SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
February 6, 1998 (January 26, 1998)
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Date of Report (Date of Earliest Event Reported)
ZIONS BANCORPORATION
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(Exact Name of Registrant As Specified In Its Charter)
UTAH
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(State or Other Jurisdiction of Incorporation or Organization)
0-2610 87-0227400
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(Commission File Number) (IRS Employer Identification No.)
One South Main, Suite 1380
Salt Lake City, Utah 84111
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(Address of Principal Executive Offices)(Zip Code)
(801) 524-4787
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(Registrant's Telephone Number, including Area Code)
1
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Item 5. Other Events
On January 26, 1998, Zions Bancorporation issued its earnings release
for the quarter and year ended December 31, 1997.
A copy of the press release issued in connection with the announcement
is attached hereto as Exhibit 99.1 and is incorporated by reference herein in
its entirety.
Item 7. Financial Statements, Pro forma Financial Statements and Exhibits.
(c) Exhibits.
The following exhibits are filed with this Current Report on Form 8-K:
Exhibit
Number Description
- ------ -----------
99.1 Press release, dated January 26, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunder duly authorized.
Dated: February 6, 1998
ZIONS BANCORPORATION
By: /s/ Dale M. Gibbons
Name: Dale M. Gibbons
Title: Executive Vice President and
Chief Financial Officer
2
[EXHIBIT 99.1 TO FORM 8-K DATED FEBRUARY 6, 1998]
***FOR IMMEDIATE RELEASE***
FOR: ZIONS BANCORPORATION ZIONS BANCORPORATION
One South Main, Suite 1380 Contact: Dale Gibbons
Salt Lake City, Utah One South Main, Suite 1380
Harris H. Simmons Salt Lake City, Utah 84111
President/Chief Executive Officer Tel: (801) 524-4787
January 26, 1998
ZIONS BANCORPORATION REPORTS RECORD FOURTH QUARTER EARNINGS
Salt Lake City, Utah, January 26, 1998 - Zions Bancorporation (Nasdaq: ZION)
today reported record net income of $31.4 million or $0.48 per diluted share for
the quarter ended December 31, 1997. For the year, net income was $122.4 million
or $1.89 per diluted share. These figures have been restated to account for the
Company's merger with GB Bancorporation as a pooling-of-interests and include
$1.7 million ($0.03 per share) in after-tax charges incurred during the fourth
quarter related to the business combination.
Operating cash earnings for the quarter were $34.9 million or $0.54 per diluted
share, an increase of 18.1% and 17.4%, respectively, over the restated $29.6
million or $0.46 per diluted share earned in the fourth quarter of 1996. For the
third quarter of 1997, restated operating cash earnings were $0.51 per diluted
share. Operating cash ROE for the fourth quarter was 26.5% and cash ROA was
1.41%. The Company's operating cash efficiency ratio of noninterest expense as a
percentage of net interest income and noninterest income was 60.4% for the
quarter compared to 58.8% for the third quarter. Operating cash earnings are
earnings before the amortization of goodwill and core deposit intangible assets
and merger charges. Operating cash performance ratios are determined as if
goodwill and core deposit intangible assets and their associated expense and
merger charges have not been recognized on the financial statements.
For 1997, restated operating cash earnings were $130.0 million or $2.01 per
diluted share, an increase of 18.0% and 16.9%, respectively, over the restated
$110.2 million or $1.72 per diluted
Exhibit 99.1, Page 1
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share earned in 1996. Operating cash ROE was 25.3% and cash ROA was 1.43%. On a
net income basis, ROE was 19.9% and ROA was 1.33% for 1997.
"1997 was an outstanding year for Zions and its shareholders," said Harris H.
Simmons, president and chief executive officer of Zions Bancorporation. "We
expanded the base of our banking operations from three states to seven and
increased customer convenience by adding over 100 ATMs, more home banking
options, and banking over the Internet. Our stock price was up 74% for the
year." Mr. Simmons continued, "We are very excited about 1998 as we continue to
enhance our core banking franchise with several pending acquisitions, commence
municipal revenue bond underwriting, and become the first bank in the country to
offer digital signature repository services."
At December 31, 1997, on-balance-sheet and securitized loans (excluding
long-term residential first mortgages) increased 25.9% to $5.92 billion and
deposits increased 33.9% to $6.85 billion over the restated balances one year
ago. Excluding the $465 million in loans and $967 million in deposits from the
Company's acquisitions of Aspen Bancshares, Tri-State Bank (Idaho), 31 Wells
Fargo Bank branches, and Sun State Capital Corporation, which are not reflected
in the year-ago balances, on-balance-sheet and securitized loans increased 16.0%
and deposits were up 15.0%. For the quarter, taxable-equivalent net interest
income increased 21.7% to $99.4 million, noninterest income was $39.1 million,
an increase of 29.3%, and noninterest expense, excluding goodwill amortization
and merger charges, was up 31.3% to $83.7 million.
The net interest margin increased to 4.39% during the fourth quarter from 4.32%
during the third quarter. The margin decline from 4.91% for the fourth quarter
of 1996 was primarily due to the money market investment and short term
borrowing arbitrage the Company has engaged in to mitigate the cost of the $200
million in trust preferred securities issued in December 1996.
The ratio of nonperforming assets to total loans and other real estate was 0.33%
at December 31, 1997 compared to 0.36% one year ago. For the year, net loan
losses were 0.19% of total loans compared to 0.11% during 1996. At $80.5 million
on December 31, 1997, the allowance for loan losses was six times nonperforming
loans and 1.65% of total loans.
The Company completed its acquisition of Sun State Capital Corporation, the
holding company of Sun State Bank, on October 17, 1997 and merged with GB
Bancorporation, the holding company
Exhibit 99.1, Page 2
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of Grossmont Bank, on November 14. Sun State Bank has been merged into Zions'
subsidiary, Nevada State Bank, and Grossmont Bank is now a subsidiary of Zions
Bancorporation.
On January 6, 1998, Zions merged with Vectra Banking Corporation, the holding
company of Vectra Bank, and on January 23, the merger with Sky Valley Bank
Corporation, the holding company of The First National Bank in Alamosa, was
completed. Zions' pending mergers with Tri-State Finance Corporation, SBT
Bankshares, Inc., FP Bancorp, Inc., and Routt County National Bank Corporation,
the holding companies of Tri-State Bank (Colorado), State Bank and Trust of
Colorado Springs, First Pacific National Bank, and First National Bank of
Colorado, respectively, are anticipated to be completed by the end of the second
quarter. The combined assets of these companies, which are not included in the
1997 financial statements, are approximately $1.5 billion.
Under local management teams and community identities, Zions Bancorporation
operates full-service banking offices in Arizona, California, Colorado, Idaho,
Nevada, New Mexico, and Utah. It also offers a comprehensive array of
investment, mortgage, insurance, and electronic commerce services and is a
leader in providing innovative financing solutions for small businesses
nationwide. Investor information can be accessed via the Internet at
http://www.zionsbank.com. Zions Bancorporation's common shares are traded on The
Nasdaq Stock Market under the symbol "ZION".
FORWARD-LOOKING INFORMATION
This news release contains statements regarding the projected performance of
Zions and its operations. These statements constitute forward-looking
information within the meaning of the Private Securities Litigation Reform Act.
Actual results may differ materially from the projections provided in this
release since such projections involve significant risks and uncertainties.
Factors that might cause such differences include, but are not limited to, the
timing of closing proposed acquisitions and new operations being delayed or such
acquisitions or activities being prohibited, competitive pressures among
financial institutions increasing significantly, economic conditions, either
nationally or locally in areas in which Zions conducts its operations, being
less favorable than expected, legislation or regulatory changes which adversely
affect the ability of the Company to conduct, or the accounting for, business
combinations and new operations.
Exhibit 99.1, Page 3
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<TABLE>
<CAPTION>
ZIONS BANCORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(UNAUDITED)
Three Months Ended Year Ended
December 31, December 31,
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(In thousands, except per share and ratio data) 1997 1996 % Change 1997 1996 % Change
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<S> <C> <C> <C> <C> <C> <C>
EARNINGS
Taxable-equivalent net interest income $ 99,448 $ 81,732 21.68 % $ 358,676 $ 296,372 21.02 %
Net interest income 97,652 79,472 22.88 % 351,799 289,166 21.66 %
Noninterest income 39,111 30,260 29.25 % 143,167 114,270 25.29 %
Provision for loan losses 1,425 1,650 (13.64)% 6,175 4,640 33.08 %
Noninterest expense 87,937 64,531 36.27 % 301,218 235,272 28.03 %
Income before income taxes 47,401 43,551 8.84 % 187,573 163,524 14.71 %
Income taxes 16,046 14,777 8.59 % 65,211 56,101 16.24 %
Net income 31,355 28,774 8.97 % 122,362 107,423 13.91 %
PER COMMON SHARE
Net income (diluted) .48 .45 6.67 % 1.89 1.68 12.50 %
Dividends .12 .11 9.09 % .47 .425 10.59 %
Book value 10.25 8.72 17.55 %
SELECTED RATIOS
Return on average assets 1.24% 1.58% 1.33% 1.55%
Return on average common equity 18.32% 20.62% 19.88% 20.95%
Efficiency ratio 63.47% 57.62% 60.02% 57.29%
Net interest margin 4.39% 4.91% 4.27% 4.68%
OPERATING CASH EARNINGS*
Taxable-equivalent net interest income $ 99,448 $ 81,732 21.68 % $ 358,676 $ 296,372 21.02 %
Net interest income 97,652 79,472 22.88 % 351,799 289,166 21.66 %
Noninterest income 39,111 30,260 29.25 % 143,167 114,270 25.29 %
Provision for loan losses 1,425 1,650 (13.64)% 6,175 4,640 33.08 %
Noninterest expense 83,696 63,731 31.33 % 292,651 232,421 25.91 %
Income before income taxes 51,642 44,351 16.44 % 196,140 166,375 17.89 %
Income taxes 16,742 14,794 13.17 % 66,150 56,169 17.77 %
Net income 34,900 29,557 18.08 % 129,990 110,206 17.95 %
PER COMMON SHARE
Net income (diluted) .54 .46 17.39 % 2.01 1.72 16.86 %
Dividends .12 .11 9.09 % .47 .425 10.59 %
Book value 7.76 8.01 (3.12)%
SELECTED RATIOS
Return on average assets 1.41% 1.64% 1.43% 1.60%
Return on average common equity 26.48% 23.06% 25.34% 23.26%
Efficiency ratio 60.40% 56.91% 58.32% 56.60%
Net interest margin 4.39% 4.91% 4.27% 4.68%
<FN>
* Before amortization of goodwill and core deposit intangible assets and merger charges.
</FN>
</TABLE>
Exhibit 99.1, Page 4
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<TABLE>
<CAPTION>
ZIONS BANCORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (CONTINUED)
(UNAUDITED)
Three Months Ended Year Ended
December 31, December 31,
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(In thousands, except per share and ratio data) 1997 1996 % Change 1997 1996 % Change
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<S> <C> <C> <C> <C> <C> <C>
AVERAGE BALANCES
Total assets $10,000,545 $ 7,232,654 38.27% $ 9,214,155 $ 6,914,213 33.26%
Investment securities 2,939,144 2,046,572 43.61% 2,575,295 1,977,875 30.21%
Net loans and leases 4,758,266 3,697,034 28.70% 4,341,675 3,432,347 26.49%
Goodwill and core deposit intangibles 155,944 44,893 247.37% 102,484 38,863 163.71%
Total deposits 6,561,765 4,971,379 31.99% 5,783,370 4,731,899 22.22%
Shareholders' equity 678,898 554,910 22.34% 615,535 512,739 20.05%
Weighted average common and common-
equivalent shares outstanding 65,072,000 64,422,000 1.01% 64,629,000 63,930,000 1.09%
AT PERIOD END
Total assets $ 9,521,803 $ 7,116,413 33.80%
Investment securities 2,789,496 1,983,643 40.62%
Net loans and leases 4,871,650 3,837,149 26.96%
Sold loans being serviced* 1,050,293 867,887 21.02%
Allowance for loan losses 80,481 76,803 4.79%
Goodwill and core deposit intangibles 158,836 44,885 253.87%
Total deposits 6,854,462 5,119,692 33.88%
Shareholders' equity 655,460 554,610 18.18%
Common shares outstanding 63,962,100 63,620,928 .54%
Average equity to average assets 6.79% 7.67% 6.68% 7.42%
Common dividend payout 24.47% 22.52% 23.20% 23.27%
Nonperforming assets 15,969 13,699 16.57%
Loans past due 90 days or more 9,944 3,563 179.09%
Nonperforming assets to net loans and leases,
other real estate owned and other
nonperforming assets at December 31 .33% .36%
<FN>
* Amount represents the outstanding balance of loans and receivables sold and
being serviced by the Company, excluding long-term first mortgage
residential real estate loans.
</FN>
</TABLE>
Exhibit 99.1, Page 5
