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    01 25 11-11 42 27 am 01 25 11-11 42 27 am Document Transcript

    • ab Global Equity Research Americas Banks, Ex-S&L UBS Investment Research 12-month rating Sell Zions Bancorporation Unchanged 12m price target US$17.00 Prior: US$16.00 4Q Miss Due to Credit; Pressures to Persist Price US$23.75 Worse-than-expected credit results drove the 4Q miss RIC: ZION.O BBG: ZION US ZION reported EPS of ($0.62), missing UBSe & cons. estimates of ($0.45) & 25 January 2011 ($0.36), resp. NII came in higher, but credit costs offset. We increase ’11E (to a loss of $0.40 from a loss of $1.00) & ‘12E (to $0.80 from $0.75) due to faster LLR Trading data release and to acc’t for the NII beat. 52-wk range US$30.00-17.49 Market cap. US$3.57bn Credit recovery likely, but pace to disappoint Shares o/s 150m (COM) Credit losses were 5% higher than our estimate. Worse-than-expected term CRE & Free float 94% const. trends offset better results within resi RE. Const recovery will likely Avg. daily volume (000) 3,577 improve losses, but we believe cont’d duress w/in term CRE & resi RE will keep Avg. daily value (m) US$79.8 levels elevated. We are lowering our ’11 (to 160bp from 175bp) & ’12 loss est. (to 80bp from 85bp ) to account for this qtr’s resi RE beat. Fortunately, we believe Balance sheet data 12/11E ZION still has meaningful credit leverage ahead (LLR ratio = 3.9%). Common equity US$4.62bn Lending revs to trend down in the near-term P/BVPS x 1.0 Lending revs trended flat and were 2% above our forecast. Earning asset bals Tier one capital ratio 15.7% exceeded our est. given less dep attrition, and the NIM came in 3bp above as mgmt Forecast returns shifted cash into higher-yielding secs. Cont’d mix-shift will likely enhance the core NIM, but it will unlikely offset the decline in loans. As such, we are forecasting a Forecast price appreciation -28.4% 5% decline in NII for ’11. Forecast dividend yield 0.2% Forecast stock return -28.2% Maintain Sell Rating; expectations remain elevated Market return assumption 5.6% ZION trades at 29x our ’12E vs. our 13x target multiple. Our three-prong valuation Forecast excess return -33.8% methodology (P/E, P/TBV, and DCF) drives our price target to $17 from $16. EPS (UBS, US$) 12/11E 12/10 From To Cons. Actual Q1E (0.44) (0.25) (0.14) (0.72) Q2E (0.45) (0.25) 0.01 (0.84) Q3E (0.09) 0.06 0.16 (0.52) Highlights (US$m) 12/09 12/10 12/11E 12/12E 12/13E Q4E (0.03) 0.04 0.27 (0.62) Revenues 2,072 2,161 2,156 2,282 2,526 12/11E (1.00) (0.40) 0.38 Pre-tax profits (1,609) (452) 161 529 599 12/12E 0.75 0.80 1.91 Net income (1,069) (444) (74) 156 220 EPS (UBS, US$) (8.59) (2.68) (0.40) 0.80 1.10 Performance (US$) Net DPS (UBS, US$) 0.10 0.04 0.04 0.04 0.04 60.0 Stock Price (US$) Rel. S & P 500 140 50.0 120 Profitability & Valuation 5-yr hist av. 12/10 12/11E 12/12E 12/13E 40.0 100 ROE % 2.9 -10.1 -1.6 3.1 4.2 30.0 80 P/Op x 6.7 8.0 10.1 7.8 5.8 20.0 60 40 P/BVPS x 1.3 0.9 1.0 0.9 0.9 10.0 20 PE (UBS) x 37.9 -8.1 -59.5 29.7 21.6 0.0 0 01/08 04/08 07/08 10/08 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 Net dividend yield % 2.2 0.2 0.2 0.2 0.2 Price Target (US$) (LHS) Stock Price (US$) (LHS) Source: Company accounts, Thomson Reuters, UBS estimates. (UBS) valuations are stated before goodwill-related charges and other adjustments for Rel. S & P 500 (RHS) abnormal and economic items at the analysts judgement. Source: UBS Valuations: based on an average share price that year, (E): based on a share price of US$23.75 on 24 Jan 2011 19:42 EST www.ubs.com/investmentresearch Heather Wolf, CFA Elena Kim Joshua Rogers Analyst Associate Analyst Associate Analyst heather.wolf@ubs.com elena.kim@ubs.com joshua.rogers@ubs.com +1-212-713 4290 +1 212 713 4057 +1-212-713 2364 This report has been prepared by UBS Securities LLC ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 10. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
    • Zions Bancorporation 25 January 2011Table 1: ZION Valuation Summary TheoreticalZION Weighting Valuation($ in MM, except for per share data)TARGET P/TBVAssumption ValueCurrent P/TBV 1.2Price / Tangible Book value 1.0Trough TBV Estimate $19.08Theoretical value implied by Price / Tangible Book va $19 50% $10Discounted Cash FlowAssumption ValueStage 1 (2009 - 2013) Net Income Growth NM B/S Growth 2.0 TCE / TA Target 6.9 Beta 1.8Stage 2 (2014 - 2018) Net Income Growth 10.0 B/S Growth 2.0 TCE / TA Target 8.0 Beta 1.5Theoretical value Implied by DCF $20 25% $5Target P/EAssumption ValueCurrent P/E NM10-year average P/E 13.8Target Sustainable P/E 13.0Year: 20122012 EPS Estimate $0.802012 EPS Estimate (PV) $0.71Avg of theoretical values implied by Target P/E $9 25% $2Price Target $17Source: Company Filings, UBS Estimates UBS 2
    • Zions Bancorporation 25 January 2011 Table 2: ZION Variance Table Zions Bancorporation EARNINGS RESULTS AND FORECAST ($ M illions, Exce pt As Noted) Actual Estim ate New Old New Old New Old Ne w Old Ne w Old KEY FORECAST VARIABLES: 3Q10 4Q10 4Q10E Variance 2010E 2010E Variance 2011E 2011E Variance 2012E 2012E Variance 2013E 2013E Variance 2014E 2014E Variance EOP Loans $37,887 $37,074 $37,269 -1% $37,074 $37,269 -1% $37,278 $37,594 -1% $37,728 $37,799 0% $38,860 $39,311 -1% $40,414 $41,669 -3% Average Loans $37,864 $37,294 $37,578 -1% $38,157 $38,206 0% $37,162 $37,247 0% $37,559 $37,696 0% $38,294 $38,555 -1% $39,637 $40,490 -2% Average Earning Assets $47,242 $46,849 $46,180 1% $46,863 $46,696 0% $46,380 $44,998 3% $45,462 $44,194 3% $46,094 $45,942 0% $47,992 $48,729 -2% Net Interest Margin (%) 3.84 3.49 3.46 3bp 3.73 3.73 1bp 3.58 3.55 3bp 3.82 3.79 3bp 4.25 4.25 0bp 4.40 4.40 0bp Net Interest Income (FTE) 457.2 412.0 402.8 2% 1,749.1 1,739.9 1% 1,660.8 1,599.1 4% 1,737.1 1,675.4 4% 1,959.0 1,952.5 0% 2,111.6 2,144.1 -2% Loan Loss Provision 184.7 173.2 153.0 13% 852.1 831.9 2% 250.0 392.0 -36% 41.0 19.0 116% 200.0 249.0 -20% 200.0 202.0 -1% Noninterest Revenues 112.7 125.0 127.2 -2% 492.4 494.6 0% 518.2 527.1 -2% 544.7 538.9 1% 567.1 550.0 3% 595.6 562.3 6% Securities Transactions (16.4) (11.7) (15.0) -22% (80.3) (83.6) -4% (23.0) (45.0) -49% 0.0 0.0 NA 0.0 0.0 NA 0.0 0.0 NA Tot. Revenue 553 525 515 2% 2,161 2,151 0% 2,156 2,081 4% 2,282 2,214 3% 2,526 2,503 1% 2,707 2,706 0% Staf f Expenses 207.9 207.3 209.6 -1% 825.3 827.7 0% 829.1 838.9 -1% 837.4 854.0 -2% 854.1 883.8 -3% 878.0 919.2 -4% OREO Expenses 44.3 25.5 42.0 -39% 144.8 161.3 -10% 106.0 127.3 -17% 47.2 64.7 -27% 25.5 35.1 -27% 12.2 16.8 -27% Other Expenses 203.8 210.6 192.2 10% 768.8 750.5 2% 809.5 761.3 6% 826.8 776.5 6% 847.5 802.1 6% 877.2 834.2 5% Total Expenses 456.0 443.4 443.8 0% 1,739.0 1,739.5 0% 1,744.6 1,727.4 1% 1,711.4 1,695.2 1% 1,727.1 1,721.0 0% 1,767.4 1,770.2 0% Pre-Tax Income (FTE) (87.2) (91.4) (81.9) -12% (429.9) (420.5) -2% 161.4 (38.2) 523% 529.4 500.1 6% 599.1 532.5 12% 739.8 734.2 1% FTE Tax Rate (%) 35.2 20.8 45.0 -24pp 23.7 28.5 -5pp 34.4 69.9 -36pp 35.0 40.0 -5pp 35.0 35.0 0pp 35.0 35.0 0pp Net Income (56.5) (72.4) (45.0) 61% (327.9) (300.5) 9% 105.9 (11.5) -1023% 344.1 300.1 15% 389.4 346.2 12% 480.9 477.2 1% Available For Common (89.5) (110.3) (79.9) -30mn (444.0) (413.7) -30mn (73.8) (183.6) 110mn 155.8 144.9 11mn 220.2 212.7 7mn 311.6 343.8 -32mn Op. EARNINGS PER SHARE (F.D.) ($0.52) ($0.62) ($0.45) -39% ($2.68) ($2.49) -8% ($0.40) ($1.00) 60% $0.80 $0.75 6% $1.10 $1.05 4% $1.55 $1.70 -9% GAAP EPS (F.D.) ($0.47) ($0.62) ($0.45) -39% ($2.49) ($2.30) -8% ($0.40) ($1.00) 60% $0.80 $0.75 6% $1.10 $1.05 4% $1.55 $1.70 -9% Book Value Per Share $26.07 $25.11 $25.93 ($0.81) $25.11 $25.93 ($0.81) $24.93 $25.09 ($0.16) $25.62 $25.43 $0.18 $26.67 $26.45 $0.23 $28.19 $28.11 $0.08 Tangible Book Value Per Share $19.81 $19.08 $20.40 ($1.32) $19.08 $20.40 ($1.32) $19.11 $19.78 ($0.66) $20.36 $20.72 ($0.36) $21.53 $21.85 ($0.32) $23.12 $23.58 ($0.46) Dividends Per Share $0.01 $0.01 $0.01 $0.00 $0.04 $0.04 $0.00 $0.04 $0.04 $0.00 $0.04 $0.04 $0.00 $0.04 $0.04 $0.00 $0.04 $0.04 $0.00 Average Fully-Diluted Shares 172.9 178.1 179.2 -1mn 166.0 166.2 0mn 185.1 183.4 2mn 194.9 192.9 2mn 200.6 202.0 -1mn 200.6 202.0 -1mn CAPITAL RATIOS: EOP Common Equity/Assets (%) 9.05 8.99 9.28 -29bp 8.99 9.28 -29bp 9.20 9.58 -38bp 10.36 10.45 -10bp 10.47 10.35 11bp 10.59 10.38 21bp Tang. Common Equity/Assets (%) 7.03 6.98 7.45 -46 6.98 7.45 -46 7.21 7.71 -50 8.41 8.68 -27 8.62 8.71 -9 8.85 8.85 0 Tangible Common Equity/RWA (%) 8.03 7.98 8.53 -55 7.98 8.53 -55 8.24 8.82 -58 9.61 9.94 -33 9.87 9.99 -12 10.14 10.16 -3 Tier 1 Common/RWA (%) 8.66 8.59 8.91 -32 8.59 8.91 -32 8.80 9.17 -36 10.13 10.22 -9 10.32 10.20 11 10.54 10.34 20 Tier 1/RWA (%) 14.15 15.01 14.62 39 15.01 14.62 39 15.73 16.32 -59 14.62 13.63 99 14.67 13.44 123 14.71 13.39 132 PROFITABILITY RATIOS: Return On Assets (%) (0.4) (0.6) (0.4) -21 (0.6) (0.6) -5 0.2 (0.0) 23 0.7 0.6 8 0.8 0.7 9 0.9 0.9 2 Return On Common Equity (%) (7.7) (9.5) (6.8) -271 (10.1) (9.3) -71 (1.6) (4.0) 234 3.1 3.0 19 4.2 4.0 13 5.6 6.2 -58 Return On Tangible Common Equity (%) (9.7) (12.0) (8.4) -353 (12.7) (11.6) -110 (1.6) (4.8) 318 4.5 4.1 37 5.6 5.3 30 7.2 7.7 -53 Operating Expenses/Revenues (%) 80.0 82.6 83.8 -118 77.6 77.8 -27 80.1 81.2 -118 75.0 76.6 -155 68.4 68.8 -40 65.3 65.4 -12 BALANCE SHEET ITEM S: EOP Total Assets $51,048 $51,035 $50,608 1% $51,035 $50,608 1% $50,241 $48,112 4% $49,618 $49,153 1% $51,127 $51,608 -1% $53,412 $54,726 -2% EOP Equity $6,495 $6,647 $6,722 -1% $6,647 $6,722 -1% $7,154 $7,111 1% $6,597 $6,122 8% $6,810 $6,326 8% $7,113 $6,662 7% EOP Pref erred Equity $1,875 $2,057 $2,025 2% $2,057 $2,025 2% $2,532 $2,500 1% $1,459 $983 48% $1,459 $983 48% $1,459 $983 48% EOP Common Equity $4,619 $4,591 $4,697 -2% $4,591 $4,697 -2% $4,622 $4,611 0% $5,139 $5,138 0% $5,351 $5,343 0% $5,654 $5,679 0% EOP Tangible Common Equity $3,510 $3,487 $3,695 -6% $3,487 $3,695 -6% $3,544 $3,634 -2% $4,084 $4,185 -2% $4,320 $4,414 -2% $4,637 $4,763 -3% CREDIT QUALITY INDICATORS: Net Charge-Of f s $236 $251 $238 5% $969 $956 1% $595 $650 -8% $301 $319 -6% $250 $249 0% $200 $202 -1% % Average Loans 2.47 2.67 2.51 16bp 2.54 2.50 4bp 1.60 1.75 -14bp 0.80 0.85 -4bp 0.65 0.65 1bp 0.50 0.50 1bp Nonperf orming Assets $2,293 $1,828 $2,141 -15% $1,828 $2,141 -15% $1,590 $1,940 -18% $1,272 $1,670 -24% $882 $1,270 -31% $583 $851 -31% % EOP Loans + OREO 6.00 4.89 5.69 -80bp 4.89 5.69 -80bp 4.24 5.12 -88bp 3.36 4.39 -104bp 2.26 3.22 -95bp 1.44 2.04 -60bp Nonperf orming Loans $1,586 $1,162 $1,427 -19% $1,162 $1,427 -19% $946 $1,250 -24% $771 $1,113 -31% $539 $890 -39% $378 $623 -39% % EOP Loans (excl. OREO) 4.19 3.13 3.83 -70bp 3.13 3.83 -70bp 2.54 3.33 -79bp 2.04 2.94 -90bp 1.39 2.26 -88bp 0.93 1.50 -56bp Loan Loss Reserve $1,530 $1,440 $1,445 0% $1,440 $1,445 0% $1,095 $1,187 -8% $835 $887 -6% $785 $887 -11% $785 $887 -11% % EOP Loans 4.04 3.89 3.88 1bp 3.89 3.88 1bp 2.94 3.16 -22bp 2.21 2.35 -13bp 2.02 2.26 -24bp 1.94 2.13 -19bp % Nonperf orming Loans 79.02 94.22 80.65 1357 94.22 80.65 1357 81.06 71.83 923 74.93 60.97 1396 100.64 78.53 2211 150.40 115.68 3472 Source: Company Filings, UBS EstimatesUBS 3
    • Table 3: ZION Earnings Model Zions Bancorporation 25 January 2011 Zions Bancorporation EARNINGS RESULTS AND FORECAST ($ Millions, Except As Noted) Forecast Forecast KEY FORECAST VARIABLES: 1Q10 2Q10 3Q10 4Q10 1Q11E 2Q11E 3Q11E 4Q11E 1Q12E 2Q12E 3Q12E 4Q12E 2009 2010E 2011E 2012E 2013E 2014E 2015E 4Q/3Q 4Q/4Q 10E/09 11E/10E 12E/11E 13E/12E 14E/13E 15E/14E EOP Loans $39,313 $38,354 $37,887 $37,074 $37,074 $37,111 $37,185 $37,278 $37,390 $37,502 $37,615 $37,728 $40,535 $37,074 $37,278 $37,728 $38,860 $40,414 $42,435 (2.1) (8.5) (8.5) 0.6 1.2 3.0 4.0 5.0 Average Loans 39,883 38,813 37,864 37,294 37,074 37,093 37,148 37,232 37,334 37,446 37,559 37,671 41,663 38,157 37,162 37,559 38,294 39,637 41,424 (1.5) (8.9) (8.4) (2.6) 1.1 2.0 3.5 4.5 Average Earning Assets 46,405 46,956 47,242 46,849 46,784 46,492 46,123 46,018 46,011 45,400 44,957 45,257 48,928 46,863 46,380 45,462 46,094 47,992 50,556 (0.8) (2.7) (4.2) (1.0) (2.0) 1.4 4.1 5.3 Net Interest Margin (%) 4.03 3.58 3.84 3.49 3.72 3.41 3.66 3.53 3.79 3.76 3.85 3.78 3.93 3.73 3.58 3.82 4.25 4.40 4.50 (9.1) (8.4) (19) (15) 24 43 15 10 Net Interest Income (FTE) 461.0 419.0 457.2 412.0 429.7 395.6 425.8 409.8 440.0 430.2 435.8 431.2 1,921.0 1,749.1 1,660.8 1,737.1 1,959.0 2,111.6 2,275.0 (9.9) (10.9) (8.9) (5.0) 4.6 12.8 7.8 7.7 Loan Loss Provision 265.6 228.7 184.7 173.2 115.0 85.0 30.0 20.0 13.0 3.0 10.0 15.0 2,016.9 852.1 250.0 41.0 200.0 200.0 165.0 (6.2) (55.7) (57.8) (70.7) (83.6) 387.8 0.0 (17.5) Noninterest Revenues 126.3 128.4 112.7 125.0 128.7 128.4 130.6 130.5 135.2 135.3 136.9 137.3 625.1 492.4 518.2 544.7 567.1 595.6 627.6 10.9 (21.6) (21.2) 5.2 5.1 4.1 5.0 5.4 Securities Transactions (33.2) (19.0) (16.4) (11.7) (10.0) (8.0) (5.0) 0.0 0.0 0.0 0.0 0.0 (474.0) (80.3) (23.0) 0.0 0.0 0.0 0.0 - - - - - - - - Tot. Revenue 554 528 553 525 548 516 551 540 575 566 573 568 2,072 2,161 2,156 2,282 2,526 2,707 2,903 (5.1) 2.3 4.3 (0.2) 5.8 10.7 7.2 7.2 Staff Expenses 204.3 205.8 207.9 207.3 208.3 206.2 206.2 208.3 208.3 208.3 208.3 212.5 818.8 825.3 829.1 837.4 854.1 878.0 908.8 (0.3) 0.2 0.8 0.5 1.0 2.0 2.8 3.5 OREO Expenses 32.6 42.4 44.3 25.5 34.2 27.0 25.7 19.1 14.4 13.0 10.4 9.4 110.8 144.8 106.0 47.2 25.5 12.2 6.4 (42.5) (33.5) 30.7 (26.8) (55.4) (46.1) (52.0) (47.5) Other Expenses 172.2 182.1 203.8 210.6 201.1 201.1 202.1 205.2 205.2 205.2 207.2 209.3 714.8 768.8 809.5 826.8 847.5 877.2 910.5 3.3 6.2 7.6 5.3 2.1 2.5 3.5 3.8 Total Expenses 409.2 430.4 456.0 443.4 443.6 434.4 434.1 432.6 427.9 426.4 426.0 431.2 1,644.4 1,739.0 1,744.6 1,711.4 1,727.1 1,767.4 1,825.7 (2.8) 0.0 5.7 0.3 (1.9) 0.9 2.3 3.3 Pre-Tax Income (FTE) (120.7) (130.7) (87.2) (91.4) (10.3) (3.4) 87.4 87.7 134.3 136.2 136.8 122.3 (1,589.2) (429.9) 161.4 529.4 599.1 739.8 912.0 (4.7) 71.5 72.9 137.5 228.1 13.2 23.5 23.3 FTE Tax Rate (%) 29.0 13.2 35.2 20.8 45.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 39.1 23.7 34.4 35.0 35.0 35.0 35.0 (1,449) (1,833.7) (1,538) 1,063 64 (0) 0 0 Net Income (85.6) (113.4) (56.5) (72.4) (5.6) (2.2) 56.8 57.0 87.3 88.5 88.9 79.5 (967.7) (327.9) 105.9 344.1 389.4 480.9 592.8 (28.1) 63.0 66.1 132.3 224.9 13.2 23.5 23.3 Available For Common (109.0) (135.2) (89.5) (110.3) (46.5) (45.5) 10.4 7.8 35.1 34.6 48.7 37.4 (1,068.6) (444.0) (73.8) 155.8 220.2 311.6 423.6 (23.2) 49.6 58.4 83.4 311.1 41.3 41.5 35.9 Op. EARNINGS PER SHARE (F.D.) ($0.72) ($0.84) ($0.52) ($0.62) ($0.25) ($0.25) $0.06 $0.04 $0.19 $0.18 $0.24 $0.19 ($8.59) ($2.68) ($0.40) $0.80 $1.10 $1.55 $2.11 (19.6) 60.4 68.9 85.1 300.5 37.3 41.5 35.9 GAAP EPS (F.D.) ($0.57) ($0.84) ($0.47) ($0.62) ($0.25) ($0.25) $0.06 $0.04 $0.19 $0.18 $0.24 $0.19 ($9.93) ($2.49) ($0.40) $0.80 $1.10 $1.55 $2.11 (33.0) 50.9 75.0 84.0 300.5 37.3 41.5 35.9 Book Value Per Share $26.98 $26.62 $26.07 $25.11 $25.11 $24.85 $24.90 $24.93 $25.11 $25.21 $25.44 $25.62 $27.97 $25.11 $24.93 $25.62 $26.67 $28.19 $30.10 (3.7) (10.2) (10.2) (0.7) 2.7 4.1 5.7 6.8 Tangible Book Value Per Share $19.98 $20.18 $19.81 $19.08 $19.19 $18.97 $19.05 $19.11 $19.33 $19.89 $20.15 $20.36 $20.47 $19.08 $19.11 $20.36 $21.53 $23.12 $25.03 (3.7) (6.8) (6.8) 0.2 6.5 5.8 7.4 8.3 Dividends Per Share $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.10 $0.04 $0.04 $0.04 $0.04 $0.04 $0.20 0.0 0.0 (60.0) 0.0 0.0 0.0 0.0 400.0 Average Fully-Diluted Shares 151.1 161.8 172.9 178.1 184.1 185.4 185.4 185.4 185.4 193.0 200.6 200.6 124.4 166.0 185.1 194.9 200.6 200.6 200.6 3.0 27.3 33.4 11.5 5.3 2.9 0.0 0.0 CAPITAL RATIOS: EOP Common Equity/Assets (%) 8.36 8.85 9.05 8.99 9.14 9.13 9.20 9.20 9.28 10.32 10.35 10.36 8.23 8.99 9.20 10.36 10.47 10.59 10.73 (5) 76.5 76 20 116 11 12 15 Tang. Common Equity/Assets (%) 6.33 6.86 7.03 6.98 7.14 7.13 7.19 7.21 7.30 8.32 8.38 8.41 6.16 6.98 7.21 8.41 8.62 8.85 9.09 (4) 82.6 83 22 120 21 23 24 Tangible Common Equity/RWA (%) 6.56 7.34 8.03 7.98 8.16 8.14 8.22 8.24 8.34 9.50 9.58 9.61 5.99 7.98 8.24 9.61 9.87 10.14 10.42 (5) 198.4 198 26 137 25 27 28 Tier 1 Common/RWA (%) 7.14 7.91 8.66 8.59 8.76 8.73 8.80 8.80 8.89 10.06 10.11 10.13 6.73 8.59 8.80 10.13 10.32 10.54 10.80 (6) 186.5 186 21 133 19 22 26 Tier 1 /RWA (%) 11.19 13.76 14.15 15.01 14.68 15.05 15.38 15.73 15.99 14.20 14.40 14.62 10.53 15.01 15.73 14.62 14.67 14.71 14.76 86 448.0 448 72 (111) 5 4 5 PROFITABILITY RATIOS: Return On Assets (%) (0.7) (0.9) (0.4) (0.6) (0.0) (0.0) 0.4 0.5 0.7 0.7 0.7 0.6 (1.8) (0.6) 0.2 0.7 0.8 0.9 1.1 (13) 89.6 115 84 48 8 15 16 Return On Common Equity (%) (10.7) (12.4) (7.7) (9.5) (4.1) (4.0) 0.9 0.7 3.0 2.8 3.8 2.9 (24.8) (10.1) (1.6) 3.1 4.2 5.6 7.2 (180) 1,142.4 1,476 844 476 103 147 158 Return On Tangible Common Equity (%) (14.2) (16.7) (10.2) (12.5) (5.4) (5.2) 1.2 0.9 3.9 3.6 4.8 3.7 (32.8) (13.1) (2.1) 4.0 5.2 6.9 8.8 (234) 1,608.6 1,979 1,100 606 121 173 182 Operating Expenses/Revenues (%) 69.7 78.6 80.0 82.6 79.4 82.9 78.0 80.1 74.4 75.4 74.4 75.9 64.6 77.6 80.1 75.0 68.4 65.3 62.9 254 1,129.9 1,300 248 (506) (663) (308) (239) BALANCE SHEET ITEMS: EOP Total Assets $51,713 $52,147 $51,048 $51,035 $50,924 $50,451 $50,185 $50,241 $50,172 $49,019 $49,286 $49,618 $51,123 $51,035 $50,241 $49,618 $51,127 $53,412 $56,256 (0.0) (0.2) (0.2) (1.6) (1.2) 3.0 4.5 5.3 EOP Equity 5,857 6,421 6,495 6,647 6,786 6,889 6,998 7,154 7,257 6,348 6,465 6,597 5,710 6,647 7,154 6,597 6,810 7,113 7,497 2.4 16.4 16.4 7.6 (7.8) 3.2 4.5 5.4 EOP Preferred Equity 1,532 1,807 1,875 2,057 2,132 2,282 2,382 2,532 2,602 1,292 1,362 1,459 1,503 2,057 2,532 1,459 1,459 1,459 1,459 9.7 36.9 36.9 23.1 (42.4) 0.0 0.0 0.0 EOP Common Equity 4,325 4,614 4,619 4,591 4,655 4,607 4,616 4,622 4,655 5,057 5,103 5,139 4,207 4,591 4,622 5,139 5,351 5,654 6,038 (0.6) 9.1 9.1 0.7 11.2 4.1 5.7 6.8 EOP Tangible Common Equity 3,203 3,499 3,510 3,487 3,558 3,517 3,532 3,544 3,583 3,990 4,043 4,084 3,079 3,487 3,544 4,084 4,320 4,637 5,020 (0.6) 13.3 13.3 1.6 15.2 5.8 7.4 8.3 CREDIT QUALITY INDICATORS: Net Charge-Offs $227 $255 $236 $251 $215 $175 $110 $95 $88 $78 $70 $65 $1,175 $969 $595 $301 $250 $200 $165 6.5 (14.8) (17.5) (38.6) (49.4) (16.9) (20.0) (17.5) % Average Loans 2.31 2.64 2.47 2.67 2.35 1.89 1.17 1.01 0.94 0.83 0.74 0.68 2.82 2.54 1.60 0.80 0.65 0.50 0.40 20.0 (18.3) (28.1) (93.8) (80.0) (14.9) (14.8) (10.6) Nonperforming Assets $2,785 $2,547 $2,293 $1,828 $1,766 $1,708 $1,650 $1,590 $1,503 $1,421 $1,344 $1,272 $2,769 $1,828 $1,590 $1,272 $882 $583 $371 (20.3) (34.0) (34.0) (13.0) (20.0) (30.6) (33.9) (36.5) % EOP Loans + OREO 7.01 6.57 6.00 4.89 4.73 4.57 4.41 4.24 4.00 3.77 3.56 3.36 6.77 4.89 4.24 3.36 2.26 1.44 0.87 (110.4) (187.5) (187.5) (65.3) (88.2) (109.2) (82.3) (56.9) Nonperforming Loans $2,031 $1,794 $1,582 $1,162 $1,103 $1,048 $996 $946 $899 $854 $811 $771 $2,081 $1,162 $946 $771 $539 $378 $227 (26.6) (44.2) (44.2) (18.5) (18.5) (30.0) (30.0) (40.0) % EOP Loans (excl. OREO) 5.17 4.68 4.17 3.13 2.98 2.82 2.68 2.54 2.40 2.28 2.16 2.04 5.13 3.13 2.54 2.04 1.39 0.93 0.53 (104.2) (200.0) (200.0) (59.5) (49.5) (65.4) (45.4) (40.0) Loan Loss Reserve $1,582 $1,564 $1,530 $1,440 $1,340 $1,250 $1,170 $1,095 $1,020 $945 $885 $835 $1,433 $1,440 $1,095 $835 $785 $785 $785 (5.9) (5.9) 0.5 (24.0) (23.7) (6.0) 0.0 0.0 % EOP Loans 4.02 4.08 4.04 3.89 3.62 3.37 3.15 2.94 2.73 2.52 2.35 2.21 3.78 3.89 2.94 2.21 2.02 1.94 1.85 (15.3) 10.7 10.7 (94.7) (72.4) (19.3) (7.8) (9.3) % Nonperforming Loans 66.70 73.28 79.02 94.22 90.46 86.96 84.00 81.06 79.23 77.02 75.69 74.93 64.36 94.22 81.06 74.93 100.64 150.40 239.62 1,520.1 2,986.2 2,986.2 (1,316.3) (612.4) 2,570.7 4,976.5 8,921.3 Source: Company Filings, UBS EstimatesUBS 4
    • Table 4: ZION Net Interest Margin Model Zions Bancorporation 25 January 2011 ZION (1) (1) (2) (2) Volume Inputs 3Q10 4Q10 2011E 2012E Growth Inputs Loan growth (20%) (6%) (0%) 1% NPL growth (38%) (59%) (6%) (1%) Noninterest bearing deposit growth 40% (5%) (1%) (1%) Interest bearing core deposit growth (10%) (1%) (2%) (2%) Shareholders Equity growth 46% 0% 7% (0%) Ratios Loan/Deposit 91% 91% 92% 95% NPL/Loans 5.96% 4.00% 3.79% 3.72% Cash & Cash Equiv./Earn. Asset 11.0% 10.7% 9.2% 8.4% Inv. Sec./Earn. Asset 8.7% 9.5% 10.5% 9.0% (1) (1) (2) (2) Rate Inputs 3Q10 4Q10 2011E 2012E Date 9/30/2010 12/31/2010 12/31/2011 12/31/2012 Loans % of Fixed Rate Loans - Total 27% NA 27% 27% C&I (Fixed Rate) % of Fixed Rate Loans in C&I NA NA 30% 30% Duration of Fixed Rate C&I Loans NA NA 2.3 2.3 Reinvestment Risk in Fixed Rate C&I NA NA 1.00% 0.50% C&I (Variable Rate) Years to Reprice Variable Rate C&I NA NA 2.3 2.3 Yield Compression on Variable Rate C&I NA NA 1.00% 0.50% CRE % of Fixed Rate Loans in CRE NA NA 30% 30% Duration of Fixed Rate CRE Loans NA NA 5.0 5.0 Reinvestment Risk in CRE NA NA 0.50% 0.40% Resi RE % of Fixed Rate Loans in Resi RE NA NA 35% 35% Duration of Fixed Rate Resi RE Loans NA NA 7.0 7.0 Reinvestment Risk in Resi RE NA NA 0.50% 0.40% Other Cons / Auto % of Fixed Rate Loans in Cons NA NA 5% 5% Duration of Fixed Rate Cons Loans NA NA 1.5 1.5 Reinvestment Risk in Cons NA NA 0.10% 0.00% Investment Securities % of Agency RMBS 9% 9% 9% 9% RMBS Duration of Agency RMBS Securities Portfolio NA 3.0 3.0 3.0 Agency RMBS Securities Reinvestment Risk (%) NA 0.00% 0.00% 0.00% Other Securities Duration of Other Securities Portfolio NA 6.0 6.0 6.0 Other Securities Reinvestment Risk (%) NA 1.25% 1.25% 1.00% Deposits Interest Bearing Core Deposit Rate (%) 0.54% 0.48% 0.45% 0.40% CD Rate (%) 1.07% 1.00% 0.90% 1.00% Other Liabilities Other Interest-bearing liabilities rate (%) 7.28% 7.24% 7.30% 7.50% (1) Current growth trends reflect QoQ annualized rates (2) 2011E & 2012E growth trends reflect YoY ratesUBS 5
    • Average Balance Sheet Zions Bancorporation 25 January 2011 3Q10 4Q10E 2011E 2012E Interest Interest Avg Bal Yield/Rate Avg Bal Yield/Rate Avg Bal Interest Inc/Exp Yield/Rate Avg Bal Interest Inc/Exp Yield/Rate Inc/Exp Inc/Exp Cash and Cash Equivalents 5,193 4 0.27% 5,023 3 0.27% 4,267 12 0.27% 3,802 10 0.27% Agency RMBS 356 3 2.98% 386 3 2.98% 421 13 2.98% 354 11 2.98% Other Investment Securities 3,769 28 2.98% 4,085 31 3.00% 4,447 124 2.79% 3,743 98 2.63% Total Investment Securities 9,318 35 1.47% 9,494 37 1.56% 9,135 148 1.62% 7,898 119 1.51% Performing loans 35,607 552 6.15% 35,801 542 6.00% 35,754 2084 5.83% 36,161 2083 5.76% NPL 2,258 0 0.00% 1,493 0 0.00% 1,409 0 0.00% 1,398 0 0.00% Total Loans 37,864 552 5.78% 37,294 542 5.76% 37,162 2084 5.61% 37,559 2083 5.55% Other Earning Assets 59 1 4.50% 61 1 3.56% 61 2 3.56% 61 2 3.56% Total Earning Assets 47,242 #N/A 587 4.93% 46,849 #N/A 579 4.91% 46,358 2235 4.82% 45,518 2205 4.84% Other Assets 4,537 4,458 4,458 4,458 Total Assets 51,779 51,307 50,816 49,976 Interest bearing core deposits 21,771 30 0.54% 21,718 26 0.48% 21,325 96 0.45% 20,880 84 0.40% CDs 6,130 17 1.07% 5,845 15 1.00% 5,367 48 0.90% 5,159 52 1.00% Total interest-bearing deposits 27,901 46 0.66% 27,563 41 0.59% 26,692 144 0.54% 26,039 135 0.52% Other Interest-bearing liabilities 3,069 56 7.28% 2,969 54 7.24% 2,969 217 7.30% 2,969 223 7.50% Total interest-bearing liab & deps 30,970 #N/A 103 1.31% 30,532 #N/A 95 1.24% 29,660 361 1.22% 29,008 358 1.23% Noninterest bearing deposits 13,787 13,607 13,498 13,336 Other liabilities 601 601 601 601 Stockholders equity 6,421 6,567 7,057 7,032 Total liab & stockholders equity 51,779 51,307 50,816 49,976 NII/NIM 485 4.07% 484 4.10% 1874 4.04% 1847 4.06% 0% Loan Detail 3Q10 4Q10E 2011E 2012E Interest Interest Avg Bal Yield/Rate Avg Bal Yield/Rate Avg Bal Interest Inc/Exp Yield/Rate Avg Bal Interest Inc/Exp Yield/Rate Inc/Exp Inc/Exp Commercial and Industrial 9,388 9,647 9,888 10,482 Leasing 401 412 465 486 Total C&I Loans 9,790 10,059 10,354 10,968 Construction and land development 4,200 3,582 3,313 3,313 Construction and other consumer real estate 365 344 319 319 Term 7,539 7,614 7,461 7,325 Owner Occupied 8,333 8,251 8,086 7,939 Total CRE Loans 20,437 19,791 19,180 18,896 1-4 family residential 3,504 3,514 3,584 3,763 Home equity credit line 2,154 2,151 2,172 2,216 Total Resi RE Loans 5,658 5,665 5,756 5,979 Bankcard and other revolving plans 287 298 295 309 Other 271 234 248 260 Foreign Loans 84 - - - Total Other Cons/ Auto Loans 641 532 543 569 Total net loans held for investment ex. FDIC 36,525 515 5.60% 36,047 505 5.56% 35,833 1,973 5.51% 36,412 1,994 5.48% FDIC-Supported Loans 1,150 35 11.93% 1,034 34 13.08% 931 93 10.00% 838 75 9.00% Loans Held for Sale 189 2 4.67% 213 2 4.49% 399 18 4.49% 309 14 4.49% Total Loans 37,864 552 5.79% 37,294 542 5.76% 37,162 2,084 5.61% 37,559 2,083 5.55% Source: Company Filings, UBS EstimatesUBS 6
    • Table 5:ZION Credit Loss Projections (Summary) Zions Bancorporation 25 January 2011 Zions Bancorpora 2008 Losses 2009 Loss Forecast 2010E Loss Forecast NCO NCO NCO 2008E % of NPL 2009 % of NPL 2010 % of NPL Loan Category 2008 Balance Freq. Severity Rate $ Losses 2009 Balance Freq. Severity Rate Losses ($) 2010 Balance Freq. Severity Rate $ Losses Growth Loans (%) Growth Loans (%) Growth Loans (%) (bp) (bp) (bp) Residential R/E 6% $6,209,824 15% 1.5% 19% 0.6% 29 $18,269 4% $6,489,941 16% 2.9% 52% 2.1% 151 $97,813 -3% $6,307,956 16.5% 2.7% 52% 2.8% 138 $87,000 Revolving 26% $1,947,183 5% 0.4% 22% 0.1% 9 $1,705 15% $2,237,345 5% 0.9% 77% 0.4% 70 $15,576 0% $2,260,102 5.9% 1.6% 70% 0.7% 112 $25,247 First lien -1% $3,860,669 9% 2.0% 19% 0.8% 37 $14,331 0% $3,905,900 9% 3.8% 45% 3.2% 171 $66,639 -5% $3,756,403 9.8% 3.3% 45% 4.1% 145 $54,454 Second lien 3% $401,973 1% 2.5% 22% 1.2% 56 $2,233 -16% $346,696 1% 5.3% 86% 2.2% 450 $15,598 -17% $291,451 0.8% 3.0% 85% 2.3% 250 $7,300 Commercial R/E 11% $22,628,005 55% 4.0% 30% 2.2% 119 $268,953 1% $23,168,441 56% 8.1% 42% 6.9% 337 $781,331 -11% $20,897,664 54.8% 6.9% 42% 7.3% 307 $641,344 Construction 1% $8,907,130 22% 8.8% 32% 4.5% 282 $251,204 -21% $7,386,488 18% 17.1% 50% 14.4% 848 $626,098 -38% $4,739,204 12.4% 15.9% 48% 15.4% 755 $357,825 Multifamily 24% $661,049 2% 2.6% 56% 1.1% 146 $9,684 31% $872,318 2% 6.2% 21% 5.4% 128 $11,162 4% $911,303 2.4% 3.5% 34% 4.5% 162 $14,794 Nonfarm, nonresl 18% $12,907,566 31% 0.8% 7% 0.7% 3 $7,581 14% $14,724,408 35% 3.8% 26% 2.7% 138 $144,208 1% $15,055,676 39.5% 4.3% 35% 4.8% 253 $267,133 Farmland 3% $152,260 0% 4.0% 8% 2.9% 32 $484 22% $185,228 0% 15.0% 0% 16.7% -7 ($137) 3% $191,481 0.5% 4.7% 5% 14.8% 83 $1,592 Foreign property NA $0 0% NA 0% NA - $0 NA $0 0% 0.0% 0% NA NA $0 NA $0 0.0% 0.0% 0% NA NA $0 C&I 15% $11,206,002 27% 2.4% 32% 1.0% 75 $83,700 -7% $10,541,083 25% 4.0% 62% 2.6% 248 $260,955 -8% $9,785,969 25.6% 3.0% 69% 2.8% 217 $212,389 Credit Cards 3% $114,184 0% 2.9% 100% 0.2% 286 $3,271 0% $117,513 0% 5.3% 95% 0.3% 503 $5,906 5% $126,769 0.3% 5.8% 100% 0.0% 580 $7,353 Other Consumer -8% $655,094 2% 2.8% 100% 0.4% 278 $18,228 -13% $584,727 1% 5.3% 85% 0.8% 453 $26,463 -18% $487,370 1.3% 3.0% 85% 1.1% 253 $12,347 Leases 1% $411,336 1% 2.0% 14% 1.3% 28 $1,134 -7% $382,051 1% 1.1% 47% 1.8% 52 $1,984 -5% $365,764 1.0% 4.0% 50% 3.3% 201 $7,353 Agricultural Loans 3% $200,252 0% 1.0% 0% 0.1% 5 $106 -1% $198,628 0% 1.5% 15% 1.9% 22 $445 -9% $182,329 0.5% 4.5% 15% 5.2% 67 $1,215 Total 11% $41,424,696 100% 3.1% 31% 1.60% 95 $393,661 -1% $41,482,382 100% 6.1% 46% 4.9% 283 $1,174,897 -9% $38,153,821 100% 5.1% 47% 5.2% 254 $969,000 Zions 2011E Loss Forecast 2012E Loss Forecast NCO NCO 2011E 2011E % of NPL 2012E 2012E % of NPL Loan Category Freq. Severity Rate $ Losses Freq. Severity Rate $ Losses Growth Balance Loans (%) Growth Balance Loans (%) (bp) (bp) Residential R/E 0% $6,332,734 17% 2.4% 54% 2.3% 127 $80,488 3% $6,526,581 17% 1.9% 46% 1.7% 85 $55,284 Revolving 0% $2,269,953 6% 1.5% 75% 0.7% 114 $25,797 1% $2,302,196 6% 0.8% 70% 0.4% 52 $11,977 First lien 1% $3,803,760 10% 2.9% 45% 3.2% 130 $49,526 4% $3,967,947 11% 2.5% 40% 2.4% 98 $38,830 Second lien -12% $259,021 1% 2.4% 85% 2.7% 199 $5,165 -2% $256,439 1% 2.2% 80% 1.2% 175 $4,478 Commercial R/E -7% $19,537,309 53% 4.5% 38% 5.9% 184 $360,414 -3% $19,107,371 51% 2.5% 36% 5.2% 89 $170,475 Construction -23% $3,739,439 10% 8.9% 42% 10.5% 372 $139,019 -7% $3,486,433 9% 3.4% 40.3% 5.8% 138 $48,125 Multifamily -2% $903,552 2% 4.1% 36% 5.0% 149 $13,468 -1% $898,222 2% 3.5% 35% 5.9% 119 $10,646 Nonfarm, nonresl -3% $14,703,633 40% 3.5% 36% 5.3% 147 $201,592 -2% $14,527,698 39% 2.3% 34% 6.0% 92 $108,402 Farmland -2% $190,685 1% 4.7% 30% 9.4% 332 $6,335 1% $195,019 1% 6.0% 30% 7.7% 169 $3,301 Foreign property NA $0 0% 0.0% 0% NA NA $0 NA $0 0% 0.0% 0% NA NA $0 C&I 3% $10,105,684 27% 2.0% 65% 1.5% 129 $130,346 5% $10,683,104 28% 0.9% 65% 0.7% 55 $59,175 Credit Cards 0% $129,247 0% 4.5% 100% 0.0% 450 $5,816 1% $132,656 0% 3.0% 100% 0.0% 295 $3,913 Other Consumer 2% $500,444 1% 2.5% 85% 0.8% 212 $10,589 3% $519,907 1% 2.0% 90% 0.4% 181 $9,397 Leases 1% $372,950 1% 3.5% 40% 3.4% 138 $5,155 4% $388,891 1% 2.0% 15% 3.0% 30 $1,152 Agricultural Loans -1% $181,722 0% 3.5% 10% 5.2% 36 $648 5% $190,468 1% 3.0% 5% 4.8% 15 $280 Total -3% $37,160,091 100% 3.4% 45% 3.9% 160 $593,456 1% $37,548,979 100% 1.9% 42% 3.2% 80 $299,676 Cumulative Loss Forecasts (2008 - 2012) Cumulative Loss Forecasts (2009 - 2010) Loss Severity NCO NCO Loan Category Cumulative Freq. (%) $ Losses Cumulative Freq. (%) LS (%) $ Losses (%) Rate (bp) Rate (bp) Residential R/E 10.7% 36% 385 $258,553 5.4% 36% 222 $143,990 Revolving 5.0% 70% 349 $80,301 2.5% 68% 181 $40,823 First lien 13.4% 41% 543 $223,779 6.9% 39% 310 $121,093 Second lien 14.0% 72% 1011 $34,773 7.7% 72% 660 $22,898 Commercial R/E 23.3% 41% 959 $2,222,517 13.6% 38% 614 $1,422,675 Construction 34.3% 47% 1597 $1,422,271 25.0% 43% 1332 $983,923 Multifamily 18.6% 36% 660 $59,754 9.4% 29% 285 $25,956 Nonfarm, nonresl 14.2% 34% 490 $728,917 7.9% 32% 273 $411,341 Farmland 31.1% 19% 594 $11,574 18.4% 4% 76 $1,455 Foreign property NA NA NA $0 NA NA NA $0 C&I 10.4% 59% 617 $746,565 6.6% 58% 449 $473,344 Credit Cards 20.0% 99% 1979 $26,259 10.7% 0% 1046 $13,259 Other Consumer 12.6% 89% 1120 $77,024 7.8% 85% 664 $38,810 Leases 10.9% 35% 386 $16,778 4.9% 40% 244 $9,337 Agricultural Loans 12.0% 11% 130 $2,693 5.6% 14% 84 $1,660 Total 18.0% 44% 800 $3,350,388 10.4% 42% 507 $2,103,074 Source: Company Filings, UBS EstimatesUBS 7
    • Table 6: ZION Construction Credit Loss Projections (Detail) Zions Bancorporation 25 January 2011 2008 Construction Losses AZ Northern California Southern California NV CO Texas UT & ID Other (inc. WA) Total Loss Loss Loss Loss Loss Loss Loss Loss Loss % of % of % of % of % of % of % of % of % of Const Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Const Const Const Const Const Const Const Const (bp) (bp) (bp) (bp) (bp) (bp) (bp) (bp) (bp) Resi Constr 2% $180,212 22.0% 35% 15.5% 770 $13,876 1% $75,088 6.0% 30% 4.3% 180 $1,352 2% $173,537 10.0% 35% 6.7% 350 $6,074 1% $60,071 18.0% 40% 11.6% 720 $4,325 1% $128,484 3.0% 15% 2.6% 45 $578 3% $285,335 2.0% 8% 1.8% 16 $457 2% $176,874 12.0% 18% 10.1% 216 $3,820 1% $100,118 3.0% 1% 3.0% 2 $15 13% $1,179,719 9.0% 29% 6.6% 259 $30,497 Resi Land 6% $523,949 30.0% 54% 16.3% 1634 $85,595 1% $81,763 12.0% 44% 7.1% 528 $4,317 2% $206,910 15.0% 48% 8.5% 713 $14,744 2% $168,531 25.0% 50% 14.3% 1250 $21,066 1% $101,786 6.0% 39% 3.7% 236 $2,403 6% $492,245 3.0% 15% 2.6% 45 $2,215 5% $438,849 17.0% 29% 12.7% 488 $21,398 1% $93,443 5.0% 1% 5.0% 5 $49 24% $2,107,476 16.1% 45% 9.6% 720 $151,787 Total Resi 8% $704,161 28.0% 51% 16.1% 1413 $99,471 2% $156,851 9.1% 40% 5.7% 361 $5,669 4% $380,447 12.7% 43% 7.7% 547 $20,817 3% $228,602 23.2% 48% 13.6% 1111 $25,391 3% $230,271 4.3% 30% 3.1% 129 $2,982 9% $777,580 2.6% 13% 2.3% 34 $2,672 7% $615,723 15.6% 26% 12.0% 41 0 $25,218 2% $193,561 4.0% 1% 3.9% 3 $64 37% $3,287,195 13.6% 41% 8.5% 555 $182,284 Comml Const 6% $547,310 12.0% 25% 9.3% 300 $16,419 1% $118,473 3.0% 15% 2.6% 45 $533 4% $397,133 4.0% 20% 3.2% 80 $3,177 5% $455,535 12.5% 10% 11.4% 120 $5,470 1% $83,431 1.0% 10% 0.9% 10 $83 14% $1,291,517 1.0% 5% 1.0% 5 $646 3% $265,312 5.0% 12% 4.4% 60 $1,592 7% $617,392 0.3% 0% 0.3% 0 $0 42% $3,776,103 4.5% 16% 3.8% 74 $27,921 Comml Land 3% $250,294 19.0% 35% 13.2% 665 $16,645 0% $16,686 7.0% 30% 5.0% 210 $350 1% $96,780 8.0% 35% 5.3% 280 $2,710 5% $405,476 20.0% 20% 16.7% 400 $16,219 1% $73,420 4.0% 25% 3.0% 100 $734 8% $679,131 1.5% 12% 1.3% 18 $1,217 2% $195,229 8.0% 20% 6.5% 160 $3,124 1% $126,816 1.5% 0% 1.5% 0 $0 21% $1,843,833 9.1% 24% 7.1% 222 $40,999 Total Comml 9% $797,604 14.2% 29% 10.5% 415 $33,064 2% $135,159 3.5% 19% 2.9% 65 $884 6% $493,914 4.8% 25% 3.6% 119 $5,887 10% $861,011 16.0% 16% 13.9% 252 $21,689 2% $156,851 2.4% 22% 1.9% 52 $818 22% $1,970,648 1.2% 8% 1.1% 9 $1,863 5% $460,541 6.3% 16% 5.3% 102 $4,716 8% $744,208 0.5% 0% 0.5% 0 $0 63% $5,619,935 6.0% 20% 4.9% 123 $68,920 Total Const 17% $1,501,764 20.6% 43% 13.0% 883 $132,535 3% $292,010 6.5% 34% 4.4% 224 $6,552 10% $874,360 8.2% 37% 5.3% 305 $26,704 12% $1,089,613 17.5% 25% 13.8% 432 $47,081 4% $387,121 3.5% 28% 2.6% 98 $3,799 31% $2,748,228 1.6% 10% 1.4% 17 $4,535 12% $1,076,264 11.6% 24% 9.1% 278 $29,934 11% $937,768 1.2% 1% 1.2% 1 $64 100% $8,907,130 8.8% 32% 6.2% 282 $251,204 Note: Comml const consists of 25% retail, 17% apartments, 12% office, 5% industrial, 3% medical, 3% hotel, and 2% other) 2008 Avg Construction 8,907,130 2009 Construction Loss Forecast AZ Northern California Southern California NV CO Texas UT & ID Other (inc. WA) Total Loss Loss Loss Loss Loss Loss Loss Loss Loss % of % of % of % of % of % of % of % of % of Const Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Const Const Const Const Const Const Const Const (bp) (bp) (bp) (bp) (bp) (bp) (bp) (bp) (bp) Resi Constr 1% $78,543 18.5% 58% 31.5% 1415 $11,115 0% $5,236 15.0% 35% 56.3% 512 $268 1% $83,779 25.0% 40% 26.7% 943 $7,898 0% $13,963 50.0% 64% 57.5% 2884 $4,027 2% $143,122 8.2% 25% 7.9% 220 $3,152 3% $235,628 18.0% 15% 17.3% 278 $6,554 2% $116,941 17.0% 45% 19.3% 1017 $11,889 1% $97,742 1.0% 25% 2.7% 88 $860 10% $774,953 15.3% 34% 16.9% 591 $45,764 Resi Land 4% $331,624 38.0% 83% 26.6% 3099 $102,772 1% $54,107 20.0% 48% 19.6% 912 $4,933 2% $179,775 35.0% 50% 28.3% 1634 $29,383 2% $116,941 56.0% 85% 31.4% 4567 $53,408 2% $111,705 12.0% 40% 10.3% 468 $5,231 7% $499,181 35.0% 35% 27.4% 1242 $61,977 5% $338,606 19.0% 65% 16.8% 1563 $52,910 1% $40,144 2.0% 30% 8.5% 338 $1,355 23% $1,672,083 31.0% 59% 23.2% 1,866 $311,968 Total Resi 6% $410,166 34.3% 80% 27.8% 2777 $113,887 1% $59,343 19.6% 47% 22.9% 876 $5,201 4% $263,554 31.8% 48% 27.7% 1415 $37,281 2% $130,904 55.4% 83% 34.9% 4388 $57,435 3% $254,827 9.9% 33% 9.0% 329 $8,383 10% $734,809 29.5% 31% 23.9% 933 $68,530 6% $455,547 18.5% 61% 17.5% 1422 $64,799 2% $137,886 1.3% 27% 4.4% 161 $2,216 33% $2,447,036 26.0% 54% 21.0% 1,462 $357,732 Comml Const 5% $403,185 7.7% 40% 13.5% 439 $17,687 2% $132,650 8.9% 23% 8.7% 216 $2,866 5% $335,115 15.0% 23% 14.8% 351 $11,751 5% $399,694 35.0% 49% 27.9% 1969 $78,697 2% $158,830 5.0% 15% 4.7% 77 $1,218 17% $1,289,843 9.0% 5% 9.3% 45 $5,757 4% $310,679 7.0% 30% 7.5% 263 $8,179 7% $495,691 1.0% 10% 1.1% 13 $626 48% $3,525,686 10.9% 29% 10.5% 360 $126,782 Comml Land 3% $188,502 12.5% 52% 18.2% 796 $15,011 0% $15,709 16.0% 35% 15.0% 557 $876 1% $94,251 18.0% 38% 16.1% 667 $6,283 3% $233,882 45.0% 74% 32.0% 3818 $89,298 1% $83,779 8.0% 30% 7.8% 246 $2,059 7% $495,691 14.0% 20% 12.8% 287 $14,243 3% $225,155 7.5% 55% 6.7% 557 $12,533 1% $76,797 3.0% 33% 3.4% 167 $1,282 19% $1,413,765 17.2% 51% 14.1% 1,001 $141,584 Total Comml 8% $591,687 9.2% 45% 14.9% 553 $32,698 2% $148,358 9.6% 25% 9.3% 252 $3,742 6% $429,366 15.7% 27% 15.0% 420 $18,033 9% $633,576 38.7% 60% 29.2% 2652 $167,995 3% $242,609 6.0% 22% 5.7% 135 $3,278 24% $1,785,533 10.4% 11% 10.3% 112 $20,001 7% $535,835 7.2% 41% 7.2% 387 $20,712 8% $572,488 1.3% 17% 1.4% 33 $1,907 67% $4,939,452 12.7% 37% 11.5% 543 $268,366 Total Const 14% $1,001,853 19.5% 75% 19.4% 1,463 $146,585 3% $207,701 12.5% 35% 13.0% 431 $8,943 9% $692,920 21.8% 37% 19.6% 798 $55,314 10% $764,481 41.5% 71% 30.0% 2,949 $225,430 7% $497,436 8.0% 29% 7.4% 234 $11,661 34% $2,520,342 16.0% 22% 14.0% 351 $88,531 13% $991,381 12.4% 70% 11.6% 863 $85,511 10% $710,373 1.3% 46% 2.0% 58 $4,123 100% $7,386,488 17.1% 50% 14.4% 848 $626,098 Note: Comml const consists of 29% retail, 34% apartments, 15% office, 5% industrial, 5% medical, 6% hotel, and 6% other) Nevada State Bank Prob ln NPL (%) Losses ($) Vectra Prob ln NPL (%) Losses ($) Amegy Prob ln NPL (%) Losses ($) Zions First Prob ln NPL (%) Losses ($) 2009 Avg Construction 7,386,488 2009 Growth -17% 41 2009 Decay Rate 15% Nevada State Bank Vectra Amegy Bank NA 10.25 Zions First 0 Balance Problem loan NPL losses Balance Problem loan NPL losses Balance Prob ln NPL Balance Prob ln NPL Losses Balance Prob ln NPL Losses Balance Prob ln NPL Losses 2010 Construction Losses AZ Northern California Southern California NV CO Texas UT & ID Other (inc. WA) Total Loss Loss Loss Loss Loss Loss Loss Loss Loss % of % of % of % of % of % of % of % of % of Const Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Const Const Const Const Const Const Const Const (bp) (bp) (bp) (bp) (bp) (bp) (bp) (bp) (bp) Resi Constr 1% $48,900 12.0% 65% 19.2% 768 $3,755 0% $3,418 5.0% 40% 30.2% 286 $98 1% $53,486 10.0% 65% 14.2% 895 $4,787 0% $8,006 18.0% 65% 32.4% 903 $723 2% $94,836 3.5% 35% 6.0% 159 $1,503 3% $155,675 12.0% 30% 15.9% 461 $7,181 2% $74,368 7.0% 45% 13.4% 285 $2,119 1% $65,199 6.0% 30% 5.6% 185 $1,203 11% $503,887 8.7% 42% 12.7% 424 $21,369 Resi Land 4% $187,760 15.0% 85% 14.8% 1153 $21,645 1% $34,599 10.0% 60% 13.0% 658 $2,278 2% $110,606 10.0% 85% 11.4% 1207 $13,347 1% $60,459 18.0% 85% 16.1% 1353 $8,181 2% $73,090 6.0% 65% 6.2% 501 $3,659 7% $313,689 14.0% 50% 18.9% 807 $25,309 4% $209,141 9.0% 65% 11.6% 538 $11,251 1% $26,442 11.0% 50% 9.3% 613 $1,622 21% $1,015,786 12.2% 67% 14.3% 859 $87,292 Total Resi 5% $236,659 14.4% 82% 15.8% 1073 $25,400 1% $38,018 9.6% 59% 14.6% 625 $2,376 3% $164,092 10.0% 78% 12.4% 1105 $18,134 1% $68,465 18.0% 83% 18.1% 1301 $8,904 4% $167,926 4.6% 52% 6.1% 307 $5,162 10% $469,364 13.3% 44% 17.9% 692 $32,490 6% $283,509 8.5% 61% 12.1% 472 $13,370 2% $91,641 7.4% 39% 6.6% 308 $2,825 32% $1,519,674 11.0% 61% 13.8% 715 $108,661 Comml Const 6% $264,209 22.0% 45% 19.7% 953 $25,192 2% $87,915 12.0% 30% 12.7% 375 $3,299 5% $220,590 13.0% 35% 15.3% 508 $11,214 5% $241,431 32.0% 60% 27.8% 1810 $43,704 2% $106,008 7.0% 20% 7.9% 149 $1,576 18% $862,266 15.0% 25% 15.3% 454 $39,150 4% $205,415 15.0% 35% 13.8% 523 $10,744 7% $331,903 10.0% 30% 7.7% 310 $10,292 49% $2,319,738 16.2% 37% 15.2% 626 $145,172 Comml Land 3% $121,268 22.0% 60% 18.8% 1273 $15,433 0% $10,231 14.0% 40% 15.9% 555 $568 1% $61,044 12.0% 45% 14.4% 553 $3,376 3% $126,786 42.0% 80% 27.7% 3007 $38,130 1% $55,442 10.0% 35% 10.4% 356 $1,974 7% $327,341 24.0% 30% 23.4% 739 $24,184 3% $146,656 20.0% 60% 12.4% 1177 $17,258 1% $51,025 15.0% 40% 11.2% 602 $3,070 19% $899,792 23.3% 52% 19.1% 1,156 $103,992 Total Comml 8% $385,476 22.0% 50% 19.4% 1054 $40,626 2% $98,146 12.2% 31% 13.0% 394 $3,867 6% $281,634 12.8% 37% 15.1% 518 $14,590 8% $368,218 35.4% 68% 27.7% 2222 $81,834 3% $161,450 8.0% 26% 8.7% 220 $3,550 25% $1,189,607 17.5% 27% 17.5% 532 $63,333 7% $352,071 17.1% 47% 13.2% 795 $28,002 8% $382,928 10.7% 32% 8.1% 349 $13,362 68% $3,219,530 18.2% 43% 16.2% 774 $249,164 Total Const 13% $622,136 19.1% 56% 18.0% 1,061 $66,025 3% $136,164 11.5% 40% 13.4% 459 $6,243 9% $445,726 11.8% 62% 14.1% 734 $32,724 9% $436,683 32.7% 64% 26.1% 2,078 $90,738 7% $329,376 6.3% 42% 7.4% 265 $8,713 35% $1,658,971 16.3% 35% 17.6% 578 $95,824 13% $635,579 13.2% 49% 12.7% 651 $41,372 10% $474,569 10.0% 34% 7.8% 341 $16,187 100% $4,739,204 15.9% 48% 15.4% 755 $357,825 2010E Growth -33% 2010E Decay Rate 65% 2011E Construction Loss Forecast AZ Northern California Southern California NV CO Texas UT & ID Other (inc. WA) Total Loss Loss Loss Loss Loss Loss Loss Loss Loss % of % of % of % of % of % of % of % of % of Const Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Const Const Const Const Const Const Const Const (bp) (bp) (bp) (bp) (bp) (bp) (bp) (bp) (bp) Resi Constr 1% $38,558 5.0% 65% 8.6% 303 $1,169 0% $2,763 4.0% 40% 13.2% 143 $39 1% $41,896 7.0% 65% 7.6% 432 $1,812 0% $6,269 10.0% 65% 15.3% 577 $361 2% $77,149 2.0% 35% 3.5% 68 $528 3% $124,709 6.0% 30% 9.8% 170 $2,117 2% $60,113 2.5% 45% 6.2% 107 $644 1% $52,970 2.5% 25% 3.9% 61 $324 9% $404,426 4.3% 42% 7.0% 173 $6,994 Resi Land 4% $145,088 6.0% 85% 6.3% 484 $7,022 1% $27,437 6.0% 70% 6.1% 447 $1,226 2% $85,225 8.0% 85% 5.4% 653 $5,569 1% $46,222 10.0% 85% 7.5% 803 $3,714 2% $58,434 3.5% 65% 3.5% 222 $1,300 7% $246,849 7.0% 50% 10.2% 327 $8,066 4% $166,883 5.0% 65% 6.0% 312 $5,201 1% $21,018 5.0% 50% 5.9% 242 $508 17% $797,155 6.3% 68% 7.2% 409 $32,605 Total Resi 5% $183,647 5.8% 81% 6.8% 446 $8,191 1% $30,200 5.8% 68% 6.8% 419 $1,265 3% $127,120 7.7% 79% 6.2% 581 $7,380 1% $52,491 10.0% 83% 8.4% 776 $4,075 4% $135,583 2.6% 52% 3.5% 135 $1,828 10% $371,558 6.7% 44% 10.1% 274 $10,183 6% $226,995 4.3% 62% 6.0% 257 $5,844 2% $73,988 3.2% 36% 4.4% 113 $832 25% $1,201,581 5.7% 61% 7.1% 330 $39,599 Comml Const 6% $206,322 12.5% 45% 14.0% 524 $10,810 2% $70,738 8.0% 30% 10.1% 229 $1,621 5% $176,286 7.0% 35% 10.0% 232 $4,084 5% $180,055 20.0% 55% 19.2% 999 $17,995 2% $86,280 3.5% 20% 5.6% 68 $587 18% $691,007 10.0% 25% 12.9% 236 $16,331 4% $164,035 8.0% 35% 10.1% 266 $4,367 7% $267,941 5.0% 25% 6.5% 122 $3,257 39% $1,842,665 9.7% 35% 11.6% 320 $59,052 Comml Land 2% $93,112 15.0% 60% 13.1% 842 $7,844 0% $8,157 11.0% 40% 12.4% 415 $339 1% $48,672 8.0% 45% 9.6% 342 $1,662 2% $88,332 20.0% 80% 14.1% 1467 $12,956 1% $44,653 6.0% 35% 7.7% 202 $903 7% $258,504 13.0% 30% 17.2% 358 $9,253 3% $113,182 9.0% 60% 8.1% 517 $5,852 1% $40,582 10.0% 40% 10.1% 384 $1,559 15% $695,193 12.5% 50% 13.2% 581 $40,368 Total Comml 8% $299,434 13.3% 50% 13.7% 623 $18,654 2% $78,894 8.3% 31% 10.4% 248 $1,959 6% $224,958 7.2% 37% 9.9% 255 $5,746 7% $268,387 20.0% 63% 17.6% 1153 $30,951 4% $130,933 4.4% 27% 6.3% 114 $1,489 25% $949,511 10.8% 27% 14.0% 269 $25,585 7% $277,217 8.4% 46% 9.3% 369 $10,219 8% $308,522 5.7% 28% 7.0% 156 $4,816 54% $2,537,857 10.5% 40% 12.0% 392 $99,420 Total Const 13% $483,081 10.4% 53% 11.0% 556 $26,845 3% $109,095 7.6% 39% 9.4% 296 $3,224 9% $352,078 7.4% 51% 8.6% 373 $13,126 9% $320,877 18.4% 59% 16.0% 1,092 $35,027 7% $266,516 3.5% 36% 4.9% 124 $3,317 35% $1,321,069 9.6% 28% 12.9% 271 $35,768 13% $504,212 6.6% 48% 7.8% 319 $16,064 10% $382,510 5.2% 28% 6.5% 148 $5,648 79% $3,739,439 8.9% 42% 10.5% 372 $139,019 2011E Growth -18% 2011E Decay Rate 70% 2012E Construction Loss Forecast AZ Northern California Southern California NV CO Texas UT & ID Other (inc. WA) Total Loss Loss Loss Loss Loss Loss Loss Loss Loss % of % of % of % of % of % of % of % of % of Const Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Balance Freq. Severity NPL (%) Rate Losses ($) Const Const Const Const Const Const Const Const (bp) (bp) (bp) (bp) (bp) (bp) (bp) (bp) (bp) Resi Constr 1% $36,075 1.0% 55% 3.6% 53 $192 0% $2,606 2.0% 30% 6.2% 57 $15 1% $38,940 1.0% 55% 3.2% 53 $208 0% $5,784 2.0% 55% 6.4% 104 $60 2% $73,041 1.0% 25% 2.0% 25 $180 3% $117,468 1.0% 20% 4.4% 19 $227 2% $56,801 1.0% 35% 2.9% 34 $194 1% $50,167 0.5% 20% 1.8% 10 $49 8% $380,883 1.0% 32% 3.2% 30 $1,126 Resi Land 4% $134,498 2.0% 75% 2.8% 147 $1,972 1% $25,483 3.0% 60% 3.4% 176 $449 2% $78,318 2.0% 75% 2.5% 147 $1,152 1% $42,147 3.0% 75% 3.4% 219 $923 1% $54,895 2.0% 55% 2.2% 109 $596 6% $230,675 2.0% 40% 4.9% 77 $1,777 4% $156,068 2.0% 55% 3.1% 108 $1,680 1% $19,726 1.5% 40% 3.0% 59 $116 16% $741,810 2.1% 58% 3.5% 117 $8,664 Total Resi 5% $170,574 1.8% 73% 2.9% 127 $2,164 1% $28,089 2.9% 58% 3.7% 165 $463 3% $117,259 1.7% 71% 2.7% 116 $1,360 1% $47,930 2.9% 73% 3.8% 205 $983 3% $127,935 1.4% 43% 2.1% 61 $776 9% $348,143 1.7% 36% 4.7% 58 $2,003 6% $212,870 1.7% 52% 3.0% 88 $1,874 2% $69,893 0.8% 31% 2.2% 24 $165 24% $1,122,693 1.7% 53% 3.4% 87 $9,791 Comml Const 5% $190,871 6.0% 45% 8.4% 256 $4,895 2% $66,431 3.0% 30% 5.8% 87 $576 4% $165,532 3.0% 30% 5.7% 87 $1,436 4% $162,505 8.0% 55% 10.5% 410 $6,670 2% $81,688 1.0% 20% 2.9% 20 $160 17% $648,699 4.0% 25% 7.6% 95 $6,183 4% $153,759 3.0% 35% 5.6% 101 $1,555 7% $252,997 2.0% 25% 3.9% 49 $1,235 36% $1,722,482 3.9% 35% 6.7% 132 $22,710 Comml Land 2% $84,730 7.0% 60% 7.6% 401 $3,394 0% $7,588 5.0% 40% 7.5% 191 $145 1% $45,448 4.0% 45% 5.7% 174 $790 2% $77,761 8.0% 80% 6.7% 609 $4,739 1% $41,992 2.0% 35% 4.1% 68 $286 6% $241,184 5.0% 30% 9.6% 141 $3,393 3% $104,743 4.0% 60% 4.6% 233 $2,441 1% $37,812 3.0% 40% 5.4% 116 $437 14% $641,258 5.1% 50% 7.3% 244 $15,625 Total Comml 7% $275,602 6.3% 50% 8.1% 301 $8,289 2% $74,019 3.2% 32% 5.9% 97 $721 6% $210,981 3.2% 34% 5.7% 105 $2,225 6% $240,265 8.0% 63% 9.3% 475 $11,409 3% $123,679 1.3% 28% 3.3% 36 $446 24% $889,883 4.3% 27% 8.2% 108 $9,576 7% $258,502 3.4% 47% 5.2% 155 $3,996 8% $290,809 2.1% 28% 4.1% 57 $1,672 50% $2,363,740 4.2% 40% 6.9% 162 $38,334 Total Const 12% $446,175 4.6% 51% 6.1% 234 $10,454 3% $102,109 3.1% 37% 5.3% 116 $1,184 9% $328,239 2.7% 41% 4.6% 109 $3,586 8% $288,196 7.1% 60% 8.4% 430 $12,393 7% $251,614 1.4% 35% 2.7% 49 $1,222 33% $1,238,026 3.5% 26% 7.2% 94 $11,580 13% $471,372 2.7% 47% 4.2% 125 $5,870 10% $360,702 1.9% 27% 3.7% 51 $1,837 74% $3,486,433 3.4% 40% 5.8% 138 $48,125 2012E Growth -5% 2012E Decay rate 65% Cumulative Construction Loss Forecasts (2008 - 2012E) AZ No. CA So. CA NV CO TX UT & ID Other (incl. WA) Total Loss Freq Severity Loss Rate (bp) Losses ($) Freq Severity Loss Rate (bp) Losses ($) Freq Severity Loss Rate (bp) Losses ($) Freq Severity Loss Rate (bp) Losses ($) Freq Severity Rate Losses ($) Freq Severity Loss Rate (bp) Losses ($) Freq Severity Loss Rate (bp) Losses ($) Freq Severity Loss Rate (bp) Losses ($) Freq Severity Loss Rate (bp) Losses ($) (bp) Resi Constr 32% 53% 1671 $30,107 7% 34% 236 $1,772 25% 48% 1,197 $20,779 28% 57% 1,581 $9,497 16% 29% 462 $5,942 25% 23% 579 $16,535 26% 41% 1,055 $18,666 9% 26% 245 $2,452 23% 39% 896 $105,750 Resi Land 56% 74% 4180 $219,006 31% 53% 1,615 $13,202 52% 60% 3,103 $64,194 67% 77% 5,180 $87,293 26% 50% 1,296 $13,189 50% 41% 2,018 $99,344 36% 58% 2,106 $92,439 10% 38% 391 $3,650 46% 60% 2,811 $592,317 Total Resi 50% 71% 3538 $249,113 19% 49% 955 $14,974 40% 56% 2,234 $84,973 57% 75% 4,234 $96,789 20% 41% 831 $19,131 41% 37% 1,490 $115,879 33% 54% 1,804 $111,105 10% 32% 315 $6,102 38% 56% 2,124 $698,067 Comml Const 33% 41% 1370 $75,003 27% 27% 751 $8,895 27% 29% 797 $31,661 64% 52% 3,349 $152,537 24% 18% 434 $3,625 26% 20% 527 $68,068 30% 33% 996 $26,438 9% 27% 250 $15,409 30% 34% 1,011 $381,636 Comml Land 44% 53% 2330 $58,327 37% 37% 1,365 $2,278 37% 41% 1,531 $14,820 57% 70% 3,979 $161,342 25% 33% 811 $5,956 29% 27% 770 $52,291 38% 56% 2,111 $41,207 13% 38% 501 $6,348 37% 50% 1,858 $342,568 Total Comml 37% 45% 1672 $133,331 29% 29% 827 $11,173 29% 32% 941 $46,481 61% 60% 3,645 $313,879 24% 25% 611 $9,581 27% 22% 611 $120,358 34% 44% 1,469 $67,645 10% 29% 292 $21,757 32% 40% 1,289 $724,205 Total Const 43% 59% 2547 $382,444 24% 38% 895 $26,147 34% 45% 1,503 $131,454 60% 63% 3,769 $410,668 22% 34% 742 $28,712 31% 28% 860 $236,237 33% 50% 1,661 $178,750 10% 30% 297 $27,859 34% 47% 1,597 $1,422,271 Source: Company Filings, UBS EstimatesUBS 8
    • Table 7: ZION Term CRE Credit Loss Projections (Detail) Zions Bancorporation 25 January 2011 2008 Term CRE Losses AZ NV CA UT & ID CO TX Other (inc. WA) Total % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss NPL NPL NPL Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) (%) (%) (%) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) Non-owner occupied 5% $689,054 0.2% 0% 0.2% 0 $0 4% $577,840 0.2% 12% 0.2% 3 $152 9% $1,202,175 0.2% 40% 0.1% 10 $1,181 15% $2,013,939 0.5% 4% 0.5% 2 $400 2% $333,151 0.1% 0% 0.1% 0 $0 3% $362,850 0.2% (1%) 0.3% 0 ($9) 1% $68,920 0.5% 13% 0.4% 6 $40 39% $5,247,928 0.3% 10% 0.3% 3 $1,764 Multifamily 0% $22,332 0.0% 0% 0.0% 0 $0 1% $92,579 9.9% 100% 0.0% 991 $9,171 1% $174,798 0.0% 0% 0.0% 0 $0 2% $242,562 2.2% 9% 2.0% 20 $493 0% $40,254 0.0% 0% 0.0% 0 $0 1% $85,611 3.1% 1% 3.1% 2 $20 0% $2,914 0.0% 0% 0.0% 0 $0 5% $661,049 2.6% 56% 1.1% 146 $9,684 Owner-occupied 6% $805,078 0.6% 31% 0.4% 19 $1,520 3% $430,878 0.6% 0% 0.6% 0 $0 11% $1,541,619 1.1% 2% 1.0% 2 $279 31% $4,163,196 1.4% 6% 1.3% 9 $3,711 2% $289,535 0.1% 0% 0.1% 0 $0 3% $384,736 0.7% 12% 0.6% 8 $307 0% $44,596 0.0% 0% 0.0% 0 $0 56% $7,659,638 1.1% 7% 1.0% 8 $5,817 Total term CRE 11% $1,516,464 0.3% 31.0% 0.3% 348 $1,520 8% $1,101,297 1.2% 71% 0.3% 85 $9,323 22% $2,918,593 1% 8% 0.6% 5 $1,460 47% $6,419,697 1% 6% 1.1% 7 $4,604 5% $662,940 0.0% 0.0% 0.1% 0 $0 6% $833,196 1% 5% 0.7% 4 $318 1% $116,430 0% 13% 0.2% 3 $40 100% $13,568,615 1% 14% 0.8% 13 $17,265 2009 Term CRE Losses AZ NV CA UT & ID CO TX Other (inc. WA) Total % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss NPL NPL NPL Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) (%) (%) (%) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) Non-owner occupied 6% $777,315 1.5% 57% 0.8% 88 $6,856 5% $625,930 15.2% 62% 6.6% 934 $58,468 12% $1,631,413 3.6% 15% 3.2% 54 $8,741 18% $2,399,882 2.7% 25% 2.4% 68 $16,247 2% $334,725 1.7% 70% 0.6% 121 $4,048 4% $538,221 0.6% 9% 0.7% 6 $306 1% $82,431 11.5% (70%) 18.3% -803 ($6,621) 41% $6,389,916 3.9% 35% 2.7% 138 $88,045 Multifamily 0% $14,705 0.0% 0% 0.0% 0 $0 1% $108,623 6.4% 24% 5.0% 151 $1,640 2% $341,947 4.1% 0% 4.1% 0 $0 2% $238,124 5.1% 34% 5.0% 170 $4,054 0% $39,825 0.6% 0% 0.6% 0 $0 1% $121,283 17.3% 26% 13.4% 451 $5,468 0% $7,812 0.0% 0% 0.0% 0 $0 6% $872,318 6.2% 21% 5.4% 128 $11,162 Owner-occupied 5% $799,811 3.5% 29% 2.8% 101 $8,105 3% $461,128 4.8% 43% 3.3% 205 $9,467 12% $1,870,961 3.7% 14% 3.9% 53 $9,826 28% $4,351,381 3.8% 14% 4.3% 51 $22,089 2% $297,077 2.5% 0% 2.6% 0 $0 3% $496,242 2.5% 0% 2.9% 1 $55 0% $57,893 16.3% 70% 5.5% 1144 $6,621 53% $8,334,492 3.8% 18% 3.9% 67 $56,163 Total term CRE 11% $1,591,831 2.5% 37% 1.8% 94 $14,961 8% $1,195,680 10.4% 56% 5.1% 582 $69,575 26% $3,844,320 3.7% 13% 3.6% 48 $18,567 47% $6,989,386 3.4% 18% 3.6% 61 $42,390 5% $671,627 2.0% 0.0% 1.5% 60 $4,048 8% $1,155,746 3.2% 16% 2.9% 50 $5,829 1% $148,136 12.8% 0% 12.9% 0 $0 100% $15,596,725 4.0% 25% 3.5% 100 $155,370 2010 Term CRE Losses AZ NV CA UT & ID CO TX Other (inc. WA) Total % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss NPL NPL NPL Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) (%) (%) (%) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) Non-owner occupied 5% $776,209 2.4% 30% 2.2% 72 $5,558 4% $578,795 17.5% 60% 12.5% 1003 $58,025 11% $1,692,124 3.5% 30% 4.3% 135 $22,812 15% $2,372,624 5.2% 30% 5.2% 162 $38,367 2% $355,990 5.5% 55% 3.0% 301 $10,725 4% $683,346 5.0% 50% 2.8% 265 $18,112 1% $98,603 1.2% 35% 0.2% 1252 $12,341 41% $6,557,691 5.5% 42% 4.8% 253 $165,939 Multifamily 0% $14,749 4.5% 25% 3.4% 113 $166 1% $104,568 3.0% 30% 5.4% 110 $1,150 2% $355,624 4.0% 30% 4.7% 199 $7,094 1% $234,208 5.0% 40% 6.3% 216 $5,052 0% $42,612 1.3% 20% 1.3% 33 $142 1% $150,558 1.3% 45% 1.6% 78 $1,167 0% $8,984 1.0% 25% 0.8% 25 $22 6% $911,303 3.5% 34% 4.5% 162 $14,794 Owner-occupied 5% $798,146 2.2% 40% 3.1% 108 $8,637 3% $442,702 5.0% 40% 5.4% 194 $8,586 12% $1,940,690 2.5% 25% 4.2% 90 $17,397 27% $4,305,613 3.4% 25% 5.2% 117 $50,317 2% $317,872 3.2% 15% 4.2% 73 $2,314 4% $630,192 7.3% 25% 6.7% 218 $13,761 0% $62,770 1.2% 25% 4.0% 29 $182 53% $8,497,985 3.4% 27% 4.8% 119 $101,194 Total term CRE 10% $1,589,103 2.3% 35% 2.7% 90 $14,361 7% $1,126,065 11.2% 56% 8.9% 602 $67,761 25% $3,988,438 3.1% 28% 4.3% 119 $47,303 43% $6,912,446 4.1% 28% 5.2% 136 $93,735 4% $716,475 4.2% 0.0% 3.4% 184 $13,181 9% $1,464,096 5.6% 36% 4.4% 226 $33,041 1% $170,357 1.2% 31% 1.7% 736 $12,546 100% $15,966,980 4.3% 35% 4.8% 177 $281,927 2011E Term CRE Losses AZ NV CA UT & ID CO TX Other (inc. WA) Total % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss NPL NPL NPL Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) (%) (%) (%) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) Non-owner occupied 5% $757,961 2.0% 35% 2.5% 75 $5,714 3% $516,795 10.0% 40% 13.0% 372 $19,245 11% $1,680,718 3.5% 35% 4.5% 131 $22,064 14% $2,259,304 4.5% 30% 6.1% 131 $29,592 2% $350,628 4.0% 40% 4.0% 157 $5,520 5% $741,719 4.0% 40% 3.8% 158 $11,704 1% $97,054 1.5% 35% 1.1% 52 $509 41% $6,404,179 4.3% 35% 5.3% 147 $94,349 Multifamily 0% $14,372 4.5% 40% 4.4% 205 $295 1% $97,754 4.0% 40% 5.3% 187 $1,823 2% $352,077 4.0% 35% 5.1% 149 $5,257 1% $222,415 7.0% 35% 8.2% 236 $5,254 0% $42,541 1.5% 30% 1.7% 52 $221 1% $164,971 1.0% 35% 1.4% 35 $573 0% $9,422 1.5% 30% 1.4% 47 $44 6% $903,552 4.1% 36% 5.0% 149 $13,468 Owner-occupied 5% $777,951 2.0% 50% 2.6% 116 $8,985 3% $412,105 4.5% 45% 5.5% 212 $8,725 12% $1,931,991 2.0% 35% 3.4% 91 $17,653 26% $4,109,237 3.0% 35% 4.6% 131 $54,002 2% $316,715 2.5% 30% 3.7% 107 $3,403 4% $685,643 5.0% 35% 6.3% 202 $13,880 0% $65,812 1.5% 40% 2.7% 90 $596 53% $8,299,454 2.9% 37% 4.3% 129 $107,244 Total term CRE 10% $1,550,285 2.0% 43% 2.5% 33 $14,994 7% $1,026,654 7.2% 41% 9.2% 290 $29,794 25% $3,964,787 2.8% 35% 4.0% 113 $44,974 42% $6,590,955 3.6% 33% 5.2% 135 $88,849 5% $709,884 1261.8% 0.0% 3.7% 129 $9,144 10% $1,592,333 4.1% 37% 4.6% 164 $26,157 1% $172,288 1.5% 37% 1.7% 67 $1,149 100% $15,607,185 3.5% 36% 4.7% 138 $215,060 2012E Term CRE Losses AZ NV CA UT & ID CO TX Other (inc. WA) Total % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss % of Loss NPL NPL NPL Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) Term Balance Freq. Severity NPL (%) Rate Losses ($) (%) (%) (%) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) CRE (bp) Non-owner occupied 5% $755,104 2.3% 35% 3.3% 77 $5,836 3% $491,958 4.0% 35% 12.3% 126 $6,210 11% $1,669,686 2.5% 35% 5.0% 85 $14,121 14% $2,199,617 4.0% 30% 7.4% 114 $25,169 2% $347,868 2.0% 30% 4.4% 59 $2,052 5% $772,660 2.0% 30% 4.1% 58 $4,511 1% $101,639 1.5% 35% 1.7% 52 $530 41% $6,338,532 3.0% 32% 6.0% 92 $58,427 Multifamily 0% $14,225 4.0% 40% 5.6% 155 $220 1% $93,937 3.0% 40% 5.8% 115 $1,082 2% $349,449 4.0% 35% 6.4% 135 $4,708 1% $215,392 5.0% 35% 9.4% 164 $3,537 0% $42,431 1.3% 30% 2.2% 37 $157 1% $172,919 1.5% 35% 2.0% 52 $899 0% $9,869 1.5% 30% 2.1% 45 $44 6% $898,222 3.5% 35% 5.9% 119 $10,646 Owner-occupied 5% $773,458 0.8% 50% 2.3% 37 $2,845 3% $395,510 2.0% 45% 5.3% 86 $3,411 12% $1,923,165 2.0% 35% 3.8% 68 $13,124 26% $4,000,591 2.0% 35% 4.8% 68 $27,023 2% $315,014 1.0% 30% 3.4% 29 $919 5% $712,638 1.0% 35% 5.1% 33 $2,384 0% $68,790 1.0% 40% 2.5% 39 $270 53% $8,189,166 1.7% 36% 4.3% 61 $49,975 Total term CRE 10% $1,542,787 1.5% 39% 2.8% 46 $8,901 6% $981,404 3.1% 38% 8.9% 109 $10,702 26% $3,942,300 2.4% 35% 4.5% 81 $31,952 42% $6,415,600 2.8% 33% 5.8% 87 $55,728 5% $705,312 530.7% 0.0% 3.8% 44 $3,128 11% $1,658,217 1.5% 32% 4.3% 47 $7,793 1% $180,299 1.3% 36% 2.1% 47 $843 100% $15,425,920 2.4% 34% 5.1% 77 $119,049 Cumulative Construction Loss Forecasts (2008 - 2012E) AZ NV CA UT & ID CO TX Other (inc. WA) Total Loss Rate Freq Severity Loss Rate (bp) Losses ($) Freq Severity Loss Rate (bp) Losses ($) Freq Severity Loss Rate (bp) Losses ($) Freq Severity Loss Rate (bp) Losses ($) Freq Severity Losses ($) Freq Severity Loss Rate (bp) Losses ($) Freq Severity Loss Rate (bp) Losses ($) Freq Severity Loss Rate (bp) Losses ($) (bp) Non-owner occupied 8% 38% 309 $23,964 45% 55% 2455 $142,099 13% 32% 407 $68,919 16% 29% 463 $109,774 13% 48% 628 $22,345 12% 42% 507 $34,624 14% 49% 690 $6,799 16% 39% 623 $408,524 Multifamily 13% 37% 462 $681 25% 58% 1422 $14,867 15% 0% 480 $17,059 23% 34% 785 $18,390 5% 27% 122 $521 20% 27% 540 $8,127 4% 29% 123 $111 18% 35% 656 $59,754 Owner-occupied 9% 42% 377 $30,092 16% 42% 682 $30,189 11% 28% 300 $58,278 13% 28% 365 $157,142 9% 23% 209 $6,636 16% 30% 482 $30,387 19% 65% 1222 $7,669 12% 30% 377 $320,393 Total term CRE 9% 40% 344 $54,737 32% 53% 1662 $187,155 12% 30% 362 $144,256 14% 29% 413 $285,306 11% 38% 412 $29,501 15% 34% 500 $73,138 15% 56% 856 $14,578 14% 0% 0 Source: Company Filings, UBS EstimatesUBS 9
    • Zions Bancorporation 25 January 2011 Zions BancorporationZions Bancorporation is a Salt Lake City-based bank holding company with abalance sheet in excess of $50 billion. Zions operates in Utah, Arizona, Nevada,Texas, California, New Mexico, Colorado, Oregon, and Washington. Thecompanys outstanding loans include commercial real estate (39%), C&I (24%),construction (18%), and residential real estate (15%). In early 2009, Zionsissued ~$255 million as part of the US Treasurys TARP program. Statement of RiskUpside risks to our Sell rating include: 1) a more robust economic recovery,which would translate into lower losses in commercial and CRE loans; 2) Fedtightening that is either or both greater and faster than anticipated, drivinglending margins upward; and 3) more aggressive reserve drawdown, enhancingcredit leverage to normalized EPS. Analyst CertificationEach research analyst primarily responsible for the content of this researchreport, in whole or in part, certifies that with respect to each security or issuerthat the analyst covered in this report: (1) all of the views expressed accuratelyreflect his or her personal views about those securities or issuers; and (2) no partof his or her compensation was, is, or will be, directly or indirectly, related tothe specific recommendations or views expressed by that research analyst in theresearch report. UBS 10
    • Zions Bancorporation 25 January 2011Required DisclosuresThis report has been prepared by UBS Securities LLC, an affiliate of UBS AG. UBS AG, its subsidiaries, branches andaffiliates are referred to herein as UBS.For information on the ways in which UBS manages conflicts and maintains independence of its research product;historical performance information; and certain additional disclosures concerning UBS research recommendations,please visit www.ubs.com/disclosures. The figures contained in performance charts refer to the past; past performance isnot a reliable indicator of future results. Additional information will be made available upon request. UBS Securities Co.Limited is licensed to conduct securities investment consultancy businesses by the China Securities RegulatoryCommission.UBS Investment Research: Global Equity Rating Allocations 1 2 UBS 12-Month Rating Rating Category Coverage IB Services Buy Buy 49% 40% Neutral Hold/Neutral 42% 35% Sell Sell 8% 21% 3 4 UBS Short-Term Rating Rating Category Coverage IB Services Buy Buy less than 1% 14% Sell Sell less than 1% 0%1:Percentage of companies under coverage globally within the 12-month rating category.2:Percentage of companies within the 12-month rating category for which investment banking (IB) services were provided withinthe past 12 months.3:Percentage of companies under coverage globally within the Short-Term rating category.4:Percentage of companies within the Short-Term rating category for which investment banking (IB) services were providedwithin the past 12 months.Source: UBS. Rating allocations are as of 31 December 2010.UBS Investment Research: Global Equity Rating Definitions UBS 12-Month Rating Definition Buy FSR is > 6% above the MRA. Neutral FSR is between -6% and 6% of the MRA. Sell FSR is > 6% below the MRA. UBS Short-Term Rating Definition Buy: Stock price expected to rise within three months from the time the rating was assigned Buy because of a specific catalyst or event. Sell: Stock price expected to fall within three months from the time the rating was assigned Sell because of a specific catalyst or event. UBS 11
    • Zions Bancorporation 25 January 2011KEY DEFINITIONS Forecast Stock Return (FSR) is defined as expected percentage price appreciation plus gross dividend yield over the next 12months. Market Return Assumption (MRA) is defined as the one-year local market interest rate plus 5% (a proxy for, and not aforecast of, the equity risk premium). Under Review (UR) Stocks may be flagged as UR by the analyst, indicating that the stocks price target and/or rating aresubject to possible change in the near term, usually in response to an event that may affect the investment case or valuation. Short-Term Ratings reflect the expected near-term (up to three months) performance of the stock and do not reflect anychange in the fundamental view or investment case.Equity Price Targets have an investment horizon of 12 months.EXCEPTIONS AND SPECIAL CASESUK and European Investment Fund ratings and definitions are: Buy: Positive on factors such as structure, management,performance record, discount; Neutral: Neutral on factors such as structure, management, performance record, discount; Sell:Negative on factors such as structure, management, performance record, discount.Core Banding Exceptions (CBE): Exceptions to the standard +/-6% bands may be granted by the Investment ReviewCommittee (IRC). Factors considered by the IRC include the stocks volatility and the credit spread of the respective companysdebt. As a result, stocks deemed to be very high or low risk may be subject to higher or lower bands as they relate to the rating.When such exceptions apply, they will be identified in the Company Disclosures table in the relevant research piece.Research analysts contributing to this report who are employed by any non-US affiliate of UBS Securities LLC are notregistered/qualified as research analysts with the NASD and NYSE and therefore are not subject to the restrictions contained inthe NASD and NYSE rules on communications with a subject company, public appearances, and trading securities held by aresearch analyst account. The name of each affiliate and analyst employed by that affiliate contributing to this report, if any,follows.UBS Securities LLC: Heather Wolf, CFA; Elena Kim; Joshua Rogers.Company Disclosures Company Name Reuters 12-mo rating Short-term rating Price Price date 2, 4, 6a, 6b, 6c, 7, Zions Bancorporation 16 ZION.O Sell N/A US$23.75 24 Jan 2011Source: UBS. All prices as of local market close.Ratings in this table are the most current published ratings prior to this report. They may be more recent than the stock pricingdate2. UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of securities of this company/entity or one of its affiliates within the past 12 months.4. Within the past 12 months, UBS AG, its affiliates or subsidiaries has received compensation for investment banking services from this company/entity.6a. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided.6b. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investment banking securities-related services are being, or have been, provided.6c. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided.7. Within the past 12 months, UBS Securities LLC has received compensation for products and services other than investment banking services from this company/entity.16. UBS Securities LLC makes a market in the securities and/or ADRs of this company.Unless otherwise indicated, please refer to the Valuation and Risk sections within the body of this report. UBS 12
    • Zions Bancorporation 25 January 2011Zions Bancorporation (US$) Price Target (US$) Stock Price (US$) 120 100 80 60 40 20 0 01-Jan-06 01-Apr-06 01-Jul-06 01-Oct-06 01-Jan-07 01-Apr-07 01-Jul-07 01-Oct-07 01-Jan-08 01-Apr-08 01-Jul-08 01-Oct-08 01-Jan-09 01-Apr-09 01-Jul-09 01-Oct-09 01-Jan-10 01-Apr-10 01-Jul-10 01-Oct-10 01-Jan-11 Buy 1 Buy Neutral Sell No RatingSource: UBS; as of 24 Jan 2011Note: On August 4, 2007 UBS revised its rating system. (See UBS Investment Research: Global Equity Rating Definitions tablefor details). From September 9, 2006 through August 3, 2007 the UBS ratings and their definitions were: Buy 1 = FSR is > 6%above the MRA, higher degree of predictability; Buy 2 = FSR is > 6% above the MRA, lower degree of predictability; Neutral 1 =FSR is between -6% and 6% of the MRA, higher degree of predictability; Neutral 2 = FSR is between -6% and 6% of the MRA,lower degree of predictability; Reduce 1 = FSR is > 6% below the MRA, higher degree of predictability; Reduce 2 = FSR is > 6%below the MRA, lower degree of predictability. The predictability level indicates an analysts conviction in the FSR. Apredictability level of 1 means that the analysts estimate of FSR is in the middle of a narrower, or smaller, range of possibilities.A predictability level of 2 means that the analysts estimate of FSR is in the middle of a broader, or larger, range of possibilities.From October 13, 2003 through September 8, 2006 the percentage band criteria used in the rating system was 10%. UBS 13
    • Zions Bancorporation 25 January 2011Global DisclaimerThis report has been prepared by UBS Securities LLC, an affiliate of UBS AG. UBS AG, its subsidiaries, branches and affiliates are referred to herein as UBS. In certain countries, UBS AG isreferred to as UBS SA.This report is for distribution only under such circumstances as may be permitted by applicable law. Nothing in this report constitutes a representation that any investment strategy orrecommendation contained herein is suitable or appropriate to a recipient’s individual circumstances or otherwise constitutes a personal recommendation. It is published solely for informationpurposes, it does not constitute an advertisement and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments in any jurisdiction. 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