Zions Bancorporation Reports 2009 Fourth Quarter Results Showing Improvement of Credit Measures

Jan 25, 2010, 16:10 ET from Zions Bancorporation

SALT LAKE CITY, Jan. 25 /PRNewswire-FirstCall/ -- Zions Bancorporation (Nasdaq: ZION) ("Zions" or "the Company") today reported a fourth quarter net loss applicable to common shareholders of $176.5 million or $1.26 per diluted share, compared to a net loss of $181.9 million or $1.43 per diluted share for the third quarter of 2009.

As discussed subsequently, the Company has included in this press release expected revisions for certain second and third quarter 2009 amounts as a result of changes in the accounting for its June 2009 subordinated debt modification. The Company believes these changes will increase tangible common equity by $173 million at June 30, 2009 and by $166 million at September 30, 2009, increasing the tangible common equity ratio at those dates by 0.34% and 0.33%, respectively, compared to the ratios previously disclosed.

Fourth Quarter 2009 Highlights

Positives:

  • Tangible common equity ratio of 6.12% compared to 5.76% (revised from 5.43%) in third quarter.
  • Net loan charge-offs of $292.1 million, which included a $39 million recovery, compared to $381.3 million in third quarter.
  • Loan loss provision of $390.7 million compared to $565.9 million in third quarter.
  • Ratio of allowance for loan losses to net loans and leases of 3.95% compared to 3.61% in third quarter; ratio of total allowance and reserve for credit losses to net loans and leases of 4.25% compared to 3.86% in third quarter.
  • Average noninterest-bearing demand deposits of $12.1 billion compared to $11.4 billion in third quarter, an increase of $0.7 billion or 25.3% annualized.

Challenges:

  • Nonperforming lending related assets of $2.3 billion compared to $2.2 billion in third quarter (excluding FDIC-supported assets); ratio to net loans and other real estate owned of 5.93% compared to 5.40% in third quarter.
  • Credit-related impairment losses on CDO securities of $99.3 million compared to $56.5 million in third quarter; approximately 95% of the fourth quarter losses had been previously recognized in OCI.
  • In spite of originating and renewing approximately $1.7 billion of new credit during the fourth quarter, loan balances declined 2.6% from the third quarter due to continued weakness in loan demand.

"We enter into 2010 feeling increasingly confident that peak levels of loan losses are behind us, and that economic conditions in the majority of our markets have begun to stabilize," said Harris H. Simmons, chairman and chief executive officer. Mr. Simmons continued, "Various measures of credit quality have steadied or improved compared to prior quarters, which is likely to lead to lower loan losses and provision expenses. While the economic, political, and regulatory environment remains in flux, our capital ratios remain significantly above regulatory benchmarks for a "well capitalized" banking institution, and we are encouraged with the recent improvement in our tangible common equity ratio."  

Amended Financial Statements

As described in a separate Form 8-K filed on this date, the Company has reevaluated its accounting for the June 2009 subordinated debt modification in connection with responding to regular inquiries received from the Securities and Exchange Commission in January 2010. As a result, the Company has incorporated into these results expected revisions to its financial statements for the second and third quarters of 2009. The primary expected change is an increase to tangible common equity resulting from the Company's recalculation of the amount of gain recognized in earnings and the value of the conversion feature granted to noteholders. Amounts for the second and third quarters of 2009 in this press release (including the attached financial exhibits) reflect these expected changes. The Company anticipates filing amended Forms 10-Q for the periods ending June 30, 2009 and September 30, 2009.

Asset Quality

Net loan and lease charge-offs for the fourth quarter of 2009 were $292.1 million or 2.98% annualized of average loans excluding FDIC-supported assets. This compares with $381.3 million or 3.79% annualized of average loans excluding FDIC-supported assets for the third quarter of 2009 and $179.7 million or 1.72% annualized of average loans for the fourth quarter of 2008. The 2009 fourth quarter net charge-offs included a $39.3 million recovery on a commercial credit charged-off during the second quarter of 2009. Net charge-offs on construction development loans subsided during the quarter.

The provision for loan losses was $390.7 million for the fourth quarter of 2009 compared to $565.9 million for the third quarter of 2009 and $285.2 million for the fourth quarter of 2008. When combined with the provision for unfunded lending commitments, the total provision for credit losses was $117.8 million in excess of net loan and lease charge-offs.

The allowance for loan losses as a percentage of net loans and leases excluding FDIC-supported assets was 3.95% at December 31, 2009 compared to 3.61% at September 30, 2009 and 1.65% at December 31, 2008. The combined allowance for loan losses and reserve for unfunded lending commitments was $1,647.8 million, or 4.25% of net loans and leases excluding FDIC-supported assets at December 31, 2009, compared to 3.86% at September 30, 2009 and 1.77% at December 31, 2008.

Nonperforming lending related assets were $2,330.0 million at December 31, 2009 ($2,740.1 million including FDIC-supported assets) compared to $2,171.0 million at September 30, 2009 and $1,138.4 million at December 31, 2008. The ratio of nonperforming lending related assets excluding FDIC-supported assets to net loans, leases and other real estate owned was 5.93% at December 31, 2009 compared to 5.40% at September 30, 2009 and 2.71% at December 31, 2008.

Capital and Financing Actions

During the fourth quarter of 2009, the Company sold 11,237,500 shares of common stock for $155.5 million (average price of $13.84) under a common equity distribution program. These shares were sold in connection with the announced sale of $250 million of common stock that commenced on September 17, 2009. Net of commissions and fees, this sale added $152.9 million to tangible common equity during the quarter, or 0.31% to the tangible common equity ratio. The amount of common stock at December 31, 2009 that remained available for issuance under the program was approximately $27.3 million.

During the fourth quarter of 2009, $35.7 million of subordinated debt was converted into shares of the Company's Series C preferred stock under the previously announced debt modification program. The tangible common equity ratio decreased by 0.04% primarily from the acceleration of discount amortization on the converted debt, which increased interest expense by approximately $20.0 million during the fourth quarter of 2009.

On December 22, 2009, the Company completed the exchange of approximately $71.5 million liquidation amount of its Series A preferred stock into 2,816,834 shares of common stock. Tangible common equity was increased by the same amount. The exchange represented 51% of the liquidation amount of the Series A preferred stock outstanding at the time of the exchange.

On December 30, 2009, the Company executed an agreement to modify $40 million of certain subordinated debt held by one institutional investor in a manner similar to the previous subordinated debt modification, resulting in a $15.2 million pretax gain.

For the year 2009, the Company raised Tier 1 capital of approximately $997 million from the net issuance of $464 million of common stock and from the net effects of the debt modification and the preferred stock redemptions, which totaled $533 million.

The tangible common equity ratio was 6.12% at December 31, 2009 compared to 5.76% (revised from 5.43%) at September 30, 2009 and 5.89% at December 31, 2008. The change from the third quarter was primarily due to the impact of the equity transactions and secondarily to reductions in the balance sheet. The estimated Tier 1 common to risk-weighted assets ratio was 6.50% at December 31, 2009 compared to 6.59% at September 30, 2009.

Loans

Net loans and leases of $40.2 billion at December 31, 2009 decreased approximately $1.1 billion or 10.3% annualized from $41.3 billion at September 30, 2009, and decreased $1.5 billion or 3.5% from $41.7 billion at December 31, 2008. Excluding FDIC-supported assets, net loans and leases decreased approximately $0.9 billion or 9.1% annualized to $38.7 billion from $39.6 billion at September 30, 2009 and decreased $2.9 billion, or 7.0% from the balance one year ago. The net decrease from September 30, 2009 was primarily in the construction and land development portfolio.

Deposits

Average noninterest-bearing demand deposits for the fourth quarter of 2009 increased $0.7 billion or 25.3% annualized to $12.1 billion compared to $11.4 billion for the third quarter of 2009. Average total deposits for the fourth quarter of 2009 decreased $0.4 billion or 3.8% annualized to $42.9 billion compared to $43.3 billion for the third quarter of 2009, and increased $3.4 billion or 8.5% compared to $39.6 billion for the fourth quarter of 2008.

Net Interest Income

The net interest margin was 3.81% for the fourth quarter of 2009 compared to 3.91% for the third quarter of 2009 and 4.20% for the fourth quarter of 2008. The net interest margin for the fourth quarter of 2009 was unfavorably impacted primarily by 0.11% for the discount amortization on the modified subordinated debt, and an additional 0.17% for the accelerated discount amortization due to the previously discussed conversion of $35.7 million of modified subordinated debt. The net interest margin was favorably impacted during the fourth quarter by the previously mentioned growth of noninterest-bearing demand deposits, reduced rates on interest-bearing deposits, and strong pricing on new loans.

Investment Securities

During the fourth quarter of 2009, the Company recognized credit-related net impairment losses on CDOs of $99.3 million, or $0.44 per diluted share, compared to $56.5 million during the third quarter of 2009. Approximately $94.7 million of the impairment losses during the fourth quarter had been previously recognized in OCI.

CDOs for which the underlying collateral is predominantly bank trust preferred securities comprise $2.2 billion of the $2.7 billion par amount of the bank and insurance CDO portfolio. Below is a table showing the Company's current predominantly bank CDO distribution by original rating (e.g. 52% of the current $2.2 billion was originally rated AAA). Most (86%) of the $99.3 million of securities impairment charges taken during the fourth quarter came from the original single A and BBB rated, predominantly bank CDOs.

(In millions)





































December 31, 2009







Par


Amortized cost


Carrying value


% of carrying

value to par


Change

12/31/09


Original

ratings

Amount


%


Amount


%


Amount


%


12/31/09


9/30/09


vs 9/30/09





















AAA

$ 1,138


52%


$    944


53%


$    832


71%


73%


69%


4%


A

      949


44%


      807


45%


      324


28%


34%


37%


-3%


BBB

        91


4%


        40


2%


        15


1%


16%


25%


-9%



$ 2,178


100%


$ 1,791


100%


$ 1,171


100%


54%


53%


1%



Noninterest Income

Noninterest income for the fourth quarter of 2009 was $65.9 million compared to $270.7 million for the third quarter of 2009 and a loss of $82.3 million for the fourth quarter of 2008. The decline for the fourth quarter of 2009 compared to the third quarter was primarily due to higher security impairment losses and lower fair value and nonhedge derivative income in the fourth quarter, and to acquisition related gains of $146.2 million in the third quarter. These declines were offset in part by the $15.2 million gain from the $40 million debt modification previously discussed.

The sequential quarter decline in fair value and nonhedge derivative income during the fourth quarter was mainly due to a lower amount of hedge ineffectiveness recognized primarily on cash flow hedges of floating rate loans.

Noninterest Expense

Noninterest expense for the fourth quarter of 2009 was $441.1 million compared to $434.7 million for the third quarter of 2009 and $398.2 million for the fourth quarter of 2008. Primary changes in the fourth quarter of 2009 compared to the third quarter included a decrease in the provision for unfunded lending commitments to $19.2 million from $36.5 million, offset primarily by increases in other real estate expense, FDIC premiums, and other noninterest expense.

Conference Call

Zions will host a conference call to discuss these fourth quarter results at 5:30 p.m. ET this afternoon (January 25, 2010). Media representatives, analysts and the public are invited to listen to this discussion by calling 1-888-500-6974 (international: 719-325-2327) and entering the passcode 4744324, 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 8:30 p.m. ET on Monday, January 25, 2010, until midnight ET on Monday, February 1, 2010, by dialing 1-888-203-1112 (international: 719-457-0820) and entering the passcode 4744324. The webcast of the conference call will also be archived and available for 30 days.

About Zions Bancorporation

Zions Bancorporation is one of the nation's premier financial services companies, consisting of a collection of great banks in select high growth markets. Zions operates its banking businesses under local management teams and community identities through approximately 500 offices in ten 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 news release. Factors that might cause such differences include, but are not limited to: the Company's ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either 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 litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company's operations or business; and changes in accounting policies, procedures or determinations as may be required by the Financial Accounting Standards Board or other regulatory agencies, including determinations relating to the Company's accounting treatment of its subordinated debt modification.

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


Year Ended

(In thousands, except per share and ratio data)


December 31,


December 31,



2009


2008


% Change


2009


2008


% Change

EARNINGS













Taxable-equivalent net interest income


$ 462,608   


$ 514,422   


(10.07)%


$ 1,920,845   


$ 1,995,368   


(3.73)%

Taxable-equivalent revenue


528,495   


432,132   


22.30 %


2,724,946   


2,186,060   


24.65 %

Net interest income


456,889   


508,442   


(10.14)%


1,897,532   


1,971,646   


(3.76)%

Noninterest income


65,887   


(82,290)  


180.07 %


804,101   


190,692   


321.68 %

Provision for loan losses


390,719   


285,189   


37.00 %


2,016,927   


648,269   


211.13 %

Noninterest expense


441,129   


398,167   


10.79 %


1,671,510   


1,474,963   


13.33 %

Impairment loss on goodwill


2,224   


353,804   


(99.37)%


636,216   


353,804   


79.82 %

Income (loss) before income taxes


(311,296)  


(611,008)  


49.05 %


(1,623,020)  


(314,698)  


(415.74)%

Income taxes (benefit)


(125,809)  


(126,512)  


0.56 %


(401,343)  


(43,365)  


(825.50)%

Net income (loss)


(185,487)  


(484,496)  


61.72 %


(1,221,677)  


(271,333)  


(350.25)%

Net income (loss) applicable to noncontrolling interests


(1,423)  


(1,520)  


6.38 %


(5,566)  


(5,064)  


(9.91)%

Net income (loss) applicable to controlling interest


(184,064)  


(482,976)  


61.89 %


(1,216,111)  


(266,269)  


(356.72)%

Net earnings (loss) applicable to common shareholders


(176,482)  


(498,084)  


64.57 %


(1,234,447)  


(290,693)  


(324.66)%














PER COMMON SHARE













Net earnings (loss) (diluted)


(1.26)  


(4.37)  


71.17 %


(9.92)  


(2.68)  


(270.15)%

Dividends


0.01   


0.32   


(96.88)%


0.10   


1.61   


(93.79)%

Book value per common share








27.85   


42.65   


(34.70)%

Tangible common equity per common share








20.35   


27.24   


(25.29)%














SELECTED RATIOS













Return on average assets


(1.37)%


(3.52)%




(2.25)%


(0.50)%



Return on average common equity


(16.80)%


(38.77)%




(28.35)%


(5.69)%



Efficiency ratio


83.47 %


92.14 %




61.34 %


67.47 %



Net interest margin


3.81 %


4.20 %




3.94 %


4.18 %







ZIONS BANCORPORATION AND SUBSIDIARIES













FINANCIAL HIGHLIGHTS (Continued)













(Unaudited)




























Three Months Ended


Year Ended

(In thousands, except share and ratio data)


December 31,


December 31,



2009


2008


% Change


2009


2008


% Change

AVERAGE BALANCES













Total assets


$ 53,259,715   


$ 54,546,364   


(2.36)%


$ 54,048,324   


$ 53,761,908   


0.53 %

Total interest-earning assets


48,161,377   


48,708,673   


(1.12)%


48,770,074   


47,690,955   


2.26 %

Securities


4,451,396   


4,516,559   


(1.44)%


4,651,059   


4,825,234   


(3.61)%

Net loans and leases


40,740,630   


41,769,536   


(2.46)%


41,513,066   


40,794,781   


1.76 %

Goodwill


1,017,361   


1,720,536   


(40.87)%


1,174,407   


1,936,865   


(39.37)%

Core deposit and other intangibles


120,512   


130,703   


(7.80)%


124,901   


136,698   


(8.63)%

Total deposits


42,936,759   


39,580,867   


8.48 %


42,847,011   


37,572,680   


14.04 %

Shareholders’ equity:













Preferred equity


1,543,363   


961,072   


60.59 %


1,558,046   


431,936   


260.71 %

Common equity


4,166,944   


5,110,430   


(18.46)%


4,354,634   


5,107,675   


(14.74)%

Noncontrolling interests


19,178   


28,751   


(33.30)%


23,718   


29,156   


(18.65)%














Weighted average common and common-













equivalent shares outstanding


139,858,788   


114,065,100   


22.61 %


124,442,992   


108,908,028   


14.26 %














AT PERIOD END













Total assets








$ 51,123,007   


$ 55,092,791   


(7.21)%

Total interest-earning assets








45,677,809   


49,071,281   


(6.92)%

Securities








4,548,757   


4,509,308   


0.87 %

Net loans and leases








40,188,980   


41,658,738   


(3.53)%

Allowance for loan losses








1,531,332   


686,999   


122.90 %

Reserve for unfunded lending commitments








116,445   


50,934   


128.62 %

Goodwill








1,015,161   


1,651,377   


(38.53)%

Core deposit and other intangibles








113,416   


125,935   


(9.94)%

Total deposits








41,840,589   


41,316,496   


1.27 %

Shareholders’ equity:













Preferred equity








1,502,784   


1,581,834   


(5.00)%

Common equity








4,189,874   


4,919,862   


(14.84)%

Noncontrolling interests








17,599   


27,320   


(35.58)%














Common shares outstanding








150,425,070   


115,344,813   


30.41 %














Average equity to average assets


10.76%


11.18%




10.98%


10.36%



Tangible common equity ratio








6.12%


5.89%



Tangible equity ratio








9.16%


8.91%
















Nonperforming assets, excluding FDIC-supported assets








$   2,330,045   


$   1,138,375   


104.68 %

Ratio of nonperforming assets, excluding FDIC-supported













assets, to net loans and leases and other real estate owned








5.93%


2.71%



Accruing loans past due 90 days or more, excluding













FDIC-supported assets








$      107,040   


$      129,567   


(17.39)%





ZIONS BANCORPORATION AND SUBSIDIARIES











FINANCIAL HIGHLIGHTS (Continued)











(Unaudited)
























Three Months Ended

(In thousands, except per share and ratio data)


December 31,


September 30,


June 30,


March 31,


December 31,



2009


2009 (1)


2009 (1)


2009


2008

EARNINGS











Taxable-equivalent net interest income


$       462,608   


$       478,135   


$       499,432   


$       480,670   


$       514,422   

Taxable-equivalent revenue


528,495   


748,875   


1,112,168   


335,408   


432,132   

Net interest income


456,889   


472,180   


493,688   


474,775   


508,442   

Noninterest income


65,887   


270,740   


612,736   


(145,262)  


(82,290)  

Provision for loan losses


390,719   


565,930   


762,654   


297,624   


285,189   

Noninterest expense


441,129   


434,707   


419,469   


376,205   


398,167   

Impairment loss on goodwill


2,224   


-   


-   


633,992   


353,804   

Income (loss) before income taxes


(311,296)  


(257,717)  


(75,699)  


(978,308)  


(611,008)  

Income taxes (benefit)


(125,809)  


(100,046)  


(23,761)  


(151,727)  


(126,512)  

Net income (loss)


(185,487)  


(157,671)  


(51,938)  


(826,581)  


(484,496)  

Net income (loss) applicable to noncontrolling interests


(1,423)  


(2,394)  


(1,209)  


(540)  


(1,520)  

Net income (loss) applicable to controlling interest


(184,064)  


(155,277)  


(50,729)  


(826,041)  


(482,976)  

Net earnings (loss) applicable to common shareholders


(176,482)  


(181,880)  


(23,758)  


(852,327)  


(498,084)  












PER COMMON SHARE











Net earnings (loss) (diluted)


(1.26)  


(1.43)  


(0.21)  


(7.47)  


(4.37)  

Dividends


0.01   


0.01   


0.04   


0.04   


0.32   

Book value per common share


27.85   


30.38   


33.89   


34.39   


42.65   

Tangible common equity per common share


20.35   


22.01   


24.78   


24.34   


27.24   












SELECTED RATIOS











Return on average assets


(1.37)%


(1.15)%


(0.38)%


(6.05)%


(3.52)%

Return on average common equity


(16.80)%


(16.74)%


(2.37)%


(70.07)%


(38.77)%

Efficiency ratio


83.47 %


58.05 %


37.72 %


112.16 %


92.14 %

Net interest margin


3.81 %


3.91 %


4.10 %


3.94 %


4.20 %












(1) Certain amounts were revised as previously discussed.





ZIONS BANCORPORATION AND SUBSIDIARIES











FINANCIAL HIGHLIGHTS (Continued)











(Unaudited)
























Three Months Ended

(In thousands, except share and ratio data)


December 31,


September 30,


June 30,


March 31,


December 31,



2009


2009 (1)


2009 (1)


2009


2008

AVERAGE BALANCES











Total assets


$   53,259,715   


$   53,494,525   


$   54,068,979   


$   55,399,675   


$   54,546,364   

Total interest-earning assets


48,161,377   


48,556,637   


48,905,370   


49,473,679   


48,708,673   

Securities


4,451,396   


4,758,872   


4,907,115   


4,486,050   


4,516,559   

Net loans and leases


40,740,630   


41,741,646   


41,797,670   


41,781,241   


41,769,536   

Goodwill


1,017,361   


1,017,387   


1,017,382   


1,654,222   


1,720,536   

Core deposit and other intangibles


120,512   


126,614   


125,768   


126,759   


130,703   

Total deposits


42,936,759   


43,349,431   


42,958,798   


42,128,652   


39,580,867   

Shareholders’ equity:











Preferred equity


1,543,363   


1,518,289   


1,587,752   


1,583,659   


961,072   

Common equity


4,166,944   


4,309,497   


4,018,032   


4,932,977   


5,110,430   

Noncontrolling interests


19,178   


22,810   


25,268   


27,720   


28,751   












Weighted average common and common-











equivalent shares outstanding


139,858,788   


127,581,404   


115,908,127   


114,106,164   


114,065,100   












AT PERIOD END











Total assets


$   51,123,007   


$   53,298,150   


$   52,767,954   


$   54,545,012   


$   55,092,791   

Total interest-earning assets


45,677,809   


48,293,329   


47,933,124   


49,091,438   


49,071,281   

Securities


4,548,757   


4,500,906   


4,920,445   


4,800,957   


4,509,308   

Net loans and leases


40,188,980   


41,255,104   


41,307,998   


41,756,753   


41,658,738   

Allowance for loan losses


1,531,332   


1,432,715   


1,248,055   


832,878   


686,999   

Reserve for unfunded lending commitments


116,445   


97,225   


60,688   


52,761   


50,934   

Goodwill


1,015,161   


1,017,385   


1,017,385   


1,034,465   


1,651,377   

Core deposit and other intangibles


113,416   


123,551   


121,675   


124,585   


125,935   

Total deposits


41,840,589   


43,007,981   


42,644,172   


43,307,233   


41,316,496   

Shareholders’ equity:











Preferred equity


1,502,784   


1,529,462   


1,491,730   


1,587,027   


1,581,834   

Common equity


4,189,874   


4,143,246   


4,238,944   


3,965,979   


4,919,862   

Noncontrolling interests


17,599   


21,533   


24,021   


26,828   


27,320   












Common shares outstanding


150,425,070   


136,398,089   


125,095,328   


115,335,668   


115,344,813   












Average equity to average assets


10.76%


10.94%


10.41%


11.81%


11.18%

Tangible common equity ratio


6.12%


5.76%


6.00%


5.26%


5.89%

Tangible equity ratio


9.16%


8.73%


8.94%


8.28%


8.91%












Nonperforming assets, excluding FDIC-supported assets


$     2,330,045   


$     2,171,014   


$     1,922,557   


$     1,647,913   


$     1,138,375   

Ratio of nonperforming assets, excluding FDIC-supported











assets, to net loans and leases and other real estate owned


5.93%


5.40%


4.68%


3.96%


2.71%

Accruing loans past due 90 days or more, excluding











FDIC-supported assets


$        107,040   


$        186,519   


$        178,300   


$          88,035   


$        129,567   












(1) Certain amounts were revised as previously discussed.





ZIONS BANCORPORATION AND SUBSIDIARIES











CONSOLIDATED BALANCE SHEETS













December 31,


September 30,


June 30,


March 31,


December 31,

(In thousands, except share amounts)


2009


2009 (1)


2009 (1)


2009


2008



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)



ASSETS











Cash and due from banks


$   1,370,189 


$      992,940 


$   1,229,205 


$   1,321,972 


$   1,475,976 

Money market investments:











Interest-bearing deposits and commercial paper


652,964 


2,234,337 


1,005,060 


1,952,555 


2,332,759 

Federal funds sold


20,985 


44,056 


390,619 


13,277 


83,451 

Security resell agreements


57,556 


52,539 


57,476 


305,111 


286,707 

Investment securities:











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











$833,455, $835,814, $891,186, $1,361,460, and $1,443,555)


869,595 


877,105 


937,942 


1,648,971 


1,790,989 

Available-for-sale, at fair value


3,655,619 


3,547,092 


3,903,895 


3,086,788 


2,676,255 

Trading account, at fair value (includes $0, $0, $0, $0, and $538











transferred as collateral under repurchase agreements)


23,543 


76,709 


78,608 


65,198 


42,064 



4,548,757 


4,500,906 


4,920,445 


4,800,957 


4,509,308 












Loans held for sale  


208,567 


206,387 


251,526 


262,785 


200,318 












Loans:











Loans and leases excluding FDIC-supported assets


38,882,083 


39,782,240 


40,654,802 


41,220,610 


41,791,237 

FDIC-supported assets


1,444,594 


1,607,493 


783,238 


660,892 




40,326,677 


41,389,733 


41,438,040 


41,881,502 


41,791,237 

Less:











Unearned income and fees, net of related costs


137,697 


134,629 


130,042 


124,749 


132,499 

Allowance for loan losses


1,531,332 


1,432,715 


1,248,055 


832,878 


686,999 

Loans and leases, net of allowance


38,657,648 


39,822,389 


40,059,943 


40,923,875 


40,971,739 












Other noninterest-bearing investments


1,099,961 


1,061,464 


1,046,131 


1,051,956 


1,044,092 

Premises and equipment, net


710,534 


698,225 


703,613 


701,742 


687,096 

Goodwill


1,015,161 


1,017,385 


1,017,385 


1,034,465 


1,651,377 

Core deposit and other intangibles


113,416 


123,551 


121,675 


124,585 


125,935 

Other real estate owned


389,782 


413,901 


304,778 


243,609 


191,792 

Other assets


2,277,487 


2,130,070 


1,660,098 


1,808,123 


1,532,241 



$ 51,123,007 


$ 53,298,150 


$ 52,767,954 


$ 54,545,012 


$ 55,092,791 












LIABILITIES AND SHAREHOLDERS’ EQUITY











Deposits:











Noninterest-bearing demand


$ 12,324,247 


$ 11,453,247 


$ 11,142,017 


$ 10,517,910 


$   9,683,385 

Interest-bearing:











Savings and NOW


5,843,573 


5,392,096 


4,949,711 


4,710,899 


4,452,919 

Money market


16,378,874 


17,413,735 


17,276,743 


18,103,564 


16,826,846 

Time under $100,000


2,497,395 


2,784,593 


2,845,893 


3,112,864 


2,974,566 

Time $100,000 and over


3,117,472 


3,949,684 


4,455,225 


4,647,015 


4,756,218 

Foreign


1,679,028 


2,014,626 


1,974,583 


2,214,981 


2,622,562 



41,840,589 


43,007,981 


42,644,172 


43,307,233 


41,316,496 












Securities sold, not yet purchased


43,404 


39,360 


51,109 


39,892 


35,657 

Federal funds purchased


208,669 


1,008,181 


1,169,809 


1,213,970 


965,835 

Security repurchase agreements


577,346 


509,014 


565,975 


551,686 


899,751 

Other liabilities


588,527 


651,139 


597,543 


578,768 


669,111 

Commercial paper


1,084 


2,449 


1,019 


984 


15,451 

Federal Home Loan Bank advances and other borrowings:











One year or less


120,189 


42,962 


47,152 


429,655 


2,039,853 

Over one year


15,722 


18,803 


18,882 


127,680 


128,253 

Long-term debt


2,017,220 


2,324,020 


1,917,598 


2,715,310 


2,493,368 

Total liabilities


45,412,750 


47,603,909 


47,013,259 


48,965,178 


48,563,775 












Shareholders’ equity:











Preferred stock, without par value, authorized 3,000,000 shares


1,502,784 


1,529,462 


1,491,730 


1,587,027 


1,581,834 

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











shares; issued and outstanding 150,425,070, 136,398,089,











125,095,328, 115,335,668, and 115,344,813 shares


3,318,417 


3,125,344 


2,935,724 


2,607,541 


2,599,916 

Retained earnings


1,324,516 


1,502,232 


1,685,522 


1,713,897 


2,433,363 

Accumulated other comprehensive income (loss)


(436,899)


(469,112)


(368,164)


(340,727)


(98,958)

Deferred compensation


(16,160)


(15,218)


(14,138)


(14,732)


(14,459)

Controlling interest shareholders’ equity


5,692,658 


5,672,708 


5,730,674 


5,553,006 


6,501,696 

Noncontrolling interests


17,599 


21,533 


24,021 


26,828 


27,320 

Total shareholders’ equity


5,710,257 


5,694,241 


5,754,695 


5,579,834 


6,529,016 



$ 51,123,007 


$ 53,298,150 


$ 52,767,954 


$ 54,545,012 


$ 55,092,791 












(1) Certain amounts were revised as previously discussed.





ZIONS BANCORPORATION AND SUBSIDIARIES











CONSOLIDATED STATEMENTS OF INCOME











(Unaudited)













Three Months Ended

(In thousands, except per share amounts)


December 31,


September 30,


June 30,


March 31,


December 31,



2009


2009 (1)


2009 (1)


2009


2008

Interest income:











Interest and fees on loans


$        569,613 


$        586,246 


$        583,590 


$        579,852 


$        650,885 

Interest on loans held for sale


2,735 


2,434 


3,082 


2,756 


2,442 

Lease financing


5,289 


5,125 


4,735 


4,593 


4,999 

Interest on money market investments


1,800 


1,195 


1,543 


3,376 


7,172 

Interest on securities:











Held-to-maturity – taxable


(2,075)


4,864 


9,367 


18,908 


22,317 

Held-to-maturity – nontaxable


5,396 


5,806 


5,796 


6,265 


6,396 

Available-for-sale – taxable


21,063 


23,460 


26,982 


21,703 


28,680 

Available-for-sale – nontaxable


1,813 


1,830 


1,778 


1,678 


1,711 

Trading account


492 


842 


823 


571 


598 

Total interest income


606,126 


631,802 


637,696 


639,702 


725,200 












Interest expense:











Interest on savings and money market deposits


43,921 


54,554 


64,949 


74,553 


95,717 

Interest on time and foreign deposits


28,671 


42,780 


52,577 


62,679 


77,806 

Interest on short-term borrowings


2,714 


2,325 


3,661 


6,020 


20,368 

Interest on long-term borrowings


73,931 


59,963 


22,821 


21,675 


22,867 

Total interest expense


149,237 


159,622 


144,008 


164,927 


216,758 












Net interest income


456,889 


472,180 


493,688 


474,775 


508,442 

Provision for loan losses


390,719 


565,930 


762,654 


297,624 


285,189 

Net interest income after provision for loan losses


66,170 


(93,750)


(268,966)


177,151 


223,253 












Noninterest income:











Service charges and fees on deposit accounts


53,475 


54,466 


51,833 


52,788 


52,641 

Other service charges, commissions and fees


38,794 


39,227 


40,291 


38,227 


40,532 

Trust and wealth management income


5,825 


8,209 


8,750 


7,165 


8,910 

Capital markets and foreign exchange


8,692 


12,106 


16,311 


13,204 


15,048 

Dividends and other investment income


12,942 


2,597 


2,684 


8,408 


16,001 

Loan sales and servicing income


7,011 


2,359 


7,040 


5,851 


4,420 

Income (loss) from securities conduit


32 



(149)


1,235 


1,542 

Fair value and nonhedge derivative income (loss)


31,367 


58,092 


20,316 


4,004 


(5,819)

Equity securities gains (losses), net


(2,164)


(1,805)


(619)


2,763 


(14,125)

Fixed income securities gains (losses), net


(7,385)


1,900 


1,444 


195 


(1,139)

Impairment losses on investment securities:











Impairment losses on investment securities


(134,357)


(198,378)


(71,515)


(165,616)


(196,472)

Noncredit-related losses on securities not expected to











be sold (recognized in other comprehensive income)


35,051 


141,863 


29,546 


82,943 


Net impairment losses on investment securities


(99,306)


(56,515)


(41,969)


(82,673)


(196,472)

Valuation losses on securities purchased




(11,701)


(200,391)


(7,868)

Gains on swap termination and debt modification


15,220 



493,725 



Acquisition related gains


56 


146,153 


22,977 



Other


1,328 


3,951 


1,803 


3,962 


4,039 

Total noninterest income


65,887 


270,740 


612,736 


(145,262)


(82,290)












Noninterest expense:











Salaries and employee benefits


206,823 


205,433 


202,420 


204,161 


190,861 

Occupancy, net


28,667 


28,556 


26,651 


28,327 


29,460 

Furniture and equipment


24,689 


25,320 


24,870 


24,999 


26,507 

Other real estate expense


38,290 


30,419 


23,748 


18,343 


40,124 

Legal and professional services


10,081 


9,076 


9,497 


8,543 


14,774 

Postage and supplies


7,879 


7,680 


8,036 


8,410 


9,873 

Advertising


5,738 


4,418 


5,678 


7,148 


10,078 

FDIC premiums


24,197 


19,820 


42,329 


14,171 


5,745 

Amortization of core deposit and other intangibles


10,135 


7,575 


7,078 


6,886 


8,055 

Provision for unfunded lending commitments


19,220 


36,537 


7,927 


1,827 


(577)

Other


65,410 


59,873 


61,235 


53,390 


63,267 

Total noninterest expense


441,129 


434,707 


419,469 


376,205 


398,167 












Impairment loss on goodwill


2,224 




633,992 


353,804 












Income (loss) before income taxes


(311,296)


(257,717)


(75,699)


(978,308)


(611,008)

Income taxes (benefit)


(125,809)


(100,046)


(23,761)


(151,727)


(126,512)

Net income (loss)


(185,487)


(157,671)


(51,938)


(826,581)


(484,496)

Net income (loss) applicable to noncontrolling interests


(1,423)


(2,394)


(1,209)


(540)


(1,520)

Net income (loss) applicable to controlling interest


(184,064)


(155,277)


(50,729)


(826,041)


(482,976)

Preferred stock dividends


(24,633)


(26,603)


(25,447)


(26,286)


(15,108)

Preferred stock redemption


32,215 



52,418 



Net earnings (loss) applicable to common shareholders


$      (176,482)


$      (181,880)


$        (23,758)


$      (852,327)


$      (498,084)












Weighted average common shares outstanding during the period:











Basic shares


139,859 


127,581 


115,908 


114,106 


114,065 

Diluted shares


139,859 


127,581 


115,908 


114,106 


114,065 












Net earnings (loss) per common share:











Basic


$            (1.26)


$            (1.43)


$            (0.21)


$            (7.47)


$            (4.37)

Diluted


(1.26)


(1.43)


(0.21)


(7.47)


(4.37)












(1) Certain amounts were revised as previously discussed.





ZIONS BANCORPORATION AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF INCOME (Continued)





(Unaudited)







Year Ended

(In thousands, except per share amounts)


December 31,



2009


2008

Interest income:





Interest and fees on loans


$    2,319,301 


$    2,646,112 

Interest on loans held for sale


11,007 


10,074 

Lease financing


19,742 


22,099 

Interest on money market investments


7,914 


47,780 

Interest on securities:





Held-to-maturity – taxable


31,064 


62,282 

Held-to-maturity – nontaxable


23,263 


25,368 

Available-for-sale – taxable


93,208 


151,139 

Available-for-sale – nontaxable


7,099 


7,170 

Trading account


2,728 


1,875 

Total interest income


2,515,326 


2,973,899 






Interest expense:





Interest on savings and money market deposits


237,977 


370,568 

Interest on time and foreign deposits


186,707 


342,325 

Interest on short-term borrowings


14,720 


178,875 

Interest on long-term borrowings


178,390 


110,485 

Total interest expense


617,794 


1,002,253 






Net interest income


1,897,532 


1,971,646 

Provision for loan losses


2,016,927 


648,269 

Net interest income after provision for loan losses


(119,395)


1,323,377 






Noninterest income:





Service charges and fees on deposit accounts


212,562 


206,988 

Other service charges, commissions and fees


156,539 


167,669 

Trust and wealth management income


29,949 


37,752 

Capital markets and foreign exchange


50,313 


49,898 

Dividends and other investment income


26,631 


46,362 

Loan sales and servicing income


22,261 


24,379 

Income from securities conduit


1,118 


5,502 

Fair value and nonhedge derivative income (loss)


113,779 


(47,976)

Equity securities gains (losses), net


(1,825)


793 

Fixed income securities gains (losses), net


(3,846)


849 

Impairment losses on investment securities:





Impairment losses on investment securities


(569,866)


(304,040)

Noncredit-related losses on securities not expected to





be sold (recognized in other comprehensive income)


289,403 


Net impairment losses on investment securities


(280,463)


(304,040)

Valuation losses on securities purchased


(212,092)


(13,072)

Gains on swap termination and debt modification


508,945 


Acquisition related gains


169,186 


Other


11,044 


15,588 

Total noninterest income


804,101 


190,692 






Noninterest expense:





Salaries and employee benefits


818,837 


810,501 

Occupancy, net


112,201 


114,175 

Furniture and equipment


99,878 


100,136 

Other real estate expense


110,800 


50,378 

Legal and professional services


37,197 


45,517 

Postage and supplies


32,005 


37,455 

Advertising


22,982 


30,731 

FDIC premiums


100,517 


19,858 

Amortization of core deposit and other intangibles


31,674 


33,162 

Provision for unfunded lending commitments


65,511 


1,467 

Other


239,908 


231,583 

Total noninterest expense


1,671,510 


1,474,963