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ANNUAL REPORT 2021
A LEGACY OF
T R U S T
THE FIVE CHARACTERISTICS
THAT TRULY GREAT BANKS
HAVE IN COMMON
1. Great banks consistently produce strong
risk-adjusted returns. They have strong
capital, ample liquidity and exceptional
credit quality.
2. Great banks invest in their communities
and use both their financial and human
resources to make communities stronger.
3. Great banks invest in building enduring
and reliable relationships based on a
deep understanding of their customers’
needs, and they have an unwavering
commitment to the highest standards
of ethics and integrity.
4. Great banks invest in the future.
5. Great banks make investments in their
people and are continually strengthening
their team.
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| 23? |
Zions Bancorporation is made
up of a collection of successful
financial institutions led by
teams of talented banking
professionals. Each of our
affiliates offers expansive
and unique services and
leverages their community
ties. Additionally, we are
enthusiastic about the
demographic trends within
our footprint with superior
economic growth and job
creation compared to most of
our peers. These two elements
combine to create one of the
most attractive regional bank
entities in the United States.
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Salt Lake City, UT
San Diego, CA
Houston, TX
Phoenix, AZ
$13.2B average loans
$23.6B average deposits
$819M total net revenue
$12.9B average loans
$15.7B average deposits
$639M total net revenue
$12.2B average loans
$15.5B average deposits
$604M total net revenue
$4.8B average loans
$7.3B average deposits
$251M total net revenue
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Las Vegas, NV
Denver, CO
Seattle, WA
$3.0B average loans
$6.7B average deposits
$197M total net revenue
$3.4B average loans
$4.4B average deposits
$169M total net revenue
$1.6B average loans
$1.5B average deposits
$60M total net revenue
s
ue
PERFORMANCE
AT A GLANCE
EARNINGS PER SHARE GROWTH
Substitutes Net Charge-Offs
for Provision for Credit Losses
Indexed: 2016 = 100
400
350
300
250
200
150
100
50
0
2016
2017
2018
2019
2020
2021
ZION
ZION (GAAP)
Peer Top Quartile
Peer Bottom Quartile
The solid lines represent the after-tax per share effect of removing provision
expense and replacing it with net charge-offs, as well as eliminating securities
gains/(losses).
RETURN ON TOTAL EQUITY (MODIFIED)
Substitutes Net Charges-Offs for
Provision for Credit Losses
25%
20%
15%
10%
5%
0%
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TOTAL SHAREHOLDER RETURN
Includes the reinvestment of cash dividends into shares of the company
Zions
Zions' Peers
KBW Regional Bank Index (KRX)
351%
293%
226%
65%
43%
30%
70%
56%
55%
49%
44%
37%
10-year
5-year
3-year
1-year
Source: Bloomberg data, Zions’ calculations. Assumes dividends are reinvested
in the issuing company’s stock; the peer median is calculated by taking the
unweighted median of the individual total return performance figures of the
17 members of the peer group. The KBW Regional Bank Index is a modified
market capitalization weighted index.
Trust is perhaps chief
among the bedrock
principles on which
successful and sustainable
businesses are built.
CHAIRMAN’S MESSAGE
To our shareholders
As we approach our 150th anniversary — as
marked from the founding of Zion’s Savings Bank
& Trust Company in 1873 — I’ve found myself
thinking a great deal about the characteristics
that enable an institution to course-correct and
right itself as it navigates the winding path of its
history, and to adapt and evolve as the world
around it changes. These are particularly
important considerations in our industry at
a time when revolutionary change in the way
customers interact with their bank is
transforming the competitive landscape.
Global investment in financial technology, or
“fintech,” companies surpassed $200 billion in
2021 and will almost certainly be even greater
in the coming year. The barriers to entry in
banking are eroding, accelerating a trend that
arguably began in the mid-1980s with the
establishment of regional interstate banking
compacts that culminated with the passage of
the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994, allowing banks to broaden
their reach from coast to coast. The beginnings
of the internet era in the mid-1990s heralded a
new chapter in the erosion of competitive barriers,
as banks began competing online for deposits
and loans. This evolutionary change was further
accelerated by the introduction of the Apple iPhone™
in 2007 and the subsequent proliferation of smart
phones and digital technologies that allow the
great majority of everyday bank transactions
to be conducted on a device we all carry in our
pocket or purse.
Technologies, regulations, customer preferences
and any number of variables will ever be in a
state of flux. But the foundational principles
of banking will always remain constant. In the
banking industry, trust is perhaps chief among
the bedrock principles on which successful and
sustainable businesses are built.
| 1 |
I recall vividly a lesson taught years ago by a
memorable and highly regarded professor,
Charles Williams, who for many years held the
endowed chair in commercial banking at Harvard
Business School. Professor Williams wielded a
long wooden pointer, which he flailed with abandon
as he strode about the classroom, occasionally
smacking the stick on a desktop to punctuate a
principle he was teaching. On one occasion, as he
was trying to have us understand the fundamental
importance of customers’ confidence in a bank,
and how fragile a bank can be when that trust is
broken, he slapped his pointer on my desktop and
exclaimed, “A bank’s customers are like birds on a
telephone line. When one flies, they all fly!”
Though he was speaking specifically about banks
that are overly dependent on volatile wholesale
funding, the principle is more broadly applicable.
Confidence, the Latin origin of which means “with
full trust,” is truly the bedrock of every bank that
is built for the long term. Our business is, in some
respects, quite simple: it is the management of
millions of promises. Every borrower signs a note
that includes a promise to pay. We, in turn, promise
to make good on our commitments to provide
depositors and other creditors with funds at the
time and place they’re to be available. Making
good on each and every such promise, every day,
is the stock and trade of banking.
Technology can be acquired, but trust can only be
earned. And while earning trust takes time, it is
delicate and can vanish almost instantly if it is
violated. How does a bank build the kind of trust
with its customers that enables sustainable
growth? I’d point to five characteristics that truly
great banks, built for the long term and deserving
of their customers’ trust, have in common. In the
body of this letter, I’d like to explain how we’re
working to ensure that these characteristics are
embedded in how we conduct business, and some
of our achievements in the past year in continuing
to strengthen these fundamental elements of
our business.
”
Texas Pipe and Amegy have
had a relationship for over 10
years. It has grown stronger
every year. We can call our
relationship manager, the
credit department, or the
President of the Bank, and
they all know who we are
and our history. The Amegy
team makes a point of
knowing its clients, and it
makes all the difference.”
Keith Rubenstein, CEO
Texas Pipe and Supply
10 years, Amegy Bank client
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”
Over the past 30 years, Zions Bank and Black Diamond have
forged a lasting partnership, not simply one that is focused on
a transaction. Zions has helped us through growth initiatives,
including Black Diamond’s purchase by Clarus Corporation in
2010, and has continued to support our efforts in serving the
outdoor community. Even today, as we continue to grow,
the support that Zions Bank provides is unwavering.”
Aaron Kuehne, COO
Black Diamond, Clarus Corporation
31 years, Zions Bank client
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1. Great banks consistently produce strong
risk-adjusted returns. They have strong
capital, ample liquidity and exceptional
credit quality.
Zions Bancorporation’s financial results, credit
outcomes, liquidity and capital were all very strong
in 2021, particularly given the backdrop of the
lingering pandemic and its impact on economic
activity, employment, interest rates and loan
demand. We achieved net income applicable to
common shareholders of $1.1 billion, or $6.79
per fully diluted share, up 118% and 125%,
respectively, over the prior year’s results. Our
return on average assets was 1.29%, and our
return on average tangible common equity was
17.3%. A great deal of the improvement in our
nominal earnings was attributable to a sizeable
reversal of loss reserves we’d established in early
2020 due to the uncertainty posed by the pandemic.
Loan loss provisions can be very volatile, particularly
under current accounting rules and during times
of economic uncertainty, as they are an estimation
of future loss events rather than a measure of
loan losses that have actually transpired. As Billy
Joel sang in a popular old song, sometimes “the
good ole days weren’t always good, and tomorrow
ain’t as bad as it seems.” Accordingly, a better way
to look at current operational performance, in our
view, is to focus on changes in pretax, pre-provision
net revenue (“PPNR”), less actual net loan losses.
This is a measure of pretax operating income less
realized credit costs.
By this measure, our results were also impressive
relative to the prior year. Adjusted PPNR less net
charged-off loans totaled $1,115 million in 2021, up
7% from $1,039 million in 2020. We achieved these
results despite the continuation of a very low interest
rate environment this past year, pressuring our
net interest margin, which decreased to 2.72%
in 2021 from 3.15% in 2020. During this period of
very low interest rates, we’ve been fortunate to
EARNINGS PER SHARE (DILUTED)
$6.79
$4.08
$4.16
$2.60
$3.02
2017
2018
2019
2020
2021
PRE-PROVISION NET REVENUE LESS NET CHARGE-OFFS,
AS A PERCENTAGE OF RISK-WEIGHTED ASSETS
12%
10%
8%
6%
4%
2%
0%
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Ticker symbols have been used throughout this document in lieu of the names of peer banks;
the legend is defined on page 19.
have income from Paycheck Protection Program,
or PPP, loans augmenting our revenue to a greater
extent than most other banks. Revenue from these
loans totaled $235 million in 2021, a $90 million
increase from the prior year.
Loan growth was very weak in 2021, both across
the banking industry and at Zions. Average loans
outstanding totaled $52.0 billion, a decrease of
$1.0 billion from the prior year. Excluding PPP loans,
average loans totaled $47.4 billion, down $1.1 billion
or 2.2% from the prior year, as businesses flush with
cash both paid down debt and held back on capital
expenditures. At the same time, average deposits
grew 20% to $76.3 billion, with noninterest-bear-
ing demand deposits comprising 49% of total de-
posits, versus 45% a year ago. As we saw greater
| 4 |
LOAN GROWTH
Average balances
Zions
Peer Median
9.8%
8.7%
7.6%
6.4%
6.3%
7.3%
4.4%
3.4%
2017
2018
2019
2020
2021
-0.8%
-1.9%
evidence that much of the deposit growth we’ve
experienced is likely to be reasonably durable, we
increased our securities portfolio, which grew
49% to $24.9 billion over the course of the year
and produced revenue that helped stabilize our
net interest income.
Customer-related fees increased 5% to $575
million, with particularly strong growth in card
and wealth management fees, which grew 16%
and 14%, respectively. We’re particularly pleased
with the progress we’ve made in building our
wealth management business in recent years,
from a relatively small base. Total assets under
management grew 26% in 2021 to $11 billion, with
over three quarters of the increase coming from
net new client assets. Strong gains from venture
capital investments made through SBIC funds
helped further propel total noninterest income
to $703 million, up 22% from the prior year.
Noninterest expenses were well-controlled, rising
2.2% over 2021 levels, and producing an “efficiency
ratio” — a measure of operating expense relative
to revenue — of 60.8%, up slightly from 59.4% a year
ago, as the continuing low interest rate environment
and weak loan demand dampened revenue growth,
which was 4.3% for the year.
risk at the same time we’ve built capital and
liquidity. Over the past fifteen years, our total
assets have grown by 98%. At the same time,
our total risk-weighted assets — a regulatory
measure of the riskiness of the assets we employ
in the business — grew by a more modest 38%.
This repositioning of our balance sheet has produced
credit results that have been impressive in recent
years, both in an absolute and relative sense. In
2021, net charged-off loans as a percentage of
average loans totaled a meager one basis point,
or 0.01%, and our net charge-offs over the past
decade have averaged 0.14% of loans. Comparatively,
net charge-offs for the industry averaged 0.24%
of loans in 2021 and 0.54% over the past decade.
Our capital position remains solid, both in absolute
terms and relative to peers. Even after increasing
our quarterly dividend in mid-2021 by 12%, to
NET CHARGE-OFFS AS A PERCENTAGE
OF AVERAGE LOANS
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COMMON EQUITY TIER 1 CAPITAL RATIO
Well Capitalized (Regulatory Threshold)
0.30%
0.25%
0.20%
0.15%
0.10%
0.05%
0.00%
-0.05%
14%
12%
10%
8%
6%
4%
2%
0%
Since the financial crisis of 2008, we’ve fundamentally
reshaped our balance sheet by reducing relative
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across the full spectrum of the yield curve, our
$0.38 from $0.34 per share, and repurchasing
taxable-equivalent net interest income would
$800 million of our common stock during the year,
increase 12%, or approximately $250 million
our regulatory Common Equity Tier 1 Capital ratio
was 10.2% at year-end, positioned more closely over a 12-month period. We are wary of the
to where we’ve indicated we’d like to maintain our
common equity, at a level somewhat ahead of
the peer regional bank median.
harmful impact inflation can have on the economy
and on our clients, and we’re hopeful that the
As noted in this letter last year, the Federal
Reserve’s monetary policy has resulted in a vast
increase in the economy’s money supply. In recent
months, we’ve seen the highest rate of inflation in
four decades. While some policymakers have
suggested that this inflation is transitory and
mainly a result of pandemic-related supply chain
issues, it seems increasingly evident that the
inflation may well be with us much longer than
the pandemic will, as a very competitive labor
market is producing the type of wage inflation
that historically has shown a tendency to trigger
an inflationary spiral that can be cured only with
higher interest rates.
We’re well positioned to deal with the three or
four interest rate hikes that have been predicted
for 2022, as our balance sheet remains “asset
sensitive,” meaning that our net interest margin
is expected to expand as interest rates rise. In
fact, we’ve estimated that, given our balance sheet
composition at year-end 2021, if interest rates
were to rise a full percentage point simultaneously
DEPOSIT GROWTH
Average balances
Zions
Peer Median
19.7%
17.4%
15.6%
15.7%
8.1%
3.2%
6.4%
4.2%
3.6%
1.9%
2017
2018
2019
2020
2021
Federal Reserve will take the steps necessary
to bring interest rates and money supply into
greater alignment with historical norms.
2. Great banks invest in their communities
and use both their financial and human
resources to make communities stronger.
We care deeply about the local communities we
serve. Our very structure, which we refer to as a
“collection of great banks,” is designed to produce
the kind of insight and caring about local needs
that is usually associated with a truly exceptional
community bank, paired with the capabilities of
a larger regional banking institution, by keeping
decision making and leadership closer to our
customers and our communities. We demonstrated
in spades this kind of focus on responding to
community and client needs over the past two years
during the pandemic, perhaps most especially
through our performance with PPP. Through the two
rounds of the program, we funded approximately
77,000 loans totaling $10.2 billion to small businesses
across the western U.S. and were recognized as
the nation’s 10th largest originator of these loans,
which were critically important to the survival
of so many local businesses.
Over 20,000 of the loans we originated were to
businesses that had not previously banked with
us, and who found that in many cases they were
being neglected by their own banks. We’ve made
significant progress in helping a great many of
these businesses develop a full banking relationship
with us.
Another example of our commitment to strengthen
local communities is the Small Business Diversity
Banking Program we initiated this past May. Working
with the Office of Comptroller of the Currency
under their “Project REACh,” we received approval
to establish more flexible credit underwriting
standards for small businesses owned by women,
minorities and veterans — one of the only such
programs in the country. The program was
instrumental in allowing us to expand our outreach
to qualifying businesses, and from its introduction
in mid-May through the end of the year we approved
502 small business loans totaling $155 million to
minority, women and veteran-owned businesses.
We expect to continue to build this program into
a source of capital that will enable thousands of
such underserved businesses to flourish in the
years ahead.
We also introduced “Bank On” certified accounts
that meet the standards established by the Cities
for Financial Empowerment Fund for accounts
intended to extend the reach of banking services
to populations that have traditionally remained
“under-banked.” These accounts provide access
to banking services, including a debit card and
ATM access, at very low cost and with no minimum
balance or overdraft fees.
Our bankers devote thousands of hours to community
service each year, helping in soup kitchens,
volunteering as leaders of youth organizations,
raising money for nonprofit organizations and
much more. I’ve always believed that community
service is one of the great hallmarks of America’s
banking industry, and it is in fact the rare bank
that isn’t working hard to make the markets in
which they operate stronger. I also believe that the
nearly 10,000 bankers at Zions Bancorporation do
this exceptionally well. They really take to heart
our determination to use our balance sheet and
our know-how to make a difference in the
neighborhoods in which they live.
One measure of our commitment to holistically
serving our communities is the Outstanding rating
we were recently awarded by our regulators for
our performance under the Community Reinvestment
Act, reflecting the myriad of ways in which we’ve
been working to deploy capital into the communities
we serve, including, very importantly, the low and
moderate-income neighborhoods in our markets,
and providing volunteer service to literally hundreds
of organizations.
| 8 |
3. Great banks invest in building enduring
and reliable relationships based on a deep
understanding of their customers’ needs,
and they have an unwavering commitment
to the highest standards of ethics
and integrity.
Building strong, trusting relationships is central
to Zions Bancorporation’s culture and our way of
doing business. I occasionally tell our bankers of
an experience I had years ago when I was a teenager.
My father was CEO of Zions Bank at the time, and
every summer we had a barbecue picnic at my
”
The Ute Mountain Ute Tribe values
its partnership with Vectra Bank,
and the banking industry; 38
years is a long time to have a
partnership with any organization.
Through Vectra Bank during
the COVID-19 pandemic, we
established credit cards for more
than 1,800 adult members of the
Tribe. That enabled our members
to have ready access to funds
to purchase food and medicine
during the depths of
the pandemic.”
Manuel Heart, Chairman
Ute Mountain Ute Tribe
38 years, Vectra Bank client
parents’ home for the bank’s officers. On one
such occasion, Mal Hill, a correspondent banker
at Chemical Bank who had built the kind of
relationship with Zions that has since been my
personal standard for what strong relationships
look like, was in town and came out to our home
for the dinner. Toward the end of the evening, I
happened to glance through the kitchen window,
and what I saw remains etched in my memory:
Mal Hill was there at the kitchen sink, with his
shirtsleeves rolled up, washing dishes. He’d
truly become “one of the family.”
Mal Hill was our correspondent banker for years,
and when we bought Nevada State Bank in 1985
and needed some bridge financing to complete the
purchase, I instinctively called Mal, who responded,
“consider it done.” He was able to make that
commitment because he’d developed the kind of
deep understanding of our business that allowed
him to commit quickly and confidently. That’s the
type of experience we aspire to have all our
bankers able to deliver to their customers.
One of my favorite recent examples of building this
kind of relationship involves Chef Chris Williams,
the owner of Lucille’s, a well-known and highly
regarded restaurant in Houston’s Museum District.
Lucille’s found itself in the national spotlight when
then-candidate Joe Biden met with the family of
George Floyd at the restaurant on the day of
Floyd’s public viewing. Almost a year later,
Williams received a call from his landlord, notifying
him that he was going to lose his lease, and the
building was going to be sold.
“It was terrifying. The asking price — they were
essentially charging us for the asset that we built,”
Williams said. Buying the building “wasn’t in my
plan. It wasn’t in my budget … I started panicking.”
After struggling to secure a bank loan for almost
two months — “everyone showing interest, but
no one stepping up,” Williams thought he’d found
a solution with a local nonprofit lender. But after
connecting with Jevaughn Sterling, an executive
vice president at Amegy Bank, through a mutual
connection at the Greater Houston Black Chamber
of Commerce, who analyzed the deal and explained
its drawbacks. “I don’t have a financial education,
and Jevaughn walked me through these things
so I could understand that I would have paid
$1.5 million over the asking price, because I
thought I had no other options,” Williams said.
With Jevaughn Sterling’s help, Williams secured a
loan from Amegy Bank, and he now owns the land
on which his 1923 Museum District bungalow sits,
making it possible for Williams to control his own
destiny, and helping ensure that he’ll be serving
his patrons some of the very best Southern
cuisine in Houston for a very long time to come.
This is the kind of experience that has led our
customers, in surveys conducted by Greenwich
Associates, a leading national market research
firm that conducts over 24,000 interviews annually
with small- and middle-market business owners,
to rank us among the leading banks in the United
States in serving the needs of these businesses, many
of which are family owned. Recently, Greenwich
Associates announced that Zions Bancorporation
ranked in second place, behind only M&T Bank
Corporation — an organization we greatly admire
— among all U.S. banks in 2021 in terms of the
number of “Excellence” awards bestowed by
Greenwich, winning 27 Excellence awards in
categories including Overall Satisfaction,
Likelihood to Recommend, and in a variety
of cash management capabilities. Zions was
also one of only four banks in the country to win
six of six possible awards in Small Business
and Middle Market “Best Brands” categories,
including “Bank You Can Trust,” “Values
Long-term Relationships,” and “Ease of Doing
Business.” I’m especially proud of the many
bankers in our organization who provide such
outstanding service to our customers.
Some years ago, one of our younger up-and-coming
bankers was telling me with pride that he’d secured
| 9 |
”
When looking at our financial
needs nearly 40 years ago, we
entrusted Nevada State Bank
with our business. During our
partnership of four decades,
NSB has been a trusted source
for financial information. As
our business grew, NSB was
ready and willing to take on
each expansion. We here at
Kalb could not be happier
with the service we have
received over the years, and
we hope to continue the
relationship that has grown
right along with the
communities where both
of our organizations began.”
Steven C Kalb, CEO
Kalb Industries
40 years, Nevada State Bank client
| 10 |
an opportunity for the bank to participate in a
large, syndicated loan to a nationally recognized
company. I thanked him for his effort, but also told
him that over the course of his career, he would
find much greater satisfaction in building long-term
relationships with entrepreneurs who build
successful small businesses and helping them
grow into thriving, larger businesses, than he
would chasing participations in large multibank
loans. I also noted that, not inconsequentially, it
would almost invariably be more profitable to the
bank. It’s how we uniquely create value, and it’s
great fun to be a financial partner to entrepreneurs
working their tails off, pursuing their dreams.
4. Great banks invest in the future.
In at least one very important respect, we’re
leading the industry in making a technology
investment that will allow us to be highly responsive
to customers in this digital era. Ten years ago,
we embarked on the largest and most intensive
project of its kind in the bank’s history, to replace
our core loan and deposit systems with a modern,
integrated core processing system that will allow
us to integrate third-party products and deliver
new and better experiences to customers, and to
our own colleagues, with greater agility. It’s been
a monumental effort, and by mid-2023, we’ll have
completed this mammoth project, with the
”
Amegy has been a loyal ally
of MIDWAY’s for over 25
years - their professionalism,
commitment to excellence
and ’can do‘ attitude, make
them a Preferred Partner.”
Brad Freels, Chairman and CEO
Midway Companies
25 years, Amegy Bank client
| 11 |
deployment of the deposit module of the system, at
a time when many other banks with aged systems
are still grappling with how to begin this journey.
At the same time, we’ve introduced numerous
new digital capabilities, both internally and to our
customers. This past year we launched a new
digital consumer banking platform that delivers
the same experience for both smart phone and
online customers and provides extensive new
features and functionality. Customer feedback has
been exceptional, and we provide digital banking
capabilities that equal or exceed those of most of
our large competitors. A similar upgrade for our
small business customers is currently underway.
We launched our new Spark digital small business
loan application, which has a more intuitive user
experience and provides the ability for bankers to
collaboratively complete a digital loan application
with a borrower.
We continue to upgrade the automation of our
mortgage origination process with the result
that over 95% of our mortgages are now originated
using digital tools, allowing us to expedite
underwriting and processing, and facilitating
record production of over $4 billion in residential
mortgages in 2021 — a 16% increase in a year
when the Mortgage Bankers Association reported
an overall 8% decline in production nationally.
Our process automation team implemented
solutions that saved nearly 300,000 hours of
manual labor during 2021, and they have a goal to
increase the savings to one million hours per year
by 2025. Their work is being increasingly augmented
by a team of “citizen developers” — bankers working
in many areas of our business who are trained in
process automation techniques. We currently have
30 citizen developers either certified or undergoing
training, and another 35 on a waiting list, all of
them focused on how to improve efficiency through
automation in their own departments and divisions.
A great deal of our technology investment is internally
focused, designed to create greater efficiency and
better tools for our bankers. A good example is
IRIS, a real-time interactive data analytics tool
designed and implemented by our data science
team that provides bankers with insights into
customers’ needs based on changes in their
transactional patterns. IRIS predicts the likelihood
that a customer will find a product to be useful
”
For more than 15 years,
Lumencor has trusted
Commerce Bank of Oregon
to support our growth as we
evolved into a market leader
in state-of-the-art lighting
and measurement
instrumentation.”
Claudia Jaffe, Co-Founder and EVP
Lumencor
15 years, The Commerce Bank
of Oregon client
based on usage patterns of other comparable
clients, and even provides customer-specific
information that helps the banker provide
customized solutions.
Cybersecurity is one of our highest investment
priorities and we made strong progress during
the past year in continually strengthening our data
protection defenses. Management of information
security risk has become an ever-increasing
challenge for businesses of all types in an era of
frequent and often highly publicized ransomware
attacks; it is particularly important for banks,
considering the very nature of our business. Our
| 12 |
”
Over the past 35 years, Bray
Whaler’s business has grown
from repeat and referral
business, with a fiduciary
trust at the center of these
relationships. Vectra Bank has
many times customized its
systems to meet our needs. Its
assistance in getting us the PPP
loan was outstanding, swift,
and sustained us through the
pandemic. We appreciate our
35-year relationship, first as
Tri-State Bank, and now as
Vectra Bank.”
Elisa Whaler, President & CEO
Bray Whaler
35 years, Vectra Bank client
spending on cybersecurity has routinely increased
at a strong double-digit percentage rate in recent
years and is a significant component of our overall
technology budget.
A major objective of our internally focused
technology and operations agenda this past year,
and in the year ahead, is a continual strengthening
of our systems architecture, our internal process
controls, and our operational excellence and
resilience. We made great strides during the year
in increasing our front-line bankers’ adeptness at
identifying both operational risks and opportunities
for improvement and, where appropriate, creating
and implementing remediation plans.
5. Great banks make investments in their
people and are continually strengthening
their team.
We’ve materially ramped up our efforts to bolster
the skill sets and professionalism of our bankers
in recent years, knowing that a well-trained
workforce is both happier and more productive,
and thus more likely to have a longer tenure with
the bank. Most importantly, well-trained bankers
are simply better at understanding customers’
problems and needs and finding solutions for them.
Though the pandemic and a very tight labor market
have presented challenges over the past two years,
we’ve continued to recruit exceptional college
graduates into our Banker Development Program,
providing both formal training and experience
working alongside experienced bankers. In 2021,
we hosted over 900 training experiences to support
employees in building new skills or advancing in
their careers. This included virtual, in-person and
self-paced online learning. We provide new manager
training programs, tuition reimbursement,
education sponsorship opportunities, job shadowing,
coaching, and formal mentoring programs for
employees to create tailored learning plans for
personal and professional development. Our
technology employees also avail themselves
of a broad array of online educational offerings
pertinent to their roles and aspirations.
We are particularly focused on building the skills
of the career bankers in our branches. At a time
when many banks are so focused on process
centralization that front-line employees feel
increasingly powerless to make basic decisions
or do the right thing for customers, we’re working
hard to build the skill sets of our front-line
branch-based bankers and provide them with
enhanced authority.
We have hundreds of our branch managers and
business bankers participating in our “Champion”
program, whereby they are developing credit,
sales, product knowledge and other skills that
| 13 |
enable them to earn increasing levels of credit and
other decision-making authority that will enable
them to better serve their customers. While it’s
true that the volume of transactions in our bank
branches has decreased dramatically in recent
years, the importance of consultative problem
solving by our bankers has continually increased.
We’re determined that our local bankers, working
from these branches where connections are made
with so many of our best customers, will be the
most qualified bankers in the industry.
We added substantial, additional depth to our
banking teams this past year with the addition of
a strong agricultural banking team in Arizona; the
establishment of an entertainment industry group
in California; strong new leadership of our gaming
industry team in Nevada; the expansion of our
capital markets business, including the creation
of a new real estate capital markets group; and
the expansion to all 50 states of our Practice
Pathways business, through which we finance
dental practices, veterinarians and other specialty
medical businesses.
This coming summer we’ll celebrate the opening
of a new 400,000 square foot technology campus in
Midvale, Utah that will become home to approximately
2,000 of our colleagues who work primarily in
technology and operational roles. The new facility,
which is transforming a former EPA-designated
Superfund site to a modern campus designed to
a Platinum LEED energy efficiency standard, will
reduce our space usage for these employees by
20% and will provide an exceptional environment
for collaboration and creativity, with abundant
natural light, open space, and expansive views
of the Wasatch range of the Rocky Mountains.
With most of our office-based employees having
worked from home for the past two years through
the COVID-19 pandemic, we have the same
questions and challenges facing most U.S.
employers. What will the workplace of the future
look like? Will working from home become the
norm for many of our people? How does a company
create a culture in which creative ideas are easily
shared and innovation can flourish if team members
are working hybrid schedules or connect only via
a digital display?
We’re hopeful that by creating appealing spaces
designed for teamwork and providing amenities
that make coming into the office preferable to
working from the dining room table, we’ll find that,
as we make our way back to the office, it will be
a big improvement over the experience so many
of us have had for too many months. We certainly
believe that for most, though not all, of our people,
their best work will happen when they’re working
in proximity to one another.
In conclusion, our people are working hard to
create a bank that’s “built to last” — one in which
our clients, investors, and the public can, without
hesitation, place their trust. We have an amazing
team, and I’m incredibly proud of the work they
do every day to build stronger communities and
to help our customers thrive. I’m proud beyond
words to be associated with them.
As we begin another year, I’m excited about the
opportunities that await us. I expect the economy
will continue to strengthen as we emerge from a
”
Amegy has been a trusted
relationship for 16 years,
understanding our business
each step along the way and
helping us to navigate growth
challenges and succeed as a
company and Hispanic
community leaders”
Salvador Escalona, CEO
Mexilink
16 years, Amegy Bank client
pandemic that has been challenging in so many ways
for most all of us. We’re in a period of great change, but
I believe we’re making the kinds of investments that will
allow us to not only successfully navigate the changing
world around us, but to become stronger, better, and more
competitive in the years ahead.
I want to express my appreciation to J. David Heaney, who
retired from his service to our board of directors this past
year. Prior to his 15 years on our board, he was a founding
director of Amegy Bancorporation, Inc., which was acquired
by Zions in December 2005, and continued to serve on Amegy’s
advisory board until his retirement. At the same time, we
were extremely pleased to welcome Maria Contreras-Sweet
to our board. Maria is a former administrator of the U.S.
Small Business Administration. Her strong understanding of
banking, regulation and the financial services marketplace,
her experience with small and medium-sized businesses,
and her promotion of workplace diversity and equity will
bring a valuable perspective to the board. We’re delighted
to have her with us!
I want to especially thank our more than one million customers
— individuals, businesses, nonprofit organizations, local
government entities and others — who not only entrust us
with their savings, but who know they can rely on us to be
there when it counts. It’s a trust we don’t take for granted.
A great many of our customers have been with us for
a very long time; others have only recently begun doing
business with us. In every case, we pledge to do all we can
to earn their trust each day. Our goal, always, is to help our
customers become financially stronger over time as they
bank with us. Our Guiding Principles state, in part, “We
want to be proud of the customers we’re associated with,
and we want them to be proud to be associated with us.”
We’re exceedingly proud of the company we keep, and we
appreciate their loyalty and enthusiasm for doing business
with Zions Bancorporation and our affiliated brands.
Respectfully,
Harris H. Simmons
Chairman and CEO
February 24, 2022
| 15 |
”
Laird Norton Company (LNC) is a seventh-generation
family-owned enterprise that invests in real estate
and operating companies. Among its many holdings,
LNC wholly owns Laird Norton Properties, a real
estate investment firm, and has majority investments
in Laird Norton Wealth Management, a wealth
management company, and Heartland, a real estate
consulting firm. For nearly 30 years, The Commerce
Bank has been a trusted financial partner; they know
LNC well, and we know the Bank. This long-standing
relationship with Commerce, and their dedication to
customer service allows us to efficiently operate with
confidence.”
Sally Simpson, VP of Finance and Administration
Laird Norton
29 years, The Commerce Bank of Washington client
||||||||||||||||||||||||||||||||||||||||||||||||||||||| 1616161611616116161616161616161616161616161611111161161616661661661611616116166166616111161611166161611611616166161616161611666616166111666661661611666616161616666666611616661666666661666666666166666616616666611666666666111166666666666661166666666666666666616666666616666666166666666666166661661666616666666616 |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 16 |
Financial Highlights1
(Figures in millions, except ratios and per share amounts)
For the Year
Net interest income
Noninterest income
Total net revenue
Provision for credit losses
Noninterest expense
Pre-provision net revenue
Net income
Net earnings applicable to common shareholders
Per Common Share
Net earnings – diluted
Tangible book value at year-end
Market price – end
Market price – high
Market price – low
At Year-End
Assets
Loans and leases, net of unearned income and fees
Deposits
Common equity
Performance Ratios
Return on average assets
Return on average common equity
Return on average tangible common equity
Net interest margin
Net charge-offs to average loans and leases (ex-PPP)
Total allowance for credit losses to loans and leases outstanding (ex-PPP)
Capital Ratios at Year End
Common equity tier 1 capital
Tier 1 leverage
Tangible common equity
Other Selected Information
2021/2020
Change (%)
2021
2020
2019
2018
2017
—
22
4
NM
2
8
109
118
125
3
45
30
79
14
(5 )
19
(4 )
$2,208
703
2,911
(276)
1,741
1,202
1,129
1,100
$6.79
39.62
63.16
68.25
42.12
$2,216
574
2,790
414
1,704
1,114
539
505
$3.02
38.42
43.44
52.48
23.58
$2,272
562
2,834
39
1,742
1,118
816
782
$4.16
34.98
51.92
52.08
39.11
$2,230
552
2,782
(40)
1,679
1,125
884
850
$4.08
31.97
40.74
59.19
38.08
$2,065
544
2,609
17
1,656
988
592
550
$2.60
30.87
50.83
52.20
38.43
$93,200
$81,479
$69,172
$68,746
$66,288
50,851
82,789
7,023
53,476
69,653
7,320
48,709
57,085
6,787
46,714
54,101
7,012
44,780
52,621
7,113
%
1.29
14.9
17.3
2.72
0.01
1.13
%
10.2
7.2
6.5
%
0.71
7.2
8.4
3.15
0.22
1.74
%
10.8
8.3
7.8
165.6
1,666
1.36
44.6%
59%
59%
%
1.17
11.2
13.1
3.54
0.08
1.14
%
10.2
9.2
8.5
%
1.33
12.1
14.2
3.61
(0.04)
1.18
%
11.7
10.3
8.9
%
0.91
7.7
9.0
3.45
0.17
1.29
%
12.1
10.5
9.3
186.5
23,505
1.28
29.0%
170%
206.5
12,943
1.04
23.8%
103%
209.7
7,009
0.44
16.2%
74%
59.5%
59.6%
62.3%
Weighted average diluted common shares outstanding (in thousands)
Bank common shares repurchased (in thousands)
Dividends declared
Common dividend payout ratio 2
Capital distributed as a percentage of net earnings applicable to common share-
holders3
Efficiency ratio
(3)
710
6
160.2
13,497
1.44
21.1%
94%
60.8%
1This table includes certain non-GAAP measures. See “GAAP to Non-GAAP Reconciliation” on page 18 for more information.
²The common dividend payout ratio is equal to common dividends paid divided by net earnings applicable to common shareholders.
3This ratio is the common dividends paid plus share repurchases for the year, divided by net earnings applicable to common shareholders.
| 17 |
GAAP to Non-GAAP Reconciliation
(Figures in millions, except per share amounts)
Pre-Provision Net Revenue (PPNR)
(a)
Total noninterest expense
LESS adjustments:
Severance costs
Other real estate expense
SBIC investment success fee accrual
Amortization of core deposit and other intangibles
Restructuring costs
Pension termination-related expense
(b)
Total adjustments
(a-b)=(c) Adjusted noninterest expense
(d)
(e)
Net interest income
Fully taxable-equivalent adjustments
(d+e)=(f)
Taxable-equivalent net interest income (TENII)
(g)
Noninterest Income
(f+g)=(h)
Combined Income
LESS adjustments:
Fair value and nonhedge derivative income (loss)
Securities gains, net
(i)
Total adjustments
(h-i)=(j)
Adjusted revenue
2021
2020
2019
2018
2017
$1,741
$1,704
$1,742
$1,679
$1,656
1
-
7
1
-
(5)
4
1,737
2,208
32
2,240
703
1
1
-
-
1
28
31
1,673
2,216
28
2,243
574
25
(3)
-
1
15
-
38
3
1
-
1
2
-
7
7
(1)
-
6
4
-
16
1,704
1,672
1,640
2,272
26
2,298
562
2,230
22
2,252
552
2,065
35
2,100
544
2,943
2,818
2,860
2,804
2,644
14
71
85
(6)
7
1
(9)
3
(6)
(1)
1
-
(2)
14
12
2,858
2,816
2,866
2,804
2,632
(j-c)
Adjusted pre-provision net revenue (PPNR)
1,121
1,144
1,162
1,132
992
Net Earnings Applicable to Common Shareholders (NEAC)
Net earnings applicable to common
Diluted Shares
Diluted EPS
(k)
PLUS Adjustments:
Adjustments to noninterest expense
Adjustments to revenue
Tax effect for adjustments
Preferred stock redemption
Total adjustments
(l)
Adjustments per share
(k+l)=(m) Adjusted EPS
Provision for Loan Losses
(Net Charge-offs) / Recovery
Tax effect for adjustments
Total after-tax adjustments
1,100
160.3
6.79
4
(85)
20
-
(61)
(0.38)
6.41
(258)
(6)
65
(199)
505
165.6
3.02
31
(1)
(8)
-
22
0.13
3.15
385
(105)
(69)
211
EPS impact of substituting net charge-offs for provision
(1.24)
1.28
Profitability
Adjusted Return on Assets
Adjusted Return on Tangible Common Equity
Efficiency Ratio
(c)/(j)
1.22%
16.3%
60.8%
0.74%
8.7%
59.4%
| 18 |
782
186.5
4.16
38
6
(11)
-
33
0.18
4.34
37
(37)
-
-
-
1.22%
13.7%
59.5%
850
206.5
4.08
7
-
(2)
-
5
0.02
4.10
(39)
16
6
(17)
550
209.7
2.60
16
(12)
(1)
2
5
0.03
2.63
24
(73)
12
(37)
(0.08)
(0.18)
1.34%
14.2%
59.6%
0.92%
9.1%
62.3%
ZIONS’ PEER GROUP
Ticker Symbol / Company Name
ASB Associated Banc-Corp
BOKF BOK Financial Corporation
CFG Citizens Financial Group, Inc.
CMA Comerica Incorporated
EWBC East West Bancorp, Inc.
FHN First Horizon National Corporation
FITB Fifth Third Bancorp
FNB F.N.B. Corporation
FRC First Republic Bank
HBAN Huntington Bancshares Inc.
KEY KeyCorp
MTB M&T Bank Corp.
PBCT People’s United Financial, Inc.
RF Regions Financial Corp.
SNV Synovus Financial Corp.
WAL Western Alliance Bancorporation
WTFC Wintrust Financial Corp.
Zions Bancorporation, N.A.
BOARD OF DIRECTORS
CORPORATE OFFICERS
Harris H. Simmons
Chairman and Chief Executive Officer
Zions Bancorporation
Maria Contreras-Sweet
Managing Member
Contreras Sweet Companies
Rockway Equity Partners
Gary L. Crittenden
Private Investor
Suren K. Gupta
Executive Vice President of
Technology and Strategic Ventures
Allstate Insurance Company
Claire A. Huang
Former Chief Marketing Officer
J.P. Morgan Chase and Company
Vivian S. Lee
President, Health Platforms
Verily Life Sciences
Scott J. McLean
President and Chief Operating Officer
Zions Bancorporation
Edward F. Murphy
Former Chief Financial Officer
Federal Reserve Bank of New York
Stephen D. Quinn
Former Managing Director and
General Partner
Goldman, Sachs & Co.
Aaron B. Skonnard
Chief Executive Officer
Pluralsight, Inc.
Barbara A. Yastine
Former Chair, President and
Chief Executive Officer
Ally Bank
Harris H. Simmons
Chairman and Chief Executive Officer
Scott J. McLean
President and Chief Operating Officer
EXECUTIVE VICE PRESIDENTS
Bruce K. Alexander
CEO, Vectra Bank Colorado
A. Scott Anderson
CEO, Zions Bank
Paul E. Burdiss
Chief Financial Officer
Kenneth J. Collins
Enterprise Program Management
Eric Ellingsen
CEO, California Bank & Trust
Travis E. Finstad
Chief Audit Executive
Alan M. Forney
CEO, The Commerce Bank
of Washington
Olga T. Hoff
Retail Banking
Thomas E. Laursen
General Counsel
Scott A. Law
Chief Human Resources Officer
Keith D. Maio
Chief Risk Officer
Michael Morris
Chief Credit Officer
Rebecca K. Robinson
Wealth Management
Terry A. Shirey
CEO, Nevada State Bank
Jennifer A. Smith
Chief Technology and Operations Officer
Steven D. Stephens
CEO, Amegy Bank
Randy R. Stewart
Enterprise Mortgage Lending
Mark Young
CEO, National Bank of Arizona
| 19 |
Corporate Information
EXECUTIVE OFFICES
One South Main Street
Salt Lake City, Utah 84133-1109
801-844-7637
ANNUAL SHAREHOLDERS’ MEETING
April 29, 2022, 1 p.m. MDT
Webcast details will be provided on the
zionsbancorporation.com website
TRANSFER AGENT
Zions Bank
Corporate Trust Department
One South Main Street, 12th Floor
Salt Lake City, Utah 84133-1109
801-844-7545 or 888-416-5176
REGISTRAR
Zions Bank
One South Main Street, 12th Floor
Salt Lake City, Utah 84133-1109
AUDITORS
Ernst & Young LLP
15 W. South Temple
Suite 1800
Salt Lake City, Utah 84101
NASDAQ GLOBAL SELECT
MARKET SYMBOL
ZION
OTHER LISTED SECURITIES
Series A Preferred Stock – NASDAQ: ZIONP
Series G Preferred Stock – NASDAQ: ZIONO
Series I Preferred Stock – CUSIP: 989701BD8
Series J Preferred Stock – CUSIP: 989701BF3
DIVIDEND REINVESTMENT PLAN
Shareholders can reinvest their cash dividends
in additional shares of our common stock at
the market price on the dividend payment
date. Shareholders, as well as brokers and
custodians who hold our common stock for
clients, can obtain a prospectus of the plan
on the Zions Bancorporation website at
zionsbancorporation.com or by writing to:
Zions Bancorporation
Dividend Reinvestment Plan
P.O. Box 30880
Salt Lake City, Utah 84130-0880
CREDIT RATINGS
Credit ratings are updated regularly and may be
found on the Zions Bancorporation website at
zionsbancorporation.com.
OPTION MARKET MAKERS
Chicago Board Options Exchange
Philadelphia Stock Exchange
SELECTED INDEX MEMBERSHIPS
S&P 500
S&P Global 1200
KBW Bank
NASDAQ Financial 100
INVESTOR RELATIONS
For financial information about the bank,
analysts, investors and news media
representatives should contact:
James R. Abbott
801-844-7637
james.abbott@zionsbancorp.com
ZIONS BANCORPORATION
NEWS RELEASES
Our news releases are available on our
website at zionsbancorporation.com.
To be added to the email distribution list,
please visit zionsbancorporation.com
and click on “Email Notifications.”
INTERNET SITES
Zions Bancorporation
zionsbancorporation.com
Zions Bank
zionsbank.com
Amegy Bank
amegybank.com
California Bank & Trust
calbanktrust.com
National Bank of Arizona
nbarizona.com
Nevada State Bank
nsbank.com
Vectra Bank Colorado
vectrabank.com
The Commerce Bank of Washington
tcbwa.com
The Commerce Bank of Oregon
tcboregon.com
Zions Direct
zionsdirect.com
This document may contain statements that could be considered “forward looking.” Readers should review the forward-looking statement disclaimer
of Zions’ Annual Report on Form 10-K, which can be found on the website at zionsbancorporation.com and applies equally to this document.
Certain financial measures containing descriptive words such as “core” or “adjusted” are subject to the GAAP to Non-GAAP reconciliation table, which
can be found on page 18.
Printed on paper that contains 10% post-consumer recycled content and is elemental chlorine free.
| 20 |
One South Main Street
Salt Lake City, Utah 84133
ZIONSBANCORPORATION.COM