View Annual Report
Total Page：16
File Type：pdf, Size：1020Kb
Increasing YEAR IN REVIEW Improving Investing A COLLECTION OF GREAT BANKS 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 in 11 western and southwestern states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. Zions is a national leader in small business lending and public finance advisory services, and received 31 “Excellence” awards by Greenwich Associates for the 2015 survey — the most of all banks in the United States. Zions Bank Nevada State Bank Salt Lake City, UT; Boise, ID; Las Vegas, NV Jackson, WY $4 billion assets $20 billion assets Amegy Bank of Texas Vectra Bank Colorado Houston, TX Denver, CO $14 billion assets $3 billion assets INTEREST EARNING ASSET MIX California Bank & Trust The Commerce Bank of Washington San Diego, CA The Commerce Bank of Oregon Cash $12 billion assets Portland, OR / Seattle, WA 14% $1 billion assets Securities 13% Loans 73% National Bank of Arizona Phoenix, AZ $5 billion assets FINANCIAL HIGHLIGHTS 2015/2014 (In millions, except per share amounts) Change 2015 2014 2013 2012 FOR THE YEAR Net interest income (A) 2% $ 1,715.3 $ 1,680.0 $ 1,696.3 $ 1,731.9 Noninterest income (B) –26% 377.1 508.6 337.4 419.9 Total net revenue (A+B) –4% 2,092.4 2,188.6 2,033.7 2,151.8 Noninterest expense –4% 1,600.5 1,665.3 1,714.4 1,595.0 Provision for loan losses 141% 40.0 (98.1) (87.1) 14.2 Income (loss) before income taxes –27% 451.9 621.4 406.4 541.6 Income taxes (benefit) –36% 142.4 222.9 142.9 193.4 Net income (loss) –22% 309.5 398.5 263.5 348.2 Preferred stock dividends and redemptions –13% (62.9) (71.9) (95.5) (170.9) Net earnings (loss) applicable to common shareholders –24% 246.6 326.6 294.0 178.6 PER COMMON SHARE Net earnings (loss) – diluted –29% 1.20 1.68 1.58 0.97 BANCORPORATION ZIONS Net earnings (loss) – basic –29% 1.20 1.68 1.58 0.97 Dividends declared 38% 0.22 0.16 0.13 0.04 Book value1 4% 32.67 31.35 29.57 26.73 Market price – end 27.30 28.51 29.96 21.40 Market price – high 33.03 33.33 31.40 22.81 Market price – low 23.72 25.02 21.56 16.40 AT YEAR-END Assets 4% 59,670 57,209 56,031 55,512 Net loans and leases 1% 40,650 40,064 39,043 37,670 2015 YEAR IN REVIEW Deposits 5% 50,374 47,848 46,363 46,134 Long-term debt –25% 817 1,092 2,274 2,337 Shareholders’ equity: Preferred equity –17% 829 1,004 1,004 1,128 Common equity 5% 6,679 6,366 5,461 4,924 PERFORMANCE RATIOS Return on average assets 0.53% 0.71% 0.48% 0.66% Return on average common equity 3.75% 5.42% 5.73% 3.76% Return on average tangible common equity 4.55% 6.70% 7.44% 5.18% Net interest margin 3.19% 3.26% 3.36% 3.57% CAPITAL RATIOS 1 Equity to assets 12.58% 12.88% 11.54% 10.90% Tangible common equity 9.63% 9.48% 8.02% 7.09% Common Equity Tier 1 (Basel III), Tier 1 Common (Basel I)2 12.22% 11.92% 10.18% 9.80% Tier 1 leverage2 11.26% 11.82% 10.48% 10.96% Tier 1 risk-based capital2 14.08% 14.47% 12.77% 13.38% Total risk-based capital2 16.12% 16.27% 14.67% 15.05% SELECTED INFORMATION Average common and common-equivalent shares (millions) 203.7 192.8 184.3 183.2 Common dividend payout ratio 18.30% 9.56% 8.20% 4.14% Full-time equivalent employees (actual) 10,200 10,462 10,452 10,368 Commercial banking offices (actual) 450 460 469 480 1 At year-end, as a percent of total assets (GAAP), or risk-weighted assets (regulatory) 2 For 2015, ratios are based on Basel III. For years prior to 2015, ratios are based on Basel I. – 1 – PERFORMANCE METRICS ADJUSTED RETURN ON ADJUSTED RETURN ON AVERAGE ASSETS TANGIBLE COMMON EQUITY 1.00% 10% 8% 0.75% 6% 0.50% 4% 0.25% 2% 0.00% 0% 2012 2013 2014 2015 2012 2013 2014 2015 COMMON EQUITY TIER AS A WHOLESALE BORROWINGS PROFILE PERCENTAGE OF RISK WEIGHTED ASSETS as of December 31, 2015 Borrowings Annual Interest Expense (in millions) (in millions) 12% $2,500 $350 10% $300 $2,000 $250 8% $1,500 $200 6% $1,000 $150 4% $100 $500 2% $50 0% $0 $0 2012 2013 2014 4Q15 RF STI (Annualized) BBT FRC KEY ASB CFG SNV FHN MTB FITB CMA ZION PBCT CBSH FMER BOKF HBAN EWBC Senior Debt Total Interest Expense Subordinate Debt Interest Expense on Debt 1 Primarily adjusted to exclude the impact of securities impairment and debt extinguishment charges taken in 2014 and 2015. Full reconciliation on page 19. – 2 – -0.0% 0.0% 3.0% -0.1% 4.5% 0.4% 0.5% 0.3% 0.2% 1.5% 0.1% NET LOAN LOSSES CHARGEOFFS AVERAGE LOANS AVERAGE CHARGEOFFS LOSSES NET LOAN BOKF FMER FRC EWBC EWBC BBT PBCT FRC ZION ZION NET INTERESTMARGIN SNV SNV ASB HBAN MTB MTB 2015 2015 FHN RF HBAN CBSH CMA STI STI PBCT FMER KEY KEY FITB CBSH ASB BANCORPORATION ZIONS CFG FHN RF CFG BBT CMA FITB BOKF – 3 – 2015 YEAR IN REVIEW 3.0% 4.5% 0.0% 1.5% NET CHARGE-OFFS NET LOAN LOSSES CHARGEOFFS AVERAGE LOANS 0.0% 0.4% 0.6% 0.8% 0.2% EWBC 2012 2013 2014 2015 FRC RISKADJUSTED NETINTERESTMARGIN RISKADJUSTED FMER ZION BBT SNV ZION MTB HBAN RF 2015 PBCT CBSH Peer Median ASB STI FHN KEY BOKF CFG FITB CMA HARRIS H. SIMMONS Chairman and CEO TO OUR SHAREHOLDERS We’re focused on increasing our capacity for growth, improving and streamlining our organizational structure and investing in technologies that will allow us to create an unsurpassed experience for our customers. ZIONS BANCORPORATION ZIONS Over the course of the past year the management team and Like any institution being built for the long term, ours will all of our dedicated colleagues at Zions Bancorporation always be a “work in progress.” The progress we made in have made significant strides in transforming your company 2015, and our focus in the immediate future is on increasing into an organization capable of producing strong returns to our capacity for growth, improving and streamlining our investors in a low-growth environment. We’ve reduced risk organizational structure and investing in technologies in the balance sheet and in our operations, which should that, when paired with our focus on building the strongest lower our overall cost of capital and allow for greater client relationships in the industry, will allow us to create an 2015 YEAR IN REVIEW flexibility in returning capital to shareholders in the years unsurpassed experience for our customers. And we’re highly ahead. And we’ve simplified our organizational structure in focused on achieving earnings performance that will match a manner that should allow us to accelerate our growth with our balance sheet and reputational strengths. a focus on streamlining the way we do business. Our goal is to create experiences that are simple, easy and fast for FINANCIAL RESULTS both our clients and our colleagues who serve them, while Net earnings applicable to common shareholders was maintaining the intense local focus on serving customers $247 million, or $1.20 per diluted common share in 2015, and communities that has consistently resulted in Zions compared to $327 million, or $1.68 per diluted common Bancorporation achieving customer satisfaction scores that share, in 2014. During the second quarter of 2015, we took place us at the top of the industry. actions to substantially reduce potential risk in our balance sheet by selling our remaining portfolio of collateralized The past few years have presented their share of challenges, debt obligation (“CDO”) securities, realizing a loss of $137 but we continue to work through them vigorously, and in the million, or $0.42 per diluted common share. Shareholders’ process we’ve built an institution with some extraordinary equity was not incrementally impacted in an adverse strengths. These include one of the industry’s strongest manner by this sale, as the loss had previously been geographical footprints; a core deposit franchise that is included in accumulated other comprehensive income, or nearly second to none; common equity, total capital and “AOCI,” which is a component of total shareholders’ equity. loan loss reserve measures that are among the strongest of Excluding this securities loss, net earnings applicable to any of the nation’s larger banks; and virtually unsurpassed common shareholders in 2015 was $332 million, or $1.62 per customer loyalty and favorability ratings. diluted common share. – 5 – WE ARE ENCOURAGED THAT LOAN DEMAND ACCELERATED IN THE FOURTH QUARTER OF 2015, AND THAT STRONGER DEMAND APPEARS TO BE CONTINUING “ IN THE EARLY MONTHS OF 2016. ” COLLATERALIZED DEBT OBLIGATIONS, PAR VALUE in the fourth quarter of 2015, and that stronger demand $ in millions appears to be continuing in the early months of 2016. $2,500 Noninterest income, excluding gains and losses on fixed- $2,000 income securities, increased 3.5% to $515.8 million in 2015 from $498.2 million in 2014, with particularly strong $1,500 growth in capital markets, mortgage banking and treasury management, which saw revenue increases of 28%, 14% $1,000 and 13%, respectively.