SALT LAKE CITY, April 21, 2014 /PRNewswire/ --Zions Bancorporation (NASDAQ: ZION) ("Zions" or "the Company") today reported first quarter net earnings applicable to common shareholders of $76.2 million, or $0.41 per diluted common share, compared to a loss of $(59.4) million, or $(0.32) per diluted share for the fourth quarter of 2013, and earnings of $88.3 million, or $0.48 per diluted share for the first quarter of 2013. The Company's loss in the fourth quarter of 2013 included $137 million after-tax, or $0.74 per diluted share, of impairment charges on collateralized debt obligation ("CDO") securities and debt extinguishment costs.
First Quarter 2014 Highlights
- Sales and paydowns of nearly $1 billion, or 45% of the par amount of CDO securities in the first quarter of 2014, resulted in net pretax gains of approximately $31 million, or $0.10 per diluted share after-tax. The sales were made as a result of the Volcker Rule, as modified, and the Company's efforts to reduce risk in its CDO portfolio.
- Loans and leases held for investment increased $155 million this quarter ($220 million excluding FDIC-supported loans) compared to the prior quarter, to $39.2 billion at March 31, 2014. Average loans and leases increased $501 million this quarter ($545 million excluding FDIC supported loans).
- Net interest income decreased to $416 million this quarter from $432 million in the prior quarter; the change is primarily the result of a decline in income from FDIC-supported loans and of two fewer days in the quarter. The net interest margin decreased slightly to 3.31% from 3.33%.
- Credit quality remained strong as gross loan and lease charge-offs were $20.8 million, the lowest level since 2007, and net loan and lease charge-offs were 0.08% annualized of average loans and leases.
- Tangible book value per common share improved by approximately 3% compared to the prior quarter, increasing to $24.53 from $23.88; compared to the year-ago period, tangible book value per common share improved by approximately 13%, a significant portion of which is attributable to the sales of CDOs and improvement in their fair values.
"We are pleased with the successful reduction in our CDO securities portfolio, which improved the Company's risk profile while also improving both its tangible and Tier 1 common equity levels, as many of these securities had high risk weightings and were sold at prices above the values recorded at December 31, 2013," said Harris H. Simmons, chairman and chief executive officer. Mr. Simmons continued, "After a strong fourth quarter, our first quarter loan growth was somewhat slower; however, our capital levels continue to improve and we are optimistic as we look at the underlying economic strength within our footprint."
Loans
Loans and leases held for investment increased $155 million on a net basis, or 0.4%, ($220 million or 0.6% excluding FDIC-supported loans) to $39.2 billion at March 31, 2014 from $39.0 billion at December 31, 2013. Increases of approximately $321 million were predominantly in commercial real estate loans, primarily in California and Texas, and 1-4 family residential loans, primarily in Texas and Utah. These increases were partially offset by decreases of approximately $166 million, primarily in commercial owner occupied and FDIC-supported loans.
Average loans and leases increased $501 million, or 1.3%, ($545 million or 1.4% excluding FDIC-supported loans) to $39.1 billion during the first quarter of 2014, compared to $38.6 billion during the fourth quarter of 2013. Unfunded lending commitments increased by approximately$0.3 billion during the first quarter of 2014 to $17.5 billion at March 31, 2014, compared to a $0.6 billion increase during the fourth quarter of 2013.
Deposits
Total deposits increased $170 million to $46.5 billion at March 31, 2014, compared to $46.4 billion at December 31, 2013. Average total deposits for the first quarter of 2014 decreased $0.5 billion, or 1%, to $45.8 billion, compared to $46.3 billion for the fourth quarter of 2013. The ratio of average loans to average deposits was 85.5% for the first quarter of 2014, compared to 83.5% for the fourth quarter of 2013.
Shareholders' Equity
Preferred stock dividends were $25 million in the first quarter of 2014, compared to $18 million in the fourth quarter of 2013. The increase was due to the phase-in of semiannual dividend accruals on a newly issued series of preferred stock. Subsequent quarterly preferred stock dividends for 2014 and 2015 are expected to average approximately $16 million.
The estimated Tier 1 common equity ratio was 10.53% at March 31, 2014, compared to 10.18% at December 31, 2013.
CDO Investment Securities
During the first quarter of 2014, the Company recorded a total of $993 million par amount of sales and paydowns of CDO securities, thereby reducing the exposure by 45% compared to the par value recorded at December 31, 2013. The sales included those previously announced on February 12, 2014 of $631 million par amount of CDO securities resulting in first quarter pretax gains of $65 million. These securities had been identified for sale as of December 31, 2013 and their amortized cost was adjusted to fair value as of that date.
Late in the first quarter, the Company sold an additional $301 million par amount of primarily insurance CDOs. These sales resulted in net realized pretax losses of $39 million, a substantial improvement compared to the $65 million of unrealized losses recorded on these securities at December 31, 2013, reflecting further price improvement during the first quarter. Accordingly, the sales were accretive to tangible common equity.
Total sales proceeds of CDO securities in the first quarter were $607 million and, together with approximately $5 million of gains on paydowns, resulted in net gains of $31 million. Interest income recognized during the first quarter of 2014 on the securities sold or paid down was approximately $2 million.
The following table provides selected information on the CDOs, stratified into performing tranches without credit impairment and nonperforming tranches at March 31, 2014:
March 31, 2014 | ||||||||||||||||||||||||
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 | ||||||||||||||||||||
Performing CDOs | ||||||||||||||||||||||||
Predominantly bank CDOs | 23 | $ | 655 | $ | 590 | $ | 486 | $ | (104) | 5.3% | 74% | |||||||||||||
Insurance CDOs | 2 | 50 | 48 | 46 | (2) | 2.2% | 92% | |||||||||||||||||
Other CDOs | - | - | - | - | - | -% | -% | |||||||||||||||||
Total performing CDOs | 25 | 705 | 638 | 532 | (106) | 5.1% | 75% | |||||||||||||||||
Nonperforming CDOs 3 | ||||||||||||||||||||||||
CDOs credit impaired prior to last 12 months | 18 | 382 | 291 | 200 | (91) | 5.5% | 52% | |||||||||||||||||
CDOs credit impaired during last 12 months | 7 | 145 | 59 | 42 | (17) | 5.5% | 29% | |||||||||||||||||
Total nonperforming CDOs | 25 | 527 | 350 | 242 | (108) | 5.5% | 46% | |||||||||||||||||
Total CDOs | 50 | $ | 1,232 | $ | 988 | $ | 774 | $ | (214) | 5.3% | 63% | |||||||||||||
1 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. | |
The following table shows changes in selected information on the CDOs from December 31, 2013 to March 31, 2014, primarily reflecting the impact of the first quarter sales and paydowns previously discussed:
Change from December 31, 2013 to March 31, 2014 | |||||||||||||||||||||||||||
Decrease (increase) in net unrealized losses recognized in AOCI | Weighted average discount rate | % of carrying value to par | |||||||||||||||||||||||||
(Amounts in millions) | No. of tranches | Par amount | Amortized cost | Carrying value | |||||||||||||||||||||||
Performing CDOs | |||||||||||||||||||||||||||
Predominantly bank CDOs | - | $ | (32) | $ | (27) | $ | (13) | $ | 14 | (0.3)% | 1% | ||||||||||||||||
Insurance CDOs | (20) | (383) | (365) | (300) | 65 | (2.7)% | 12% | ||||||||||||||||||||
Other CDOs | (3) | (43) | (26) | (26) | - | nm | nm | ||||||||||||||||||||
Total performing CDOs | (23) | (458) | (418) | (339) | 79 | (0.4)% | -% | ||||||||||||||||||||
Nonperforming CDOs | |||||||||||||||||||||||||||
CDOs credit impaired prior to last 12 months | (14) | (232) | (78) | (85) | (7) | (1.5)% | 6% | ||||||||||||||||||||
CDOs credit impaired during last 12 months | (16) | (303) | (128) | (105) | 23 | (1.0)% | (4)% | ||||||||||||||||||||
Total nonperforming CDOs | (30) | (535) | (206) | (190) | 16 | (1.3)% | 5% | ||||||||||||||||||||
Total CDOs | (53) | $ | (993) | $ | (624) | $ | (529) | $ | 95 | (0.8)% | 4% | ||||||||||||||||
The improvement in the Company's accumulated other comprehensive income ("AOCI") during the first quarter is primarily attributable to the previously mentioned sales of CDO securities and to fair value price increases in remaining CDO securities.
Due to the significant decrease in its CDO portfolio, the Company has given notice effective April 28, 2014 to cancel the Total Return Swap ("TRS") described in detail in the 2013 Annual Report on Form 10-K. The Company expects to record less than $0.5 million in expense for the TRSduring the second quarter of 2014 beyond that already accrued, following which the expense will be zero. At March 31, 2014, the TRS reduced risk-weighted assets by approximately $1.1 billion.
Net Interest Income
Net interest income decreased to $416 million for the first quarter of 2014, compared to $432 million for the fourth quarter of 2013. The decrease is primarily the result of lower interest income of approximately $10 million on FDIC-supported loans and of two fewer days in the first quarter compared to the fourth quarter. Lower yields on new loans pressured net interest income, but were partially offset by lower long-term debt costs from the Company's previous refinancing activities. The net interest margin decreased slightly to 3.31% in the first quarter of 2014, compared to 3.33% in the fourth quarter of 2013.
Noninterest Income
Noninterest income for the first quarter of 2014 was $138 million, compared to a loss of $(31) million for the fourth quarter of 2013. The increase this quarter was primarily due to other-than-temporary impairment ("OTTI") recognized on CDO securities in the prior quarter, and to net gains on sales and paydowns of CDO securities.
Noninterest Expense
Noninterest expense for the first quarter of 2014 was $398 million compared to $495 million for the fourth quarter of 2013. Changes this quarter compared to the previous quarter were due primarily to (1) the debt extinguishment cost of $79.9 million recognized in the fourth quarter; (2) the decrease in professional and legal services to $11.0 million this quarter from $23.9 million in the fourth quarter, due to increased consulting expenses in the fourth quarter largely related to the Company's CCAR submission; and (3) the increase in salaries and employee benefits, due primarily to increased FTE count, payroll taxes and variable compensation accruals.
Asset Quality
Credit quality remained stable and strong as nonperforming lending-related assets declined to $441 million at March 31, 2014 from $453 million at December 31, 2013, offset by a slight increase of 4.50% in the level of classified loans. The ratio of nonperforming lending-related assets to loans and leases and other real estate owned decreased to 1.12% at March 31, 2014, compared to 1.15% at December 31, 2013.
Gross loan and lease charge-offs were $20.8 million during the first quarter of 2014, compared to $37.4 million in the fourth quarter of 2013. The first quarter of 2014 amount is the lowest level since 2007. Net loan and lease charge-offs were $8 million in the first quarter of 2014, compared to $19 million in the fourth quarter of 2013.
The negative provision for loan losses was approximately $1 million for the first quarter of 2014, compared to a negative provision of $31 million for the fourth quarter of 2013. The allowance for credit losses was $826 million, or 2.11% of loans and leases at March 31, 2014, compared to $836 million, or 2.14% of loans and leases at December 31, 2013.
Annual Shareholders' Meeting
The Company's Annual Shareholders' Meeting will be held Friday, May 30, 2014 at 1:00 p.m. at the Company's headquarters, One South Main Street, Salt Lake City, Utah, in the Founders Room, 18th Floor.
Conference Call
Zions will host a conference call to discuss these first quarter results at 5:30 p.m. ET this afternoon (April 21, 2014). 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 22015506, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation website at www.zionsbancorporation.com. 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 475 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, and received 12 "Excellence" awards by Greenwich Associates for the 2013 survey. 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 could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company'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) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
PER COMMON SHARE | |||||||||||||||||||
Dividends | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.01 | |||||||||
Book value per common share 1 | 30.19 | 29.57 | 28.87 | 27.82 | 27.43 | ||||||||||||||
Tangible book value per common share 1 | 24.53 | 23.88 | 23.16 | 22.09 | 21.67 | ||||||||||||||
SELECTED RATIOS | |||||||||||||||||||
Return on average assets | 0.74% | (0.30)% | 0.80% | 0.61% | 0.83% | ||||||||||||||
Return on average common equity | 5.52% | (4.51)% | 16.03% | 4.35% | 7.18% | ||||||||||||||
Tangible return on average tangible common equity | 6.96% | (5.45)% | 20.34% | 5.73% | 9.37% | ||||||||||||||
Net interest margin | 3.31% | 3.33% | 3.22% | 3.44% | 3.44% | ||||||||||||||
Capital Ratios | |||||||||||||||||||
Tangible common equity ratio 1 | 8.24% | 8.02% | 7.90% | 7.57% | 7.53% | ||||||||||||||
Tangible equity ratio 1 | 10.06% | 9.85% | 9.75% | 10.78% | 9.97% | ||||||||||||||
Average equity to average assets | 11.90% | 11.20% | 12.39% | 12.11% | 11.54% | ||||||||||||||
Risk-Based Capital Ratios 1,2 | |||||||||||||||||||
Tier 1 common equity | 10.53% | 10.18% | 10.47% | 10.03% | 10.07% | ||||||||||||||
Tier 1 leverage | 10.71% | 10.48% | 10.63% | 11.75% | 11.55% | ||||||||||||||
Tier 1 risk-based capital | 13.16% | 12.77% | 13.10% | 14.30% | 14.08% | ||||||||||||||
Total risk-based capital | 15.07% | 14.67% | 14.82% | 15.94% | 15.75% | ||||||||||||||
Taxable-equivalent net interest income | $ | 420,305 | $ | 435,714 | $ | 419,236 | $ | 434,579 | $ | 422,252 | |||||||||
Weighted average common and common-equivalent shares outstanding | 185,122,844 | 184,208,544 | 184,742,414 | 184,061,623 | 183,655,129 | ||||||||||||||
Common shares outstanding 1 | 184,895,182 | 184,677,696 | 184,600,005 | 184,436,656 | 184,246,471 | ||||||||||||||
1 At period end. | |
2 Ratios for March 31, 2014 are estimates. | |
CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||
(In thousands, except shares) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
ASSETS | |||||||||||||||||||
Cash and due from banks | $ | 1,341,319 | $ | 1,175,083 | $ | 1,365,082 | $ | 1,183,097 | $ | 928,817 | |||||||||
Money market investments: | |||||||||||||||||||
Interest-bearing deposits | 8,157,837 | 8,175,048 | 8,180,639 | 8,180,010 | 5,785,268 | ||||||||||||||
Federal funds sold and security resell agreements | 379,947 | 282,248 | 209,070 | 221,799 | 2,340,177 | ||||||||||||||
Investment securities: | |||||||||||||||||||
Held-to-maturity, at adjusted cost (approximate fair value $635,379, $609,547, $727,908, $734,292, and $684,668) | 606,279 | 588,981 | 777,849 | 783,371 | 736,158 | ||||||||||||||
Available-for-sale, at fair value | 3,423,205 | 3,701,886 | 3,333,889 | 3,193,395 | 3,287,844 | ||||||||||||||
Trading account, at fair value | 56,172 | 34,559 | 38,278 | 26,385 | 28,301 | ||||||||||||||
4,085,656 | 4,325,426 | 4,150,016 | 4,003,151 | 4,052,303 | |||||||||||||||
Loans held for sale | 126,344 | 171,328 | 114,810 | 164,619 | 161,559 | ||||||||||||||
Loans and leases, net of unearned income and fees | 39,198,136 | 39,043,365 | 38,272,730 | 38,187,945 | 37,762,419 | ||||||||||||||
Less allowance for loan losses | 736,953 | 746,291 | 797,523 | 813,912 | 841,781 | ||||||||||||||
Loans, net of allowance | 38,461,183 | 38,297,074 | 37,475,207 | 37,374,033 | 36,920,638 | ||||||||||||||
Other noninterest-bearing investments | 848,775 | 855,642 | 851,349 | 852,939 | 855,388 | ||||||||||||||
Premises and equipment, net | 785,519 | 726,372 | 720,365 | 717,299 | 706,746 | ||||||||||||||
Goodwill | 1,014,129 | 1,014,129 | 1,014,129 | 1,014,129 | 1,014,129 | ||||||||||||||
Core deposit and other intangibles | 33,562 | 36,444 | 39,667 | 43,239 | 47,000 | ||||||||||||||
Other real estate owned | 39,248 | 46,105 | 66,381 | 80,789 | 89,904 | ||||||||||||||
Other assets | 807,325 | 926,228 | 1,001,597 | 1,069,436 | 1,208,635 | ||||||||||||||
$ | 56,080,844 | $ | 56,031,127 | $ | 55,188,312 | $ | 54,904,540 | $ | 54,110,564 | ||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Noninterest-bearing demand | $ | 19,257,889 | $ | 18,758,753 | $ | 18,566,137 | $ | 17,803,950 | $ | 17,311,150 | |||||||||
Interest-bearing: | |||||||||||||||||||
Savings and money market | 23,097,351 | 23,029,928 | 22,806,132 | 22,887,404 | 22,760,397 | ||||||||||||||
Time | 2,528,735 | 2,593,038 | 2,689,688 | 2,810,431 | 2,889,903 | ||||||||||||||
Foreign | 1,648,111 | 1,980,161 | 1,607,409 | 1,514,270 | 1,528,745 | ||||||||||||||
46,532,086 | 46,361,880 | 45,669,366 | 45,016,055 | 44,490,195 | |||||||||||||||
Federal funds and other short-term borrowings | 279,837 | 340,348 | 273,774 | 256,615 | 326,769 | ||||||||||||||
Long-term debt | 2,158,701 | 2,273,575 | 2,304,301 | 2,173,176 | 2,352,569 | ||||||||||||||
Reserve for unfunded lending commitments | 88,693 | 89,705 | 84,147 | 104,082 | 100,455 | ||||||||||||||
Other liabilities | 435,311 | 501,056 | 523,915 | 494,280 | 489,923 | ||||||||||||||
Total liabilities | 49,494,628 | 49,566,564 | 48,855,503 | 48,044,208 | 47,759,911 | ||||||||||||||
Shareholders' equity: | |||||||||||||||||||
Preferred stock, without par value, authorized 4,400,000 shares | 1,003,970 | 1,003,970 | 1,003,970 | 1,728,659 | 1,301,289 | ||||||||||||||
Common stock, without par value; authorized 350,000,000 shares; issued and outstanding 184,895,182, 184,677,696, 184,600,005, 184,436,656, and 184,246,471 shares | 4,185,513 | 4,179,024 | 4,172,887 | 4,167,828 | 4,170,888 | ||||||||||||||
Retained earnings | 1,542,195 | 1,473,670 | 1,540,455 | 1,338,401 | 1,290,131 | ||||||||||||||
Accumulated other comprehensive income (loss) | (145,462) | (192,101) | (384,503) | (374,556) | (406,903) | ||||||||||||||
Controlling interest shareholders' equity | 6,586,216 | 6,464,563 | 6,332,809 | 6,860,332 | 6,355,405 | ||||||||||||||
Noncontrolling interests | - | - | - | - | (4,752) | ||||||||||||||
Total shareholders' equity | 6,586,216 | 6,464,563 | 6,332,809 | 6,860,332 | 6,350,653 | ||||||||||||||
$ | 56,080,844 | $ | 56,031,127 | $ | 55,188,312 | $ | 54,904,540 | $ | 54,110,564 | ||||||||||
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
(In thousands, except per share amounts) | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
Interest income: | ||||||||||||||||||||
Interest and fees on loans | $ | 434,344 | $ | 458,493 | $ | 442,366 | $ | 460,308 | $ | 453,433 | ||||||||||
Interest on money market investments | 5,130 | 5,985 | 6,175 | 5,764 | 5,439 | |||||||||||||||
Interest on securities | 28,094 | 25,539 | 24,866 | 27,161 | 25,876 | |||||||||||||||
Total interest income | 467,568 | 490,017 | 473,407 | 493,233 | 484,748 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Interest on deposits | 12,779 | 13,622 | 14,506 | 15,143 | 15,642 | |||||||||||||||
Interest on short- and long-term borrowings | 38,324 | 44,360 | 43,380 | 47,433 | 50,991 | |||||||||||||||
Total interest expense | 51,103 | 57,982 | 57,886 | 62,576 | 66,633 | |||||||||||||||
Net interest income | 416,465 | 432,035 | 415,521 | 430,657 | 418,115 | |||||||||||||||
Provision for loan losses | (610) | (30,538) | (5,573) | (21,990) | (29,035) | |||||||||||||||
Net interest income after provision for loan losses | 417,075 | 462,573 | 421,094 | 452,647 | 447,150 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Service charges and fees on deposit accounts | 42,594 | 43,729 | 44,701 | 44,329 | 43,580 | |||||||||||||||
Other service charges, commissions and fees | 43,519 | 46,877 | 45,977 | 45,888 | 42,731 | |||||||||||||||
Wealth management income | 7,077 | 8,067 | 7,120 | 7,732 | 6,994 | |||||||||||||||
Capital markets and foreign exchange | 5,000 | 6,516 | 7,309 | 6,740 | 7,486 | |||||||||||||||
Dividends and other investment income | 7,864 | 9,898 | 12,101 | 11,339 | 12,724 | |||||||||||||||
Loan sales and servicing income | 6,474 | 5,155 | 8,464 | 10,723 | 10,951 | |||||||||||||||
Fair value and nonhedge derivative loss | (8,539) | (5,347) | (4,403) | (2,957) | (5,445) | |||||||||||||||
Equity securities gains, net | 912 | 314 | 3,165 | 2,209 | 2,832 | |||||||||||||||
Fixed income securities gains (losses), net | 30,914 | (6,624) | 1,580 | (1,153) | 3,299 | |||||||||||||||
Impairment losses on investment securities: | ||||||||||||||||||||
Impairment losses on investment securities | (27) | (141,733) | (10,470) | (4,910) | (31,493) | |||||||||||||||
Noncredit-related losses on securities not expected to be sold (recognized in other comprehensive income) | - | - | 1,403 | 693 | 21,376 | |||||||||||||||
Net impairment losses on investment securities | (27) | (141,733) | (9,067) | (4,217) | (10,117) | |||||||||||||||
Other | 2,531 | 1,998 | 5,243 | 4,515 | 6,184 | |||||||||||||||
Total noninterest income (loss) | 138,319 | (31,150) | 122,190 | 125,148 | 121,219 | |||||||||||||||
Noninterest expense: | ||||||||||||||||||||
Salaries and employee benefits | 233,406 | 226,616 | 229,185 | 227,328 | 229,789 | |||||||||||||||
Occupancy, net | 28,305 | 28,733 | 28,230 | 27,951 | 27,389 | |||||||||||||||
Furniture, equipment and software | 27,944 | 27,450 | 26,560 | 26,545 | 26,074 | |||||||||||||||
Other real estate expense | 1,607 | (1,024) | (831) | 1,590 | 1,977 | |||||||||||||||
Credit related expense | 6,906 | 6,509 | 7,265 | 9,397 | 10,482 | |||||||||||||||
Provision for unfunded lending commitments | (1,012) | 5,558 | (19,935) | 3,627 | (6,354) | |||||||||||||||
Professional and legal services | 10,995 | 23,886 | 16,462 | 17,149 | 10,471 | |||||||||||||||
Advertising | 6,398 | 5,571 | 6,091 | 5,807 | 5,893 | |||||||||||||||
FDIC premiums | 7,922 | 8,789 | 9,395 | 10,124 | 9,711 | |||||||||||||||
Amortization of core deposit and other intangibles | 2,882 | 3,224 | 3,570 | 3,762 | 3,819 | |||||||||||||||
Debt extinguishment cost | - | 79,910 | - | 40,282 | - | |||||||||||||||
Other | 72,710 | 79,528 | 64,671 | 78,116 | 78,097 | |||||||||||||||
Total noninterest expense | 398,063 | 494,750 | 370,663 | 451,678 | 397,348 | |||||||||||||||
Income (loss) before income taxes | 157,331 | (63,327) | 172,621 | 126,117 | 171,021 | |||||||||||||||
Income taxes (benefit) | 56,121 | (21,855) | 61,107 | 43,091 | 60,634 | |||||||||||||||
Net income (loss) | 101,210 | (41,472) | 111,514 | 83,026 | 110,387 | |||||||||||||||
Net loss applicable to noncontrolling interests | - | - | - | - | (336) | |||||||||||||||
Net income (loss) applicable to controlling interest | 101,210 | (41,472) | 111,514 | 83,026 | 110,723 | |||||||||||||||
Preferred stock dividends | (25,020) | (17,965) | (27,507) | (27,641) | (22,399) | |||||||||||||||
Preferred stock redemption | - | - | 125,700 | - | - | |||||||||||||||
Net earnings (loss) applicable to common shareholders | $ | 76,190 | $ | (59,437) | $ | 209,707 | $ | 55,385 | $ | 88,324 | ||||||||||
Weighted average common shares outstanding during the period: | ||||||||||||||||||||
Basic shares | 184,440 | 184,209 | 184,112 | 183,647 | 183.396 | |||||||||||||||
Diluted shares | 185,123 | 184,209 | 184,742 | 184,062 | 183,655 | |||||||||||||||
Net earnings (loss) per common share: | ||||||||||||||||||||
Basic | $ | 0.41 | $ | (0.32) | $ | 1.13 | $ | 0.30 | $ | 0.48 | ||||||||||
Diluted | 0.41 | (0.32) | 1.12 | 0.30 | 0.48 | |||||||||||||||
Loan Balances Held for Investment by Portfolio Type (Unaudited) | |||||||||||||||||||||||||||||
(In millions) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 12,512 | $ | 12,481 | $ | 11,904 | $ | 11,899 | $ | 11,504 | |||||||||||||||||||
Leasing | 389 | 388 | 375 | 388 | 390 | ||||||||||||||||||||||||
Owner occupied | 7,348 | 7,437 | 7,379 | 7,394 | 7,501 | ||||||||||||||||||||||||
Municipal | 482 | 449 | 449 | 454 | 484 | ||||||||||||||||||||||||
Total commercial | 20,731 | 20,755 | 20,107 | 20,135 | 19,879 | ||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Construction and land development | 2,264 | 2,183 | 2,240 | 2,191 | 2,039 | ||||||||||||||||||||||||
Term | 8,080 | 8,006 | 7,929 | 7,971 | 8,012 | ||||||||||||||||||||||||
Total commercial real estate | 10,344 | 10,189 | 10,169 | 10,162 | 10,051 | ||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||
Home equity credit line | 2,165 | 2,133 | 2,124 | 2,124 | 2,125 | ||||||||||||||||||||||||
1-4 family residential | 4,796 | 4,737 | 4,637 | 4,486 | 4,408 | ||||||||||||||||||||||||
Construction and other consumer real estate | 330 | 325 | 321 | 322 | 320 | ||||||||||||||||||||||||
Bankcard and other revolving plans | 361 | 356 | 332 | 315 | 293 | ||||||||||||||||||||||||
Other | 186 | 198 | 208 | 212 | 208 | ||||||||||||||||||||||||
Total consumer | 7,838 | 7,749 | 7,622 | 7,459 | 7,354 | ||||||||||||||||||||||||
FDIC-supported loans 1 | 285 | 350 | 375 | 432 | 478 | ||||||||||||||||||||||||
Total loans | $ | 39,198 | $ | 39,043 | $ | 38,273 | $ | 38,188 | $ | 37,762 | |||||||||||||||||||
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) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
(In thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||
Balance sheet: | |||||||||||||||||||||||||||||
Change in assets from reestimation of cash flows - increase (decrease): | |||||||||||||||||||||||||||||
FDIC-supported loans | $ | 18,453 | $ | 28,502 | $ | 15,018 | $ | 28,424 | $ | 18,977 | |||||||||||||||||||
FDIC indemnification asset | (15,972) | (19,934) | (12,965) | (21,845) | (20,288) | ||||||||||||||||||||||||
Balance at end of period: | |||||||||||||||||||||||||||||
FDIC-supported loans (included in loans and leases) | 285,313 | 350,271 | 374,861 | 431,935 | 477,725 | ||||||||||||||||||||||||
FDIC indemnification asset (included in other assets) | 13,184 | 26,411 | 41,771 | 51,297 | 71,100 | ||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
(In thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||
Statement of income: | |||||||||||||||||||||||||||||
Interest income: | |||||||||||||||||||||||||||||
Interest and fees on loans | $ | 18,453 | $ | 28,502 | $ | 15,018 | $ | 28,424 | $ | 18,977 | |||||||||||||||||||
Noninterest expense: | |||||||||||||||||||||||||||||
Other noninterest expense | 15,972 | 19,934 | 12,965 | 21,845 | 20,288 | ||||||||||||||||||||||||
Net increase (decrease) in pretax income | $ | 2,481 | $ | 8,568 | $ | 2,053 | $ | 6,579 | $ | (1,311) | |||||||||||||||||||
Nonperforming Lending-Related Assets (Unaudited) | |||||||||||||||||||
(Amounts in thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
Nonaccrual loans | $ | 397,549 | $ | 402,219 | $ | 466,795 | $ | 515,708 | $ | 589,221 | |||||||||
Other real estate owned | 37,841 | 42,817 | 58,295 | 70,031 | 80,701 | ||||||||||||||
Nonperforming lending-related assets, excluding FDIC-supported assets | 435,390 | 445,036 | 525,090 | 585,739 | 669,922 | ||||||||||||||
FDIC-supported nonaccrual loans | 4,117 | 4,394 | 4,744 | 5,256 | 4,927 | ||||||||||||||
FDIC-supported other real estate owned | 1,407 | 3,288 | 8,086 | 10,758 | 9,203 | ||||||||||||||
FDIC-supported nonperforming lending-related assets | 5,524 | 7,682 | 12,830 | 16,014 | 14,130 | ||||||||||||||
Total nonperforming lending-related assets | $ | 440,914 | $ | 452,718 | $ | 537,920 | $ | 601,753 | $ | 684,052 | |||||||||
Ratio of nonperforming lending-related assets to loans 1 and leases and other real estate owned | 1.12% | 1.15% | 1.40% | 1.57% | 1.80% | ||||||||||||||
Accruing loans past due 90 days or more, excluding FDIC-supported loans | $ | 6,661 | $ | 9,957 | $ | 9,398 | $ | 10,685 | $ | 12,708 | |||||||||
Accruing FDIC-supported loans past due 90 days or more | 31,529 | 30,391 | 22,450 | 33,410 | 47,208 | ||||||||||||||
Ratio of accruing loans past due 90 days or more to loans 1 and leases | 0.10% | 0.10% | 0.08% | 0.11% | 0.16% | ||||||||||||||
Nonaccrual loans and accruing loans past due 90 days or more | $ | 439,856 | $ | 446,961 | $ | 503,387 | $ | 565,059 | $ | 654,064 | |||||||||
Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans 1 and leases | 1.12% | 1.14% | 1.31% | 1.47% | 1.72% | ||||||||||||||
Accruing loans past due 30 - 89 days, excluding FDIC-supported loans | $ | 110,566 | $ | 104,760 | $ | 85,128 | $ | 103,075 | $ | 155,896 | |||||||||
Accruing FDIC-supported loans past due 30 - 89 days | 3,839 | 11,752 | 10,983 | 6,522 | 11,571 | ||||||||||||||
Restructured loans included in nonaccrual loans | 130,534 | 136,135 | 166,573 | 162,496 | 193,975 | ||||||||||||||
Restructured loans on accrual | 318,511 | 345,299 | 384,793 | 385,428 | 416,181 | ||||||||||||||
Classified loans, excluding FDIC-supported loans | 1,295,976 | 1,240,148 | 1,432,806 | 1,639,206 | 1,737,178 | ||||||||||||||
1Includes loans held for sale. |
Allowance for Credit Losses (Unaudited) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
(Amounts in thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
Allowance for Loan Losses | |||||||||||||||||||
Balance at beginning of period | $ | 746,291 | $ | 797,523 | $ | 813,912 | $ | 841,781 | $ | 896,087 | |||||||||
Add: | |||||||||||||||||||
Provision for losses | (610) | (30,538) | (5,573) | (21,990) | (29,035) | ||||||||||||||
Adjustment for FDIC-supported loans | (817) | (1,481) | (2,118) | (209) | (7,429) | ||||||||||||||
Deduct: | |||||||||||||||||||
Gross loan and lease charge-offs | (20,795) | (37,405) | (22,826) | (35,099) | (35,467) | ||||||||||||||
Recoveries | 12,884 | 18,192 | 14,128 | 29,429 | 17,625 | ||||||||||||||
Net loan and lease charge-offs | (7,911) | (19,213) | (8,698) | (5,670) | (17,842) | ||||||||||||||
Balance at end of period | $ | 736,953 | $ | 746,291 | $ | 797,523 | $ | 813,912 | $ | 841,781 | |||||||||
Ratio of allowance for loan losses to loans and leases, at period end | 1.88% | 1.91% | 2.08% | 2.13% | 2.23% | ||||||||||||||
Ratio of allowance for loan losses to nonperforming loans, at period end | 183.47% | 183.54% | 169.13% | 156.23% | 141.68% | ||||||||||||||
Annualized ratio of net loan and lease charge-offs to average loans | 0.08% | 0.20% | 0.09% | 0.06% | 0.19% | ||||||||||||||
Reserve for Unfunded Lending Commitments | |||||||||||||||||||
Balance at beginning of period | $ | 89,705 | $ | 84,147 | $ | 104,082 | $ | 100,455 | $ | 106,809 | |||||||||
Provision charged (credited) to earnings | (1,012) | 5,558 | (19,935) | 3,627 | (6,354) | ||||||||||||||
Balance at end of period | $ | 88,693 | $ | 89,705 | $ | 84,147 | $ | 104,082 | $ | 100,455 | |||||||||
Total Allowance for Credit Losses | |||||||||||||||||||
Allowance for loan losses | $ | 736,953 | $ | 746,291 | $ | 797,523 | $ | 813,912 | $ | 841,781 | |||||||||
Reserve for unfunded lending commitments | 88,693 | 89,705 | 84,147 | 104,082 | 100,455 | ||||||||||||||
Total allowance for credit losses | $ | 825,646 | $ | 835,996 | $ | 881,670 | $ | 917,994 | $ | 942,236 | |||||||||
Ratio of total allowance for credit losses to loans and leases outstanding, at period end | 2.11% | 2.14% | 2.30% | 2.40% | 2.50% | ||||||||||||||
Nonaccrual Loans by Portfolio Type (Excluding FDIC-Supported Loans) (Unaudited) | |||||||||||||||||||||||||||||
(In millions) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 109 | $ | 98 | $ | 100 | $ | 94 | $ | 100 | |||||||||||||||||||
Leasing | 1 | 1 | 1 | 1 | 1 | ||||||||||||||||||||||||
Owner occupied | 127 | 136 | 158 | 186 | 195 | ||||||||||||||||||||||||
Municipal | 10 | 10 | 10 | 9 | 9 | ||||||||||||||||||||||||
Total commercial | 247 | 245 | 269 | 290 | 305 | ||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Construction and land development | 29 | 29 | 65 | 70 | 93 | ||||||||||||||||||||||||
Term | 59 | 60 | 61 | 71 | 102 | ||||||||||||||||||||||||
Total commercial real estate | 88 | 89 | 126 | 141 | 195 | ||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||
Home equity credit line | 10 | 9 | 8 | 11 | 12 | ||||||||||||||||||||||||
1-4 family residential | 48 | 53 | 58 | 66 | 71 | ||||||||||||||||||||||||
Construction and other consumer real estate | 3 | 4 | 4 | 5 | 4 | ||||||||||||||||||||||||
Bankcard and other revolving plans | 1 | 1 | 1 | 2 | 1 | ||||||||||||||||||||||||
Other | 1 | 1 | 1 | 1 | 1 | ||||||||||||||||||||||||
Total consumer | 63 | 68 | 72 | 85 | 89 | ||||||||||||||||||||||||
Total nonaccrual loans | $ | 398 | $ | 402 | $ | 467 | $ | 516 | $ | 589 | |||||||||||||||||||
Net Charge-Offs by Portfolio Type (Unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
(In millions) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 1 | $ | 15 | $ | 2 | $ | 2 | $ | 5 | |||||||||||||||||||
Leasing | (1) | - | - | - | - | ||||||||||||||||||||||||
Owner occupied | 2 | 1 | 2 | 3 | 5 | ||||||||||||||||||||||||
Municipal | - | - | - | - | - | ||||||||||||||||||||||||
Total commercial | 2 | 16 | 4 | 5 | 10 | ||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Construction and land development | (2) | (3) | (1) | (3) | (3) | ||||||||||||||||||||||||
Term | 7 | 5 | 3 | (2) | 5 | ||||||||||||||||||||||||
Total commercial real estate | 5 | 2 | 2 | (5) | 2 | ||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||
Home equity credit line | - | - | 1 | 2 | 2 | ||||||||||||||||||||||||
1-4 family residential | 1 | - | 1 | 3 | 3 | ||||||||||||||||||||||||
Construction and other consumer real estate | (1) | - | - | 1 | (1) | ||||||||||||||||||||||||
Bankcard and other revolving plans | 2 | 1 | 1 | - | 2 | ||||||||||||||||||||||||
Other | (1) | - | - | - | - | ||||||||||||||||||||||||
Total consumer loans | 1 | 1 | 3 | 6 | 6 | ||||||||||||||||||||||||
Total net charge-offs | $ | 8 | $ | 19 | $ | 9 | $ | 6 | $ | 18 | |||||||||||||||||||
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES (Unaudited) | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, 2014 | December 31, 2013 | September 30, 2013 | ||||||||||||
(In thousands) | Average balance | Average rate | Average balance | Average rate | Average balance | Average rate | ||||||||
ASSETS | ||||||||||||||
Money market investments | $ | 8,137,123 | 0.26% | $ | 9,154,232 | 0.26% | $ | 9,454,131 | 0.26 | |||||
Securities: | ||||||||||||||
Held-to-maturity | 587,473 | 5.65% | 770,168 | 4.75% | 778,268 | 4.73% | ||||||||
Available-for-sale | 3,470,983 | 2.48% | 3,230,152 | 2.17% | 3,071,039 | 2.22% | ||||||||
Trading account | 58,543 | 3.34% | 43,063 | 3.39% | 25,959 | 3.21% | ||||||||
Total securities | 4,116,999 | 2.95% | 4,043,383 | 2.68% | 3,875,266 | 2.73% | ||||||||
Loans held for sale | 157,170 | 3.61% | 119,671 | 3.73% | 131,652 | 3.70% | ||||||||
Loans 1: | ||||||||||||||
Loans and leases | 38,805,192 | 4.30% | 38,259,795 | 4.41% | 37,818,273 | 4.43% | ||||||||
FDIC-supported loans | 319,695 | 29.35% | 363,982 | 36.88% | 405,316 | 20.52% | ||||||||
Total loans | 39,124,887 | 4.51% | 38,623,777 | 4.72% | 38,223,589 | 4.60% | ||||||||
Total interest-earning assets | 51,536,179 | 3.71% | 51,941,063 | 3.77% | 51,684,638 | 3.66% | ||||||||
Cash and due from banks | 1,040,906 | 1,026,814 | 976,159 | |||||||||||
Allowance for loan losses | (745,671) | (790,361) | (810,290) | |||||||||||
Goodwill | 1,014,129 | 1,014,129 | 1,014,129 | |||||||||||
Core deposit and other intangibles | 35,072 | 38,137 | 41,751 | |||||||||||
Other assets | 2,552,965 | 2,470,837 | 2,608,252 | |||||||||||
Total assets | $ | 55,433,580 | $ | 55,700,619 | $ | 55,514,639 | ||||||||
LIABILITIES | ||||||||||||||
Interest-bearing deposits: | ||||||||||||||
Savings and money market | $ | 22,908,201 | 0.16% | $ | 22,972,978 | 0.16% | $ | 22,982,998 | 0.17% | |||||
Time | 2,560,283 | 0.49% | 2,642,104 | 0.50% | 2,749,985 | 0.56% | ||||||||
Foreign | 1,751,910 | 0.20% | 1,796,912 | 0.20% | 1,675,256 | 0.20% | ||||||||
Total interest-bearing deposits | 27,220,394 | 0.19% | 27,411,994 | 0.20% | 27,408,239 | 0.21% | ||||||||
Borrowed funds: | ||||||||||||||
Federal funds and other short-term borrowings | 249,043 | 0.11% | 271,501 | 0.11% | 260,744 | 0.11% | ||||||||
Long-term debt | 2,237,457 | 6.93% | 2,352,748 | 7.47% | 2,198,752 | 7.81% | ||||||||
Total borrowed funds | 2,486,500 | 6.25% | 2,624,249 | 6.71% | 2,459,496 | 7.00% | ||||||||
Total interest-bearing liabilities | 29,706,894 | 0.70% | 30,036,243 | 0.77% | 29,867,735 | 0.77% | ||||||||
Noninterest-bearing deposits | 18,557,992 | 18,842,097 | 18,179,584 | |||||||||||
Other liabilities | 569,361 | 584,887 | 591,735 | |||||||||||
Total liabilities | 48,834,247 | 49,463,227 | 48,639,054 | |||||||||||
Shareholders' equity: | ||||||||||||||
Preferred equity | 1,003,970 | 1,003,970 | 1,685,512 | |||||||||||
Common equity | 5,595,363 | 5,233,422 | 5,190,073 | |||||||||||
Total shareholders' equity | 6,599,333 | 6,237,392 | 6,875,585 | |||||||||||
Total liabilities and shareholders' equity | $ | 55,433,580 | $ | 55,700,619 | $ | 55,514,639 | ||||||||
Spread on average interest-bearing funds | 3.01% | 3.00% | 2.89% | |||||||||||
Net yield on interest-earning assets | 3.31% | 3.33% | 3.22% | |||||||||||
1 Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans. |
GAAP to Non-GAAP Reconciliation (Unaudited) | ||||||||||||||||||
Tangible Return on Average Tangible Common Equity | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
(Amounts in thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||
Net earnings (loss) applicable to common shareholders (GAAP) | $ | 76,190 | $ | (59,437) | $ | 209,707 | $ | 55,385 | $ | 88,324 | ||||||||
Adjustments, net of tax: | ||||||||||||||||||
Amortization of core deposit and other intangibles | 1,827 | 2,046 | 2,268 | 2,391 | 2,425 | |||||||||||||
Net earnings (loss) applicable to common shareholders, excluding the effects of the adjustments, net of tax (non-GAAP) (a) | $ | 78,017 | $ | (57,391) | $ | 211,975 | $ | 57,776 | $ | 90,749 | ||||||||
Average common equity (GAAP) | $ | 5,595,363 | $ | 5,233,422 | $ | 5,190,073 | $ | 5,102,082 | $ | 4,990,317 | ||||||||
Average goodwill | (1,014,129) | (1,014,129) | (1,014,129) | (1,014,129) | (1,014,129) | |||||||||||||
Average core deposit and other intangibles | (35,072) | (38,137) | (41,751) | (45,262) | (49,069) | |||||||||||||
Average tangible common equity (non-GAAP) (b) | $ | 4,546,162 | $ | 4,181,156 | $ | 4,134,193 | $ | 4,042,691 | $ | 3,927,119 | ||||||||
Number of days in quarter (c) | 90 | 92 | 92 | 91 | 90 | |||||||||||||
Number of days in year (d) | 365 | 365 | 365 | 365 | 365 | |||||||||||||
Tangible return on average tangible common equity (non-GAAP) (a/b/c*d) | 6.96% | (5.45)% | 20.34% | 5.73% | 9.37% | |||||||||||||
This press release presents the non-GAAP financial measure previously shown. The adjustments to reconcile from the applicable GAAP financial measure to the non-GAAP financial measure 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 measure 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. This non-GAAP financial measure is 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 this non-GAAP financial measure 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 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
