Zions Bancorporation(US:ZION)2022-02-25 00:58Financial Performance - Zions Bancorporation reported annual net revenue of $2.9 billion in 2021 and total assets of $93 billion as of December 31, 2021[16]. - Net earnings applicable to common shareholders increased by 118% to $1,100 million in 2021 from $505 million in 2020, driven by a significant decrease in credit loss reserves and improved noninterest income[134]. - Total net revenue rose by 4% to $2.911 billion in 2021, compared to $2.790 billion in 2020[150]. - Net income surged by 109% to $1.129 billion in 2021, up from $539 million in 2020[150]. - The efficiency ratio increased to 60.8% in 2021 from 59.4% in 2020, as adjusted noninterest expense growth outpaced adjusted taxable-equivalent revenue growth[137]. - Noninterest income increased by 22% to $703 million in 2021, up from $574 million in 2020[150]. - The provision for credit losses was a negative $276 million in 2021, compared to a positive $414 million in 2020, reflecting improved economic forecasts and strong credit quality[148]. - The company experienced a significant increase in legal and compliance costs due to regulatory requirements, impacting overall financial performance[101]. Capital and Liquidity - The Common Equity Tier 1 (CET1) capital to total risk-weighted assets ratio was 10.2%, indicating a well-capitalized status[16]. - The bank met all capital adequacy requirements under the Basel III capital rules as of December 31, 2021[27]. - The minimum capital ratio requirements under Basel III include 4.5% CET1 to risk-weighted assets and 8.0% total capital to risk-weighted assets[28]. - The bank's liquidity profile remained strong during 2021, adhering to Basel III liquidity requirements[31]. - The company relies heavily on customer deposits as its primary source of liquidity, which may be affected by market forces and other events[73]. Employee and Workforce Development - The bank serves over one million customers through 418 branches and employs 9,685 full-time equivalent employees[16]. - The company successfully transitioned approximately 70% of its employees to remote work since the beginning of the COVID-19 pandemic in 2020[46]. - The company achieved a diverse workforce, with 51% of management roles held by women and 27% by people of color[48]. - In the 2021 Banker Development Program, 53% of participants were women and 38% were people of color, highlighting the company's commitment to diversity[50]. - The company offers over 2,000 learning options and hosted more than 900 training experiences in 2021 to support employee development[54]. Regulatory Compliance and Risks - The company is subject to various regulations, including the Dodd-Frank Act, which imposes limits on interchange fees and requires compliance with consumer protection laws[43]. - Regulatory compliance includes limitations on dividends and requirements for approval of acquisitions, impacting operational flexibility[39]. - The company is subject to stress testing requirements due to having assets exceeding $10 billion, which may limit its ability to increase dividends or repurchase shares[94]. - Regulatory compliance and changes in accounting standards pose ongoing risks that could materially affect financial reporting and conditions[98]. - System vulnerabilities and cyber security risks are significant concerns, with potential impacts on operations and customer services[89]. Loan Portfolio and Asset Management - The company has significant concentrations of risk in its loan portfolio, particularly in real estate and oil and gas-related lending[62]. - As of December 31, 2021, loan balances in Utah/Idaho, Texas, and California comprised 77% of the commercial lending portfolio[64]. - Total loans and leases decreased by $2.6 billion, or 5%, due to PPP loan forgiveness, but excluding PPP loans, total loans increased by $1.1 billion, or 2%[148]. - The allowance for credit losses (ACL) decreased by $282 million to $553 million at December 31, 2021, with the ratio of ACL to net loans and leases (ex-PPP) at 1.13% compared to 1.74% in 2020[172]. - Nonperforming lending-related assets amounted to $89 million in 2021, with a ratio of nonperforming assets to net loans and leases at 0.69%[201]. Strategic Initiatives and Changes - The company has completed significant organizational changes, including the merger of its bank holding company and the consolidation of 15 loan operations sites into two[77]. - Ongoing investments are being made in strategic projects, including the development of customer-facing digital capabilities and enhancements to online banking services[78]. - The company is actively managing the transition from LIBOR to alternative reference rates, which could impact its financial condition and operations[68]. - The transition from LIBOR to alternative pricing benchmarks requires the development of new systems and analytics, impacting risk management processes[71]. Shareholder Returns and Stock Performance - In 2021, the company repurchased 13.5 million common shares for $800 million at an average price of $59.27 per share, representing 8.2% of common stock outstanding as of the prior year-end[125]. - A dividend of $0.38 per common share was declared in January 2022, payable on February 24, 2022[123]. - The company’s common stock performance over five years showed a cumulative total return of 165.4% as of 2021, compared to 129.8% for the KRX Regional Bank Index and 233.3% for the S&P 500[128].