Zions Bancorporation Reports Earnings Of $0.34 Per Diluted Common Share For Third Quarter 2012
SALT LAKE CITY, Oct. 22, 2012 /PRNewswire/ -- Zions Bancorporation (NASDAQ: ZION) ("Zions" or "the Company") today reported third quarter net earnings applicable to common shareholders of $62.3 million or $0.34 per diluted common share, compared to $55.2 million or $0.30 per diluted share for the second quarter of 2012.
Adjusted for the noncash effects in the third quarter of (1) the discount amortization on conversion of subordinated debt and additional accretion, net of expense, on acquired FDIC-supported loans ($6.3 million, $0.03 per share), and (2) the remaining discount amortization for the $700 million redemption of Troubled Asset Relief Program ("TARP") preferred stock ($16.6 million, $0.09 per share), net earnings were $85.2 million or $0.46 per diluted share for the third quarter of 2012, compared to $72.9 million or $0.40 per diluted share for the second quarter of 2012.
Third Quarter 2012 Highlights
- Loans and leases, excluding FDIC-supported loans, increased $351 million, or an annualized 3.9%, to $36.6 billion at September 30, 2012.
- Net interest income increased to $444 million from $432 million in the second quarter; core net interest income declined slightly to $439 million from $444 million in the second quarter.
- Both net loan and lease charge-offs and nonperforming lending-related assets declined 11%, as credit quality continues to improve.
- Tangible common equity per common share improved to $20.24 from $19.65 in the second quarter.
- The Company successfully completed the redemption of its TARP preferred stock.
"We are pleased with the accomplishments in the third quarter, including stronger loan growth and the final redemption of TARP funds," said Harris H. Simmons, chairman and chief executive officer. "Regarding loan growth, we currently expect stronger loan balances in the fourth quarter and in 2013," continued Mr. Simmons. "We are also pleased with the continued strong improvement in credit quality, including a strong improvement in nonperforming assets and net charge-offs compared to the prior quarter."
Loans
Loans and leases, excluding FDIC-supported loans, increased $351 million on a net basis to $36.6 billion at September 30, 2012, compared to $36.2 billion at June 30, 2012. The increases were predominantly in commercial and industrial, 1-4 family residential, and term commercial real estate loans and were widespread geographically. Decreases of $285 million in commercial owner occupied and construction and land development loans partially offset increases in other loan categories. Average loans and leases, excluding FDIC-supported loans, were $36.5 billion during the third quarter of 2012, compared to $36.1 billion during the second quarter of 2012.
Deposits
Average total deposits for the third quarter of 2012 increased $535 million, or 1.2% (5.0% annualized), to $43.5 billion, compared to $42.9 billion for the second quarter of 2012. The increase resulted from a higher level of average noninterest-bearing demand deposits, primarily in nonpersonal accounts, for the third quarter of 2012, which were $16.8 billion compared to $16.2 billion for the second quarter of 2012. The ratio of loans to deposits was 84.9% at September 30, 2012, compared to 85.4% at June 30, 2012.
Debt and Shareholders' Equity
As previously reported, on September 26, 2012, the Company redeemed the remaining $700 million of TARP preferred stock pursuant to its Capital Plan submitted to the Federal Reserve in January 2012. The increase in the preferred stock dividend this quarter primarily resulted from the remaining discount amortization related to warrants issued in conjunction with the TARP preferred stock.
As previously announced, effective September 17, 2012, approximately $5.4 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 $2.0 million ($1.6 million after-tax) in the third quarter of 2012, compared to $16.2 million ($13.2 million after-tax) in the second quarter of 2012.
Accumulated other comprehensive income (loss) improved by approximately $41 million, primarily due to fair value increases in CDO investment securities.
The tangible common equity ratio was 7.17% at September 30, 2012, compared to 6.91% at June 30, 2012. The estimated common equity tier 1 capital ratio was 9.84% at September 30, 2012, compared to 9.78% at June 30, 2012.
Net Interest Income
Net interest income increased 2.8% to $444 million for the third quarter of 2012, compared to $432 million for the second quarter of 2012. Core net interest income, adjusted for the discount amortization on convertible subordinated debt and accretion on acquired loans, was approximately $439 million for the third quarter of 2012, compared to $444 million for the second quarter of 2012.
The net interest margin increased to 3.63% in the third quarter of 2012, compared to 3.62% in the second quarter of 2012. The core net interest margin decreased 12 basis points to 3.60% in the third quarter, compared to 3.72% in the second quarter. The decreases in the core net interest income and margin were due primarily to reduced yields on loans and investment securities attributable to rate resets; on these assets, the initial rate was fixed for a period of time (typically five years) and the current benchmark index rate is significantly lower than it was at the time the assets were originated. Similarly, maturing loans are being replaced at tighter credit spreads.
Noninterest Income
Noninterest income for the third quarter of 2012 was $119.2 million, compared to $123.0 million for the second quarter of 2012. The decrease was primarily due to lower dividends and other investment income in the third quarter compared to higher levels recognized in the second quarter. Other less volatile sources of noninterest income, such as various service charges on deposits and loans, were relatively stable compared to the second quarter.
CDO Investment Securities
During the third quarter of 2012, the Company recognized credit-related other-than-temporary impairment ("OTTI") on collateralized debt obligations ("CDOs") of $2.7 million or $0.01 per diluted share, compared to $7.3 million or $0.02 per diluted share during the second quarter of 2012. OTTI this quarter was due primarily to the impact of prepayments on the value of junior CDO tranches. Gains resulting from cash principal payments on CDOs previously written down, amounting to $3.0 million, exceeded OTTI during the third quarter of 2012.
The following table stratifies the CDOs into performing tranches without credit impairment and nonperforming tranches at September 30, 2012:
|
September 30, 2012 | |||||||||||||||||||||||||||
|
Net unrealized losses recognized in AOCI 1 |
Weighted average discount rate 2 |
% of carrying value to par | |||||||||||||||||||||||||
|
(Amounts in millions) |
No. of tranches |
Par amount |
Amortized cost |
Carrying value |
September 30, |
June 30, |
Change | ||||||||||||||||||||
|
Performing CDOs |
|||||||||||||||||||||||||||
|
Predominantly bank CDOs |
30 |
$ |
887 |
$ |
792 |
$ |
637 |
$ |
(155) |
5.34 |
% |
72 |
% |
63 |
% |
9 |
% | ||||||||||
|
Insurance-only CDOs |
21 |
450 |
444 |
322 |
(122) |
8.51 |
% |
72 |
% |
73 |
% |
(1) |
% | ||||||||||||||
|
Other CDOs |
7 |
79 |
68 |
62 |
(6) |
7.29 |
% |
78 |
% |
76 |
% |
2 |
% | ||||||||||||||
|
Total performing CDOs |
58 |
1,416 |
1,304 |
1,021 |
(283) |
6.46 |
% |
72 |
% |
67 |
% |
5 |
% | ||||||||||||||
|
Nonperforming CDOs 3 |
|||||||||||||||||||||||||||
|
CDOs deferring interest, but never credit impaired |
3 |
72 |
72 |
19 |
(53) |
13.69 |
% |
26 |
% |
29 |
% |
(3) |
% | ||||||||||||||
|
CDOs credit impaired prior to last 12 months |
32 |
593 |
437 |
128 |
(309) |
13.44 |
% |
22 |
% |
23 |
% |
(1) |
% | ||||||||||||||
|
CDOs credit impaired during last 12 months |
23 |
444 |
275 |
63 |
(212) |
14.84 |
% |
14 |
% |
16 |
% |
(2) |
% | ||||||||||||||
|
Total nonperforming CDOs |
58 |
1,109 |
784 |
210 |
(574) |
14.02 |
% |
19 |
% |
21 |
% |
(2) |
% | ||||||||||||||
|
Total CDOs |
116 |
$ |
2,525 |
$ |
2,088 |
$ |
1,231 |
$ |
(857) |
9.78 |
% |
49 |
% |
47 |
% |
2 |
% | ||||||||||
|
1 Accumulated other comprehensive income, amounts presented are pretax. |
|
2 Margin over related LIBOR index. |
|
3 Defined as either deferring current interest ("PIKing") or OTTI; the majority are predominantly bank CDOs. |
Fair value increases occurred in senior tranches and were driven by collateral credit quality improvements, prepayments and declining credit spreads.
Noninterest Expense
Noninterest expense for the third quarter of 2012 was $395.0 million compared to $401.7 million for the second quarter of 2012. The decrease was due primarily to a reduction in other real estate expense resulting from increased net gains on property sales, and to a decline in the provision for unfunded lending commitments.
Asset Quality
Net loan and lease charge-offs decreased 11% to $38 million for the third quarter of 2012, compared to $43 million million for the second quarter of 2012; gross charge-offs declined 20% compared to the second quarter and have declined 54% compared to the year-ago period. Net charge-offs declined primarily in commercial and industrial and home equity credit line loans.
Nonperforming lending-related assets declined 11% to $838 million at September 30, 2012 from $938 million at June 30, 2012. Nonaccrual loans declined 9% to $719 million at September 30, 2012 from $793 million at June 30, 2012. The ratio of nonperforming lending-related assets to loans and leases and other real estate owned decreased to 2.23% at September 30, 2012, compared to 2.53% at June 30, 2012.
Classified loans, excluding FDIC-supported loans, decreased approximately 4% to $1.8 billion at September 30, 2012, compared to $1.9 billion at June 30, 2012. Approximately 76% of classified loans were current as to principal and interest for the third quarter of 2012, compared to 73% for the second quarter of 2012.
The provision (credit) for loan losses was $(1.9) million for the third quarter of 2012, compared to $10.9 million for the second quarter of 2012. The allowance for credit losses was $1.0 billion, or 2.77% of loans and leases at September 30, 2012, compared to $1.1 billion, or 2.92% of loans and leases at June 30, 2012. The reduction in both the allowance and the provision is attributable to improvement in the quantity and severity of problem loans.
Conference Call
Zions will host a conference call to discuss these third quarter results at 5:30 p.m. ET this afternoon (October 22, 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 32821169, 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, October 22, 2012, until midnight ET on Monday, October 29, 2012, by dialing 404-537-3406 (domestic and international) and entering the same 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.
|
Financial Highlights (Unaudited) | |||||||||||||||||||
|
Three Months Ended | |||||||||||||||||||
|
(In thousands, except share, per share, and ratio data) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, | ||||||||||||||
|
PER COMMON SHARE |
|||||||||||||||||||
|
Dividends |
$ |
0.01 |
$ |
0.01 |
$ |
0.01 |
$ |
0.01 |
$ |
0.01 |
|||||||||
|
Book value per common share 1 |
26.05 |
25.48 |
25.25 |
25.02 |
24.78 |
||||||||||||||
|
Tangible common equity per common share 1 |
20.24 |
19.65 |
19.39 |
19.14 |
18.87 |
||||||||||||||
|
SELECTED RATIOS |
|||||||||||||||||||
|
Return on average assets |
0.82 |
% |
0.70 |
% |
0.69 |
% |
0.67 |
% |
0.84 |
% | |||||||||
|
Return on average common equity |
5.21 |
% |
4.71 |
% |
2.21 |
% |
3.84 |
% |
5.58 |
% | |||||||||
|
Net interest margin |
3.63 |
% |
3.62 |
% |
3.73 |
% |
3.86 |
% |
3.99 |
% | |||||||||
|
Capital Ratios |
|||||||||||||||||||
|
Tangible common equity ratio 1 |
7.17 |
% |
6.91 |
% |
6.89 |
% |
6.77 |
% |
6.90 |
% | |||||||||
|
Tangible equity ratio 1 |
9.32 |
% |
10.35 |
% |
10.24 |
% |
11.33 |
% |
11.56 |
% | |||||||||
|
Average equity to average assets |
12.22 |
% |
12.37 |
% |
13.31 |
% |
13.27 |
% |
13.51 |
% | |||||||||
|
Risk-Based Capital Ratios 1,2 |
|||||||||||||||||||
|
Common equity tier 1 capital |
9.84 |
% |
9.78 |
% |
9.71 |
% |
9.57 |
% |
9.53 |
% | |||||||||
|
Tier 1 leverage |
11.04 |
% |
12.31 |
% |
12.17 |
% |
13.40 |
% |
13.48 |
% | |||||||||
|
Tier 1 risk-based capital |
13.46 |
% |
15.03 |
% |
14.83 |
% |
16.13 |
% |
16.10 |
% | |||||||||
|
Total risk-based capital |
15.21 |
% |
16.89 |
% |
16.76 |
% |
18.06 |
% |
18.12 |
% | |||||||||
|
Taxable-equivalent net interest income |
$ |
448,632 |
$ |
436,610 |
$ |
447,161 |
$ |
466,699 |
$ |
475,580 |
|||||||||
|
Weighted average common and common-equivalent shares outstanding |
183,382,650 |
183,136,631 |
182,963,828 |
182,823,190 |
182,857,702 |
||||||||||||||
|
Common shares outstanding 1 |
184,156,402 |
184,117,522 |
184,228,178 |
184,135,388 |
184,294,782 |
||||||||||||||
|
1 At period end. |
|
2 Ratios for September 30, 2012 are estimates. |
|
CONSOLIDATED BALANCE SHEETS | ||||||||||||||
|
(In thousands, except share amounts) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, | |||||||||
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) | |||||||||||
|
ASSETS |
||||||||||||||
|
Cash and due from banks |
$ |
1,060,918 |
$ |
1,124,673 |
$ |
1,082,186 |
$ |
1,224,350 |
$ |
1,102,768 | ||||
|
Money market investments: |
||||||||||||||
|
Interest-bearing deposits |
5,519,463 |
7,887,175 |
7,629,399 |
7,020,895 |
5,118,066 | |||||||||
|
Federal funds sold and security resell agreements |
1,960,294 |
83,529 |
52,634 |
102,159 |
165,106 | |||||||||
|
Investment securities: |
||||||||||||||
|
Held-to-maturity, at adjusted cost (approximate fair value $655,768, $715,710, $728,479, $729,974, and $715,608) |
740,738 |
773,016 |
797,149 |
807,804 |
791,569 | |||||||||
|
Available-for-sale, at fair value |
3,127,192 |
3,167,590 |
3,223,086 |
3,230,795 |
3,970,602 | |||||||||
|
Trading account, at fair value |
13,963 |
20,539 |
19,033 |
40,273 |
49,782 | |||||||||
|
3,881,893 |
3,961,145 |
4,039,268 |
4,078,872 |
4,811,953 | ||||||||||
|
Loans held for sale |
220,240 |
139,245 |
184,579 |
201,590 |
159,300 | |||||||||
|
Loans, net of unearned income and fees: |
||||||||||||||
|
Loans and leases |
36,582,253 |
36,231,104 |
35,903,475 |
36,393,782 |
35,924,054 | |||||||||
|
FDIC-supported loans |
588,566 |
642,246 |
687,126 |
750,870 |
800,454 | |||||||||
|
37,170,819 |
36,873,350 |
36,590,601 |
37,144,652 |
36,724,508 | ||||||||||
|
Less allowance for loan losses |
925,341 |
971,716 |
1,010,059 |
1,049,958 |
1,148,903 | |||||||||
|
Loans, net of allowance |
36,245,478 |
35,901,634 |
35,580,542 |
36,094,694 |
35,575,605 | |||||||||
|
Other noninterest-bearing investments |
874,903 |
867,882 |
875,037 |
865,231 |
860,045 | |||||||||
|
Premises and equipment, net |
709,188 |
714,913 |
715,815 |
719,276 |
726,503 | |||||||||
|
Goodwill |
1,015,129 |
1,015,129 |
1,015,129 |
1,015,129 |
1,015,129 | |||||||||
|
Core deposit and other intangibles |
55,034 |
59,277 |
63,538 |
67,830 |
72,571 | |||||||||
|
Other real estate owned |
118,190 |
144,816 |
158,592 |
153,178 |
203,173 | |||||||||
|
Other assets |
1,426,271 |
1,507,594 |
1,499,588 |
1,605,905 |
1,721,101 | |||||||||
|
$ |
53,087,001 |
$ |
53,407,012 |
$ |
52,896,307 |
$ |
53,149,109 |
$ |
51,531,320 | |||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||||||||
|
Deposits: |
||||||||||||||
|
Noninterest-bearing demand |
$ |
17,295,911 |
$ |
16,498,248 |
$ |
16,185,140 |
$ |
16,110,857 |
$ |
14,911,729 | ||||
|
Interest-bearing: |
||||||||||||||
|
Savings and NOW |
7,685,192 |
7,505,841 |
7,406,910 |
7,159,101 |
6,711,002 | |||||||||
|
Money market |
14,284,870 |
14,439,389 |
14,813,495 |
14,616,740 |
14,576,527 | |||||||||
|
Time |
3,107,815 |
3,211,942 |
3,326,717 |
3,413,550 |
3,536,755 | |||||||||
|
Foreign |
1,398,749 |
1,504,827 |
1,366,826 |
1,575,361 |
1,627,135 | |||||||||
|
43,772,537 |
43,160,247 |
43,099,088 |
42,875,609 |
41,363,148 | ||||||||||
|
Securities sold, not yet purchased |
21,708 |
104,882 |
47,404 |
44,486 |
30,070 | |||||||||
|
Federal funds purchased and security repurchase agreements |
451,214 |
759,591 |
486,808 |
608,098 |
630,901 | |||||||||
|
Other short-term borrowings |
6,608 |
7,621 |
19,839 |
70,273 |
125,290 | |||||||||
|
Long-term debt |
2,326,659 |
2,274,571 |
2,283,121 |
1,954,462 |
1,898,439 | |||||||||
|
Reserve for unfunded lending commitments |
105,850 |
103,586 |
98,718 |
102,422 |
98,062 | |||||||||
|
Other liabilities |
484,170 |
507,151 |
474,551 |
510,531 |
466,493 | |||||||||
|
Total liabilities |
47,168,746 |
46,917,649 |
46,509,529 |
46,165,881 |
44,612,403 | |||||||||
|
Shareholders' equity: |
||||||||||||||
|
Preferred stock, without par value, authorized 4,400,000 shares |
1,123,377 |
1,800,473 |
1,737,633 |
2,377,560 |
2,354,523 | |||||||||
|
Common stock, without par value; authorized 350,000,000 shares; issued and outstanding 184,156,402, 184,117,522, 184,228,178, 184,135,388, and 184,294,782 shares |
4,162,001 |
4,157,525 |
4,162,522 |
4,163,242 |
4,160,697 | |||||||||
|
Retained earnings |
1,170,477 |
1,110,120 |
1,060,525 |
1,036,590 |
994,380 | |||||||||
|
Accumulated other comprehensive income (loss) |
(534,738) |
(576,147) |
(571,567) |
(592,084) |
(588,834) | |||||||||
|
Controlling interest shareholders' equity |
5,921,117 |
6,491,971 |
6,389,113 |
6,985,308 |
6,920,766 | |||||||||
|
Noncontrolling interests |
(2,862) |
(2,608) |
(2,335) |
(2,080) |
(1,849) | |||||||||
|
Total shareholders' equity |
5,918,255 |
6,489,363 |
6,386,778 |
6,983,228 |
6,918,917 | |||||||||
|
$ |
53,087,001 |
$ |
53,407,012 |
$ |
52,896,307 |
$ |
53,149,109 |
$ |
51,531,320 | |||||
|
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||
|
Three Months Ended | ||||||||||||||
|
(In thousands, except per share amounts) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, | |||||||||
|
Interest income: |
||||||||||||||
|
Interest and fees on loans |
$ |
479,199 |
$ |
478,569 |
$ |
486,615 |
$ |
504,243 |
$ |
520,133 | ||||
|
Interest on money market investments |
5,349 |
5,099 |
4,628 |
4,308 |
3,482 | |||||||||
|
Interest on securities: |
||||||||||||||
|
Held-to-maturity |
8,337 |
9,325 |
8,959 |
9,106 |
8,937 | |||||||||
|
Available-for-sale |
22,042 |
25,090 |
23,158 |
21,268 |
21,382 | |||||||||
|
Trading account |
110 |
148 |
338 |
548 |
462 | |||||||||
|
Total interest income |
515,037 |
518,231 |
523,698 |
539,473 |
554,396 | |||||||||
|
Interest expense: |
||||||||||||||
|
Interest on deposits |
19,049 |
20,823 |
23,413 |
26,645 |
31,093 | |||||||||
|
Interest on short-term borrowings |
193 |
256 |
779 |
1,221 |
1,501 | |||||||||
|
Interest on long-term debt |
51,597 |
65,165 |
57,207 |
49,699 |
51,207 | |||||||||
|
Total interest expense |
70,839 |
86,244 |
81,399 |
77,565 |
83,801 | |||||||||
|
Net interest income |
444,198 |
431,987 |
442,299 |
461,908 |
470,595 | |||||||||
|
Provision for loan losses |
(1,889) |
10,853 |
15,664 |
(1,476) |
14,553 | |||||||||
|
Net interest income after provision for loan losses |
446,087 |
421,134 |
426,635 |
463,384 |
456,042 | |||||||||
|
Noninterest income: |
||||||||||||||
|
Service charges and fees on deposit accounts |
44,951 |
43,426 |
43,532 |
42,873 |
44,154 | |||||||||
|
Other service charges, commissions and fees |
38,642 |
38,554 |
34,226 |
38,539 |
45,308 | |||||||||
|
Trust and wealth management income |
6,521 |
8,057 |
6,374 |
6,481 |
6,269 | |||||||||
|
Capital markets and foreign exchange |
6,026 |
7,342 |
5,734 |
8,106 |
7,729 | |||||||||
|
Dividends and other investment income |
11,686 |
21,542 |
9,480 |
7,805 |
9,356 | |||||||||
|
Loan sales and servicing income |
10,695 |
10,287 |
8,352 |
6,058 |
6,165 | |||||||||
|
Fair value and nonhedge derivative loss |
(5,820) |
(6,784) |
(4,400) |
(4,677) |
(5,718) | |||||||||
|
Equity securities gains, net |
2,683 |
107 |
9,145 |
1,961 |
5,289 | |||||||||
|
Fixed income securities gains, net |
3,046 |
5,519 |
720 |
1,288 |
13,035 | |||||||||
|
Impairment losses on investment securities: |
||||||||||||||
|
Impairment losses on investment securities |
(3,876) |
(24,026) |
(18,273) |
(12,351) |
(55,530) | |||||||||
|
Noncredit-related losses on securities not expected to be sold (recognized in other comprehensive income) |
1,140 |
16,718 |
8,064 |
265 |
42,196 | |||||||||
|
Net impairment losses on investment securities |
(2,736) |
(7,308) |
(10,209) |
(12,086) |
(13,334) | |||||||||
|
Other |
3,495 |
2,280 |
4,045 |
1,956 |
2,789 | |||||||||
|
Total noninterest income |
119,189 |
123,022 |
106,999 |
98,304 |
121,042 | |||||||||
|
Noninterest expense: |
||||||||||||||
|
Salaries and employee benefits |
220,223 |
220,765 |
224,634 |
220,290 |
216,855 | |||||||||
|
Occupancy, net |
28,601 |
28,169 |
27,951 |
27,899 |
29,040 | |||||||||
|
Furniture and equipment |
27,122 |
27,302 |
26,792 |
27,036 |
26,852 | |||||||||
|
Other real estate expense |
207 |
6,440 |
7,810 |
14,936 |
20,564 | |||||||||
|
Credit related expense |
13,316 |
12,415 |
13,485 |
14,213 |
15,379 | |||||||||
|
Provision for unfunded lending commitments |
2,264 |
4,868 |
(3,704) |
4,360 |
(2,202) | |||||||||
|
Legal and professional services |
12,749 |
12,947 |
11,096 |
14,974 |
8,897 | |||||||||
|
Advertising |
7,326 |
6,618 |
5,807 |
7,780 |
6,511 | |||||||||
|
FDIC premiums |
11,278 |
10,444 |
10,919 |
12,012 |
12,573 | |||||||||
|
Amortization of core deposit and other intangibles |
4,241 |
4,262 |
4,291 |
4,741 |
4,773 | |||||||||
|
Other |
67,648 |
67,426 |
63,291 |
76,799 |
69,776 | |||||||||
|
Total noninterest expense |
394,975 |
401,656 |
392,372 |
425,040 |
409,018 | |||||||||
|
Income before income taxes |
170,301 |
142,500 |
141,262 |
136,648 |
168,066 | |||||||||
|
Income taxes |
60,704 |
51,036 |
51,859 |
47,877 |
59,348 | |||||||||
|
Net income |
109,597 |
91,464 |
89,403 |
88,771 |
108,718 | |||||||||
|
Net loss applicable to noncontrolling interests |
(254) |
(273) |
(273) |
(248) |
(375) | |||||||||
|
Net income applicable to controlling interest |
109,851 |
91,737 |
89,676 |
89,019 |
109,093 | |||||||||
|
Preferred stock dividends |
(47,529) |
(36,522) |
(64,187) |
(44,599) |
(43,928) | |||||||||
|
Net earnings applicable to common shareholders |
$ |
62,322 |
$ |
55,215 |
$ |
25,489 |
$ |
44,420 |
$ |
65,165 | ||||
|
Weighted average common shares outstanding during the period: |
||||||||||||||
|
Basic shares |
183,237 |
182,985 |
182,798 |
182,703 |
182,676 | |||||||||
|
Diluted shares |
183,383 |
183,137 |
182,964 |
182,823 |
182,858 | |||||||||
|
Net earnings per common share: |
||||||||||||||
|
Basic |
$ |
0.34 |
$ |
0.30 |
$ |
0.14 |
$ |
0.24 |
$ |
0.35 | ||||
|
Diluted |
0.34 |
0.30 |
0.14 |
0.24 |
0.35 | |||||||||
|
Loans Balances by Portfolio Type (Unaudited) | |||||||||||||||
|
(In millions) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, | ||||||||||
|
Commercial: |
|||||||||||||||
|
Commercial and industrial |
$ |
10,748 |
$ |
10,383 |
$ |
10,157 |
$ |
10,335 |
$ |
9,733 | |||||
|
Leasing |
405 |
406 |
394 |
380 |
366 | ||||||||||
|
Owner occupied |
7,669 |
7,811 |
7,887 |
8,159 |
8,326 | ||||||||||
|
Municipal |
469 |
477 |
441 |
441 |
440 | ||||||||||
|
Total commercial |
19,291 |
19,077 |
18,879 |
19,315 |
18,865 | ||||||||||
|
Commercial real estate: |
|||||||||||||||
|
Construction and land development |
1,956 |
2,099 |
2,100 |
2,265 |
2,467 | ||||||||||
|
Term |
8,140 |
8,011 |
8,070 |
7,883 |
7,723 | ||||||||||
|
Total commercial real estate |
10,096 |
10,110 |
10,170 |
10,148 |
10,190 | ||||||||||
|
Consumer: |
|||||||||||||||
|
Home equity credit line |
2,175 |
2,181 |
2,167 |
2,187 |
2,161 | ||||||||||
|
1-4 family residential |
4,181 |
4,019 |
3,875 |
3,921 |
3,891 | ||||||||||
|
Construction and other consumer real estate |
320 |
328 |
316 |
306 |
303 | ||||||||||
|
Bankcard and other revolving plans |
295 |
284 |
274 |
291 |
278 | ||||||||||
|
Other |
224 |
232 |
223 |
226 |
236 | ||||||||||
|
Total consumer |
7,195 |
7,044 |
6,855 |
6,931 |
6,869 | ||||||||||
|
FDIC-supported loans 1 |
589 |
642 |
687 |
751 |
801 | ||||||||||
|
Total loans |
$ |
37,171 |
$ |
36,873 |
$ |
36,591 |
$ |
37,145 |
$ |
36,725 | |||||
|
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) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, | ||||||||||
|
Balance sheet: |
|||||||||||||||
|
Change in assets from reestimation of cash flows – increase (decrease): |
|||||||||||||||
|
FDIC-supported loans |
$ |
17,594 |
$ |
14,761 |
$ |
13,171 |
$ |
17,003 |
$ |
20,642 | |||||
|
FDIC indemnification asset (included in other assets) |
(14,401) |
(11,233) |
(10,002) |
(13,126) |
(15,431) | ||||||||||
|
Balance at end of period: |
|||||||||||||||
|
FDIC-supported loans |
588,566 |
642,246 |
687,126 |
750,870 |
800,454 | ||||||||||
|
FDIC indemnification asset (included in other assets) |
100,004 |
117,167 |
123,862 |
137,719 |
151,164 | ||||||||||
|
Three Months Ended | |||||||||||||||
|
(In thousands) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, | ||||||||||
|
Statement of income: |
|||||||||||||||
|
Interest income: |
|||||||||||||||
|
Interest and fees on loans |
$ |
17,594 |
$ |
14,761 |
$ |
13,171 |
$ |
17,003 |
$ |
20,642 | |||||
|
Noninterest expense: |
|||||||||||||||
|
Other noninterest expense |
14,401 |
11,233 |
10,002 |
13,126 |
15,431 | ||||||||||
|
Net increase in pretax income |
$ |
3,193 |
$ |
3,528 |
$ |
3,169 |
$ |
3,877 |
$ |
5,211 | |||||
|
Nonperforming Lending-Related Assets (Unaudited) | |||||||||||||||||||
|
(Amounts in thousands) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, | ||||||||||||||
|
Nonaccrual loans |
$ |
699,941 |
$ |
771,510 |
$ |
849,543 |
$ |
885,608 |
$ |
1,038,803 | |||||||||
|
Other real estate owned |
106,356 |
125,142 |
129,676 |
128,874 |
170,023 | ||||||||||||||
|
Nonperforming lending-related assets, excluding FDIC-supported assets |
806,297 |
896,652 |
979,219 |
1,014,482 |
1,208,826 | ||||||||||||||
|
FDIC-supported nonaccrual loans |
19,465 |
21,980 |
22,623 |
24,267 |
29,082 | ||||||||||||||
|
FDIC-supported other real estate owned |
11,834 |
19,674 |
28,916 |
24,304 |
33,150 | ||||||||||||||
|
FDIC-supported nonperforming assets |
31,299 |
41,654 |
51,539 |
48,571 |
62,232 | ||||||||||||||
|
Total nonperforming lending-related assets |
$ |
837,596 |
$ |
938,306 |
$ |
1,030,758 |
$ |
1,063,053 |
$ |
1,271,058 | |||||||||
|
Ratio of nonperforming lending-related assets to loans 1 and leases and other real estate owned |
2.23% |
2.53% |
2.79% |
2.83% |
3.43% | ||||||||||||||
|
Accruing loans past due 90 days or more, excluding FDIC-supported loans |
$ |
14,508 |
$ |
29,460 |
$ |
38,172 |
$ |
19,145 |
$ |
15,863 | |||||||||
|
Accruing FDIC-supported loans past due 90 days or more |
60,913 |
70,453 |
76,945 |
74,611 |
85,714 | ||||||||||||||
|
Ratio of accruing loans past due 90 days or more to loans 1 and leases |
0.20% |
0.27% |
0.31% |
0.25% |
0.28% | ||||||||||||||
|
Nonaccrual loans and accruing loans past due 90 days or more |
$ |
794,827 |
$ |
893,403 |
$ |
987,283 |
$ |
1,003,631 |
$ |
1,169,462 | |||||||||
|
Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans 1 and leases |
2.13% |
2.41% |
2.68% |
2.69% |
3.17% | ||||||||||||||
|
Accruing loans past due 30 - 89 days, excluding FDIC-supported loans |
$ |
143,539 |
$ |
142,501 |
$ |
171,224 |
$ |
183,976 |
$ |
174,250 | |||||||||
|
Accruing FDIC-supported loans past due 30 - 89 days |
15,462 |
15,519 |
13,899 |
24,691 |
13,816 | ||||||||||||||
|
Restructured loans included in nonaccrual loans |
207,089 |
227,568 |
276,669 |
295,825 |
308,159 | ||||||||||||||
|
Restructured loans on accrual |
421,055 |
393,360 |
401,554 |
448,109 |
430,253 | ||||||||||||||
|
Classified loans, excluding FDIC-supported loans |
1,810,099 |
1,880,932 |
2,076,220 |
2,056,472 |
2,361,574 | ||||||||||||||
|
1 Includes loans held for sale. |
|
Allowance for Credit Losses (Unaudited) | |||||||||||||||||||
|
Three Months Ended | |||||||||||||||||||
|
(Amounts in thousands) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, | ||||||||||||||
|
Allowance for Loan Losses |
|||||||||||||||||||
|
Balance at beginning of period |
$ |
971,716 |
$ |
1,010,059 |
$ |
1,049,958 |
$ |
1,148,903 |
$ |
1,237,733 | |||||||||
|
Add: |
|||||||||||||||||||
|
Provision for losses |
(1,889) |
10,853 |
15,664 |
(1,476) |
14,553 | ||||||||||||||
|
Adjustment for FDIC-supported loans |
(5,908) |
(5,856) |
(1,057) |
(2,655) |
(1,520) | ||||||||||||||
|
Deduct: |
|||||||||||||||||||
|
Gross loan and lease charge-offs |
(58,781) |
(73,685) |
(80,014) |
(120,599) |
(129,146) | ||||||||||||||
|
Recoveries |
20,203 |
30,345 |
25,508 |
25,785 |
27,283 | ||||||||||||||
|
Net loan and lease charge-offs |
(38,578) |
(43,340) |
(54,506) |
(94,814) |
(101,863) | ||||||||||||||
|
Balance at end of period |
$ |
925,341 |
$ |
971,716 |
$ |
1,010,059 |
$ |
1,049,958 |
$ |
1,148,903 | |||||||||
|
Ratio of allowance for loan losses to loans and leases, at period end |
2.49% |
2.64% |
2.76% |
2.83% |
3.13% | ||||||||||||||
|
Ratio of allowance for loan losses to nonperforming loans, at period end |
128.63% |
122.46% |
115.81% |
115.40% |
107.59% | ||||||||||||||
|
Annualized ratio of net loan and lease charge-offs to average loans |
0.42% |
0.47% |
0.59% |
1.03% |
1.11% | ||||||||||||||
|
Reserve for Unfunded Lending Commitments |
|||||||||||||||||||
|
Balance at beginning of period |
$ |
103,586 |
$ |
98,718 |
$ |
102,422 |
$ |
98,062 |
$ |
100,264 | |||||||||
|
Provision charged (credited) to earnings |
2,264 |
4,868 |
(3,704) |
4,360 |
(2,202) | ||||||||||||||
|
Balance at end of period |
$ |
105,850 |
$ |
103,586 |
$ |
98,718 |
$ |
102,422 |
$ |
98,062 | |||||||||
|
Total Allowance for Credit Losses |
|||||||||||||||||||
|
Allowance for loan losses |
$ |
925,341 |
$ |
971,716 |
$ |
1,010,059 |
$ |
1,049,958 |
$ |
1,148,903 | |||||||||
|
Reserve for unfunded lending commitments |
105,850 |
103,586 |
98,718 |
102,422 |
98,062 | ||||||||||||||
|
Total allowance for credit losses |
$ |
1,031,191 |
$ |
1,075,302 |
$ |
1,108,777 |
$ |
1,152,380 |
$ |
1,246,965 | |||||||||
|
Ratio of total allowance for credit losses to loans and leases outstanding, at period end |
2.77% |
2.92% |
3.03% |
3.10% |
3.40% | ||||||||||||||
|
Nonaccrual Loans by Portfolio Type (Excluding FDIC-Supported Loans) (Unaudited) | |||||||||||||||
|
(In millions) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, | ||||||||||
|
Loans held for sale |
$ |
— |
$ |
— |
$ |
— |
$ |
18 |
$ |
18 | |||||
|
Commercial: |
|||||||||||||||
|
Commercial and industrial |
103 |
133 |
149 |
127 |
176 | ||||||||||
|
Leasing |
1 |
1 |
1 |
2 |
1 | ||||||||||
|
Owner occupied |
223 |
240 |
245 |
239 |
268 | ||||||||||
|
Municipal |
6 |
— |
— |
— |
— | ||||||||||
|
Total commercial |
333 |
374 |
395 |
368 |
445 | ||||||||||
|
Commercial real estate: |
|||||||||||||||
|
Construction and land development |
125 |
115 |
148 |
220 |
245 | ||||||||||
|
Term |
155 |
182 |
191 |
156 |
189 | ||||||||||
|
Total commercial real estate |
280 |
297 |
339 |
376 |
434 | ||||||||||
|
Consumer: |
|||||||||||||||
|
Home equity credit line |
12 |
14 |
17 |
18 |
15 | ||||||||||
|
1-4 family residential |
66 |
76 |
87 |
91 |
108 | ||||||||||
|
Construction and other consumer real estate |
6 |
8 |
8 |
12 |
16 | ||||||||||
|
Bankcard and other revolving plans |
1 |
1 |
1 |
— |
— | ||||||||||
|
Other |
2 |
2 |
3 |
3 |
3 | ||||||||||
|
Total consumer |
87 |
101 |
116 |
124 |
142 | ||||||||||
|
Total nonaccrual loans |
$ |
700 |
$ |
772 |
$ |
850 |
$ |
886 |
$ |
1,039 | |||||
|
Net Charge-Offs by Portfolio Type (Unaudited) | |||||||||||||||
|
(In millions) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, | ||||||||||
|
Commercial: |
|||||||||||||||
|
Commercial and industrial |
$ |
3 |
$ |
9 |
$ |
17 |
$ |
9 |
$ |
27 | |||||
|
Leasing |
— |
— |
— |
— |
— | ||||||||||
|
Owner occupied |
10 |
10 |
8 |
33 |
27 | ||||||||||
|
Municipal |
— |
— |
— |
— |
— | ||||||||||
|
Total commercial |
13 |
19 |
25 |
42 |
54 | ||||||||||
|
Commercial real estate: |
|||||||||||||||
|
Construction and land development |
— |
(2) |
(2) |
13 |
17 | ||||||||||
|
Term |
16 |
13 |
18 |
24 |
15 | ||||||||||
|
Total commercial real estate |
16 |
11 |
16 |
37 |
32 | ||||||||||
|
Consumer: |
|||||||||||||||
|
Home equity credit line |
2 |
6 |
4 |
6 |
4 | ||||||||||
|
1-4 family residential |
4 |
5 |
7 |
7 |
5 | ||||||||||
|
Construction and other consumer real estate |
1 |
— |
1 |
1 |
4 | ||||||||||
|
Bankcard and other revolving plans |
2 |
1 |
2 |
2 |
3 | ||||||||||
|
Other |
— |
1 |
— |
— |
— | ||||||||||
|
Total consumer loans |
9 |
13 |
14 |
16 |
16 | ||||||||||
|
Total net charge-offs |
$ |
38 |
$ |
43 |
$ |
55 |
$ |
95 |
$ |
102 | |||||
|
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES (Unaudited) | |||||||||||||||||
|
Three Months Ended | |||||||||||||||||
|
September 30, 2012 |
June 30, 2012 |
March 31, 2012 | |||||||||||||||
|
(In thousands) |
Average |
Average rate |
Average |
Average rate |
Average |
Average rate | |||||||||||
|
ASSETS |
|||||||||||||||||
|
Money market investments |
$ |
7,990,243 |
0.27 |
% |
$ |
7,786,191 |
0.26 |
% |
$ |
7,282,245 |
0.26 |
% | |||||
|
Securities: |
|||||||||||||||||
|
Held-to-maturity |
758,761 |
5.32 |
% |
797,843 |
5.72 |
% |
799,741 |
5.53 |
% | ||||||||
|
Available-for-sale |
3,052,559 |
2.93 |
% |
3,084,771 |
3.34 |
% |
3,093,827 |
3.08 |
% | ||||||||
|
Trading account |
13,691 |
3.20 |
% |
18,877 |
3.15 |
% |
41,189 |
3.30 |
% | ||||||||
|
Total securities |
3,825,011 |
3.41 |
% |
3,901,491 |
3.82 |
% |
3,934,757 |
3.58 |
% | ||||||||
|
Loans held for sale |
183,224 |
3.52 |
% |
157,308 |
3.99 |
% |
174,902 |
3.45 |
% | ||||||||
|
Loans 1: |
|||||||||||||||||
|
Loans and leases |
36,494,927 |
4.94 |
% |
36,067,463 |
5.07 |
% |
36,078,917 |
5.17 |
% | ||||||||
|
FDIC-supported loans |
613,710 |
17.27 |
% |
661,597 |
14.84 |
% |
712,877 |
13.29 |
% | ||||||||
|
Total loans |
37,108,637 |
5.14 |
% |
36,729,060 |
5.25 |
% |
36,791,794 |
5.33 |
% | ||||||||
|
Total interest-earning assets |
49,107,115 |
4.21 |
% |
48,574,050 |
4.33 |
% |
48,183,698 |
4.41 |
% | ||||||||
|
Cash and due from banks |
1,000,159 |
1,025,681 |
1,122,979 |
||||||||||||||
|
Allowance for loan losses |
(962,950) |
(1,004,879) |
(1,046,709) |
||||||||||||||
|
Goodwill |
1,015,129 |
1,015,129 |
1,015,129 |
||||||||||||||
|
Core deposit and other intangibles |
57,345 |
61,511 |
65,837 |
||||||||||||||
|
Other assets |
3,150,014 |
3,218,519 |
3,239,161 |
||||||||||||||
|
Total assets |
$ |
53,366,812 |
$ |
52,890,011 |
$ |
52,580,095 |
|||||||||||
|
LIABILITIES |
|||||||||||||||||
|
Interest-bearing deposits: |
|||||||||||||||||
|
Savings and NOW |
$ |
7,567,020 |
0.16 |
% |
$ |
7,435,000 |
0.17 |
% |
$ |
7,200,170 |
0.20 |
% | |||||
|
Money market |
14,458,871 |
0.26 |
% |
14,522,941 |
0.28 |
% |
14,701,771 |
0.32 |
% | ||||||||
|
Time |
3,162,165 |
0.69 |
% |
3,264,853 |
0.75 |
% |
3,369,323 |
0.79 |
% | ||||||||
|
Foreign |
1,472,437 |
0.29 |
% |
1,490,695 |
0.35 |
% |
1,408,409 |
0.40 |
% | ||||||||
|
Total interest-bearing deposits |
26,660,493 |
0.28 |
% |
26,713,489 |
0.31 |
% |
26,679,673 |
0.35 |
% | ||||||||
|
Borrowed funds: |
|||||||||||||||||
|
Securities sold, not yet purchased |
2,062 |
— |
% |
6,128 |
1.90 |
% |
22,758 |
3.38 |
% | ||||||||
|
Federal funds purchased and security repurchase agreements |
453,209 |
0.14 |
% |
474,026 |
0.14 |
% |
528,662 |
0.12 |
% | ||||||||
|
Other short-term borrowings |
8,273 |
1.73 |
% |
13,290 |
2.00 |
% |
48,394 |
3.61 |
% | ||||||||
|
Long-term debt |
2,297,409 |
8.93 |
% |
2,329,608 |
11.25 |
% |
1,991,776 |
11.55 |
% | ||||||||
|
Total borrowed funds |
2,760,953 |
7.46 |
% |
2,823,052 |
9.32 |
% |
2,591,590 |
9.00 |
% | ||||||||
|
Total interest-bearing liabilities |
29,421,446 |
0.96 |
% |
29,536,541 |
1.17 |
% |
29,271,263 |
1.12 |
% | ||||||||
|
Noninterest-bearing deposits |
16,817,085 |
16,228,973 |
15,691,499 |
||||||||||||||
|
Other liabilities |
606,973 |
582,743 |
619,231 |
||||||||||||||
|
Total liabilities |
46,845,504 |
46,348,257 |
45,581,993 |
||||||||||||||
|
Shareholders' equity: |
|||||||||||||||||
|
Preferred equity |
1,765,162 |
1,830,845 |
2,355,549 |
||||||||||||||
|
Common equity |
4,758,858 |
4,713,318 |
4,644,722 |
||||||||||||||
|
Controlling interest shareholders' equity |
6,524,020 |
6,544,163 |
7,000,271 |
||||||||||||||
|
Noncontrolling interests |
(2,712) |
(2,409) |
(2,169) |
||||||||||||||
|
Total shareholders' equity |
6,521,308 |
6,541,754 |
6,998,102 |
||||||||||||||
|
Total liabilities and shareholders' equity |
$ |
53,366,812 |
$ |
52,890,011 |
$ |
52,580,095 |
|||||||||||
|
Spread on average interest-bearing funds |
3.25 |
% |
3.16 |
% |
3.29 |
% | |||||||||||
|
Net yield on interest-earning assets |
3.63 |
% |
3.62 |
% |
3.73 |
% | |||||||||||
|
1 Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans. |
|
GAAP to Non-GAAP Reconciliation (Unaudited) | |||||||||||||||
|
Three Months Ended | |||||||||||||||
|
(Amounts in thousands) |
September 30, 2012 |
June 30, 2012 |
|||||||||||||
|
Amount |
Diluted |
Amount |
Diluted |
||||||||||||
|
1. |
Net Earnings Excluding the Effects of the Discount Amortization on Convertible Subordinated Debt and Additional Accretion on Acquired Loans |
||||||||||||||
|
Net earnings applicable to common shareholders (GAAP) |
$ |
62,322 |
$ |
0.34 |
$ |
55,215 |
$ |
0.30 |
|||||||
|
Addback for the after-tax impact of: |
|||||||||||||||
|
Discount amortization on convertible subordinated debt |
6,495 |
0.03 |
6,584 |
0.04 |
|||||||||||
|
Accelerated discount amortization on convertible subordinated debt |
1,615 |
0.01 |
13,175 |
0.07 |
|||||||||||
|
Additional accretion of interest income on acquired loans, net of expense |
(1,850) |
(0.01) |
(2,035) |
(0.01) |
|||||||||||
|
Subtotal |
6,260 |
0.03 |
17,724 |
0.10 |
|||||||||||
|
Net earnings excluding the effects of the discount amortization on convertible subordinated debt and additional accretion on acquired loans (non-GAAP) |
$ |
68,582 |
$ |
0.37 |
$ |
72,939 |
$ |
0.40 |
|||||||
|
Three Months Ended | |||||||||||||||
|
September 30, 2012 |
June 30, 2012 |
||||||||||||||
|
2. |
Core Net Interest Income (NII)/Net Interest Margin (NIM) |
NII |
NIM |
NII |
NIM |
||||||||||
|
Net interest income/net interest margin as reported (GAAP) |
$ |
444,198 |
3.63 |
% |
1 |
$ |
431,987 |
3.62 |
% |
1 | |||||
|
Addback for the pretax impact of: |
|||||||||||||||
|
Discount amortization on convertible subordinated debt |
10,518 |
0.09 |
% |
10,663 |
0.09 |
% |
|||||||||
|
Accelerated discount amortization on convertible subordinated debt |
1,987 |
0.02 |
% |
16,202 |
0.13 |
% |
|||||||||
|
Additional accretion of interest income on acquired loans |
(17,594) |
(0.14) |
% |
(14,761) |
(0.12) |
% |
|||||||||
|
Core net interest income/net interest margin (non-GAAP) |
$ |
439,109 |
3.60 |
% |
$ |
444,091 |
3.72 |
% |
|||||||
|
1 Calculation of net interest margin is based on taxable-equivalent net interest income. |
This Press Release presents the following non-GAAP financial measures: 1. Net earnings excluding the effects of the discount amortization on convertible subordinated debt and additional accretion on acquired loans, and 2. Core net interest income/net interest margin. These non-GAAP financial measures exclude the effects of the following adjustments: (i) periodic discount amortization on convertible subordinated debt; (ii) accelerated discount amortization on convertible subordinated debt which has been converted; and (iii) additional accretion of interest income on acquired loans based on increased projected cash flows (net of related expense in 1.).
The identified adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are included where applicable in financial results presented in accordance with GAAP. The Company considers these adjustments to be relevant to ongoing operating results.
The Company believes that excluding the amounts associated with these adjustments to present the non-GAAP financial measures provides a meaningful base for period-to-period and company-to-company comparisons, which will assist investors and analysts in analyzing the operating results of the Company and in predicting future performance. These non-GAAP financial measures are used by management and the Board of Directors to assess the performance of the Company's business for evaluating bank reporting segment performance, for presentations of Company performance to investors, and for other reasons as may be requested by investors and analysts. The Company further believes that presenting these non-GAAP financial measures will permit investors and analysts to assess the performance of the Company on the same basis as that applied by management and the Board of Directors.
Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by stakeholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.
SOURCE Zions Bancorporation
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