Zions Bancorporation Reports Earnings of $0.30 Per Diluted Common Share for Second Quarter 2012

23 Jul, 2012, 16:10 ET from Zions Bancorporation

SALT LAKE CITY, July 23, 2012 /PRNewswire/ -- Zions Bancorporation (NASDAQ: ZION) ("Zions" or "the Company") today reported second quarter net earnings applicable to common shareholders of $55.2 million or $0.30 per diluted common share, compared to $25.5 million or $0.14 per diluted share for the first quarter of 2012. Net earnings applicable to common shareholders were favorably impacted this quarter by a 43% reduction in preferred stock dividends due primarily to the $700 million TARP redemption and related warrant amortization in the first quarter.

Adjusted for the noncash effects in the second quarter of the discount amortization on conversion of subordinated debt and additional accretion (net of expense) on acquired FDIC-supported loans, net earnings applicable to common shareholders were $72.9 million or $0.40 per diluted share for the second quarter of 2012, compared to $40.5 million or $0.22 per diluted share for the first quarter of 2012.

Second Quarter 2012 Highlights

  • Credit quality improved in nearly all major geographies and loan types. Net charge-offs decreased 20% to $43 million.
  • Loans and leases, excluding FDIC-supported loans, increased $328 million to $36.2 billion at June 30, 2012.
  • Net interest income decreased 2.3% to $432 million from $442 million in the first quarter. The core net interest margin decreased 9 basis points to 3.72% from 3.81% in the first quarter.

"We continue to enjoy strong improvement in credit trends and expect classified loans to continue to trend lower," said Harris H. Simmons, chairman and chief executive officer. "Furthermore, we were pleased to experience a moderate degree of loan growth primarily driven by business loan growth; however, our business customers generally remain quite cautious, which is constraining revenue growth," continued Mr. Simmons. "Finally, supported by the continued improvement in credit quality, we believe we are on track to redeem the balance of the TARP preferred stock in the second half of 2012."

Asset Quality

Net loan and lease charge-offs decreased 20% to $43 million for the second quarter of 2012, compared to $55 million for the first quarter of 2012. Net charge-offs declined primarily in commercial and industrial and term commercial real estate loans.

Nonperforming lending-related assets declined 9% to $0.9 billion at June 30, 2012 from $1.0 billion at March 31, 2012. Nonaccrual loans declined 9% to $793 million at June 30, 2012 from $872 million at March 31, 2012. The ratio of nonperforming lending-related assets to loans and leases and other real estate owned decreased to 2.53% at June 30, 2012, compared to 2.79% at March 31, 2012.

Classified loans, excluding FDIC-supported loans, decreased approximately 9% to $1.9 billion at June 30, 2012, compared to $2.1 billion at March 31, 2012. Approximately 73% of classified loans were current as to principal and interest for both the second and first quarters of 2012.

The provision for loan losses was $10.9 million for the second quarter of 2012, compared to $15.7 million for the first quarter of 2012.

The allowance for credit losses of approximately $1.1 billion, or 2.92% of loans and leases at June 30, 2012, was essentially unchanged from the balance at March 31, 2012.

Loans

Loans and leases, excluding FDIC-supported loans, increased $328 million to $36.2 billion at June 30, 2012, compared to $35.9 billion at March 31, 2012. The increases were predominantly in commercial and industrial and 1-4 family residential loans and were widespread geographically. Construction and land development loans were essentially unchanged from March 31, 2012 and therefore did not detract from net loan growth during the quarter. Average loans and leases, excluding FDIC-supported loans, remained essentially the same at $36.1 billion compared to the first quarter of 2012.

Deposits

Average total deposits for the second quarter of 2012 increased $571 million or 1.3% to $42.9 billion compared to $42.4 billion for the first quarter of 2012. The increase resulted primarily from a higher level of average noninterest-bearing demand deposits for the second quarter of 2012, which were $16.2 billion compared to $15.7 billion for the first quarter of 2012. The ratio of loans to deposits was 85.4% at June 30, 2012, compared to 84.9% at March 31, 2012.

Debt and Shareholders' Equity

As previously reported, on May 1, 2012, the Company issued an additional $100 million of the 4.5% senior notes, bringing the total to $400 million of these notes that are due March 27, 2017. The $100 million notes were sold at a price of 100.249%, with a yield to maturity of 4.442%. On June 20, 2012, the Company issued $158.45 million of 4.0% senior notes due June 20, 2016 at a price of 97.5%, with a yield to maturity of 4.693%. Total net proceeds to the Company from the second quarter issuances were approximately $253 million.

The Company redeemed all $254.9 million of senior notes on their maturity date of June 21, 2012 that were guaranteed under the FDIC's Temporary Liquidity Guarantee Program. The Company has no other notes outstanding under this program.

On May 7, 2012, the Company sold at par $143.75 million of Series F 7.9% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, which qualifies as Tier 1 capital. The Company redeemed on the June 15, 2012 call date all $142.5 million of Series E 11.0% preferred stock.

As previously announced, effective May 16, 2012, approximately $50.2 million of convertible subordinated debt was converted into the Company's Series C preferred stock. Accelerated discount amortization on the converted debt increased interest expense by a pretax noncash amount of approximately $16.2 million ($13.2 million after-tax) in the second quarter of 2012, compared to $12.2 million ($9.9 million after-tax) in the first quarter of 2012.

The estimated common equity tier 1 capital ratio was 9.77% at June 30, 2012, compared to 9.71% at March 31, 2012.

Net Interest Income

Net interest income decreased 2.3% to $432 million for the second quarter of 2012, compared to $442 million for the first quarter of 2012. Core net interest income, adjusted for discount amortization on convertible subordinated debt and accretion on acquired loans, was approximately $444 million for the second quarter of 2012, compared to $453 million for the first quarter of 2012.

The net interest margin decreased 11 basis points to 3.62% in the second quarter of 2012, compared to 3.73% in the first quarter of 2012. The core net interest margin decreased 9 basis points to 3.72% in the second quarter, compared to 3.81% in the first quarter. The decrease in the core net interest margin was primarily due to reduced loan yields, and to a higher cost and amount of long-term debt outstanding, much of which was deposited into a low-yielding cash account because it is intended to be used for the redemption of the remaining TARP preferred stock in the second half of 2012.

Investment Securities

During the second quarter of 2012, the Company recognized credit-related other-than-temporary impairment ("OTTI") on collateralized debt obligations ("CDOs") of $7.3 million or $0.02 per diluted share, compared to $10.2 million or $0.03 per diluted share during the first quarter of 2012. OTTI this quarter was due primarily to credit deterioration at a small number of banks. Reperformance of deferring banks continues to be a favorable trend. Partially offsetting the financial impact of OTTI on CDOs were $3.3 million of fixed income securities gains that resulted from cash principal paydowns of CDOs previously written down.

The following table stratifies the CDOs into performing tranches without credit impairment and nonperforming tranches at June 30, 2012:

June 30, 2012

Net unrealized

% of carrying

losses

Weighted

value to par

(Amounts in millions)

No. of

Par

Amortized

Carrying

recognized

average

June 30,

March 31,

tranches

amount

cost

value

in OCI 1

discount rate 2

2012

2012

Change

Performing CDOs

Predominantly bank CDOs

30

$ 904

$ 805

$ 572

$ (233)

7.02%

63%

66%

-3%

Insurance-only CDOs

21

450

445

330

(115)

7.21%

73%

74%

-1%

Other CDOs

7

82

71

62

(9)

7.54%

76%

78%

-2%

Total performing CDOs

58

1,436

1,321

964

(357)

7.11%

67%

69%

-2%

Nonperforming CDOs 3

Deferring interest, but no credit impairment

3

72

72

21

(51)

12.36%

29%

25%

4%

Credit impairment prior to last 12 months

33

595

438

136

(302)

12.84%

23%

21%

2%

Credit impairment during last 12 months

23

444

278

72

(206)

13.37%

16%

14%

2%

Total nonperforming CDOs

59

1,111

788

229

(559)

13.02%

21%

19%

2%

Total CDOs

117

$ 2,547

$ 2,109

$ 1,193

$ (916)

9.69%

47%

48%

-1%

1 Other comprehensive income, amounts presented are pretax.

2 Margin over LIBOR

3 Defined as either deferring current interest ("PIKing") or OTTI.

Noninterest Income

Noninterest income for the second quarter of 2012 was $123.0 million, compared to $107.0 million for the first quarter of 2012. The increase mainly resulted from higher dividends and other investment income from private equity investments primarily at Amegy.

Noninterest Expense

Noninterest expense for the second quarter of 2012 was $401.7 million compared to $392.4 million for the first quarter of 2012. The increase was due primarily to an $8.6 million increase in the provision for unfunded lending commitments compared to the prior quarter, driven by an increase in the volume of loan commitments.

Conference Call

Zions will host a conference call to discuss these second quarter results at 5:30 p.m. ET this afternoon (July 23, 2012). Media representatives, analysts and the public are invited to listen to this discussion by calling 253-237-1247 (domestic and international) and entering the passcode 93192595, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation website at www.zionsbancorporation.com. A replay of the call will be available from approximately 7:30 p.m. ET on Monday, July 23, 2012, until midnight ET on Monday, July 30, 2012, by dialing 855-859-2056 (domestic and international) and entering the passcode. The webcast of the conference call will also be archived and available for 30 days.

About Zions Bancorporation

Zions Bancorporation is one of the nation's premier financial services companies, consisting of a collection of great banks in select Western markets. Zions operates its banking businesses under local management teams and community identities through approximately 500 offices in 10 Western and Southwestern states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah and Washington. The Company is a national leader in Small Business Administration lending and public finance advisory services. In addition, Zions is included in the S&P 500 and NASDAQ Financial 100 indices. Investor information and links to subsidiary banks can be accessed at www.zionsbancorporation.com.

Forward-Looking Information

Statements in this press release that are based on other than historical data or that express the Company's expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management's views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that might cause such differences include, but are not limited to: the Company's ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either internationally, nationally or locally in areas in which the Company conducts its operations, including changes in securities markets and valuations in structured securities and other assets; changes in governmental policies and programs resulting from general economic and financial market conditions; changes in interest and funding rates; continuing consolidation in the financial services industry; new private and governmental legal actions or changes in existing private and governmental legal actions; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company's operations or business (including The Dodd-Frank Wall Street Reform and Consumer Protection Act); and changes in accounting policies, procedures or determinations as may be required by the Financial Accounting Standards Board or other regulatory agencies.

Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Zions Bancorporation's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and available at the SEC's Internet site (http://www.sec.gov).

Except as required by law, the Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.

ZIONS BANCORPORATION AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS

(Unaudited)

Three Months Ended

(In thousands, except share, per share, and ratio data)

June 30,

March 31,

December 31,

September 30,

June 30,

2012

2012

2011

2011

2011

PER COMMON SHARE

Dividends

$ 0.01

$ 0.01

$ 0.01

$ 0.01

$ 0.01

Book value per common share

25.48

25.25

25.02

24.78

24.88

Tangible common equity per common share

19.65

19.39

19.14

18.87

18.95

SELECTED RATIOS

Return on average assets

0.70%

0.69%

0.67%

0.84%

0.57%

Return on average common equity

4.71%

2.21%

3.84%

5.58%

2.53%

Net interest margin

3.62%

3.73%

3.86%

3.99%

3.62%

Capital Ratios

Tangible common equity ratio

6.91%

6.89%

6.77%

6.90%

6.95%

Tangible equity ratio

10.35%

10.24%

11.33%

11.56%

11.58%

Average equity to average assets

12.37%

13.31%

13.27%

13.51%

13.42%

Risk-Based Capital Ratios 1

Common equity tier 1 capital

9.77%

9.71%

9.57%

9.53%

9.36%

Tier 1 leverage

12.30%

12.17%

13.40%

13.48%

13.44%

Tier 1 risk-based capital

15.01%

14.83%

16.13%

16.10%

15.87%

Total risk-based capital

16.87%

16.76%

18.06%

18.12%

18.01%

Taxable-equivalent net interest income

$ 436,610

$ 447,161

$ 466,699

$ 475,580

$ 421,226

Weighted average common and common-

equivalent shares outstanding

183,136,631

182,963,828

182,823,190

182,857,702

182,728,185

Common shares outstanding

184,117,522

184,228,178

184,135,388

184,294,782

184,311,290

1 Ratios for June 30, 2012 are estimates.

ZIONS BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30,

March 31,

December 31,

September 30,

June 30,

(In thousands, except share amounts)

2012

2012

2011

2011

2011

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

ASSETS

Cash and due from banks

$ 1,124,673

$ 1,082,186

$ 1,224,350

$ 1,102,768

$ 1,035,028

Money market investments:

Interest-bearing deposits

7,887,175

7,629,399

7,020,895

5,118,066

4,924,992

Federal funds sold and security resell agreements

83,529

52,634

102,159

165,106

123,132

Investment securities:

Held-to-maturity, at adjusted cost (approximate fair value

$715,710, $728,479, $729,974, $715,608, and $762,998)

773,016

797,149

807,804

791,569

829,702

Available-for-sale, at fair value

3,167,590

3,223,086

3,230,795

3,970,602

4,084,963

Trading account, at fair value

20,539

19,033

40,273

49,782

51,152

3,961,145

4,039,268

4,078,872

4,811,953

4,965,817

Loans held for sale

139,245

184,579

201,590

159,300

158,943

Loans, net of unearned income and fees:

Loans and leases

36,231,104

35,903,475

36,393,782

35,924,054

35,969,702

FDIC-supported loans

642,246

687,126

750,870

800,454

853,875

36,873,350

36,590,601

37,144,652

36,724,508

36,823,577

Less allowance for loan losses

971,716

1,010,059

1,049,958

1,148,903

1,237,733

Loans, net of allowance

35,901,634

35,580,542

36,094,694

35,575,605

35,585,844

Other noninterest-bearing investments

867,882

875,037

865,231

860,045

858,678

Premises and equipment, net

714,913

715,815

719,276

726,503

722,600

Goodwill

1,015,129

1,015,129

1,015,129

1,015,129

1,015,161

Core deposit and other intangibles

59,277

63,538

67,830

72,571

77,346

Other real estate owned

144,816

158,592

153,178

203,173

238,990

Other assets

1,507,594

1,499,588

1,605,905

1,721,101

1,654,883

$ 53,407,012

$ 52,896,307

$ 53,149,109

$ 51,531,320

$ 51,361,414

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:

Noninterest-bearing demand

$ 16,498,248

$ 16,185,140

$ 16,110,857

$ 14,911,729

$ 14,475,383

Interest-bearing:

Savings and NOW

7,505,841

7,406,910

7,159,101

6,711,002

6,555,306

Money market

14,439,389

14,813,495

14,616,740

14,576,527

14,948,065

Time

3,211,942

3,326,717

3,413,550

3,536,755

3,775,409

Foreign

1,504,827

1,366,826

1,575,361

1,627,135

1,437,067

43,160,247

43,099,088

42,875,609

41,363,148

41,191,230

Securities sold, not yet purchased

104,882

47,404

44,486

30,070

42,709

Federal funds purchased and security repurchase agreements

759,591

486,808

608,098

630,901

630,058

Other short-term borrowings

7,621

19,839

70,273

125,290

147,945

Long-term debt

2,274,571

2,283,121

1,954,462

1,898,439

1,879,669

Reserve for unfunded lending commitments

103,586

98,718

102,422

98,062

100,264

Other liabilities

507,151

474,551

510,531

466,493

456,448

Total liabilities

46,917,649

46,509,529

46,165,881

44,612,403

44,448,323

Shareholders' equity:

Preferred stock, without par value, authorized 4,400,000 shares

1,800,473

1,737,633

2,377,560

2,354,523

2,329,370

Common stock, without par value; authorized 350,000,000

shares; issued and outstanding 184,117,522, 184,228,178,

184,135,388, 184,294,782 and 184,311,290 shares

4,157,525

4,162,522

4,163,242

4,160,697

4,158,369

Retained earnings

1,110,120

1,060,525

1,036,590

994,380

931,345

Accumulated other comprehensive income (loss)

(576,147)

(571,567)

(592,084)

(588,834)

(504,491)

Controlling interest shareholders' equity

6,491,971

6,389,113

6,985,308

6,920,766

6,914,593

Noncontrolling interests

(2,608)

(2,335)

(2,080)

(1,849)

(1,502)

Total shareholders' equity

6,489,363

6,386,778

6,983,228

6,918,917

6,913,091

$ 53,407,012

$ 52,896,307

$ 53,149,109

$ 51,531,320

$ 51,361,414

ZIONS BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended

(In thousands, except per share amounts)

June 30,

March 31,

December 31,

September 30,

June 30,

2012

2012

2011

2011

2011

Interest income:

Interest and fees on loans

$ 478,569

$ 486,615

$ 504,243

$ 520,133

$ 523,741

Interest on money market investments

5,099

4,628

4,308

3,482

3,199

Interest on securities:

Held-to-maturity

9,325

8,959

9,106

8,937

9,009

Available-for-sale

25,090

23,158

21,268

21,382

22,179

Trading account

148

338

548

462

538

Total interest income

518,231

523,698

539,473

554,396

558,666

Interest expense:

Interest on deposits

20,823

23,413

26,645

31,093

34,257

Interest on short-term borrowings

256

779

1,221

1,501

1,783

Interest on long-term debt

65,165

57,207

49,699

51,207

106,454

Total interest expense

86,244

81,399

77,565

83,801

142,494

Net interest income

431,987

442,299

461,908

470,595

416,172

Provision for loan losses

10,853

15,664

(1,476)

14,553

1,330

Net interest income after provision for loan losses

421,134

426,635

463,384

456,042

414,842

Noninterest income:

Service charges and fees on deposit accounts

43,426

43,532

42,873

44,154

42,878

Other service charges, commissions and fees

38,554

34,226

38,539

45,308

43,958

Trust and wealth management income

8,057

6,374

6,481

6,269

7,179

Capital markets and foreign exchange

7,342

5,734

8,106

7,729

8,358

Dividends and other investment income

21,542

9,480

7,805

9,356

17,239

Loan sales and servicing income

10,287

8,352

6,058

6,165

9,836

Fair value and nonhedge derivative income (loss)

(6,784)

(4,400)

(4,677)

(5,718)

4,195

Equity securities gains (losses), net

107

9,145

1,961

5,289

(1,636)

Fixed income securities gains (losses), net

5,519

720

1,288

13,035

(2,396)

Impairment losses on investment securities:

Impairment losses on investment securities

(24,026)

(18,273)

(12,351)

(55,530)

(6,339)

Noncredit-related losses on securities not expected to

be sold (recognized in other comprehensive income)

16,718

8,064

265

42,196

1,181

Net impairment losses on investment securities

(7,308)

(10,209)

(12,086)

(13,334)

(5,158)

Other

2,280

4,045

1,956

2,789

3,896

Total noninterest income

123,022

106,999

98,304

121,042

128,349

Noninterest expense:

Salaries and employee benefits

220,765

224,634

220,290

216,855

222,138

Occupancy, net

28,169

27,951

27,899

29,040

27,588

Furniture and equipment

27,302

26,792

27,036

26,852

26,153

Other real estate expense

6,440

7,810

14,936

20,564

17,903

Credit related expense

12,415

13,485

14,213

15,379

17,124

Provision for unfunded lending commitments

4,868

(3,704)

4,360

(2,202)

(1,904)

Legal and professional services

12,947

11,096

14,974

8,897

8,432

Advertising

6,618

5,807

7,780

6,511

5,962

FDIC premiums

10,444

10,919

12,012

12,573

15,232

Amortization of core deposit and other intangibles

4,262

4,291

4,741

4,773

4,855

Other

67,426

63,291

76,799

69,776

72,773

Total noninterest expense

401,656

392,372

425,040

409,018

416,256

Income before income taxes

142,500

141,262

136,648

168,066

126,935

Income taxes

51,036

51,859

47,877

59,348

54,325

Net income

91,464

89,403

88,771

108,718

72,610

Net loss applicable to noncontrolling interests

(273)

(273)

(248)

(375)

(265)

Net income applicable to controlling interest

91,737

89,676

89,019

109,093

72,875

Preferred stock dividends

(36,522)

(64,187)

(44,599)

(43,928)

(43,837)

Net earnings applicable to common shareholders

$ 55,215

$ 25,489

$ 44,420

$ 65,165

$ 29,038

Weighted average common shares outstanding during the period:

Basic shares

182,985

182,798

182,703

182,676

182,472

Diluted shares

183,137

182,964

182,823

182,858

182,728

Net earnings per common share:

Basic

$ 0.30

$ 0.14

$ 0.24

$ 0.35

$ 0.16

Diluted

0.30

0.14

0.24

0.35

0.16

ZIONS BANCORPORATION AND SUBSIDIARIES

Loan Balances By Portfolio Type

(Unaudited)

(In millions)

June 30,

March 31,

December 31,

September 30,

June 30,

2012

2012

2011

2011

2011

Commercial:

Commercial and industrial

$ 10,383

$ 10,157

$ 10,335

$ 9,733

$ 9,520

Leasing

406

394

380

366

365

Owner occupied

7,811

7,887

8,159

8,326

8,419

Municipal

477

441

441

440

448

Total commercial

19,077

18,879

19,315

18,865

18,752

Commercial real estate:

Construction and land development

2,099

2,100

2,265

2,467

2,748

Term

8,011

8,070

7,883

7,723

7,701

Total commercial real estate

10,110

10,170

10,148

10,190

10,449

Consumer:

Home equity credit line

2,181

2,167

2,187

2,161

2,143

1-4 family residential

4,019

3,875

3,921

3,891

3,807

Construction and other consumer real estate

328

316

306

303

308

Bankcard and other revolving plans

284

274

291

278

280

Other

232

223

226

236

231

Total consumer

7,044

6,855

6,931

6,869

6,769

FDIC-supported loans 1

642

687

751

801

854

Total loans

$ 36,873

$ 36,591

$ 37,145

$ 36,725

$ 36,824

1 FDIC-supported loans represent loans acquired from the FDIC subject to loss sharing agreements.

FDIC-Supported Loans Effect of Higher Accretion

and Impact on FDIC Indemnification Asset

(Unaudited)

(In thousands)

June 30,

March 31,

December 31,

September 30,

June 30,

2012

2012

2011

2011

2011

Balance sheet:

Change in assets from reestimation of cash      flows – increase (decrease):

FDIC-supported loans

$ 14,761

$ 13,171

$ 17,003

$ 20,642

$ 21,467

FDIC indemnification asset (included in      other assets)

(11,233)

(10,002)

(13,126)

(15,431)

(14,975)

Balance at end of period:

FDIC-supported loans

642,246

687,126

750,870

800,454

853,875

FDIC indemnification asset (included in other      assets)

100,561

106,477

120,358

135,299

150,557

Three Months Ended

June 30,

March 31,

December 31,

September 30,

June 30,

2012

2012

2011

2011

2011

Statement of income:

Interest income:

Interest and fees on loans

$ 14,761

$ 13,171

$ 17,003

$ 20,642

$ 21,467

Noninterest expense:

Other noninterest expense

11,233

10,002

13,126

15,431

14,975

Net increase in pretax income

$ 3,528

$ 3,169

$ 3,877

$ 5,211

$ 6,492

ZIONS BANCORPORATION AND SUBSIDIARIES

Nonperforming Lending-Related Assets

(Unaudited)

(Amounts in thousands)

June 30,

March 31,

December 31,

September 30,

June 30,

2012

2012

2011

2011

2011

Nonaccrual loans

$ 771,510

$ 849,543

$ 885,608

$ 1,038,803

$ 1,243,304

Other real estate owned

125,142

129,676

128,874

170,023

195,005

Nonperforming lending-related assets, excluding

FDIC-supported assets

896,652

979,219

1,014,482

1,208,826

1,438,309

FDIC-supported nonaccrual loans

21,980

22,623

24,267

29,082

30,414

FDIC-supported other real estate owned

19,674

28,916

24,304

33,150

43,985

FDIC-supported nonperforming assets

41,654

51,539

48,571

62,232

74,399

Total nonperforming lending-related assets

$ 938,306

$ 1,030,758

$ 1,063,053

$ 1,271,058

$ 1,512,708

Ratio of nonperforming lending-related assets to loans 1

and leases and other real estate owned

2.53%

2.79%

2.83%

3.43%

4.06%

Accruing loans past due 90 days or more, excluding

FDIC-supported loans

$ 29,460

$ 38,172

$ 19,145

$ 15,863

$ 19,195

Accruing FDIC-supported loans past due 90 days or more

70,453

76,945

74,611

85,714

89,554

Ratio of accruing loans past due 90 days or more to

loans 1and leases

0.27%

0.31%

0.25%

0.28%

0.29%

Nonaccrual loans and accruing loans past due 90 days or more

$ 893,403

$ 987,283

$ 1,003,631

$ 1,169,462

$ 1,382,467

Ratio of nonaccrual loans and accruing loans past due

90 days or more to loans 1and leases

2.41%

2.68%

2.69%

3.17%

3.74%

Accruing loans past due 30 - 89 days, excluding

FDIC-supported loans

$ 142,501

$ 171,224

$ 183,976

$ 174,250

$ 170,782

Accruing FDIC-supported loans past due 30 - 89 days

15,519

13,899

24,691

13,816

21,520

Restructured loans included in nonaccrual loans

227,568

276,669

295,825

308,159

324,077

Restructured loans on accrual

393,360

401,554

448,109

430,253

393,602

Classified loans, excluding FDIC-supported loans

1,880,932

2,076,220

2,056,472

2,361,574

2,675,741

1Includes loans held for sale.

ZIONS BANCORPORATION AND SUBSIDIARIES

Allowance for Credit Losses

(Unaudited)

Three Months Ended

(Amounts in thousands)

June 30,

March 31,

December 31,

September 30,

June 30,

2012

2012

2011

2011

2011

Allowance for Loan Losses

Balance at beginning of period

$ 1,010,059

$ 1,049,958

$ 1,148,903

$ 1,237,733

$ 1,349,800

Add:

Provision for losses

10,853

15,664

(1,476)

14,553

1,330

Adjustment for FDIC-supported loans

(5,856)

(1,057)

(2,655)

(1,520)

(162)

Deduct: