Zions Bancorporation Reports 2012 Third Quarter Results
Seventh Consecutive Quarter of Profitability with Earnings of $0.34 Per Share
- Zions Bancorporation, the holding company for Zions Bank, reported third quarter net earnings applicable to common shareholders of $62.3 million or $0.34 per diluted common share, compared to $55.2 million or $0.30 per diluted share for the second quarter.
- Adjusted for the noncash effects of (1) the discount amortization on conversion of subordinated debt and additional accretion (net of expense) on acquired FDIC-supported loans, and (2) the remaining discount amortization for the $700 million redemption of TARP preferred stock, net earnings were $85.2 million or $0.46 per diluted share for the third quarter, compared to $72.9 million or $0.40 per diluted share for the second quarter.
- Loans and leases, excluding FDIC-supported loans, increased $351 million, or an annualized 3.2%, to $36.6 billion at Sept. 30, 2012.
- The increases were widespread geographically and were predominantly in commercial and industrial, 1-4 family residential, and term commercial real estate loans.
- Average total deposits increased $535 million, or an annualized 5.0%, to $43.5 billion in the third quarter.
- Zions Bancorporation’s capital ratios remain well in excess of “well-capitalized” levels.
- The tangible common equity ratio equaled 7.17% at Sept. 30, 2012, compared to 6.91% at June 30, 2012.
- On Sept. 26, 2012, Zions Bancorporation redeemed its final $700 million of TARP shares. The shares were redeemed at the full face value (no discount).
- Zions took careful steps to avoid shareholder dilution during the crisis, and as a result Zions was slower to exit TARP compared to most of its peers; however, the extra attention to preventing shareholder dilution paid off with 40% less common share dilution compared to that of other large banks.
- Credit quality continued to improve in the third quarter. All major indicators improved, including net charge-offs, nonperforming assets, delinquent loans, and classified loans (loans with a well-defined weakness).
- Net charge-offs decreased 11% to $38 million compared to $43 million in the second quarter of 2012. Gross charge-offs declined 20% compared to the second quarter and have declined 54% compared to a year ago.
- Nonperforming lending-related assets declined 11% to $838 million at Sept. 30, 2012.
- Nonaccrual loans declined 9% to $719 million at Sept. 30, 2012.
- Classified loans, excluding FDIC-supported loans, decreased approximately 4% to $1.8 billion.
- Approximately 76% of classified loans were current as to principal and interest for the third quarter, compared to 73% for the second quarter of 2012.
- The ratio of nonperforming lending-related assets to net loans and leases and other real estate owned (OREO) decreased to 2.23% at Sept. 30, 2012, compared to 2.53% at June 30, 2012.
- The provision (credit) for loan losses was $(1.9) million for the third quarter, compared to $10.9 million for the second quarter of 2012.
- As a percentage of net loans and leases, the allowance was 2.77% at Sept. 30, 2012.
- Zions’ allowance to net charge-offs ratio continues to rank among the strongest of U.S. regional banks.
- As of Sept. 30, 2012, Zions Bancorporation was carrying $1.0 billion in allowances for loan losses on its balance sheet.
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