (1,739) --
Balance at end
of period $12,682 $12,030 $11,098 $10,476 $12,215
Total Allowances
for Credit Losses
Allowance for
loan losses $271,117 $269,413 $271,554 $271,226 $268,506
Allowance for
unfunded lending
commitments 12,682 12,030 11,098 10,476 12,215
Total allowances
for credit losses $283,799 $281,443 $282,652 $281,702 $280,721
Ratio of total
allowances for
credit losses to net
loans and leases
outstanding at
period end 1.25% 1.31% 1.31% 1.37% 1.41%
Sold Loans Being Serviced
(Unaudited)
Three Months Ended
(In thousands) Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2004 2004 2004 2004 2003
Balance at
beginning
of period $3,152,924 $2,643,927 $2,707,128 $2,782,175 $2,894,638
New loans sold 83,175 703,809 118,018 90,770 107,373
Payments and
other
reductions (170,190) (194,812) (181,219) (165,817) (219,836)
Balance at end
of period $3,065,909 $3,152,924 $2,643,927 $2,707,128 $2,782,175
Loan Balances By Portfolio Type
(Unaudited)
(In millions) Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2004 2004 2004 2004 2003
Loans held for sale $197 $151 $141 $185 $177
Commercial lending:
Commercial and
industrial 4,586 4,438 4,381 4,204 4,111
Leasing 370 374 381 363 377
Owner occupied 3,758 3,453 3,666 3,465 3,295
Total commercial
lending 8,714 8,265 8,428 8,032 7,783
Commercial real estate:
Construction 3,536 3,289 3,062 2,916 2,867
Term 4,087 3,859 3,921 3,646 3,426
Total commercial
real estate 7,623 7,148 6,983 6,562 6,293
Consumer:
Home equity
credit line 1,104 1,026 965 892 838
1-4 family
residential 4,234 4,118 4,170 4,057 3,874
Bankcard and
other revolving
plans 225 217 183 183 198
Other 532 573 647 697 749
Total consumer 6,095 5,934 5,965 5,829 5,659
Foreign loans 5 4 6 15 15
Other receivables 98 109 75 91 90
Total loans $22,732 $21,611 $21,598 $20,714 $20,017
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
Three Months Ended
December 31, 2003
(In thousands) Average Amount of Average
Balance Interest (1) Rate
ASSETS
Money market investments $1,125,352 $4,826 1.71%
Securities:
Held to maturity 636,886 10,931 6.83%
Available for sale 4,003,565 47,130 4.68%
Trading account 615,173 6,388 4.13%
Total securities 5,255,624 64,449 4.88%
Loans:
Loans held for sale 165,377 1,443 3.47%
Net loans and leases (2) 21,701,384 342,673 6.28%
Total loans and leases 21,866,761 344,116 6.26%
Total interest-earning assets 28,247,737 413,391 5.82%
Cash and due from banks 1,099,638
Allowance for loan losses (271,965)
Goodwill 642,646
Core deposit and
other intangibles 58,956
Other assets 1,724,466
Total assets $31,501,478
LIABILITIES
Interest-bearing deposits:
Savings and NOW $3,332,027 5,215 0.62%
Money market super NOW 9,965,528 29,986 1.20%
Time under $100,000 1,397,896 7,329 2.09%
Time $100,000 and over 1,273,926 8,236 2.57%
Foreign 397,344 1,787 1.79%
Total interest-bearing
deposits 16,366,721 52,553 1.28%
Borrowed funds:
Securities sold,
not yet purchased 523,512 5,014 3.81%
Federal funds purchased
and security repurchase
agreements 2,480,174 10,869 1.74%
Commercial paper 185,059 971 2.09%
FHLB advances and
other borrowings:
One year or less 10,538 48 1.81%
Over one year 228,417 2,912 5.07%
Long-term debt 1,692,124 22,560 5.30%
Total borrowed funds 5,119,824 42,374 3.29%
Total interest-bearing
liabilities 21,486,545 94,927 1.76%
Noninterest-bearing deposits 6,778,223
Other liabilities 453,457
Total liabilities 28,718,225
Minority interest 23,176
Total shareholders' equity 2,760,077
Total liabilities and
shareholders' equity $31,501,478
Spread on average
interest-bearing funds 4.06%
Taxable-equivalent net
interest income and net yield
on interest-earning assets $318,464 4.49%
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
Three Months Ended
December 31, 2004
(In thousands) Average Amount of Average
Balance Interest (1) Rate
ASSETS
Money market investments $1,276,303 $2,701 0.84%
Securities:
Held to maturity -- --
Available for sale 4,112,031 46,209 4.46%
Trading account 746,899 6,605 3.51%
Total securities 4,858,930 52,814 4.31%
Loans:
Loans held for sale 170,725 1,545 3.59%
Net loans and leases (2) 19,368,569 295,612 6.06%
Total loans and leases 19,539,294 297,157 6.03%
Total interest-earning assets 25,674,527 352,672 5.45%
Cash and due from banks 1,007,376
Allowance for loan losses (281,587)
Goodwill 654,151
Core deposit and
other intangibles 72,499
Other assets 1,634,648
Total assets $28,761,614
LIABILITIES
Interest-bearing deposits:
Savings and NOW $3,153,567 4,735 0.60%
Money market super NOW 8,947,633 20,795 0.92%
Time under $100,000 1,537,516 7,466 1.93%
Time $100,000 and over 1,261,845 7,295 2.29%
Foreign 236,379 484 0.81%
Total interest-bearing
deposits 15,136,940 40,775 1.07%
Borrowed funds:
Securities sold,
not yet purchased 555,778 5,371 3.83%
Federal funds purchased
and security
repurchase agreements 2,504,845 5,472 0.87%
Commercial paper 119,526 359 1.19%
FHLB advances and other
borrowings:
One year or less 37,847 163 1.71%
Over one year 234,335 2,972 5.03%
Long-term debt 1,560,761 13,694 3.48%
Total borrowed funds 5,013,092 28,031 2.22%
Total interest-bearing
liabilities 20,150,032 68,806 1.35%
Noninterest-bearing deposits 5,645,972
Other liabilities 425,033
Total liabilities 26,221,037
Minority interest 20,297
Total shareholders' equity 2,520,280
Total liabilities and
shareholders' equity $28,761,614
Spread on average
interest-bearing funds 4.10%
Taxable-equivalent
net interest income and
net yield on interest-earning
assets $283,866 4.39%
(1) Taxable-equivalent rates used where applicable.
(2) Net of unearned income and fees, net of related costs.
Loans include nonaccrual and restructured loans.
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
Year Ended
December 31, 2004
(In thousands) Average Amount of Average
Balance Interest (1) Rate
ASSETS
Money market investments $1,463,111 $16,355 1.12%
Securities:
Held to maturity 499,898 34,301 6.86%
Available for sale 3,968,043 174,563 4.40%
Trading account 732,365 29,615 4.04%
Total securities 5,200,306 238,479 4.59%
Loans:
Loans held for sale 159,444 5,038 3.16%
Net loans and leases (2) 20,886,928 1,266,525 6.06%
Total loans and leases 21,046,372 1,271,563 6.04%
Total interest-earning assets 27,709,789 1,526,397 5.51%
Cash and due from banks 1,025,536
Allowance for loan losses (271,828)
Goodwill 647,965
Core deposit and other
intangibles 64,695
Other assets 1,759,991
Total assets $30,936,148
LIABILITIES
Interest-bearing deposits:
Savings and NOW $3,337,072 20,613 0.62%
Money market super NOW 9,479,970 100,576 1.06%
Time under $100,000 1,436,631 27,524 1.92%
Time $100,000 and over 1,243,890 29,251 2.35%
Foreign 337,695 4,402 1.30%
Total interest-bearing
deposits 15,835,258 182,366 1.15%
Borrowed funds:
Securities sold,
not yet purchased 625,273 24,166 3.86%
Federal funds purchased
and security
repurchase agreements 2,682,326 32,244 1.20%
Commercial paper 200,406 3,028 1.51%
FHLB advances
and other borrowings:
One year or less 251,679 2,873 1.14%
Over one year 229,855 11,670 5.08%
Long-term debt 1,659,223 74,295 4.48%
Total borrowed funds 5,648,762 148,276 2.62%
Total interest-bearing
liabilities 21,484,020 330,642 1.54%
Noninterest-bearing deposits 6,269,110
Other liabilities 501,398
Total liabilities 28,254,528
Minority interest 22,637
Total shareholders' equity 2,658,983
Total liabilities and
shareholders' equity $30,936,148
Spread on average
interest-bearing funds 3.97%
Taxable-equivalent net
interest income and
net yield on
interest-earning assets $1,195,755 4.32%
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)
Year Ended
December 31, 2003
(In thousands) Average Amount of Average
Balance Interest (1) Rate
ASSETS
Money market investments $1,342,663 $13,011 0.97%
Securities:
Held to maturity -- --
Available for sale 3,736,095 171,523 4.59%
Trading account 710,913 24,640 3.47%
Total securities 4,447,008 196,163 4.41%
Loans:
Loans held for sale 219,631 8,280 3.77%
Net loans and leases (2) 19,105,002 1,204,856 6.31%
Total loans and leases 19,324,633 1,213,136 6.28%
Total interest-earning assets 25,114,304 1,422,310 5.66%
Cash and due from banks 953,132
Allowance for loan losses (281,679)
Goodwill 710,709
Core deposit and other
intangibles 77,472
Other assets 1,629,606
Total assets $28,203,544
LIABILITIES
Interest-bearing deposits:
Savings and NOW $2,984,064 19,114 0.64%
Money market super NOW 8,890,517 92,502 1.04%
Time under $100,000 1,643,817 36,935 2.25%
Time $100,000 and over 1,289,934 33,276 2.58%
Foreign 185,981 1,664 0.89%
Total interest-bearing
deposits 14,994,313 183,491 1.22%
Borrowed funds:
Securities sold, not yet
purchased 537,929 20,441 3.80%
Federal funds purchased
and security repurchase
agreements 2,604,802 25,473 0.98%
Commercial paper 215,251 3,028 1.41%
FHLB advances and
other borrowings:
One year or less 144,516 1,912 1.32%
Over one year 236,587 12,280 5.19%
Long-term debt 1,277,378 57,269 4.48%
Total borrowed funds 5,016,463 120,403 2.40%
Total interest-bearing
liabilities 20,010,776 303,894 1.52%
Noninterest-bearing deposits 5,258,923
Other liabilities 443,879
Total liabilities 25,713,578
Minority interest 21,790
Total shareholders' equity 2,468,176
Total liabilities
and shareholders' equity $28,203,544
Spread on average
interest-bearing funds 4.14%
Taxable-equivalent
net interest income and
net yield on
interest-earning assets $1,118,416 4.45%
(1) Taxable-equivalent rates used where applicable.
(2) Net of unearned income and fees, net of related costs.
Loans include nonaccrual and restructured loans.
SOURCE Zions Bancorporation
-0- 01/25/2005
/CONTACT: Clark Hinckley of Zions Bancorporation, +1-801-524-4787/
/Web site: http://www.zionsbancorporation.com /
(ZION)
CO: Zions Bancorporation
ST: Utah
IN: FIN
SU: ERN CCA MAV
TU-JH
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