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Goldman SachsFinancial Services Conference
December 2020
2
Forward-Looking Statements; Use of Non-GAAP Financial Measures
Forward Looking Information
These materials include “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and assumptions regarding future events or determinations, all of which are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, market trends, industry results or regulatory outcomes to differ materially from those expressed or implied by such forward-looking statements.
Without limiting the foregoing, the words “forecasts,” “targets,” anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “would,” “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 these materials. Important risk factors that may cause such material differences include, but are not limited to, the effects of the spread of the virus commonly referred to as the coronavirus or COVID-19 (and other potentially similar pandemic situations) and associated impacts on general economic conditions on, among other things, our customers’ ability to make timely payments on obligations, fee income revenue due to reduced loan origination activity and card swipe income, operating expense due to alternative approaches to doing business, and so forth; the Bank’s ability to meet operating leverage goals; the rate of change of interest-sensitive assets and liabilities relative to changes in benchmark interest rates; the ability of the Bank to upgrade its core deposit system and implement new digital products in order to remain competitive; risks associated with information security, such as systems breaches and failures; and legislative, regulatory and economic developments. These risks, as well as other factors, are discussed in the Bank’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (SEC) and available at the SEC’s Internet site (https://www.sec.gov/). In addition, you may obtain documents filed with the SEC by the Bank free of charge by contacting: Investor Relations, Zions Bancorporation, N.A., One South Main Street, 11th Floor, Salt Lake City, Utah 84133, (801) 844-7637.
We caution you against undue reliance on forward-looking statements, which reflect our views only as of the date they are made. Except as may be required by law, Zions Bancorporation, N.A. specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.
Use of Non-GAAP Financial Measures:
This document contains several references to non-GAAP measures, including pre-provision net revenue and the “efficiency ratio,” which are common industry terms used by investors and financial services analysts. Certain of these non-GAAP measures are key inputs into Zions’ management compensation and are used in Zions’ strategic goals that have been and may continue to be articulated to investors. Therefore, the use of such non-GAAP measures are believed by management to be of substantial interest to the consumers of these financial disclosures and are used prominently throughout the disclosures. A full reconciliation of the difference between such measures and GAAP financials is provided within the document, and users of this document are encouraged to carefully review this reconciliation.
▪ Strategic local “ownership” of market opportunities and challenges
▪ Roughly 2/3 of revenue from commercial customers
▪ High quality, granular deposit franchise
▪ 47%: Noninterest bearing deposits (avg) to total deposits
▪ 0.11%: Cost of deposits consistently among the lowest
of peers (ranked third best of peers in 3Q20)
Zions Is A Collection of Community Banks
3
Key Differentiators: Local decision-making and top-notch service, commercial banking focus, granular and low-cost deposit base
Source: S&P Global, as of 3Q20 except where noted. 1 Represents primarily brokered deposits. 2 Represents long-term debt / senior debt issuer rating, as of November 13, 2020.
Key Metrics 3Q20
Listing NASDAQ: ZION
Market Capitalization (as of 12/07/20) $7.0B
Total Assets $78.4B
Total Loans $53.9B
Total Deposits $67.1B
Common Equity Tier 1 Capital $5.8B
Common Equity Tier 1 Capital Ratio 10.4%
Zions Bancorp. Rating (S&P/Fitch/Kroll)2 BBB+/BBB+/A-
Rating Outlook (S&P/Fitch/Kroll)2 Neg / Neg / Stable
Financial Highlights
Zions’ Markets
Bank HeadquartersAverageDeposits % of Total
Zions Bank Salt Lake City $19B 29%
Amegy Houston $14B 21%
CB&T San Diego $14B 21%
NB│AZ Phoenix $6B 9%
NSB Las Vegas $6B 9%
Vectra Denver $4B 6%
Commerce Seattle $1B 2%
Brokered Deposits — $2B 3%
Zions Bancorporation Salt Lake City $66B 100%
Zions Receives National and Local Recognition for Excellence
4
One of only 11 banks to have averaged 10 or more Greenwich Excellence Awards since 2009 (survey inception in 2009; Zions has averaged 14 awards per year)
4
1. One of five winning teams, 2015, Zions Bank; 2. exim.gov, April 24, 2014; 3.Readers of the San Diego Union-Tribune, August 2015, for 5 years; Orange County Register, for two years in a row; 4.Ranking Arizona, 2015
Affiliates have strong brands in their markets
1 www.americanbanker.com/news/women-in-banking-top-team-for-2019-zions-bancorp; 2 The San Diego Union-Tribune (annually #1 from 2011-2019) and Orange County Register (annually #1 from 2014-2019); 3 Fifteen annual occurrences, Ranking Arizona Magazine; 4 Las Vegas Review-Journal, Reno Magazine, Elko Daily Free Press
Business Services – Banking and Community Development – Large Business
Consistently Voted Best Bank in San Diego and Orange Counties
Top team of women bankers (2015-2019) 1
National Bank of Arizona consistently voted #1 Bank in Arizona3
Nevada State Bank consistently voted #1 Bank in Nevada4
Zions’ Business Banking Reputation is Highly Ranked
Source: 2018 Greenwich Associates Market Tracking Program Nationwide. Key Competitors Include: JPMorgan, Bank of America Merrill Lynch, US Bank, Wells Fargo “Excellent” Citations are a "5" on a 5-point scale from "5" excellent to "1" poor.
Zions compares favorably to key competitors (JPMorgan, Bank of America, US Bank, Wells Fargo)
5
Middle Market Customers
(Revenues $10-500 million)
Small Business Customers
(Revenues $1-10 million)
0
10
20
30
40
50
60
70
80
90
OverallSatisfaction
Bank You Can Trust Digital ProductCapabilities
% o
f "
Exce
llen
t" C
ust
om
er C
itat
ion
s Overall Satisfaction
0
10
20
30
40
50
60
70
80
90
Satisfaction withRelationship
Managers
Satisfaction withCash Management
Specialist
Satisfaction withBranch
Customer Satisfaction With Our Bankers
0
10
20
30
40
50
60
70
80
90
Willingness toextend credit
Speed in respondingto a loan request
Flexible terms andconditions
Customer Satisfaction - Credit Process
0
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60
70
80
90
OverallSatisfaction
Bank You Can Trust Digital ProductCapabilities
% o
f "
Exce
llen
t" C
ust
om
er C
itat
ion
s
Zions Peer Average
0
10
20
30
40
50
60
70
80
90
Satisfaction withRelationship
Managers
Satisfaction withCash Management
Specialist
Satisfaction withBranch
0
10
20
30
40
50
60
70
80
90
Willingness toextend credit
Speed in respondingto a loan request
Flexible terms andconditions
0%
5%
10%
15%
20%
25%
30%
FNB
ZIO
N
PB
CT
SNV
WTF
C
HB
AN RF
FHN
KEY
JPM
USB
WFC
WA
L
ASB
BA
C
CM
A
EWB
C
FRC
FITB
BO
KF
CFG
C
$0
$5
$10
$15
$20
$25
$30
BA
C
WFC
JPM
USB
ZIO
N RF
KEY
HB
AN
SNV
PB
CT
FITB
FNB
CFG
CM
A C
FHN
EWB
C
FRC
WA
L
BO
KF
ASB
WTF
C
Zions is a Leader in Small Business Lending
Commercial Loans sized $100k - $1M
Commercial Loans sized $100k - $1M
as a percent of total commercial loans
6Note: Call report data via S&P Global, as of 2Q20; peer group shown different than typical peer group in order to show the position of the largest U.S. banks. Commercial loans includes both C&I and CRE.
Zions punches above its weight
($ billion)
Five largest U.S. banks
Success Story: Summary of Paycheck Protection Program Loans
7
PPP lending success relied on Zions’ ability to link frontline bankers and borrowers with an agile technology deployment
Zions PPP Loans Approved
ForgivenessApplicationsReceived(2)
ForgivenessApplications
Approved by SBA
Number >47,000 ~16,600 ~6,800
Amount $7 billion $2.9 billion $800 million
(1) Source: Internal and S&P Global U.S. deposit market share as of 2019, including foreign banks doing business in the U.S., as well as credit unions;Source of SBA data is the SBA PPP Report. (2) Through December 3, 2020
▪ Zions ranked 9th in PPP lending and is ranked 37th in U.S. Deposit Market Share(1)
▪ Helped 47,000+ small businesses
Future Opportunity
▪ 14,000 “new to bank” PPP recipients
▪ 33,000 “existing customers” (approx. 60% deposit-only)
▪ Aggressive calling program in place to retain “new to bank” customers and expand “existing customer” relationships
▪ New treasury management digital small business offering to be a key resource
Eligible for streamlined forgiveness (<$50M): 29,000 loans representing approximately $540 million
8
Success Story: Mortgage Banking
Successes amid COVID-19 pandemic: very strong mortgage revenue
2019▪ Roll-out
2020▪ Enhanced Digital Fulfillment Process▪ 86% of all applications taken digitally▪ 25% reduction in turn-time allowing
for record unit production3Q20▪ Second straight strong funding quarter with more than $920 million ($1
billion in Q2)▪ Pipeline remains strong with $1.8B at the end of Q3 – up 49% YoY▪ Second best quarter on record for applications, at $2.2 billion (1Q20 was $2.6
billion)
▪ Revenue increases for Mortgage year over year with modest increases in expenses and level staffing creates more efficient and profitable product line▪ Credit is comparable to 2019’s high quality production with FICO (avg: 765), LTV
(avg: 66%), and DTI (avg: 31%); all the same or slightly improved relative to 2019
31% 38%40%
59% 47%
3Q2019 4Q2019 1Q2020 2Q2020 3Q2020
Record YTD Funding
HFI HFS
$791 million$922 million
$7.2
$4.3
$14.0$12.9
$17.5
3Q2019 4Q2019 1Q2020 2Q2020 3Q2020
Loan Sales Revenue($ millions)
We Have Furthered our Digital Capabilities Meaningfully Over the Last Several Years
9
CU
STO
MER
FIR
ST A
ND
EM
PO
WER
ING
BA
NK
ERS
Treasury Internet Banking 2.0 2018-2019$10B Demand Deposits $100MM Fee Income
Digital Business Loan Application 2019$2B Loan Balances4,000 Applications
Small Business and Consumer Digital Account Opening 2016 -2019Deposit, Credit Card, and Consumer Loans – 9 out of 10 Customer Satisfaction Score
Digital Mortgage Loan Application 2019$2.7B Fundings
10,000 Applications
A F F L U E N TC O M M E R C I A L S M A L L B U S I N E S S C O N S U M E RD
IGIT
AL
TO T
HE
CO
RE Automation Center of Excellence
138 Processes Automated
FutureCore Release 3 UnderwayDeposit System Replacement
Relationship Manager Mobile Enablement 2019-2020
Deposit Product Simplification 2018-20191.5 Million Accounts - Moving from 500 to 100 Account Types
Public Website Relaunch 2018-20193 million visits per month
Mobile Positive Pay 2019Supporting 50% of Treasury Customers
Customer Data Hub 2019-2021Master Data Management for Systems of Record
Online and Mobile Banking Replacement 2020-2021625,000 consumer accounts125,000 business accounts
FutureCore Release 1 & 2 2017-2019Consumer, C&I, and CRE Lending Core System Replacement
✓ Earnings and Profitability:
▪ $1.01 diluted earnings/share compared to $0.34 in 2Q20
▪ $(0.14)/share one-time charitable contribution
▪ $0.06/share benefit from credit valuation adjustment and securities gains
▪ $277 million Pre-Provision Net Revenue
▪ $297 million Adjusted PPNR(1) when excluding the one-time $30 million charitable contribution, a 1% decrease from 2Q20
▪ $55 million provision for credit loss, down from $168 million in 2Q20
▪ $167 million: Net Income Applicable to Common, up from $57 million in the prior quarter
▪ $23 million: after-tax cost of one-time charitable contribution
▪ $9 million: after tax benefit from CVA and securities gains
✓ Capital Strength:▪ 10.4% Common Equity Tier 1 Ratio (CET1)
▪ 12.1% (CET1+Allowance for Credit Losses) / Risk-Weighted Assets
10
Third Quarter 2020 Financial HighlightsVs. 2Q20, rebound in earnings as provisions subside; loans on deferral drop more than 90%, loans 30+ days past due improves
Note: For the purposes of comparison in this presentation, we generally use linked-quarter ("LQ"), due to that being the preferred comparison for professional investors and analysts. (1) Adjusted for items such as severance, other real estate expense, pension termination-related expense, securities gains and losses and debt extinguishment costs. (2) The ACL of $917 million includes ~$2 million for PPP loans. See Appendix for GAAP to non-GAAP reconciliation tables.
✓ Credit quality (excluding PPP Loans):▪ 0.79%: ratio of NPAs+90 days past due / Loans and leases and OREO
▪ 3.4%: Classified loans / total loans
▪ 0.6%: Loans actively in deferral due to COVID-19 dropped by more than 90% from 2Q20
▪ 0.5%: Total loans delinquent by 30 days or more, down from 0.7% in 2Q20
▪ 43 basis points: net charge-offs (annualized)
▪ Increase in the allowance for credit loss (“ACL”), reflecting the continued impact on economic activity due to COVID-19
▪ ACL was $917 million2 or 1.9% of loans
▪ ACL was more than 17 quarters of NCOs at the 3Q20 level
▪ Allowance for Oil and Gas loans: 5.8% of related loans
90
110
130
150
170
190
210
230
250
1H1
4
2H1
4
1H1
5
2H1
5
1H1
6
2H1
6
1H1
7
2H1
7
1H1
8
2H1
8
1H1
9
2H1
9
1H2
0
3Q20
Long-term Focus on PPNR Growth and Expense Control
Net RevenueIndexed: 1H14 = 100
11
Positive operating leverage achieved through revenue growth and expense control
Source: S&P Global. Data adjusted to account for major acquisitions. Zions results adjusted to exclude interest income from loan recoveries which were greater than $1 million, FDIC true-ups and charitable foundation contributions. Results also adjusted for items such as severance, provision for unfunded lending commitments, securities gains and losses and debt extinguishment costs.
90
110
130
150
170
190
210
230
250
1H
14
2H
14
1H
15
2H
15
1H
16
2H
16
1H
17
2H
17
1H
18
2H
18
1H
19
2H
19
1H
20
3Q20
Adjusted Pre-Provision Net RevenueIndexed: 1H14 = 100
90
110
130
150
170
190
210
230
250
1H1
4
2H1
4
1H1
5
2H1
5
1H1
6
2H1
6
1H1
7
2H1
7
1H1
8
2H1
8
1H1
9
2H1
9
1H2
0
3Q20
ZION
Peer Top Quartile
Peer Bottom Quartile
Noninterest ExpenseIndexed: 1H14 = 100
Profitability
12
Efficiency and ROA improvement linked to relatively stable noninterest expense and revenue growth
Source: S&P Global. Zions’ efficiency ratio includes adjustments for items such as severance, provision for unfunded lending commitments, securities gains and losses and debt extinguishment costs, as outlined in the GAAP to Non-GAAP Reconciliation in the appendix. The ROA is calculated using reported annualized net income plus tax-effected annualized provisions for credit losses less tax-effected annualized net charge-offs, expressed as a percentage of average assets.
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
1H
14
2H
14
1H
15
2H
15
1H
16
2H
16
1H
17
2H
17
1H
18
2H
18
1H
19
2H
19
1H
20
3Q
20
ZION Peer Top Quartile Peer Bottom Quartile
Return on Assets (modified)Substitutes
Net Charge-Offs for Provisions
50
55
60
65
70
75
80
1H
14
2H
14
1H
15
2H
15
1H
16
2H
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1H
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2H
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1H
18
2H
18
1H
19
2H
19
1H
20
3Q
20
ZION Peer Top Quartile Peer Bottom Quartile
Efficiency Ratio%
Excluding the $30 million charitable contribution, the efficiency ratio in 3Q20 was 58.0%
Excluding the $30 million charitable contribution, the modified ROA in 3Q20 was 1.0%
12
.8%
12.1
%
10.4
%
10.3
%
10.2
%
10.1
%
10.0
%
10.0
%
9.9%
9.8%
9.8%
9.8%
9.6%
9.5%
9.3%
9.3%
9.2%
8.9%
EWB
C
BO
KF
ZIO
N
CM
A
ASB
FITB
WA
L
PB
CT
HB
AN
MT
B
CFG FR
C
FNB
KEY R
F
SNV
FHN
WTF
C
Loss-Absorbing Capital
Common Equity Tier 1 Capital Ratio(1)
13
Data as of 3Q20. Note: (1) On March 27, 2020, the federal banking agencies issued an interim final rule that gives banking organizations that implement CECL before the end of 2020 the option to reduce for two years a portion of CECL’s adverse effect on regulatory capital. As a result, we have delayed recognizing the full amount of the June 30, 2020 impact of the ACL on regulatory capital until after a two-year deferral period, which for us extends through December 31, 2021. Adjusting for that factor, Zions’ ratios in the charts above would be lower by approximately 0.14%. (2) Zions Allowance for Credit Loss to Loan Ratio excluding PPP Loans was 1.9% in 3Q20. Source: Company data and S&P Global. Total Risk-Based Capital for Zions at 3Q20 was 13.7%
Common Equity Tier 1 capital plus the allowance for credit loss is strong relative to peers
12
.8%
12.1
%
10.4
%
10.1
%
9.9% 10
.3%
10.2
%
9.8%
9.8%
9.3%
10.0
%
9.6% 10
.0%
9.5%
9.3%
9.2%
9.8%
8.9%
1.7
%
1.3
%
1.6
%
1.8
%
2.0
%
1.5
%
1.5
%
1.7
%
1.7
%
2.1% 1.
2%
1.4% 0.
9%
1.33
%
1.5%
1.5% 0.
6%
1.1%
EWB
C
BO
KF
ZIO
N
FITB
HB
AN
CM
A
ASB
CFG
MT
B RF
WA
L
FNB
PB
CT
KEY
SNV
FHN
FRC
WTF
C
CET1 Ratio ACL/RWA
CET1 Capital and Allowance for Credit Losses (2) / Risk Weighted Assets
0.02
%
0.36
%
0.8
7%
0.97
% 1.26
%
1.29
%
1.35
%
1.57
%
1.59
%
1.67
%
1.80
%
2.42
% 2.76
%
2.83
%
2.85
%
3.70
%
3.89
%
4.16
%
FRC
WA
L
PB
CT
EWB
C
WTF
C
FNB
FHN
BO
KF
MTB
ZIO
N
SNV
CM
A
FITB KEY
ASB
CFG
HB
AN RF
Capital and Profitability: Two Key Lines of Defense
Net Charge-Offs (LTM) /
Common Equity Tier 1+Allowance for Credit Losses
14
Whether looking at capital coverage of loan losses, or earnings coverage of loan losses, Zions ranks superior to many peers
Source: S&P Global, As of 3Q20 (EOP for CET1, ACL and RWA). PPNR for Zions is Adjusted PPNR, excluding $30 million one-time charitable contribution in 3Q20.2.
38%
2.34
%
2.32
%
2.23
%
2.00
%
1.97
%
1.81
%
1.77
%
1.76
%
1.74
%
1.70
%
1.69
%
1.68
%
1.68
%
1.58
%
1.44
%
1.39
%
1.00
%
WA
L
BO
KF
MT
B RF
HB
AN
EWB
C
WTF
C
FRC
ZIO
N
FITB
FNB
CFG
PB
CT
FHN
KEY
SNV
CM
A
ASB
Pre-Provision Net Revenue less Net Charge Offs /
Risk Weighted Assets
(Annualized)
15
Strong concentration of granular retail and small business deposits; small businesses are net contributors of stable deposits
NonInterest Bearing Deposits
46.8%
Savings & MM47.7%
Time Deposits
5.6%
By Account Type
Consumer 33%
Commercial 30%
Small Business 23%
Commerical Real Estate 7%
Other 4% Brokered Deposits 3%
Source: chart on the right: S&P Global, data as of 3Q20. 1) Internal data as of 2Q20. Defined by businesses gross annual revenues (GAR): Small Business: <$9.9 million; Commercial: ≥$10 million
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
0%
10%
20%
30%
40%
50%
20
07
20
08
20
09
20
10
20
11
20
12
201
3
20
14
20
15
20
16
20
17
20
18
20
19
20
20Q
3
Noninterest-Bearing Deposits / Average Deposits
ZION Peer Top Quartile
Peer Bottom Quartile Fed Funds Effective Rate (LHS)
Diversified, High Quality Deposit Portfolio
by Depositor Size(1)
Portfolio Composition
$567$559
$548
$563$555
3.48% 3.46%3.41%
3.23%
3.06%
3Q19 4Q19 1Q20 2Q20 3Q20
Net Interest Income
Net Interest IncomeNet Interest Margin
16
Changes in benchmark interest rates and balance sheet composition impact net interest income performance
($ millions)
Net Interest Margin
2Q20 3Q20
MM and Securities Loan
Yields
Wholesale and
Noninterest Bearing
Sources of Funds
Interest Bearing Deposits
MM = Money Market investments. Capitalized interest income net of costs for PPP loan originations was $141 million, to be amortized over the remaining life (~4.5 years) or when loans pay down, pay off, or are forgiven by the SBA. PPP interest income recognized: $52 million (3Q20); $39 million (2Q20).
48,828
48,713 48,797 49,252 48,222
5,016 6,771
4.75%4.56%
4.42%
3.83%3.68%
3Q19 4Q19 1Q20 2Q20 3Q20
Average Total Loans Excluding PPP Loans, Yield: 3.77% in 3Q20
Average PPP Loans, Yield: 3.03% in 3Q20
Average Loan and Deposit Growth
Average Total LoansLoan Yields
Average Total DepositsCost of Total Deposits
17
Loan growth year-over-year primarily attributed to increase in PPP loans, deposit growth aided by PPP funding
$55,284$56,741 $56,909
$63,000
$66,503
0.50% 0.44% 0.36%
0.15% 0.11%
3Q19 4Q19 1Q20 2Q20 3Q20
($ millions)
($ millions)
46%
13%
10%
9%
12%
10%
32%
13%
14%
9%
20%
10%
≤ 3m 4-12m 1-2 yrs 2-3 yrs 3-5 yrs > 5 yrs
Perc
ent
of
Loan
s
Loans: Rate Reset and Cash Flow Profile
Loans After Hedging
Interest Rate Sensitivity
18
The low and relatively flat interest rate environment and surge in deposits has resulted in increased interest rate sensitivity
Source: Company filings and S&P Global; “Prior Fed Cycle” refers to 3Q15-2Q19, reflecting the lag effect of deposit pricing relative to Fed Funds rates. The “Current Fed Cycle” begins in 3Q19 to present. (1) 12-month simulated impact of an instantaneous and parallel change in interest rates. Loans are assumed to experience prepayments, amortization and maturity events, in addition to interest rate resets in the bottom-right chart. The loan and securities portfolios have durations of 2.0 and 2.8 years, respectively. (2) For swaps maturing by the end of 2021, the annualized support to interest income from swaps is $1 million; for swaps maturing in 2022 (all of which is in the first half of the year, the annualized support to interest income is $46 million. For all swaps maturing after 2022, the annualized interest income support is $15 million.
▪ Interest rate sensitivity reduced through interest rate hedges(2):
▪ $5.3 billion “in-the-money” floors embedded in loans
▪ $1.9B in securities purchases in 3Q20 with an average yield of 1.19%-1%
8%
16%
−100 bps +100 bps +200 bps
Net Interest Income Sensitivity (1)
●A
ssu
med
●H
isto
rica
l
In the down 100 scenario, models assume rates do
not fall below zero
18%
18%
17%
14%
1%
Prior Fed Cycle (+225 bps)
Current Fed Cycle (-225 bps)
+200 bps
+100 bps
−100 bps
Total Deposit Betas
1.81%2.06% 2.35%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Through end of 2021 2022 2023-2024
Swaps Maturing Average Receive Fixed Rate (R-Axis)$ millions
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
2008Y 2009Y 2015Y 2016Y 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
NCOs / Loans (ann.)
Classified / Loans
NPAs +90/ Loans + OREO
ACL / Loans
≈ ≈
ImprovingEconomy
19
Credit Quality Ratios
Zions entered the COVID-19 economic downturn with very clean credit quality
Key Credit Metrics:
▪ Classified loans/loans: 3.4%
▪ NPAs+90(1)/loans + OREO: 0.79%
▪ Annualized net loan losses:
▪ 0.43% of average loans in 3Q20
▪ 0.23% net charge-offs of average loans over the last 12 months
Allowance for credit losses:
▪ 1.9% of total loans and leases
▪ $915 million of ACL x-PPP loans
▪ $2 million of ACL for PPP loans
▪ 5.8% ACL as a percent of oil & gas related balances ($133 million)
(1) Nonperforming assets plus loans that were ≥ 90 days past due. Note: Net Charge-offs/Loans ratio is annualized for all periods shown Nonperforming assets and classified loan ratios were averaged for the full year numbers, rather than using period-end ratios
Credit Quality
GlobalFinancial Crisis
Oil & GasDownturn
Covid-19Pandemic
All Ratios Exclude PPP Loans
Deferrals and Delinquencies: A Positive Outcome Thus Far
20
Deferrals have receded by more than 90% to 0.6% of loans; delinquency rate down 0.2%
6.3%
0.6%
6/30/2020 9/30/2020
Total Deferralsrelative to total non-PPP loans
0.7% 0.5%
6/30/2020 9/30/2020
30+ Days Past Duerelative to total non-PPP loans
Approximately 8.5% of total loan balances had been processed for modifications or payment deferrals as of June 30, 2020, some of which were not on active deferral status at June 30 (the deferral period had expired). Approximately 16% of loans that were processed for a deferral or modification were modified (e.g. interest only for six or 12 months). The 30+ days past due ratio for C19ER loans that had been granted a payment deferral period and are now resuming payments has a slightly higher ratio than the rest of the portfolio, at 1.1% .
COVID-19 Elevated Risk Loans Compared with All Other Lending(% of 3Q20 non-PPP loan balances)
September 30, 2020 COVID-19 Oil & Gas OtherPercent of Total Non-PPP Loans 8.4% 4.6% 86.9%Under Payment Deferral 3.0% 0.5% 0.3%PPP thru ZION 28% 14% 17%Secured by non-RE 30% 86% 24%Real Estate Secured 68% 9% 68%
Median LTV 52% 56% 59%LTV >90% 3% 11% 1%
Select Sub-Industries with Elevated Risk Related to COVID-19
21
COVID-19 Elevated Risk loans are less than 10% of total loans and have strong collateral coverage
COVID-19 Elevated Risk Loans:$4.1 billion (8.4%) of 3Q20 non-PPP loan balances
(1) C19ER select industries with the most criticized loans include within broad industry groups: regional and neighborhood shopping centers (excludes standalone structures), advertising/marketing, other telecommunications, motion picture/video, full-service restaurants/bars, amusement parks, sports teams, sporting goods, passenger airlines, museums, daycare, real estate agents, hotel operations, bakeries, hazardous waste.
▪ Portions of broad industry groups with significant growth in criticized rates during 1H20
▪ COVID-19 Elevated Risk portfolio strengths:▪ Strong collateral coverage with 98% secured▪ Greater proportion of customers received PPP (28% received PPP
through Zions) and other stimulus▪ COVID-19 Elevated Risk portfolio weaknesses:
▪ Greater deferral and problem loan ratios▪ Some sectors (e.g. restaurants) struggled prior to COVID-19
CRE = Commercial Real Estate; C&I = Commercial and Industrial
Loan to value (LTV) uses the Sept. 30, 2020 commitment and the most recent appraisal
$0.06
$0.16
$0.23
$0.26
$0.37
$0.38
$0.43
$0.43
$0.61
$1.12
CI Cml Svc
CI Food Bev Mfg WS
CI Real Estate Construction
CI Csmr Svc
CI Transportation
CI Ent. Rec.
CI Tech Telecom Media
CI Retail
CRE Hotel-Motel
CRE Retail
$ billions
Additional Recent Trends In Loan Balance, Credit Quality and Line Utilization
22
In 3Q, Zions experienced generally stable credit quality trends outside of COVID-19 Elevated Risk and Oil and Gas loans (excluding PPP loans)
Loan Balances by Portfolio and Weighted Average Risk Grades
$4.2 $4.3 $4.2 $4.1$2.5 $2.5 $2.5 $2.2
$42.1 $43.2$41.9
$41.7
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
4Q19 1Q20 2Q20 3Q20
Wei
ghte
d A
vera
ge R
isk
Gra
de
COVID-19 Oil & Gas Other
38.9
%
43.3
%
34.1
%
29.1
%
47.3
%
50.4
%
51.0
%
48
.9%
37.9
%
41.8
%
36.
3%
34.6
%
4Q19 1Q20 2Q20 3Q20
Line Utilization Rates(1)
Utilization rates have receded from their Q1 peaks in both COVID-19 and other portfolios
Negative grade migration is more pronounced within COVID-19 portfolios
3.1%4.2%
12.3%13.1%
2.2%3.4%
9.1%
11.4%
1.5% 1.4% 1.8% 2.0%
1.62% 1.93% 1.55% 2.19%0.72% 0.66%
2.89%3.53%
0.37% 0.40% 0.48% 0.53%
4Q19 1Q20 2Q20 3Q20
COVID-19 Oil & Gas Other
Classified (larger ratio) and Nonaccruals (smaller ratio)
1.18%
0.22%
1.97%1.66%
0.56%
0.10% 0.03%
3.53%
0.00% 0.02% 0.09% 0.12%
4Q19 1Q20 2Q20 3Q20
Net Charge-offs/Loans
(1) Line Utilization refers to revolving loans only. Net charge-offs are annualized ratios.
-0.10%
0.10%
0.30%
0.50%
0.70%
0.90%
1.10%
1.30%
1.50%
1.70%
4Q
14
2Q
15
4Q
15
2Q
16
4Q
16
2Q
17
4Q
17
2Q
18
4Q
18
2Q
19
4Q
19
2Q
20
ZION Peer Top Quartile Peer Bottom Quartile
Bump in charge offs (and later the increase in recoveries)
related to oil and gas recession
Credit Quality Trends
NPAs+90 DPD /Loans (Excluding PPP) + OREO
NCOs / Loans (Excluding PPP)(Trailing 12-month Average)
23
Zions performance with NPAs is consistent with the best quartile of the peers
Source: S&P Global, data as of 3Q20. NPAs + 90 DPD = nonperforming assets (nonaccrual loans plus other real estate owned) plus loans 90 days past due and still accruing interest.
-0.10%
0.10%
0.30%
0.50%
0.70%
0.90%
1.10%
1.30%
1.50%
1.70%
4Q
14
2Q
15
4Q
15
2Q
16
4Q
16
2Q
17
4Q
17
2Q
18
4Q
18
2Q
19
4Q
19
2Q
20
ZION Peer Top Quartile Peer Bottom Quartile
Oil and gas recession
6%
17%
24% 30
%
32%
38%
39% 41
% 44%
45%
46%
53
%
55%
57% 60
%
66%
81%
FRC
PB
CT
BO
KF
ASB
ZIO
N
CFG
CM
A
FHN
WTF
C
WA
L
FNB
SNV
EWB
C RF
KEY
HB
AN
FITB
4%
11%
12% 14
%
15% 20
%
28%
29%
30%
38%
40% 44
%
45% 50
%
51%
53%
64%
FRC
WA
L
PB
CT
FHN
ZIO
N
BO
KF
WTF
C
ASB
EWB
C
CM
A
SNV
CFG KEY
HB
AN
FNB RF
FITB
Loan Loss Severity
Annualized NCOs / Nonaccrual LoansFive Year Average (4Q15 – 3Q20)
Annualized NCOs / Nonaccrual LoansFifteen Year Average (4Q05 – 3Q20)
24Source: S&P Global as of 3Q20. Calculated using the average of annualized quarterly results. Note: Survivorship bias: some banks that may have been included in Zions’ peer group have been excluded due to their failed or merged status.
When problems arise, Zions generally experiences less severe loan losses due to strong collateral
25
Allowance for Credit Loss (“ACL”)Allowance relatively unchanged quarter over quarter
526
777914 9171.08
1.561.66 1.68
1.88 1.91
1/1/20 CECL 1Q20 2Q20 3Q20
Significant increase in ACL in 1H20, stable in 3Q20
ACL (%) ACL (%) ex-PPP
The change in 3Q20 ACL from 2Q20 reflects:
▪ Increase in expected losses due to slower economic
recovery than previously forecast and moderate credit
quality deterioration
▪ Decrease from the effects of paydowns, portfolio
aging, and decreased utilization
Changes to economic forecasts
New loans & renewals, aging of existing loans, and draws, pay-offs, etc.
Changes in credit quality and in specific reserves
CECL Economic Forecast Assumptions
• Probability weighting of four (4) economic scenarios• Reasonable & supportable period = 12 months; reversion period to long-term
average : 12 months• Economic factors vary depending upon the type of loan, but include various
combinations of national, state, and MSA-level forecasts for variables such as unemployment, real estate price indices, energy prices, GDP, etc.
• Base forecast shows economic improvement beginning in late 2020 gradually stabilizing by 2022
($ millions)
($ millions)
At September 30, 2020, the allowance for credit losses by major category was: Commercial: $603 million (1.9% of Commercial loans or 2.4% if PPP loans are excluded); Commercial Real Estate: $165 million (1.4% of CRE loans); Consumer: $149 million (1.3% of Consumer loans)
2.5%
2.3%
2.1%
1.9
%
1.9%
1.8%
1.7%
1.7%
1.7
%
1.6%
1.6%
1.5%
1.5%
1.4%
1.2%
1.0%
0.9%
0.6%
RF
FIT
B
HB
AN
CFG
CM
A
BO
KF
EWB
C
MT
B
ZIO
N
FHN
KEY
SNV
ASB
FNB
WA
L
WTF
C
PB
CT
FRC
Allowance For Credit Loss: Relative to Both Loans and to Risk-Weighted Loans
Allowance for Credit Losses / Total Loans
26
Zions’ ACL ratios compared to peers are in-line (vs. total loans) to robust (vs. risk-weighted loans)
Source: S&P Global. Regulatory information on risk-weighted loans for 3Q20 was not available at the time of publication; therefore, 2Q20 data was used. Although most ratios with loans in the denominator displayed in this presentation exclude PPP loans, we have included PPP loans in the ACL/Loans ratio here to highlight the difference between unweighted and risk weighted loans.
3.07
%
2.77
%
2.5
3%
2.26
%
2.1
7%
2.15
%
2.12
%
2.07
%
2.00
%
1.95
%
1.91
%
1.88
%
1.77
%
1.73
%
1.47
%
1.18
%
1.11
%
0.85
%
RF
FITB
HB
AN
CFG
EWB
C
ZIO
N
BO
KF
CM
A
MT
B
FHN
KEY
ASB
SNV
FNB
WA
L
WTF
C
PB
CT
FRC
Allowance for Credit Losses / Risk-Weighted Loans
▪ Company Abbreviation Key
▪ 3Q20 Financial Results Summary
▪ Loan Growth by Brand and Loan Type
▪ Oil and Gas Portfolio Detail
▪ 2018 Greenwich Associates Market Tracking Program Nationwide Data
▪ GAAP to Non-GAAP Reconciliation
Appendix
27
Company Abbreviation (Ticker Symbol) Key
28
ASB: Associated Banc-CorpBAC: Bank of AmericaBOKF: BOK Financial CorporationC: Citigroup, Inc.CFG: Citizens Financial Group, Inc.CMA: Comerica IncorporatedEWBC: East West Bancorp, Inc.FHN: First Horizon National CorporationFITB: Fifth Third BancorpFNB: FNB CorpFRC: First Republic BankHBAN: Huntington Bancshares Incorporated
JPM: JPMorgan Chase & Co.KEY: KeyCorpMTB: M&T Bank CorporationPBCT: People’s United Financial, Inc.RF: Regions Financial CorporationSNV: Synovus Financial Corp.USB: US BankWFC: Wells Fargo & Co.WAL: Western Alliance BancorporationWTFC: Wintrust Financial Corp.ZION: Zions Bancorporation, N.A.
GREEN TEXT: Included in Zions’ 2H19-1H20 peer group as listed in the annual proxy statement; this group is used by Zions’ board in determining management compensation
BLUE TEXT: Not included in Zions’ peer group as listed in the annual proxy statement, but may be particularly relevant to the topic discussed within these slides
Financial Results Summary
29
Solid and improving fundamental performance
Three Months Ended
(Dollar amounts in millions, except per share data) September 30, 2020
June 30, 2020
March 31, 2020
Earnings Results:
Diluted Earnings Per Share $ 1.01 $ 0.34 $ 0.04
Net Earnings Applicable to Common Shareholders 167 57 6
Net Interest Income 555 563 548
Noninterest Income 157 117 134
Noninterest Expense 442 430 408
Pre-Provision Net Revenue - Adjusted (1) 267 300 299
Provision for Credit Losses 55 168 258
Ratios:
Return on Assets(2) 0.89 % 0.35 % 0.08 %
Return on Common Equity(3) 9.4 % 3.3 % 0.3 %
Return on Tangible Common Equity(3) 11.0 % 3.8 % 0.4 %
Net Interest Margin 3.06 % 3.23 % 3.41 %
Yield on Loans 3.68 % 3.83 % 4.42 %
Yield on Securities 2.04 % 2.20 % 2.34 %
Average Cost of Total Deposits(4) 0.11 % 0.15 % 0.36 %
Efficiency Ratio (1) 62.2 % 57.3 % 57.7 %
Effective Tax Rate 18.6 % 19.5 % 12.5 %
Ratio of Nonperforming Assets to Loans, Leases and OREO 0.68 % 0.62 % 0.56 %
Annualized Ratio of Net Loan and Lease Charge-offs to Average Loans 0.38 % 0.23 % 0.06 %
Common Equity Tier 1 Capital Ratio(5)
10.4% 10.2% 10.0 %(1) Adjusted for items such as severance, securities gains and losses and debt extinguishment costs. See Appendix for GAAP to non-GAAP reconciliation tables.(2) Net Income before Preferred Dividends or redemption costs used in the numerator(3) Net Income Applicable to Common used in the numerator(4) Includes noninterest-bearing deposits(5) Current period ratios and amounts represent estimates
30
Loan Growth - by Bank Brand and Loan Type
Note: National Real Estate (NRE) is a division of Zions Bank with a focus on small business loans with low LTV ratios, which generally are in line with SBA 504 program parameters. “Other” loans includes municipal and other consumer loan categories. Totals shown above may not foot due to rounding.
Period-End Year over Year Loan Growth (3Q20 vs. 3Q19)
Period-End Linked Quarter Loan Growth (3Q20 vs. 2Q20)
(in millions) Zions Bank Amegy CB&T NBAZ NSB Vectra CBW Other Total
C&I (ex-Oil & Gas) (79) (97) (20) (62) (56) (23) (17) - (354)
SBA PPP 27 27 30 14 14 6 2 - 120
Owner occupied (24) 30 24 - - 23 - - 53
Energy (Oil & Gas) (16) (156) (1) (1) - (9) (1) - (184)
Municipal (3) 16 100 (14) 17 16 15 24 171
CRE C&D 42 4 (64) (36) (4) (31) 20 - (69)
CRE Term (67) (14) 173 11 12 2 25 - 142
1-4 Family (62) (36) (25) (32) (14) (28) (2) 15 (184)
Home Equity (16) (6) (7) (6) (21) (2) (1) - (59)
Other 1 (25) 1 9 (5) (4) 3 - (20)
Total net loans (197) (257) 211 (117) (57) (50) 44 39 (384)
(in millions) Zions Bank Amegy CB&T NBAZ NSB Vectra CBW Other Total
C&I (ex-Oil & Gas) (762) (366) 254 (179) (61) (77) (30) - (1,221)
SBA PPP 1,713 1,329 1,606 721 608 475 358 - 6,810
Owner occupied (47) 28 138 - 42 11 40 - 212
Energy (Oil & Gas) 31 (142) 3 (4) - 17 - - (95)
Municipal 152 75 141 74 5 30 (7) 51 521
CRE C&D 122 90 (130) (7) (4) (139) 19 - (49)
CRE Term (52) (7) 296 (79) 21 102 (21) - 260
1-4 Family (115) (34) (37) (47) (33) (46) 7 8 (297)
Home Equity (99) 12 1 (4) (33) - (10) - (133)
Other (36) (44) 15 8 (20) (17) (4) - (98)
Total net loans 907 941 2,287 483 525 356 352 59 5,910
Oil & Gas (O&G) Credit Quality
31
Oil and Gas Key Credit Quality Ratios
Excluding PPP Loans and as of September 30, 2020:
▪ Annualized NCOs equaled 3.5% of loans
▪ Classified loans equaled 11.4% of loans
▪ Allowance for credit losses of $133 million or 5.8% of balances
▪ Approximately 72% of 2020 oil production hedged in the low-$50s and 71% of gas production in the mid $2s (natural gas)
Today vs. 2014-2016 downturn:
▪ Reduced concentration of energy services (67% decline in balances, 24 percentage point reduction of concentration in the energy portfolio)
▪ Underwriting on energy services has been much stronger
▪ Less leverage
▪ Replaced term loans with revolvers
▪ Fewer junior lien or subordinated debt behind Zions’ loans going into this cycle
-5%
0%
5%
10%
15%
20%
25%
30%
35%
4Q
14
4Q
15
4Q
16
4Q
17
4Q
18
3Q
19
4Q
19
1Q
20
2Q
20
3Q
20
Net Charge-offs / Loans Classifieds / Loans
Nonperforming Assets / Loans
Note: Net Charge-offs/Loans ratio is annualized for all periods shown.
Oil and gas loans account for $2.3 billion or 5% of total loans, excluding PPP Loans
All Ratios Exclude PPP Loans
▪ Services, which accounted for bulk of charge offs in the last cycle, accounts for 17% of the portfolio versus 45% going into the previous cycle (Dec 2014)
▪ Using current mix of loans, assuming net loss rates remain the same as the 2015-2018 downturn/recovery, Zions would experience approximately $93 million of loan losses or 3.6%.
▪ Major differences today vs. then: Stronger individual loan underwriting, but less capital markets support
▪ Approximately 80% of 2020 production hedged in the low-$50s (oil) and approximately 70% in high $2s (natural gas)
▪ Allowance for credit losses of $133 million or 5.8% of balances, up from $77 million at December 31, 2019
Oil & Gas Portfolio
32Oil & Gas portfolio tracked with internal coding. Based on Internal Data as of 3Q20
Portfolio Trends
Significant realignment since downturn
Distribution of Outstanding Balance by Energy Type
Sector GCOs Recoveries NCOs
Services 11.9% 2.7% 9.2%
Upstream 5.9% 1.4% 4.5%
Other 1.2% 0.9% 0.4%
Total 7.5% 1.9% 5.7%
Historical Loss Rates (2015Q1 – 2018Q4)
4% 7% 8% 8% 5% 6% 8% 9% 9%19%
24% 28% 31% 33% 34% 34% 34% 35%
45%39% 30% 24% 23% 18% 17% 17% 17%
33% 31% 34% 37% 39% 42% 41% 40% 40%
0%
20%
40%
60%
80%
100%
2014Q4 2015Q4 2016Q4 2017Q4 2018Q4 2019Q4 2020Q1 2020Q2 2020Q3
Downstream Midstream Services Upstream
0
2
4
6
8
10
12
14
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Mar-20 Jun-20 Sep-20
Balance WARG 1st Quartile 3rd Quartile
Middle Market and Small Business Research Feedback
Key Peers*
(Average Score %)
Closest
Competitor's
Score %
Our Rank
(2018)
Middle Market (Revenues of $10-$500 million)
Overall Satisfaction
Overall Satisfaction - Customers 56 42 49 1st
Bank You Can Trust 73 56 63 1st
Values Long-Term Relationships 69 56 64 1st
Ease of Doing Business 61 53 60 1st
Digital Product Capabilities 53 46 52 1st
Satisfaction with our Bankers
Overall Customer Satisfaction with Relationship Managers 69 60 66 1st
Overall Customer Satisfaction with Cash Management Specialist 82 60 62 1st
Overall Satisfaction with Branch 60 53 70 2nd
Credit Process
Willingness to Extend Credit 71 57 61 1st
Speed in Responding to a Loan Request 65 55 63 1st
Streamlines Loan Documentation 54 49 54 1st
Flexible Terms and Conditions 67 46 53 1st
Small Business (Revenues of $1-$10 million)
Overall Satisfaction
Overall Satisfaction - Customers 57 45 54 1st
Bank You Can Trust 78 59 80 2nd
Values Long Term Relationships 67 56 71 2nd
Ease of Doing Business 69 56 68 1st
Digital Product Capabilities 58 54 67 2nd
Satisfaction with our Bankers
Overall Customer Satisfaction with Relationship Managers 71 61 72 2nd
Overall Customer Satisfaction with Cash Management Specialist 84 70 80 1st
Overall Satisfaction with Branch 70 55 71 2nd
Credit Process
Willingness to Extend Credit 65 55 65 1st
Speed in Responding to a Loan Request 60 48 53 1st
Streamlines Loan Documentation 60 47 57 1st
Flexible Terms and Conditions 66 45 53 1st
% of "Excellent" Customer Citations**
Greenwich Associates Customer Satisfaction Categories
Zions
Bancorporation
Client Score %
% of "Excellent" Customer Citations**
Source: 2018 Greenwich Associates Market Tracking Program Nationwide *Key Peers: JPMorgan, Bank of America Merrill Lynch, US Bank, Wells Fargo ** Excellent Citations are a "5" on a 5 point scale from "5" excellent to "1" poor
Zions compares favorably to global competitors (JPMorgan, Bank of America, US Bank, Wells Fargo)
33
34
GAAP to Non-GAAP Reconciliation
(Amounts in millions) 3Q20 2Q20 1Q20 4Q19 3Q19
Efficiency Ratio
Noninterest expense (GAAP) (1) (a) $ 442 $ 430 $ 408 $ 472 $ 415
Adjustments:
Severance costs 1 - - 22 2
Other real estate expense - - - - (2)
Debt extinguishment cost - - - - -
Amortization of core deposit and other intangibles - - - - -
Restructuring costs 1 - 1 15 -
Pension termination-related expense - 28 - - -
Total adjustments (b) 2 28 1 37 -
Adjusted noninterest expense (non-GAAP) (a) - (b) = (c) 440 402 407 435 415
Net Interest Income (GAAP) (d) 555 563 548 559 567
Fully taxable-equivalent adjustments (e) 7 6 7 7 7
Taxable-equivalent net interest income (non-GAAP) (d) + (e) = (f) 562 569 555 566 574
Noninterest income (GAAP) (1) (g) 157 117 134 152 146
Combined income (f) + (g) = (h) 719 686 689 718 720
Adjustments:
Fair value and nonhedge derivative income (loss) 8 (12) (11) 6 (6)
Equity securities gains (losses), net 4 (4) (6) 2 2
Total adjustments (i) 12 (16) (17) 8 (4)
Adjusted taxable-equivalent revenue (non-GAAP) (h) - (i) = (j) 707 702 706 710 724
Pre-provision net revenue (PPNR), as reported (h) – (a) $ 277 $ 256 $ 281 $ 246 $ 305
Adjusted pre-provision net revenue (PPNR) (j) - (c) $ 267 $ 300 $ 299 $ 275 $ 309
Efficiency Ratio (1) (c) / (j) 62.2 % 57.3 % 57.7 % 61.3 % 57.3 %
35
GAAP to Non-GAAP Reconciliation$ In millions except per share amounts 3Q20 2Q20 1Q20 4Q19 3Q19
Pre-Provision Net Revenue (PPNR)
(a) Total noninterest expense $442 $430 $408 $472 $415
LESS adjustments:
Severance costs 1 - - 22 2
Other real estate expense - - - - (2)
Restructuring costs 1 - 1 15 -
Pension termination-related expense - 28 - - -
(b) Total adjustments 2 28 1 37 -
(a-b)=(c) Adjusted noninterest expense 440 402 407 435 415
(d) Net interest income 555 563 548 559 567
(e) Fully taxable-equivalent adjustments 7 6 7 7 7
(d+e)=(f) Taxable-equivalent net interest income (TENII) 562 569 555 566 574
(g) Noninterest Income 157 117 134 152 146
(f+g)=(h) Combined Income $719 $686 $689 $718 $720
LESS adjustments:
Fair value and nonhedge derivative income (loss) 8 (12) (11) 6 (6)
Securities gains (losses), net 4 (4) (6) 2 2
(i) Total adjustments 12 (16) (17) 8 (4)
(h-i)=(j) Adjusted revenue $707 $702 $706 $710 $724
(j-c) Adjusted pre-provision net revenue (PPNR) $267 $300 $299 $275 $309
Net Earnings Applicable to Common Shareholders (NEAC)
(k) Net earnings applicable to common 167 57 6 174 214
(l) Diluted Shares 163,779 164,425 172,998 178,718 181,870
GAAP Diluted EPS 1.01 0.34 0.04 0.97 1.17
PLUS Adjustments:
Adjustments to noninterest expense 2 28 1 37 -
Adjustments to revenue (12) 16 17 (8) 4
Tax effect for adjustments 3 (12) (4) (11) (1)
Preferred stock redemption - - - - -
(m) Total adjustments (7) 32 14 18 3
(k+m)=(n) Adjusted net earnings applicable to common (NEAC) 160 89 20 192 217
(n)/(l) Adjusted EPS 0.98 0.54 0.12 1.07 1.19
(o) Average assets 77,983 75,914 70,205 69,575 70,252
(p) Average tangible common equity 6,063 6,016 5,910 5,852 5,988
Profitability
(n)/(o) Adjusted Return on Assets (annualized) 0.82% 0.47% 0.11% 1.09% 1.23%
(n)/(p) Adjusted Return on Tangible Common Equity (annualized) 10.6% 5.9% 1.4% 13.0% 14.4%
(c)/(j) Efficiency Ratio 62.2% 57.3% 57.7% 61.3% 57.3%
