ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/	a4q20148-kcoverpage.htm

EXHIBIT 99.1

***FOR IMMEDIATE RELEASE***



For: ZIONS BANCORPORATION					Contact: James Abbott
One South Main, 15th Floor					Tel: (801) 844-7637
Salt Lake City, Utah					January 26, 2015
Harris H. Simmons
Chairman/Chief Executive Officer

ZIONS BANCORPORATION REPORTS ANNUAL NET EARNINGS FOR 2014

OF $333 MILLION, OR $1.71 PER DILUTED COMMON SHARE

SALT LAKE CITY, January 26, 2015 – Zions Bancorporation (NASDAQ: ZION) (“Zions” or “the Company”) today reported annual net earnings for 2014 of $333.0 million, or $1.71 per diluted common share, compared to $294.0 million, or $1.58 per diluted common share, for 2013.

Net earnings for the fourth quarter of 2014 were $73.2 million, or $0.36 per diluted common share, compared to $79.1 million, or $0.40 per diluted share for the third quarter of 2014, and $(59.4) million, or $(0.32) per diluted common share for the fourth quarter of 2013. Earnings per share for the fourth quarter of 2013 were adversely impacted by impairment losses on collateralized debt obligation securities (“CDOs”) as a result of the Volcker Rule and the Company’s risk reduction strategies.

Fourth Quarter 2014 Highlights


•	Net interest income increased to $430 million this quarter from $417 million in the prior quarter, primarily due to lower interest expense that resulted from the redemption of long-term debt during the prior quarter. As a result, the net interest margin increased to 3.25% this quarter from 3.20% in the prior quarter.


•	The provision for loan losses increased to $12 million this quarter from a negative $55 million in the prior quarter, as the Company moved to strengthen reserves for its energy-related lending in light of recent declines in energy prices.


•	Credit quality metrics were stable to slightly improved, as nonperforming lending-related assets and classified loans each declined 3% this quarter from the prior quarter, and net charge-offs were 0.17% annualized of average loans.


•	The estimated Basel I Tier 1 common equity ratio was stable compared to the prior quarter and was among the highest in the industry at 11.92% at December 31, 2014.

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ZIONS BANCORPORATION

Press Release – Page 2

January 26, 2015

“We are encouraged with the continued strength of our capital and credit quality and believe the Company is well positioned for the next several quarters and years,” said Harris H. Simmons, chairman and chief executive officer. “Unemployment in our footprint has declined faster than the national average while job creation and household formation is faster than the national rate. However, we are exercising caution on lending and maintaining strong discipline with our underwriting standards and concentration limits.”

“We know there is concern regarding the potential effect of the decline of oil and gas prices on Zions’ credit quality and loan growth. Our team of energy bankers and executives, most of whom are at our Amegy Bank affiliate, has decades of energy lending experience through multiple oil and gas cycles. We are actively managing our energy-related exposure, including both individual credits and the portfolio as a whole. Our underwriting discipline has remained strong and growth in 2014 was minimal. We added to the energy-related allowance for credit losses this quarter primarily in recognition that, with the decline in oil and gas prices, the inherent credit risk in our energy portfolio has increased. Disciplined underwriting, combined with strong capital and loan loss reserve ratios, position us to deal effectively with challenges that may arise from the current price environment,” Simmons concluded.

Loans

Net loans and leases held for investment increased $324 million, or 0.8%, to $40.1 billion at December 31, 2014 from $39.7 billion at September 30, 2014. Increases of $535 million were primarily in Texas and Utah for commercial and industrial, and construction real estate loans. The increases were partially offset by $211 million of decreases in commercial owner occupied loans predominantly in the Company’s National Real Estate Group, and term commercial real estate loans primarily in Utah and Colorado, resulting from further competitive pressures from life insurance companies in a flat yield curve environment.

Average loans and leases of $39.8 billion during the fourth quarter of 2014 increased from $39.6 billion during the third quarter. Unfunded lending commitments were $17.6 billion at December 31, 2014, compared to $17.5 billion at September 30, 2014.

Energy-Related Exposure

At December 31, 2014, the Company had approximately $3.2 billion of primarily oil and gas energy-related loan balances, representing 7.9% of the total loan portfolio, compared to $3.1 billion and 7.7% at September 30, 2014, respectively. As of December 2014, $17 million (0.5%) of the $3.2 billion outstanding balances were nonperforming. The distribution of energy-related loans by customer market segment is shown in the following schedule.

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ZIONS BANCORPORATION

Press Release – Page 3

January 26, 2015



ENERGY-RELATED EXPOSURE*
(In millions)	December 31, 2014			September 30, 2014

Loans and leases
Oil and gas-related		$	3,172		$	3,064
Alternative energy		225			209
Total loans and leases		3,397			3,273
Unused commitments to extend credit		2,827			2,727
Total credit exposure		$	6,224		$	6,000

Private equity investments		$	19		$	20



Distribution of oil and gas-related balances
Upstream – exploration and production	32	%	34	%
Midstream – marketing and transportation	19	%	18	%
Downstream – refining	2	%	2	%
Other non-services	2	%	2	%
Oilfield services	33	%	31	%
Energy service manufacturing	12	%	13	%
Total loans and leases	100	%	100	%


*	Many borrowers operate in multiple businesses. Therefore, judgment has been applied in characterizing a borrower as energy-related, and to a particular segment of energy-related activity, e.g., upstream or downstream.

The Company’s historical energy lending performance has been strong despite significant volatility in both oil and natural gas prices, largely due to efforts of our highly experienced, dedicated team of bankers, conservative underwriting standards, and solid risk management controls, as detailed later. Losses following the 2008-2009 period of oil and gas price volatility were modest, and the Company has applied lessons learned from that cycle to the management of the portfolio.


•	Historically, the Company’s cumulative energy net charge-offs have been significantly below the cumulative net loss rate of general commercial and industrial lending during the last five years.


•	Classified loans increased significantly during the last downturn, but nonaccrual loans increased much more modestly, and annual losses were relatively minor.

Risk Mitigation. Several factors reduce the risk inherent in the portfolio:


•	The Company utilizes concentration limits on its energy lending, and such limits served to constrain loan growth during the past several quarters and years.


•	The oil and gas energy-related portfolio contains only senior loans – no junior or second lien positions. The Company generally avoids making first liens to borrowers that employ significant leverage through the use of junior liens or large unsecured senior tranches of debt.


•	More than 90% of the total energy-related portfolio is secured by reserves, equipment, real estate, and other collateral, or a combination of collateral types.

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ZIONS BANCORPORATION

Press Release – Page 4

January 26, 2015

Regarding upstream exploration and production loans:


•	Most borrowers have relatively balanced production between oil and gas. Gas prices have experienced a much more muted decline than oil.


•	A significant portion of the Company’s reserve-based borrowers are hedged. Of the oil production projected in 2015 and 2016, more than 50% is hedged based on weighted average commitments and the latest data provided by customers.


•	The Company applies multiple discounts to the borrower's stated value of the collateral in determining the borrowing base (commitment), to help protect credit quality against significant commodity price declines.


•	The Company employs several third-party engineering firms to conduct independent and unbiased evaluations of the energy reserves. The Company also employs internal engineering staff to review the third-party evaluations; such staff report to the chief credit officer.


•	Reserve-based commitments are subject to a borrowing base re-determination based on then-current energy prices at least every six months. The Company generally has the right to conduct two other re-determinations during the year.

Regarding energy service loans:


•	Because of the potential volatility in cash flows for energy services companies, the Company significantly limits leverage and analyzes the hypothetical performance of such loans under severely reduced cash flows during underwriting. Debt-to-EBITDA ratios for energy services companies were generally in the area of 1.5-to-1 as of the most recent financial statements available from the borrowers.


•	Many borrowers are diversified geographically and service both oil and gas related drilling and production.


•	Included in the energy service loans shown in the previous schedule are companies that have a concentration of revenues to the energy industry. However, many of these borrowers provide a broad range of products and services to the energy industry, many of which are not subject to the same volatility as new drilling activities.

In the fourth quarter, observed credit quality in the energy-related portfolio remained strong and was relatively unchanged from the third quarter. During the fourth quarter, the Company conducted certain sensitivity analyses, and based on those analyses, subjected certain energy-related credits to further scrutiny, resulting in a small number of credit downgrades. The fact that the decline in energy prices has basically all taken place in one quarter makes it difficult to see any measurable changes to the financial condition of borrowers, which is a primary driver of individual loan risk grades; such grades, in turn, are a primary driver of the quantitative portion of the allowance for credit losses. Nevertheless, the Company recognizes that some of its energy-related credits likely have incurred losses, assuming current levels of oil and gas prices persist. Therefore, it made changes to certain qualitative adjustment factors that had the effect of increasing the allowance for credit losses by approximately $25 million.

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ZIONS BANCORPORATION

Press Release – Page 5

January 26, 2015

Finally, in addition to re-evaluating certain credits and bolstering the allowance for credit losses in the fourth quarter, the Company has initiated the process of interim borrowing base re-determinations on selected borrowers. This is expected to result in some reduction of the size of the lines of credit available to those borrowers, and may result in some credit downgrades. However, the Company believes it is prudent to take early action and secure additional collateral, reduce commitments, etc., rather than wait for the normal borrowing base re-determination period in the spring of 2015.

Deposits

Total deposits increased $1.5 billion to $47.8 billion at December 31, 2014, compared to $46.3 billion at September 30, 2014, due to increases in both commercial and consumer account balances. Average total deposits for the fourth quarter of 2014 increased $1.2 billion, or 3%, to $47.5 billion, compared to $46.3 billion for the third quarter of 2014. Average noninterest-bearing deposits accounted for $0.8 billion of the total quarterly growth and amounted to 44% of total average deposits, up from 41% in the same year-ago period. Deposit increases are usually seasonally strong in the fourth quarter.

Debt and Shareholders’ Equity

After several quarters of increases, accumulated other comprehensive income (loss) declined to $(128) million at December 31, 2014 from $(111) million at September 30, 2014 primarily due to increased pension benefit obligations at December 31, 2014, which resulted from a decline in long-term interest rates and increased life expectancy assumptions.

Tangible book value per common share improved by approximately 1% to $26.27 at December 31, 2014, compared to $26.00 at September 30, 2014. Compared to December 31, 2013, tangible book value per common share improved by approximately 10%.

The estimated Basel I Tier 1 common equity ratio was 11.92% at December 31, 2014, essentially unchanged from 11.86% at September 30, 2014, but improved 17%, or 1.74 percentage points from 10.18% at December 31, 2013, due largely to the issuance of $525 million of common equity in July 2014.

Investment Securities

During the fourth quarter of 2014, the Company sold approximately $195 million par amount of CDO securities ($158 million amortized cost), resulting in net realized losses of $13 million. This compares to sales of $239 million par amount ($174 million amortized cost) during the third quarter, which resulted in net realized losses of $19 million. Gains on paydowns and payoffs of CDO securities were approximately $2 million during the fourth quarter, compared to $5 million during the third quarter. As of December 31, 2014, the Company had either sold or received full payoff of all of its Volcker-prohibited fixed income investment securities.

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ZIONS BANCORPORATION

Press Release – Page 6

January 26, 2015

Also during the fourth quarter of 2014, driven by the Federal Reserve’s adoption of the liquidity coverage ratio and consistent with previously stated intentions, the Company purchased approximately $450 million par amount of U.S. agency mortgage-backed securities. These securities have a duration of approximately 3.5 years.

Net Interest Income

Net interest income increased to $430 million in the fourth quarter of 2014 from $417 million in the third quarter. The net interest margin increased to 3.25% in the fourth quarter of 2014, compared to 3.20% in the third quarter of 2014. Interest expense on long-term debt during the fourth quarter declined approximately $12 million due to the effect of long-term debt redemptions during the third quarter.

Noninterest Income

Noninterest income for the fourth quarter of 2014 was $129 million, compared to $116 million for the third quarter of 2014. The increase in dividends and other investment income and equity securities gains was primarily due to approximately $15 million of unrealized gains on Small Business Investment Company investments. This increase was partially offset by $4 million of impairment on certain Volcker-prohibited (“covered”) private equity investments (“PEIs”). During the fourth quarter, the Company sold two covered PEIs of approximately $6 million and, with the impairment charge, recorded the remaining covered portfolio at an estimated market value of $41 million at December 31, 2014.

Noninterest Expense

Noninterest expense for the fourth quarter of 2014 was $412 million, compared to $439 million for the third quarter of 2014. The decrease was due primarily to the $44 million debt extinguishment and a $5 million severance accrual in salaries and benefits that were both recorded in the third quarter, partially offset by (1) the provision for unfunded lending commitments increasing to a positive $2 million in the fourth quarter from a negative $16 million in the prior quarter, and (2) an increase in professional and legal services related to the Company’s CCAR submission and new lending, deposit and reporting systems.

Asset Quality

Nonperforming lending-related assets declined 3% to $326 million at December 31, 2014 from $335 million at September 30, 2014. Classified loans were $1.1 billion at December 31, 2014, compared to $1.2 billion at September 30, 2014, or a decline of 3%. The ratio of nonperforming lending-related assets to loans and leases and other real estate owned decreased to 0.81% at December 31, 2014, compared to 0.84% at September 30, 2014.

Net loan and lease charge-offs were $17 million in the fourth quarter of 2014, compared to $11 million in the third quarter of 2014. Recoveries were $18 million in the fourth quarter, compared to $15 million in the third quarter.

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ZIONS BANCORPORATION

Press Release – Page 7

January 26, 2015

Charge-offs during the quarter took place in the commercial portfolio and were not driven by energy-related lending.

The provision for credit losses consists of the provision for loan losses, $12 million in the fourth quarter, plus the provision for unfunded lending commitments of $2 million in the fourth quarter. The provisions for loan losses and unfunded lending commitments in the fourth quarter reflect the Company’s decision to increase the qualitative portion of the reserves due to recent sharp declines in energy prices, offset by continued improvement in credit quality metrics during the quarter. The large negative provisions during the third quarter were due to significant reductions in commitments and outstanding balances of construction and land development loans, which carry a higher reserve ratio, and to sustained improvement in broader economic and credit quality indicators. The allowance for credit losses was $686 million, or 1.71%, of loans and leases at December 31, 2014, compared to $690 million, or 1.74%, of loans and leases at September 30, 2014.

Conference Call

Zions will host a conference call to discuss these fourth quarter results at 5:30 p.m. ET this afternoon (January 26, 2015). 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 55239414, 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 in 11 Western and Southwestern states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. The Company is a national leader in Small Business Administration lending 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. Statements based on historical data are not intended and should not be understood to indicate the Company’s expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not

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ZIONS BANCORPORATION

Press Release – Page 8

January 26, 2015

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 include the actual amount and duration of declines in the price of oil and gas as well as other factors 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.

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ZIONS BANCORPORATION

Press Release – Page 9

January 26, 2015

FINANCIAL HIGHLIGHTS

(Unaudited)



	Three Months Ended
(In thousands, except share, per share, and ratio data)	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013
PER COMMON SHARE
Dividends	$	0.04		$	0.04		$	0.04		$	0.04		$	0.04
Book value per common share ¹	31.39			31.14			30.77			30.19			29.57
Tangible book value per common share ¹	26.27			26.00			25.13			24.53			23.88

SELECTED RATIOS
Return on average assets	0.61		%	0.68		%	0.87		%	0.74		%	(0.30		)%
Return on average common equity	4.45		%	5.05		%	7.30		%	5.52		%	(4.51		)%
Tangible return on average tangible common equity	5.42		%	6.19		%	9.07		%	6.96		%	(5.45		)%
Net interest margin	3.25		%	3.20		%	3.29		%	3.31		%	3.33		%

Capital Ratios
Tangible common equity ratio ¹	9.49		%	9.70		%	8.60		%	8.24		%	8.02		%
Tangible equity ratio ¹	11.28		%	11.54		%	10.46		%	10.06		%	9.85		%
Average equity to average assets	13.22		%	12.87		%	12.26		%	11.90		%	11.20		%

Risk-Based Capital Ratios ^1,2
Basel I:
Tier 1 common equity	11.92		%	11.86		%	10.45		%	10.56		%	10.18		%
Tier 1 leverage	11.84		%	11.87		%	11.00		%	10.71		%	10.48		%
Tier 1 risk-based capital	14.47		%	14.43		%	13.00		%	13.19		%	12.77		%
Total risk-based capital	16.26		%	16.28		%	14.90		%	15.11		%	14.67		%

Taxable-equivalent net interest income	$	434,789		$	420,850		$	420,202		$	420,305		$	435,714

Weighted average common and common-equivalent shares outstanding	203,277,500			197,271,076			185,286,329			185,122,844			184,208,544
Common shares outstanding ¹	203,014,903			202,898,491			185,112,965			184,895,182			184,677,696


¹	At period end.


²	Ratios for December 31, 2014 are estimates.

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ZIONS BANCORPORATION

Press Release – Page 10

January 26, 2015

CONSOLIDATED BALANCE SHEETS



(In thousands, except shares)	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
ASSETS
Cash and due from banks	$	845,905		$	588,691		$	1,384,131		$	1,341,319		$	1,175,083
Money market investments:
Interest-bearing deposits	7,174,134			7,464,865			6,386,353			8,157,837			8,175,048
Federal funds sold and security resell agreements	1,386,291			355,844			478,535			379,947			282,248
Investment securities:
Held-to-maturity, at adjusted cost (approximate fair value $677,196, $642,529, $643,926, $635,379, and $609,547)	647,252			609,758			615,104			606,279			588,981
Available-for-sale, at fair value	3,844,248			3,563,408			3,462,809			3,423,205			3,701,886
Trading account, at fair value	70,601			55,419			56,572			56,172			34,559
	4,562,101			4,228,585			4,134,485			4,085,656			4,325,426

Loans held for sale	132,504			109,139			164,374			126,344			171,328

Loans and leases, net of unearned income and fees	40,064,016			39,739,795			39,630,363			39,198,136			39,043,365
Less allowance for loan losses	604,663			610,277			675,907			736,953			746,291
Loans, net of allowance	39,459,353			39,129,518			38,954,456			38,461,183			38,297,074

Other noninterest-bearing investments	865,950			855,743			854,978			848,775			855,642
Premises and equipment, net	829,809			811,127			803,214			785,519			726,372
Goodwill	1,014,129			1,014,129			1,014,129			1,014,129			1,014,129
Core deposit and other intangibles	25,520			28,160			30,826			33,562			36,444
Other real estate owned	18,916			27,418			27,725			39,248			46,105
Other assets	890,231			845,651			878,069			807,325			926,228
	$	57,204,843		$	55,458,870		$	55,111,275		$	56,080,844		$	56,031,127

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	20,528,287		$	19,770,405		$	19,609,990		$	19,257,889		$	18,758,753
Interest-bearing:
Savings and money market	24,583,636			23,742,911			23,308,114			23,097,351			23,029,928
Time	2,406,924			2,441,756			2,500,303			2,528,735			2,593,038
Foreign	328,391			310,264			252,207			1,648,111			1,980,161
	47,847,238			46,265,336			45,670,614			46,532,086			46,361,880

Federal funds and other short-term borrowings	244,223			191,798			258,401			279,837			340,348
Long-term debt	1,092,282			1,113,677			1,933,136			2,158,701			2,273,575
Reserve for unfunded lending commitments	81,076			79,377			95,472			88,693			89,705
Other liabilities	564,049			486,523			453,562			435,311			501,056
Total liabilities	49,828,868			48,136,711			48,411,185			49,494,628			49,566,564

Shareholders’ equity:
Preferred stock, without par value, authorized 4,400,000 shares	1,004,011			1,004,006			1,004,006			1,003,970			1,003,970
Common stock, without par value; authorized 350,000,000 shares; issued and outstanding 203,014,903, 202,898,491, 185,112,965, 184,895,182, and 184,677,696 shares	4,723,855			4,717,295			4,192,136			4,185,513			4,179,024
Retained earnings	1,776,150			1,711,785			1,640,785			1,542,195			1,473,670
Accumulated other comprehensive income (loss)	(128,041		)	(110,927		)	(136,837		)	(145,462		)	(192,101		)
Total shareholders’ equity	7,375,975			7,322,159			6,700,090			6,586,216			6,464,563
	$	57,204,843		$	55,458,870		$	55,111,275		$	56,080,844		$	56,031,127

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ZIONS BANCORPORATION

Press Release – Page 11

January 26, 2015

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



	Three Months Ended
(In thousands, except per share amounts)	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013
Interest income:
Interest and fees on loans	$	431,083		$	430,415		$	433,801		$	434,344		$	458,493
Interest on money market investments	5,913			5,483			4,888			5,130			5,985
Interest on securities	24,963			24,377			24,502			28,094			25,539
Total interest income	461,959			460,275			463,191			467,568			490,017

Interest expense:
Interest on deposits	12,548			12,313			12,096			12,779			13,622
Interest on short- and long-term borrowings	18,982			31,144			34,812			38,324			44,360
Total interest expense	31,530			43,457			46,908			51,103			57,982

Net interest income	430,429			416,818			416,283			416,465			432,035
Provision for loan losses	11,587			(54,643		)	(54,416		)	(610		)	(30,538		)
Net interest income after provision for loan losses	418,842			471,461			470,699			417,075			462,573

Noninterest income:
Service charges and fees on deposit accounts	43,616			44,941			42,873			42,594			43,729
Other service charges, commissions and fees	49,479			51,005			47,513			43,519			46,877
Wealth management income	8,078			7,438			7,980			7,077			8,067
Capital markets and foreign exchange	6,213			5,361			5,842			5,000			6,516
Dividends and other investment income	16,479			11,324			7,995			7,864			9,898
Loan sales and servicing income	6,447			6,793			6,335			6,474			5,155
Fair value and nonhedge derivative income (loss)	(961		)	44			(1,934		)	(8,539		)	(5,347		)
Equity securities gains, net	9,606			440			2,513			912			314
Fixed income securities gains (losses), net	(11,620		)	(13,901		)	5,026			30,914			(6,624		)
Impairment losses on investment securities:
Impairment losses on investment securities	—			—			—			(27		)	(141,733		)
Noncredit-related losses on securities not expected to be sold (recognized in other comprehensive income)	—			—			—			—			—
Net impairment losses on investment securities	—			—			—			(27		)	(141,733		)
Other	2,060			2,627			707			2,531			1,998
Total noninterest income (loss)	129,397			116,072			124,850			138,319			(31,150		)

Noninterest expense:
Salaries and employee benefits	238,738			245,520			238,764			233,406			226,616
Occupancy, net	29,962			28,495			28,939			28,305			28,733
Furniture, equipment and software	30,858			28,524			27,986			27,944			27,450
Other real estate expense	(3,467		)	875			(266		)	1,607			(1,024		)
Credit-related expense	7,465			6,475			7,139			6,906			6,509
Provision for unfunded lending commitments	1,699			(16,095		)	6,779			(1,012		)	5,558
Professional and legal services	26,257			16,588			12,171			10,995			23,886
Advertising	5,805			6,094			6,803			6,398			5,571
FDIC premiums	8,031			8,204			8,017			7,922			8,789
Amortization of core deposit and other intangibles	2,640			2,665			2,736			2,882			3,224
Debt extinguishment cost	—			44,422			—			—			79,910
Other	64,203			66,769			66,959			72,710			79,528
Total noninterest expense	412,191			438,536			406,027			398,063			494,750

Income (loss) before income taxes	136,048			148,997			189,522			157,331			(63,327		)
Income taxes (benefit)	47,789			53,109			69,972			56,121			(21,855		)
Net income (loss)	88,259			95,888			119,550			101,210			(41,472		)
Preferred stock dividends	(15,053		)	(16,761		)	(15,060		)	(25,020		)	(17,965		)
Net earnings (loss) applicable to common shareholders	$	73,206		$	79,127		$	104,490		$	76,190		$	(59,437	)

Weighted average common shares outstanding during the period:
Basic shares	202,783			196,687			184,668			184,440			184,209
Diluted shares	203,278			197,271			185,286			185,123			184,209

Net earnings (loss) per common share:
Basic	$	0.36		$	0.40		$	0.56		$	0.41		$	(0.32	)
Diluted	0.36			0.40			0.56			0.41			(0.32		)

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ZIONS BANCORPORATION

Press Release – Page 12

January 26, 2015

CONSOLIDATED STATEMENTS OF INCOME



	Year Ended December 31,
(In thousands, except per share amounts)	2014			2013			2012
	(Unaudited)
Interest income:
Interest and fees on loans	$	1,729,643		$	1,814,600		$	1,889,884
Interest on money market investments	21,414			23,363			21,080
Interest on securities	101,936			103,442			127,758
Total interest income	1,852,993			1,941,405			2,038,722

Interest expense:
Interest on deposits	49,736			58,913			80,146
Interest on short- and long-term borrowings	123,262			186,164			226,636
Total interest expense	172,998			245,077			306,782

Net interest income	1,679,995			1,696,328			1,731,940
Provision for loan losses	(98,082		)	(87,136		)	14,227
Net interest income after provision for loan losses	1,778,077			1,783,464			1,717,713

Noninterest income:
Service charges and fees on deposit accounts	174,024			176,339			176,401
Other service charges, commissions and fees	191,516			181,473			174,420
Wealth management income	30,573			29,913			28,402
Capital markets and foreign exchange	22,416			28,051			26,810
Dividends and other investment income	43,662			46,062			55,825
Loan sales and servicing income	26,049			35,293			39,929
Fair value and nonhedge derivative loss	(11,390		)	(18,152		)	(21,782		)
Equity securities gains, net	13,471			8,520			11,253
Fixed income securities gains (losses), net	10,419			(2,898		)	19,544
Impairment losses on investment securities:
Impairment losses on investment securities	(27		)	(188,606		)	(166,257		)
Noncredit-related losses on securities not expected to be sold (recognized in other comprehensive income)	—			23,472			62,196
Net impairment losses on investment securities	(27		)	(165,134		)	(104,061		)
Other	7,925			17,940			13,129
Total noninterest income	508,638			337,407			419,870

Noninterest expense:
Salaries and employee benefits	956,428			912,918			885,661
Occupancy, net	115,701			112,303			112,947
Furniture, equipment and software	115,312			106,629			108,990
Other real estate expense	(1,251		)	1,712			19,723
Credit related expense	27,985			33,653			50,518
Provision for unfunded lending commitments	(8,629		)	(17,104		)	4,387
Professional and legal services	66,011			67,968			52,509
Advertising	25,100			23,362			25,720
FDIC premiums	32,174			38,019			43,401
Amortization of core deposit and other intangibles	10,923			14,375			17,010
Debt extinguishment cost	44,422			120,192			—
Other	270,641			300,412			275,151
Total noninterest expense	1,654,817			1,714,439			1,596,017

Income before income taxes	631,898			406,432			541,566
Income taxes	226,991			142,977			193,416
Net income	404,907			263,455			348,150
Net loss applicable to noncontrolling interests	—			(336		)	(1,366		)
Net income applicable to controlling interest	404,907			263,791			349,516
Preferred stock dividends	(71,894		)	(95,512		)	(170,885		)
Preferred stock redemption	—			125,700			—
Net earnings applicable to common shareholders	$	333,013		$	293,979		$	178,631

Weighted average common shares outstanding during the year:
Basic shares	192,207			183,844			183,081
Diluted shares	192,789			184,297			183,236

Net earnings per common share:
Basic	$	1.72		$	1.58		$	0.97
Diluted	1.71			1.58			0.97

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ZIONS BANCORPORATION

Press Release – Page 13

January 26, 2015

Note: FDIC-supported/PCI loans previously disclosed separately have been reclassified beginning this quarter to their respective loan segments and classes due to declining materiality. Subsequent schedules presented herein reflect, as applicable, these reclassifications.

Loan Balances Held for Investment by Portfolio Type

(Unaudited)



(In millions)	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013
Commercial:
Commercial and industrial		$	13,163		$	12,874		$	12,789		$	12,493		$	12,459
Leasing		409			405			415			390			388
Owner occupied		7,351			7,430			7,499			7,460			7,568
Municipal		521			518			522			482			449
Total commercial		21,444			21,227			21,225			20,825			20,864

Commercial real estate:
Construction and land development		1,986			1,895			2,343			2,267			2,193
Term		8,127			8,259			8,093			8,239			8,203
Total commercial real estate		10,113			10,154			10,436			10,506			10,396

Consumer:
Home equity credit line		2,321			2,266			2,215			2,177			2,147
1-4 family residential		5,201			5,156			4,830			4,800			4,742
Construction and other consumer real estate		371			350			339			330			325
Bankcard and other revolving plans		401			389			381			365			361
Other		213			198			204			195			208
Total consumer		8,507			8,359			7,969			7,867			7,783

Total loans		$	40,064		$	39,740		$	39,630		$	39,198		$	39,043

FDIC-Supported/PCI Loans – Effect of Higher Accretion

and Impact on FDIC Indemnification Asset

(Unaudited)



	Three Months Ended
(In thousands)	December 31, 2014				September 30, 2014				June 30, 2014				March 31, 2014				December 31, 2013
Balance sheet:

Change in assets from reestimation of cash flows – increase (decrease):
FDIC-supported/PCI loans		$	8,876			$	7,696			$	11,701			$	18,453			$	28,502
FDIC indemnification asset		(1,532		)		(5,935		)		(9,314		)		(15,972		)		(19,934		)

Balance at end of period:
FDIC-supported/PCI loans (included in loans and leases)		181,140				190,441				250,568				285,313				350,271
FDIC indemnification asset (included in other assets)		1,605				759				5,777				13,184				26,411

	Three Months Ended
(In thousands)	December 31, 2014				September 30, 2014				June 30, 2014				March 31, 2014				December 31, 2013
Statement of income:

Interest income:
Interest and fees on loans		$	8,876			$	7,696			$	11,701			$	18,453			$	28,502

Noninterest expense:
Other noninterest expense		1,532				5,935				9,314				15,972				19,934
Net increase in pretax income		$	7,344			$	1,761			$	2,387			$	2,481			$	8,568

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ZIONS BANCORPORATION

Press Release – Page 14

January 26, 2015

Nonperforming Lending-Related Assets

(Unaudited)



(Amounts in thousands)	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013

Nonaccrual loans	$	306,648		$	307,230		$	351,447		$	401,666		$	406,613
Other real estate owned	18,916			27,418			27,725			39,248			46,105
Total nonperforming lending-related assets	$	325,564		$	334,648		$	379,172		$	440,914		$	452,718

Ratio of nonperforming lending-related assets to loans¹ and leases and other real estate owned	0.81		%	0.84		%	0.95		%	1.12		%	1.15		%

Accruing loans past due 90 days or more	$	29,228		$	30,755		$	46,769		$	38,190		$	40,348
Ratio of accruing loans past due 90 days or more to loans¹ and leases	0.07		%	0.08		%	0.12		%	0.10		%	0.10		%

Nonaccrual loans and accruing loans past due 90 days or more	$	335,876		$	337,985		$	398,216		$	439,856		$	446,961
Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans¹ and leases	0.84		%	0.85		%	1.00		%	1.12		%	1.14		%

Accruing loans past due 30-89 days	$	86,488		$	89,081		$	108,083		$	114,405		$	116,512

Restructured loans included in nonaccrual loans	97,779			109,673			103,157			130,534			136,135
Restructured loans on accrual	245,550			264,994			320,206			318,886			345,299

Classified loans	1,147,106			1,187,407			1,304,077			1,379,501			1,333,224

¹ Includes loans held for sale.

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ZIONS BANCORPORATION

Press Release – Page 15

January 26, 2015

Allowance for Credit Losses

(Unaudited)



	Three Months Ended
(Amounts in thousands)	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013
Allowance for Loan Losses
Balance at beginning of period	$	610,277		$	675,907		$	736,953		$	746,291		$	797,523
Add:
Provision for losses	11,587			(54,643		)	(54,416		)	(610		)	(30,538		)
Adjustment for FDIC-supported/PCI loans	(19		)	(25		)	(444		)	(817		)	(1,481		)
Deduct:
Gross loan and lease charge-offs	(35,544		)	(26,471		)	(23,400		)	(20,795		)	(37,405		)
Recoveries	18,362			15,509			17,214			12,884			18,192
Net loan and lease charge-offs	(17,182		)	(10,962		)	(6,186		)	(7,911		)	(19,213		)
Balance at end of period	$	604,663		$	610,277		$	675,907		$	736,953		$	746,291

Ratio of allowance for loan losses to loans and leases, at period end	1.51		%	1.54		%	1.71		%	1.88		%	1.91		%

Ratio of allowance for loan losses to nonperforming loans, at period end	197.18		%	198.64		%	192.32		%	183.47		%	183.54		%

Annualized ratio of net loan and lease charge-offs to average loans	0.17		%	0.11		%	0.06		%	0.08		%	0.20		%

Reserve for Unfunded Lending Commitments
Balance at beginning of period	$	79,377		$	95,472		$	88,693		$	89,705		$	84,147
Provision charged (credited) to earnings	1,699			(16,095		)	6,779			(1,012		)	5,558
Balance at end of period	$	81,076		$	79,377		$	95,472		$	88,693		$	89,705

Total Allowance for Credit Losses
Allowance for loan losses	$	604,663		$	610,277		$	675,907		$	736,953		$	746,291
Reserve for unfunded lending commitments	81,076			79,377			95,472			88,693			89,705
Total allowance for credit losses	$	685,739		$	689,654		$	771,379		$	825,646		$	835,996

Ratio of total allowance for credit losses to loans and leases outstanding, at period end	1.71		%	1.74		%	1.95		%	2.11		%	2.14		%

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ZIONS BANCORPORATION

Press Release – Page 16

January 26, 2015

Nonaccrual Loans by Portfolio Type

(Unaudited)



(In millions)	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013

Loans held for sale		$	—		$	—		$	29		$	—		$	—

Commercial:
Commercial and industrial		106			88			83			111			101
Leasing		—			1			1			1			1
Owner occupied		87			98			101			128			137
Municipal		1			8			9			10			10
Total commercial		194			195			194			250			249

Commercial real estate:
Construction and land development		24			25			24			29			29
Term		25			30			44			60			61
Total commercial real estate		49			55			68			89			90

Consumer:
Home equity credit line		12			12			11			10			9
1-4 family residential		50			43			45			48			53
Construction and other consumer real estate		2			2			2			3			4
Bankcard and other revolving plans		—			—			1			1			1
Other		—			—			1			1			1
Total consumer		64			57			60			63			68
Subtotal nonaccrual loans		307			307			322			402			407
Total nonaccrual loans		$	307		$	307		$	351		$	402		$	407

Net Charge-Offs by Portfolio Type

(Unaudited)



	Three Months Ended
(In millions)	December 31, 2014				September 30, 2014				June 30, 2014				March 31, 2014				December 31, 2013
Commercial:
Commercial and industrial		$	18			$	9			$	7			$	1			$	15
Leasing		—				—				—				(1		)		—
Owner occupied		—				2				(2		)		2				1
Municipal		—				—				—				—				—
Total commercial		18				11				5				2				16

Commercial real estate:
Construction and land development		(1		)		(2		)		(3		)		(2		)		(3		)
Term		(1		)		2				3				7				5
Total commercial real estate		(2		)		—				—				5				2

Consumer:
Home equity credit line		—				—				1				—				—
1-4 family residential		1				(1		)		(1		)		1				—
Construction and other consumer real estate		—				—				—				(1		)		—
Bankcard and other revolving plans		—				1				1				2				1
Other		—				—				—				(1		)		—
Total consumer loans		1				—				1				1				1
Total net charge-offs		$	17			$	11			$	6			$	8			$	19

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ZIONS BANCORPORATION

Press Release – Page 17

January 26, 2015

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES

(Unaudited)



	Three Months Ended
	December 31, 2014					September 30, 2014					June 30, 2014
(In thousands)	Average balance			Average rate		Average balance			Average rate		Average balance			Average rate
ASSETS
Money market investments	$	8,708,616		0.27	%	$	8,489,153		0.26	%	$	7,500,554		0.26	%
Securities:
Held-to-maturity	634,973			4.97	%	612,244			5.13	%	600,392			5.37	%
Available-for-sale	3,676,403			1.98	%	3,383,618			2.10	%	3,355,710			2.12	%
Trading account	69,323			3.02	%	50,970			3.14	%	66,929			3.39	%
Total securities	4,380,699			2.43	%	4,046,832			2.57	%	4,023,031			2.63	%

Loans held for sale	115,372			3.53	%	124,347			3.76	%	113,569			3.61	%
Loans and leases ¹	39,845,708			4.31	%	39,567,789			4.33	%	39,544,113			4.41	%
Total interest-earning assets	53,050,395			3.49	%	52,228,121			3.53	%	51,181,267			3.66	%
Cash and due from banks	768,490					861,798					922,421
Allowance for loan losses	(607,317		)			(674,590		)			(734,517		)
Goodwill	1,014,129					1,014,129					1,014,129
Core deposit and other intangibles	26,848					29,535					32,234
Other assets	2,692,137					2,668,896					2,620,739
Total assets	$	56,944,682				$	56,127,889				$	55,036,273

LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
Savings and money market	$	24,089,519		0.16	%	$	23,637,158		0.16	%	$	23,479,755		0.15	%
Time	2,426,878			0.45	%	2,466,552			0.45	%	2,507,489			0.47	%
Foreign	325,013			0.15	%	254,549			0.16	%	258,234			0.17	%
Total interest-bearing deposits	26,841,410			0.19	%	26,358,259			0.19	%	26,245,478			0.18	%
Borrowed funds:
Federal funds and other short-term borrowings	205,507			0.13	%	176,383			0.12	%	261,011			0.10	%
Long-term debt	1,102,673			6.81	%	1,878,247			6.57	%	2,038,810			6.84	%
Total borrowed funds	1,308,180			5.76	%	2,054,630			6.01	%	2,299,821			6.07	%
Total interest-bearing liabilities	28,149,590			0.44	%	28,412,889			0.61	%	28,545,299			0.66	%
Noninterest-bearing deposits	20,705,718					19,932,040					19,212,574
Other liabilities	564,034					557,604					529,716
Total liabilities	49,419,342					48,902,533					48,287,589
Shareholders’ equity:
Preferred equity	1,004,006					1,004,012					1,003,988
Common equity	6,521,334					6,221,344					5,744,696
Total shareholders’ equity	7,525,340					7,225,356					6,748,684
Total liabilities and shareholders’ equity	$	56,944,682				$	56,127,889				$	55,036,273

Spread on average interest-bearing funds				3.05	%				2.92	%				3.00	%

Net yield on interest-earning assets				3.25	%				3.20	%				3.29	%

¹ Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.

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ZIONS BANCORPORATION

Press Release – Page 18

January 26, 2015

CDO Investments – Selected Information Stratified into Performing

Tranches Without Credit Impairment and Nonperforming Tranches



	December 31, 2014
								Net unrealized (losses) gains 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		Net unrealized (losses) gains recognized in AOCI ¹				Weighted average discount rate ²		% of carrying value to par
Performing CDOs
Predominantly bank CDOs	17	$	443	$	420	$	325		$	(95	)	3.6	%	73%
Total performing CDOs	17	443		420		325			(95		)	3.6	%	73%

Nonperforming CDOs ³
CDOs credit impaired prior to last 12 months	12	279		172		107			(65		)	4.9	%	38%
CDOs credit impaired during last 12 months	1	1		—		—			—			3.4	%	—%
Total nonperforming CDOs	13	280		172		107			(65		)	4.9	%	38%

Total CDOs	30	$	723	$	592	$	432		$	(160	)	4.0	%	60%

¹ Amounts presented are pretax.

² Margin over related LIBOR index.

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

CDO Investments – Changes in Selected Information



	Changes from December 31, 2013 to December 31, 2014
												Decrease (increase) in net unrealized losses recognized in AOCI
(Amounts in millions)	No. of tranches		Par amount			Amortized cost			Carrying value
Performing CDOs
Predominantly bank CDOs	(6	)	$	(244	)	$	(197	)	$	(174	)		$	23
Insurance CDOs	(22	)	(433		)	(413		)	(346		)		67
Other CDOs	(3	)	(43		)	(26		)	(26		)		—
Total performing CDOs	(31	)	(720		)	(636		)	(546		)		90

Nonperforming CDOs
CDOs credit impaired prior to last 12 months	(20	)	(335		)	(197		)	(178		)		19
CDOs credit impaired during last 12 months	(22	)	(447		)	(187		)	(147		)		40
Total nonperforming CDOs	(42	)	(782		)	(384		)	(325		)		59

Total CDOs	(73	)	$	(1,502	)	$	(1,020	)	$	(871	)		$	149

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ZIONS BANCORPORATION

Press Release – Page 19

January 26, 2015

GAAP to Non-GAAP Reconciliations

(Unaudited)



(Amounts in thousands)	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013
Tangible Book Value per Common Share

Total shareholders’ equity (GAAP)	$	7,375,975		$	7,322,159		$	6,700,090		$	6,586,216		$	6,464,563
Preferred stock	(1,004,011		)	(1,004,006		)	(1,004,006		)	(1,003,970		)	(1,003,970		)
Goodwill	(1,014,129		)	(1,014,129		)	(1,014,129		)	(1,014,129		)	(1,014,129		)
Core deposit and other intangibles	(25,520		)	(28,160		)	(30,826		)	(33,562		)	(36,444		)
Tangible common equity (non-GAAP) (a)	$	5,332,315		$	5,275,864		$	4,651,129		$	4,534,555		$	4,410,020

Common shares outstanding (b)	203,015			202,898			185,113			184,895			184,678

Tangible book value per common share (non-GAAP) (a/b)	$	26.27		$	26.00		$	25.13		$	24.53		$	23.88

	Three Months Ended
(Amounts in thousands)	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013
Tangible Return on Average Tangible Common Equity

Net earnings (loss) applicable to common shareholders (GAAP)	$	73,206		$	79,127		$	104,490		$	76,190		$	(59,437	)

Adjustments, net of tax:
Amortization of core deposit and other intangibles	1,676			1,690			1,735			1,827			2,046
Net earnings (loss) applicable to common shareholders, excluding the effects of the adjustments, net of tax (non-GAAP) (a)	$	74,882		$	80,817		$	106,225		$	78,017		$	(57,391	)

Average common equity (GAAP)	$	6,521,334		$	6,221,344		$	5,744,696		$	5,595,363		$	5,233,422
Average goodwill	(1,014,129		)	(1,014,129		)	(1,014,129		)	(1,014,129		)	(1,014,129		)
Average core deposit and other intangibles	(26,848		)	(29,535		)	(32,234		)	(35,072		)	(38,137		)
Average tangible common equity (non-GAAP) (b)	$	5,480,357		$	5,177,680		$	4,698,333		$	4,546,162		$	4,181,156

Number of days in quarter (c)	92			92			91			90			92
Number of days in year (d)	365			365			365			365			365

Tangible return on average tangible common equity (non-GAAP) (a/b/c*d)	5.42		%	6.19		%	9.07		%	6.96		%	(5.45		)%

This press release presents the non-GAAP financial measures previously shown. The 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 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.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - January 26, 2015

Attached files

ZIONS BANCORPORATION, NATIONAL ASSOCIATION /UT/ Reports